New Zealand - Legal Draft

AGREEMENT BETWEEN

INDIA AND NEW ZEALAND.Whereas

the annexed Second Protocol to the Convention between the Government of the

Republic of India and the Government of New Zealand for the avoidance of double

taxation and the prevention of fiscal evasion with respect to taxes on income,

comes into force on 30th December, 1999, thirty days after the date of receipt

of the later of notifications by both the Contracting States to each other,

under article 9 of the Second Protocol, of the completion of the procedures

required under their respective laws for bringing into force the said Second

Protocol.Now,

therefore, in exercise if the powers conferred by section 90 of the Income-tax

Act, 1961 (43 of 1961), the Central Government hereby directs that all the

provisions of the said Second Protocol shall be given effect to in the Union of

India.ANNEXURESECOND

PROTOCOL TO THE CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND

THE GOVERNMENT OF NEW ZEALAND FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE

PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME.SECOND

PROTOCOLTO

THE CONVENTION BETWEEM THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE

GOVERNMENT OF NEW ZEALAND FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE

PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME.The

Government of the Republic of India and the Government of New Zealand,Having

regard to the convention between the Government of the Republic of India and

the Government of New Zealand for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income done at Auckland

on the 17th day of October, 1986 (hereinafter referred to as "the

Convention"),Have

agreed as follows:Article

1Paragraph

1(a)(ii) of article 3 of the Convention is replaced by the following:"(ii)

the term 'India' means the territory of India and includes the territorial sea

and the airspace above it, as well as any other maritime zone in which India

has sovereign rights, other rights and jurisdiction, according to the Indian

law and in accordance with international law, including the U.N. Convention of

the Law of the Sea;"Article

2Paragraph

3 of article 4 of the Convention is replaced by the following:"3.

Where by reason of the provisions of paragraph 1 a person other than an

individual is a resident of both Contracting States, then it shall be deemed to

be a resident of the State in which its place of effective management is

situated cannot be determined, then the competent authorities of the

Contracting States shall settle the question by mutual agreement."Article

3Paragraph

1 of article 6 of the Convention is replaced by the following:"1.

Income derived by a resident of a Contracting State from immovable property

(including income from agriculture or forestry) situated in the other

Contracting State may also be taxed in that other State."Article

4In

paragraph 2 of article 10 of the Convention, "20 per cent" is

replaced by "15 per cent."Article

5In

paragraph 2 of article 11 of the Convention, "15 per cent" is

replaced by "10 per cent."Article

6In

paragraph 2 of article 12 of the Convention' " 30 per cent" is

replaced by "10 per cent."Article

7Paragraph

1 of article 13 of the Convention is replaced by the following:"1.

Income or gains derived by a resident of a Contracting State from the

alienation of immovable property referred to in article 6 and situated in the

other Contracting State may also be taxed in that other State."Article

1. Paragraph 2 of

article 24 of the Convention is replaced by the following:2. "2. The taxation

on a permanent establishment which an enterprise of a Contracting State has in

the other Contracting State shall not be less favourably levied in that other3. State carrying on the

same activities. This provision shall not be construed as preventing a

contracting State from charging the profits of a permanent establishment which

a company of the other Contracting State has in the first-mentioned State at a

rate of tax which is higher then that imposed on the profits of a similar

company of the first-mentioned Contracting State."4. A new paragraph 5 is

inserted immediately after paragraph 4 of article 24 of the convention and the

original paragraph 5 of the article is renumbered paragraph 6.5. "5. The article

shall not apply to any provisions of the taxation laws of a Contracting State

which are reasonably designed to prevent or defeat the avoidance or evasion of

taxes."Article

1. The Contracting

States shall notify each other through diplomatic channels of the completion of

the procedures required by the respective laws for the entry into force of this

protocol.2. This Protocol shall

enter into force 30 days after the date of receipt of the later of the

notifications referred to in paragraph 1 of this article and its provisions

shall have effect:a. in New Zealand: for

any income year beginning on or after 1st April in the calendar year next

following the date on which the Protocol enters into force;b. in India: for any

"previous year" (as defined in the Income-tax Act,1961) beginning on

or after 1st April in the calendar year next following the date on which the

Protocol enters into force.In

WITNESS WHEREOF

the undersigned, duly authorized by their respective Governments, have signed

this Protocol.Done in duplicate at New

Delhi this twenty first day of June, 1999, in the Hindi and English languages,

both texts being equally authentic. In case of divergence between the two

texts, the English text shall be the operative one.For

the Government of the Republic of India.................................(Ravi

Kant).For

the Government of the New Zealand........................................(Adrian

G.Simcock)--------------------------------------------------------------------------------Notification

No. S. O. 166(E), dated 5th March, 1997.WHEREAS

the annexed Protocol to the Convention between the Government of the Republic

of India and the Government of New Zealand for the avoidance of double taxation

and the prevention of fiscal evasion with respect to taxes on income has come

into force on 9th January, 1997, on the notification by both the Contracting

States to each other of the compliance with the domestic requirements as

required by Article 2 of the said Protocol;NOW,

THEREFORE, in exercise of the powers conferred under section 90 of the

Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that

all the provisions of the said Protocol shall be given effect to in the Union

of India.ANNEXUREPROTOCOL

TO THE CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE

GOVERNMENT OF NEW ZEALAND FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE

PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOMEThe

Government of the Republic of India and the Government of Newzealand,Having

regard to the Convention between the Government of the Republic of India and

the Government of New Zealand for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income done at Auckland

on 17th October, 1986 (hereinafter referred to as "the Convention"),HAVE

agreed

that the following provisions shall form an integral part of the Convention:Article

1Notwithstanding

paragraph 3 of Article 23 of the Convention, a New Zealand resident deriving

income from India, being income referred to in that paragraph, shall not be

deemed to have paid Indian tax in respect of such income where the competent

authority of New Zealand considers, after consultation with the competent authority

of India, that it is inappropriate to do so having regard to:a. whether any

arrangements have been entered into by any person for the purpose of taking

advantage of paragraph 3 of Article 23 for the benefit of that person or any

other person;b. whether any benefit

accrues or may accrue to a person who is neither a New Zealand resident nor an

Indian resident;c. the prevention of

fraud or the avoidance of the taxes to which the Convention applies;d. any other matter

which either competent authority considers relevant in the particular

circumstances of the case, including any submissions from the New Zealand

resident concerned.Article

1. The Contracting

States shall notify each other that the domestic requirements for entry into

force of this Protocol have been complied with.2. This Protocol shall

enter into force on the date of the later of the notifications referred to in

paragraph (1) of this article.Article

3Article

1 of this Protocol shall apply to income derived on or after the 1st day of the

month following the date on which this Protocol enters into force.DONE at New Delhi in

duplicate this the Twenty-ninth day of August, One Thousand Nine Hundred

Ninety-six in the Hindi and the English languages, both texts being equally

authentic. In case of divergence between the two texts, the English text shall

be the operative one.For

the Government of the Republic of India(Sd.)(G.

K. Mishra)Chairman,

Central Board of Direct Taxes and Ex-Officio SpecialSecretary

to the Government of India.For

the Government of New Zealand.(Sd.)

(Nicholas William Bridge)High

Commissioner of New Zealand in India[Notification

No. 10280/F. No. 500/151/93-FTD]