Norway - Legal Draft

CONVENTION

BETWEEN THE REPUBLIC OF INDIA AND THE KINGDOM OF NORWAY FOR THE AVOIDANCE OF

DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON

INCOME AND ON CAPITALNotification

No. G.S.R. 756(E), dated 9th September, 1987.NOTIFICATION

No. 7514Whereas

the annexed Convention between the Republic of India and the Kingdom of Norway

for the avoidance of double taxation and the prevention of fiscal evasion with

respect to taxes on income and on capital has entered into force in the year

one thousand nine hundred and eighty-six, being the year in which it was

signed, on the notification by both the contracting States to each other of the

completion of the procedures required under their laws, as required by

paragraph 1 of article 31 of the said Convention;Now,

therefore, in exercise of the powers conferred by section 44A of the Wealth-tax

Act, 1957 (27 of 1957), section 90 of the Income-tax Act, 1961 (43 of 1961) and

section 24A of the Companies (Profits) Surtax Act, 1964 (7 of 1964), the

Central Government hereby directs that all the provisions of the said

Convention shall be given effect to in the Union of India.ANNEXURECONVENTION

BETWEEN THE REPUBLIC OF INDIA AND THE KINGDOM OF NORWAY FOR THE AVOIDANCE OF

DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON

INCOME AND ON CAPITAL.The

Government of the Republic of India and the Government of the Kingdom of Norway

desiring to conclude a Convention for the avoidance of double taxation and

prevention of fiscal evasion with respect of taxes on income and on capital,

have agreed as follows:Article

1PERSONAL

SCOPEThis

Convention shall apply to persons who are residents of one or both of the

Contracting States.Article

2TAXES

COVERED1. The existing taxes to

which the Convention shall apply are in particular:a. In India:i.

the

income-tax including any surcharge thereon imposed under the Income-tax Act,

1961 (43 of 1961):ii.

the

surtax imposed under the Companies (Profits) Surtax Act, 1964 (7 of 1964);iii.

the

wealth-tax imposed under the Wealth-tax Act, 1957 (27 of 1957);(hereinafter

referred to as " Indian tax ").a.b. In Norway:i.

the

national tax on income (inntektsskatt til staten);ii.

the

county municipal tax on income (inntektsskatt til fylkeskommunen);iii.

the

municipal tax on income (inntektsskatt til kommunen);iv.

the

national contributions to the Tax Equalisation Fund (fellesskatt til

skattefordelingsfondet);v.

the

national tax on capital (formuesskatt til staten);vi.

the

municipal tax on capital (formuesskatt til kommunen);vii.

the

national tax relating to income and capital form the exploration for and the

exploitation of submarine petroleum resources and activities and work relating

thereto, including pipeline transport of petroleum produced (skatt til staten vedr

* rende inntekt go formue i forbindelsemed under skelse etter og utnyttes av

undersjske petroleumsforekomaster og dertil knyttet virksomhet og arbeid,

hereunder rredningstransport av utvunnet petroleum);viii.

the

national dues on remuneration to non-resident artistes (av gift til staten av

honorarer som til faller kunstnere bosatt i utlandet);ix.

the

seamen's tax (sjmannsskatt);(hereinafter

referred to as " Norwegian tax ").1.2. The Convention shall

also apply to any identical or substantially similar taxes which are imposed by

either Contracting State after the date of signature of the present Convention

in addition to, or in place of, the existing taxes referred to in paragraph 1.

The competent authorities of the Contracting States shall notify each other of

any substantial changes which are made in their respective taxation laws.Article

3GENERAL

DEFINITIONS1. In this Convention,

unless the context otherwise requires:a. the term " India

" means the territory of India and includes, territorial sea and the air

space 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.b. the term "

Norway " means the Kingdom of Norway, including any area outside the

territorial waters of the Kingdom of Norway where the Kingdom of Norway,

according to Norwagian legislation and in accordance with international law,

may exercise her rights with respect to the seabed and sub-soil and their

natural resources; the term does not comprise Svalbard, Jan Mayen and the

Norwegian dependencies outside Europe;c. the terms " a

Contracting State " and " the other Contracting State " mean India

or Norway as the context requires;d. the term " tax

" means Indian tax or Norwegian tax, as the context requires, but shall

not include any amount which is payable in respect of any default or omission

in relation to the taxes to which this Convention applies or which represents a

penalty imposed relating to those taxes;e. the term "

person " includes an individual, a company and any other entity which is

treated as a taxable unit under the taxation laws in force in the respective

Contracting States;f. the term "

company " means any body corporate or any entity which is treated as a

company or body corporate under the taxation laws in force in the respective

Contracting States;g. the terms "

enterprise of a Contracting State " and " enterprise of the other

Contracting State " mean respectively an enterprise carried on by a

resident of a Contracting State and an enterprise carried on by a resident of

the other Contracting State;h. the term "

competent authority " means in the case of India, the Central Government

in the Ministry of Finance (Department of Revenue) or their authorised

representative; and in the case of Norway, the Minister of Finance and Customs

or his authorised representative;i. the term "

nationals " means any individual possessing the nationality of a

Contracting State and any legal person, partnership and association deriving

its status as such from the laws in force in a Contracting State;j. the term "

international traffic " means any transport by a ship or aircraft operated

by an enterprise of a Contracting State, except when the ship or aircraft is

operated solely between places in the other Contracting State.1.2. As regards the

application of the Convention by a Contracting State, any term not defined

therein shall, unless the context otherwise requires, have the meaning which it

has under the law of that State concerning the taxes to which the Convention

applies.Article

4RESIDENT1. For the purposes of

this Convention, the term " resident of a Contracting State " means

any person who, under the laws of that State, is liable to tax therein by

reason of his domicile, residence, place of management or any other criterion

of a similar nature.2. Where, by reason of

the provisions of paragraph 1, an individual is a resident of both Contracting

States, then his status shall be determined as follows:a. he shall be deemed to

be a resident of the State in which he has a permanent home available to him;

if he has a permanent home available to him in both States, he shall be deemed

to be a resident of the State with which his personal and economic relations

are closer (centre of vital interests);b. if the State in which

he has his centre of vital interests cannot be determined, or if he has not a

permanent home available to him in either State, he shall be deemed to be a

resident of the State in which he has an habitual abode;c. if he has an habitual

abode in both States or in neither of them, he shall be deemed to be a resident

of the State of which he is a national;d. if he is a national

of both States or of neither of them, the competent authorities of the

Contracting States shall settle the question by mutual agreement.1.2.3. 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.Article

5PERMANENT

ESTABLISHMENT1. For the purposes of

this Convention, the term " permanent establishment " means a fixed

place of business through which the business of an enterprise is wholly or

partly carried on.2. The term "

permanent establishment " includes especially:a. a place of

management;b. a branch;c. an office;d. a factory;e. a workshop;f. a mine, an oil or gas

well, a quarry or any other place of extraction of natural resources;g. a warehouse in

relation to a person providing storage facilities for others;h. a farm, plantation or

other place where agricultural, forestry, plantation or related activities are

carried on;i. a premises used as a

sales outlet or for receiving or soliciting orders;j. an installation or

structure used for the exploration of natural resources;k. a building site, a

construction, assembly or installation project or supervisory activities in

connection therewith, but only where such site, project or activities continue

for a period of more than three months together with other such sites, projects

or activities, if any;l. the furnishing of

services, including consultancy services, by an enterprise through employees or

other personnel engaged by the enterprise for such purpose, but only where

activities of that nature continue (for the same or a connected project) within

the country for a period or periods aggregating to more than six months within

any 12 months' period.1.2.3. Notwithstanding the

preceding provisions of this article, the term " permanent establishment

" shall be deemed not to include:a. the use of facilities

solely for the purpose of storage or display of goods or merchandise belonging

to the enterprise;b. the maintenance of a

stock of goods or merchandise belonging to the enterprise solely for the

purpose of storage or display;c. the maintenance of a

stock of goods or merchandise belonging to the enterprise solely for the

purpose of processing by another enterprise;d. the maintenance of a

fixed place of business solely for the purpose of purchasing goods or

merchandise, or of collecting information, for the enterprise;e. the maintenance of a

fixed place of business solely for the purpose of advertising, for the supply

of information, for scientific research, or for other activities which have a

preparatory or auxiliary character, for enterprise.However,

the provisions of sub-paragraphs (a) to (e) shall not be applicable where the

enterprise maintains any other fixed place of business in the other Contracting

State for any purposes other than the purposes specified in the said

sub-paragraphs.1.2.3.4. Notwithstanding the

provisions of paragraphs 1 and 2 where a person--- other than an agent of an

independent status to whom paragraph 5 applies---is acting in a Contracting

State on behalf of an enterprise of the other Contracting State, that

enterprise shall be deemed to have a permanent establishment in the

first--mentioned State, if:---a. he has and habitually

exercises in that State an authority to conclude contracts on behalf of the

enterprise, unless his activities are limited to the purchase of goods or

merchandise for the enterprise;b. he has no such

authority, but habitually maintains in the first-mentioned State a stock of

goods or merchandise from which he regularly delivers goods or merchandise on

behalf of the enterprise; orc. he habitually secures

orders in the first-mentioned State, wholly or almost wholly for the enterprise

itself or for the enterprise and other enterprises controlling, controlled by,

or subject to the same common control as, that enterprise.1.2.3.4.5. An enterprise of a

Contracting State shall not be deemed to have a permanent establishment in the

other Contracting State merely because it carries on business in that other

State through a broker, general commission agent or any other agent of an

independent status provided that such persons are acting in the ordinary course

of their business. However, when the activities of such an agent are devoted

wholly or almost wholly on behalf of that enterprise itself or on behalf of

that enterprise and other enterprise controlling, controlled by, or subject to

the same common control as, that enterprise, he shall not be considered as an

agent of an independent status within the meaning of this paragraph if it is

shown that the transactions between the agent and the enterprise were not made

under arms-length conditions. In that case, the provisions of paragraph 4 shall

apply.6. The fact that a

company which is a resident of a Contracting State controls or is controlled by

a company which is a resident of the other Contracting State, or which carries

on business in that other State (whether through a permanent establishment or

otherwise), shall not of itself constitute either company a permanent

establishment of the other.Article

6INCOME

FROM IMMOVABLE PROPERTY1. 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 be taxed

in that other State.2. The term "

immovable property " shall have the meaning which it has under the law of

the Contracting State in which the property in question is situated. The term

shall in any case include property accessory to immovable property, livestock

and equipment used in agriculture and forestry, rights to which the provisions

of general law respecting landed property apply, usufruct of immovable property

and rights to variable or fixed payments as consideration for the working of,

or the right to work, mineral deposits, sources and other natural resources.

Ships, boats and aircraft shall not be regarded as immovable property.3. The provisions of

paragraph 1 shall apply to income derived from the direct use, letting, or use

in any other form of immovable property.4. The provisions of

paragraphs 1 and 3 shall also apply to the income from immovable property of an

enterprise and to income from immovable property used for the performance of

independent personal services.Article

7BUSINESS

PROFITS1. The profits of an

enterprise of a Contracting State shall be taxable only in that State unless

the enterprise carries on business in the other Contracting State through a

permanent establishment situated therein. If the enterprise carries on business

as aforesaid, the profits of the enterprise may be taxed in the other State but

only so much of them as is attributable to:a. that permanent

establishment;b. sales in that other

State of goods or merchandise of the same or similar kind as those sold through

that permanent establishment; orc. other business

activities carried on in that other State of the same or similar kind as those

effected through that permanent establishment.1.2. Subject to the

provisions of paragraph 3, where an enterprise of a Contracting State carries

on business in the other Contracting State through a permanent establishment

situated therein, there shall in each Contracting State be attributed to that

permanent establishment the profits which it might be expected to make if it

were a distinct and separate enterprise engaged in the same or similar

activities under the same or similar conditions and dealing wholly

independently with the enterprise of which it is a permanent establishment.3. In the determination

of the profits of a permanent establishment, there shall be allowed as

deductions expenses which are incurred for the purposes of the permanent

establishment, including executive and general administrative expenses so

incurred, whether in the State in which the permanent establishment is situated

or elsewhere, in accordance with the provisions of and subject to the

limitations of the taxation laws of that State. However, no such deduction

shall be allowed in respect of amounts, if any, paid (otherwise than towards

reimbursement of actual expenses) by the permanent establishment to the head

office of the enterprise or any of the other offices, by way of royalties, fees

or other similar payments in return for the use of patents, know-how or other

rights, or by way of commission or other charges, for specific services

performed or for management, or, except in the case of a banking enterprise, by

way of interest on moneys lent to the permanent establishment. Likewise, no

account shall be taken, in the determination of the profits of a permanent establishment,

for amounts charged (otherwise than towards reimbursement of actual expenses),

by the permanent establishment to the head office of the enterprise or any of

its other offices, by way of royalties, fees or other similar payments in

return for the use of patents, know-how or other rights, or by way of

commission or other charges for specific services performed or for management,

or except in the case of banking enterprise, by way of interest on moneys lent

to the head office of the enterprise or any of its other offices.4. In so far as it has

been customary in a Contracting State to determine the profits to be attributed

to a permanent establishment on the basis of an apportionment of the total

profits of the enterprise to its various parts, nothing in paragraph 2 shall

preclude that Contracting State from determining the profits to be taxed by

such an apportionment as may be customary; the method of apportionment adopted

shall, however, be such that the result shall be in accordance with the principles

contained in this article.5. No profits shall be

attributed to a permanent establishment by reason of the mere purchase by that

permanent establishment of goods or merchandise for the enterprise.6. For the purposes of

the preceding paragraphs, the profits to be attributed to the permanent

establishment shall be determined by the same method year by year unless there

is good and sufficient reason to the contrary.7. Where profits include

items of income which are dealt with separately in other articles of this

Convention, then the provisions of those articles shall not be affected by the

provisions of this article.Article

8AIR

TRANSPORT1. Profits derived by an

enterprise of a Contracting State from the operation of aircraft in

international traffic shall be taxable only in that State.2. The provisions of

paragraph 1 shall also apply to profits from the participation in a pool, a

joint business or an international operating agency.3. The provisions of

paragraphs 1 and 2 shall apply to profits derived by the joint Norwegian,

Danish and Swedish air transport consortium, Scandinavian Airlines System

(SAS), but only in so far as profits derived by Det Norske Luftfartsselskap A/S

(DNL), the Norwegian partner of the Scandinavian Airlines System (SAS), are in

proportion to its share in that Organisation.4. For the purposes of

this article, interest on funds connected with the operation of aircraft in

international traffic shall be regarded as profits derived from the operation

of such aircraft, and the provisions of article 12 shall not apply in relation

to such interest.5. The term "

operation of aircraft " shall mean business of transportation by air of

passengers, mail, livestock or goods carried on by the owners or lessees or

charterers of aircraft, including the sale of tickets for such transportation

on behalf of other enterprises, the incidental lease of aircraft and any other

activity directly connected with such transportation.Article

9SHIPPING1. Profits derived by an

enterprise of a Contracting State from the operation of ships in international

traffic shall be taxable only in that State.2. Notwithstanding the

provisions of paragraph 1, profits derived from the operation of ships in

international traffic may be taxed in the Contracting State in which such

operation is carried on; but the tax so charged shall not exceed 50 per cent.

of the tax otherwise imposed by the internal law of that State. For purposes of

this paragraph, the amount of such profits subject to tax in India shall not

exceed 7.5 per cent. of the sums receivable in respect of the carriage of

passengers or freight embarked in India.3. The provisions of

paragraphs 1 and 2 shall also apply to profits derived from the participation

in a pool, in a joint business or in an international operating agency.4. An enterprise shall

be deemed to be an enterprise of both Contracting States if:a. the enterprise is

carried on by a company or any other body of persons where all the partners are

jointly and severally liable and at least one of the partners has unlimited

liability; andb. at least one of the

partners is a re sident of one of the Contracting States and one or more of

them is a resident of the other Contracting State; andc. the effective

management of the enterprise is not carried on solely in one of the Contracting

States.In

that case, the profits of the enterprise, subject to paragraph 2 of this

article, shall be taxable in the State where partners mentioned in

sub-paragraph (b) are residents in proportion to their part of the profits. The

provisions of this paragraph shall not be construed as to grant any benefits to

partners resident of a State other than the Contracting States.1.2.3.4.5. For the purposes of

this article, income from the operation of ships includes income derived from

the use, maintenance or rental of containers (including trailers and related

equipment for the transport of containers) in connection with the transport of

goods or merchandise in international traffic.Article

10ASSOCIATED

ENTERPRISESWherea. an enterprise of a

Contracting State participates directly or indirectly in the management,

control or capital of an enterprise of the other Contracting State, orb. the same persons

participate directly or indirectly in the management, control or capital of an

enterprise of a Contracting State and an enterprise of the other Contracting

State, and in either case conditions are made or imposed between the two

enterprises in their commercial or financial relations which differ from those

which would be made between independent enterprises, then any profits which

would, but for those conditions, have accrued to one of the enterprises, but,

by reason of those conditions, have not so accrued, may be included in the

profits of that enterprise and taxed accordingly.Article

11DIVIDENDS1. Dividends paid by a

company which is a resident of a Contracting State to a resident of the other

Contracting State may be taxed in that other State.2. However, such

dividends may also be taxed in the Contracting State of which the company

paying the dividends is a resident, and according to the laws of that State,

but if the recipient is the beneficial owner of the dividends, the tax so

charged shall not exceed:a. 15 per cent. of the

gross amount of the dividends if the beneficial owner is a company (other than

a partnership) which holds directly at least 25 per cent. of the capital of the

company paying the dividends and the dividends are attributable to a new

contribution;b. 25 per cent. of the

gross amount of the dividends in all other cases.This

paragraph shall not af fect the taxation of the company in respect of the

profits out of which the dividends are paid.1.2.3. The term "

dividends " as used in this article means income from shares or other

rights, no t being debt-claims, participating in proifits, as well as income

from other corporate rights which is subjected to the same taxation treatment

as income from shares by the laws of the State of which the company making the

distribution is a resident.4. The provisions of

paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends,

being a resident of a Contracting State, carries on business in the other

Contracting State of which the company paying the dividends is a resident,

through a permanent establishment situated therein or performs in that other

State independent personal services from a fixed base situated therein, and the

holding in respect of which the dividends are paid. is effectively connected

with such permanent establishment or fixed base. In such case, the provisions

of article 7 or article 15, as the case may be, shall apply.5. Where a company which

is a resident of a Contracting State derives profits or income from the other

Contracting State, that other State may not impose any tax on the dividends

paid by the company, except in so far as such dividends are paid to a resident

of that other State or in so far as the holding in respect of which the

dividends are paid is effectively connected with a permanent establishment or a

fixed base situated in that other State, nor subject the company's

undistributed profits to a tax on the company's undistributed profits, even if

the dividends paid or the undistributed profits consist wholly or partly of

profits or income arising in such other State.6. As used in paragraph

2 of this article, the term " new contribution " means share capital,

other than bonus shares, issued after the date of entry into force of this

Convention by a company which is a resident of a Contracting State, and

beneficially owned by a resident of the other Contracting State.Article

12INTEREST1. Interest arising in a

Contracting State and paid to a resident of the other Contracting State may be

taxed in that other State.2. However, such interest

may also be taxed in the Contracting State in which it arises, and according to

the laws of that State, but if the recipient is the beneficial owner of the

interest and it is paid in respect of a loan or debt first created after the

date of entry into force of this Convention, the tax so charged shall not

exceed 15 per cent. of the gross amount of the interest.3. Notwithstanding the

provisions of paragraph 2,--a. interest arising in a

Contracting State shall be exempt from tax in that State provided it is derived

and beneficially owned by:i.

the

Government, a political sub-division or a local authority of the other

Contracting State; orii.

the

Central Bank of the other Contracting State;a.b. interest arising in a

Contracting State shall be exempt from tax in that Contracting State to the

extent approved by the Government of that State if it is derived and

beneficially owned by any person other than a person referred to in

sub-paragraph (a) who is a resident of the other Contracting State provided

that the transaction giving rise to the debt-claim has been approved in this

regard by the Government of the first-mentioned Contracting State to be in the

interest of the industrial development of that State.1.2.3.4. The term "

interest " as used in this article means income from debt-claims of every

kind, whether or not secured by mortgage, and in particular, income from

Government securities and income from bonds or debentures, including premiums

and prizes attaching to such securities, bonds or debentures. Penalty charges

for late payment shall not be regarded as interest for the purpose of this

article.5. The provisions of

paragraphs 1 and 2 shall not apply if the beneficial owner of the interest

being a resident of a Contracting State, carries on business in the other

Contracting State in which the interest arises, through a permanent

establishment situtated therein or performs in that other State independent

personal services from a fixed base situated therein, and the debt-claim in

respect of which the interest is paid is effectively connected with such

permanent establishment or fixed base. In such case, the provisions of article

7 or article 15, as the case may be, shall apply.6. Interest shall be

deemed to arise in a Contracting State when the payer is that State itself, a

political sub-division, a local authority or a resident of that State. Where,

however, the person paying the interest, whether he is a resident of a

Contracting State or not, has in a Contracting State a permanent establishment

or a fixed base in connection with which the indebtedness on which the interest

is paid was incurred, and such interest is borne by such permanent

establishment or fixed base, then such interest shall be deemed to arise in the

State in which the permanent establishment or fixed base is situated.7. Where, by reason of a

special relationship between the payer and the beneficial owner or between both

of them and some other person, the amount of the interest, having regard to the

debt-claim for which it is paid, exceeds for whatever reason, the amount which

would have been agreed upon by the payer and the beneficial owner in the

absence of such relationship, the provisions of this article shall apply only

to the last-mentioned amount. In such a case, the excess part of the payments

shall remain taxable according to the laws of each Contracting State, due

regard being had to the other provisions of this Convention.Article

13ROYALTIES

AND FEES FOR TECHNICAL SERVICES1. Royalties and fees

for technical services arising in a Contracting State and paid to a resident of

the other Contracting State may be taxed in that other State.2. However, such

royalties and fees for technical services may also be taxed in the Contracting

State in which they arise and according to the laws of that State. But in so

far as fees for technical services are considered, to the extent such fees are

paid in respect of a contract which is signed after the date of entry into

force of this Convention, the tax so charged shall not exceed 20 per cent. of

such fees. For the purposes of this paragraph, if a lower rate of Indian tax is

agreed upon with any other State than Norway after the entry into force of this

Convention, such rate shall be applied.3. The term " royalties

" as used in this article means payments of any kind received as a

consideration for the use of, or the right to use, any copyright of literary,

artistic or scientific work, including cinematograph films or films or tapes

used for radio or television broadcasting, any patent, trade mark, design or

model, plan, secret formula or process, or for the use of, or the right to use,

industrial, commercial or scientific equipment, or for information concerning

industrial, commercial or scientific experience.1.2.3.4. The term " fees

for technical services " as used in this article means payments of any

amount to any person other than payments to an employee of a person making

payments, in consideration for the services of a managerial, technical or

consultancy nature, including the provision of services of technical or other

personnel.5. The provisions of

paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties or

fees for technical services, being a resident of a Contracting State, carries

on business in the other Contracting State in which the royalties or fees for

technical services arise, through a permanent establishment situated therein,

or perform in that other State independent personal services from a fixed base

situated therein, and the right, property or contract in respect of which the

royalties or fees for technical services are paid is effectively connected with

such permanent establishment or fixed base. In such a case, the provisions of

article 7 or article 15, as the case may be, shall apply.6. Royalties and fees

for technical services shall be deemed to arise in a Contracting State when the

payer is that State itself, a political sub-division, a local authority or a

resident of that State. Where, however, the person paying the royalties or fees

for technical services, whether he is a resident of a Contracting State or not,

has in a Contracting State a permanent establishment or a fixed base in

connection with which the liability to pay the royalties or fees for technical

services was incurred, and such royalties or fees for technical services are

borne by such permanent establishment or fixed base, then such royalties or

fees for technical services shall be deemed to arise in the State in which the

permanent establishment or fixed base is situated.7. Where, by reason of

special relationship between the payer and the beneficial owner or between both

of them and some other persons, the amount of royalties or fees for technical

services paid exceeds the amount which would have been paid in the absence of

such relationship, the provisions of this article shall apply only to the

last-mentioned amount. In such a case, the excess part of the payments shall

remain taxable according to the laws of each Contracting State, due regard

being had to the other provisions of this Convention.Article

14CAPITAL

GAINS1. 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 be

taxed in that other State.2. Gains from the

alienation of movable property forming part of the business property of a

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

other Contracting State or of movable property pertaining to a fixed base

available to a resident of a Contracting State in the other Contracting State

for the purpose of performing independent personal services, including such

gains from the alienation of such a permanent establishment (along or with the

whole enterprise) or of such fixed base, may be taxed in that other State.3. Gains from the

alienation of ships or aircraft operated in international traffic, or movable

property (including containers and related equipment) pertaining to the

operation of such ships or aircraft shall be taxable only in the Contracting

State of which the alienator is a resident.4. Gains from the

alienation of shares of the capital stock of a company, the property of which

consists directly or indirectly principally of immovable property situated in a

Contracting State may be taxed in that State.5. Gains from the

alienation of shares other than those mentioned in paragraph 4 in a company

which is a resident of a Contracting State may be taxed in that State.6. Gains from the

alienation of any property other than that mentioned in the preceding

paragraphs shall be taxable only in the Contracting State of which the

alienator is a resident.Article

15INDEPENDENT

PERSONAL SERVICES1. Income derived by an

individual who is a resident of a Contracting State from the performance of

professional services or other activities of a similar character shall be

taxable only in that State except in the following circumstances when such

income may also be taxed in the other Contracting State:a. if he has a fixed

base regularly available to him in the other Contracting State for the purpose

of performing his activities; in that case, only so much of the income as is

attributable to that fixed base may be taxed in that other State; orb. if his stay in the

other Contracting State is for a period or periods amounting to or exceeding in

the aggregate 183 days in any two consecutive years of income; in that case,

only so much of the income as is derived from his activities performed in that

other State may be taxed in that other State.However,

to the extent the above-mentioned remuneration is not taxed in the State where

the recipient is a resident, the remuneration may be taxed in the other State.1.2. The term "

professional services " includes especially independent scientific,

literary, artistic, educational or teaching activities, as well as the

independent activities of physicians, surgeons, lawyers, engineers, architects,

dentists and accountants.Article

16DEPENDENT

PERSONAL SERVICES1. Subject to the

provisions of articles 17, 18, 19, 20, 21 and 22, salaries, wages and other

similar remuneration derived by a resident of a Contracting State in respect of

an employment shall be taxable only in that State unless the employment is

exercised in the other Contracting State. If the employment is so exercised,

such remuneration as is derived therefrom may be taxed in that other State.2. Notwithstanding the

provisions of paragraph 1, remuneration derived by a resident of a Contracting

State in respect of an employment exercised in the other Contracting State

shall be taxable only in the first-mentioned State if:a. the recipient is

present in that other State for a period or periods not exceeding in the

aggregate 183 days in any two consecutive years of income andb. the remuneration is

paid by, or on behalf of, an employer who is a resident of the State of which

the recipient is a resident; andc. the remuneration is

not reasonably connected with the activities of a permanent establishment or a

fixed base which the employer has in the other State.1.2.3. Notwithstanding the

preceding provisions of this article, remuneration derived in respect of an

employment exercised aboard a ship or aircraft operated in international

traffic by an enterprise of a Contracting State may be taxed in that State.

Where a resident of Norway derives remuneration in respect of an employment

exercised aboard in aircraft operated in international traffic by the

Scandinavian Airlines System (SAS) consortium, such remuneration shall be

taxable only in Norway.Article

17DIRECTORS'

FEES AND REMUNERATION OF TOP LEVEL MANAGERIAL OFFICIALS.1. Directors' fees and

similar payments derived by a resident of a Contracting State in his capacity

as a member of the board of directors or of a similar organ of a company which

is a resident of the other Contracting State may be taxed in that other State.2. Salaries, wages and

other similar remuneration derived by a resident of a Contracting State in his

capacity as an official in a top-level managerial position of a company which

is a resident of the other Contracting State may be taxed in that other State.Article

18INCOME

EARNED BY ENTERTAINERS AND ATHLETES1. Notwithstanding the

provisions of articles 15 and 16, income derived by a resident of a Contracting

State as an entertainer, such as a theatre, motion picture, radio or television

artiste, or a musician or as an athlete, from his personal activities as such

exercised in the other Contracting State, may be taxed in that other State.2. Where income in

respect of personal activities exercised by an entertainer or an athlete in his

capacity as such accrues not to the entertainer or athlete himself but to

another person, that income may, notwithstanding the provisions of articles 7,

15 and 16, be taxed in the Contracting State in which the activities of the

entertainer or athlete are exercised.3. Notwithstanding the

provisions of paragraphs 1 and 2, income derived from such activities as

defined in paragraph 1 shall be exempt from tax in the Contracting State in

which these activities are performed if the visit of the entertainer or athlete

is within the framework of cultural exchange between the two Contracting

States, or is directly or indirectly supported, wholly or substantially, from

the public funds of the other Contracting State, including a political

sub-division or local authority of that other State.Article

19REMUNERATION

AND PENSIONS IN RESPECT OF GOVERNMENT SERVICE1.a. Remuneration, other

than a pension paid by a Contracting State or a political sub-division or a

local authority thereof to an individual in respect of services rendered to

that State or sub-division or authority thereof in the discharge of functions

of a governmental nature shall be taxable only in that State.b. However, such

remuneration shall be taxable only in the other Contracting State if the

services are rendered in that State and the individual is a resident of that

State who:i.

is

a national of that State; orii.

did

not become a resident of that State solely for the purpose of rendering the

services.1.2.a. Any pension paid by,

or out of funds created by a Contracting State or a political sub-division or a

local authority thereof to an individual in respect of services rendered to

that State or sub-division or authority shall be taxable only in that State.b. However, such pension

shall be taxable only in the other Contracting State if:i.

the

individual is a resident of, and a national of that other State; orii.

such

pension is exempt from tax in the first-mentioned State.1.2.3. The provisions of

articles 16, 17 and 20 shall apply to remuneration and pensions in respect of

services rendered in connection with a business carried on by a Contracting

State or a political sub-division or a local authority thereof.Article

20NON-GOVERNMENT

PENSIONS, ANNUITIES AND ALIMONY1. Any pension, other

than a pension referred to in article 19, or any annuity derived by a resident

of a Contracting State from sources within the other Contracting State may be

taxed in the first-mentioned Contracting State.2. The term "

pension " means a periodic payment made in consideration of past services

or by way of compensation for injuries received in the course of performance of

services.3. The term "

annuity " means a stated sum payable periodically at stated times during

life or during a specified or ascertainable period of time under an obligation

to make the payments in return for adequate and full consideration in money or

money's worth.4. Alimony received by a

resident of Norway and paid by a resident of India shall be exempt from tax in

Norway to the extent such payments are not deductible for the purposes of

Indian tax.Article

21PAYMENTS

RECEIVED BY STUDENTS AND APPRENTICES1. Payments which a

student or business apprentice who is or was immediately before visiting a

Contracting State a resident of the other Contracting State and who is present

in the first-mentioned State solely for the purpose of his education or

training receives for the purpose of his maintenance, education or training

shall not be taxed in that State, provided that such payments arise from

sources outside that State.2. In respect of grants,

scholarships and remuneration from employment not covered by paragraph 1, a

student or business apprentice described in paragraph 1 shall, in addition, be

entitled during such education or training to the same exemptions, reliefs or

reductions in respect of taxes available to residents of the State which he is

visiting.Article

22OTHER

INCOME1. Subject to the

provisions of paragraph 2, items of income of a resident of a Contracting

State, wherever arising, which are not expressly dealt with in the foregoing

articles of this Convention, shall be taxable only in that Contracting State.2. The provisions of

paragraph 1 shall not apply to income, other than income from immovable

property as defined in paragraph 2 of article 6, if the recipient of such

income, being a resident of a Contracting State, carries on business in the

other Contracting State through a permanent establishment situated therein, or

performs in that other State independent personal services from a fixed base

situated therein, and the right or property in respect of which the income is

paid is effectively connected with such permanent establishment or fixed base.

In such a case, the provisions of article 7 or article 15, as the case may be,

shall apply.3. Notwithstanding the

provisions of paragraphs 1 and 2, items of income of a resident of a

Contracting State not dealt with in the foregoing articles of this Convention

and arising in the other Contracting State may also be taxed in that other

State.Article

23OFFSHORE

ACTIVITIES1. The provisions of

this article have effect notwithstanding any other provision of this

Convention.2. A person who is a

resident of a Contracting State and carries on activities offshore in the other

Contracting State in connection with the exploration or exploitation of the

sea-bed and subsoil and their natural resources situated in that other State

shall, subject to paragraphs 3 and 4 of this article, be deemed in relation to

those activities to be carrying on business in that other State through a

permanent establishment or fixed base situated therein.3. The provisions of

paragraph 2 shall not apply where the activities are carried on for a period

not exceeding 30 days in the aggregate in any 12 months' period. However, for

the purposes of this paragraph:a. activities carried on

by an enterprise associated with another enterprise shall be regarded as

carried on by the enterprise with which it is associated if the activities in

question are substantially the same as those carried on by the last-mentioned

enterprise;b. two enterprises shall

be deemed to be associated if one is controlled directly or indirectly by the

other, or both are controlled directly or indirectly by a third person or

persons.1.2.3.4. Profits derived by a

resident of a Contracting State from the transportation of supplies or

personnel to a location, or between locations, where activities in connection

with the exploration or exploitation of the seabed and subsoil and their

natural resources are being carried on in a Contracting State, or from the

operation of tugboats and other vessels auxiliary to such activities, shall be

taxable only in the Contracting State in which the place of effective

management of the enterprise is situated.Notwithstanding

the provisions of this paragraph, profits derived from such operation may also

be taxed in the Contracting State in which the operation is carried on; but the

tax so charged shall not exceed 50 per cent. of the tax otherwise imposed by

the internal law of that State. For purposes of this paragraph, the amount of

such profits subject to tax in India shall not exceed 7.5 per cent. of the sums

receivable. However, if a lower rate of Indian tax is agreed upon with any

other State than Norway after the entry into force of this Convention, such

rate shall be applied for the purposes of this paragraph.1.2.3.4.5. .a. Subject to

sub-paragraph (b) of this paragraph, salaries, wages and similar remuneration

derived by a resident of a Contracting State in respect of an employment

connected with the exploration or exploitation of the seabed and subsoil and

their natural resources situated in the other Contracting State shall, to the

extent that the duties are performed offshore in that other State, be taxable

only in that other State provided that the employment offshore is carried on

for a period exceeding 30 days in the aggregate in any 12 months' period.b. Salaries, wages and

similar remuneration derived by a resident of the Contracting State in respect

of an employment exercised aboard a ship or aircraft engaged in the

transportation of supplies or personnel to a location, or between locations,

where activities connected with the exploration or exploitation of the seabed

and subsoil and their natural resources are being carried on in a Contracting

State, or in respect of an employment exercised aboard tugboats or other vessels

operated auxiliary to such activities, shall be taxable only in the Contracting

State in which the place of effective management of the enterprise is situated.Article

24CAPITAL1. Capital represented

by immovable property referred to in article 6, owned by a resident of a

Contracting State and situated in the other Contracting State may be taxed in

that other State.2. Capital represented

by movable property forming part of the business property of a permanent

establishment which an enterprise of a Contracting State has in the other

Contracting State, or by movable property pertaining to a fixed base available

to a resident of a Contracting State in the other Contracting State for the

purpose of performing independent personnel services, may be taxed in that

other State.3. Capital represented

by ships and aircraft operated in international traffic and by movable property

(including containers and related equipment) pertaining to the operation of

such ships and aircraft, shall be taxable only in the Contracting State of

which the owner of such ships, aircraft or property is a resident.4. All other elements of

capital of a resident of a Contracting State shall be taxable only in that

State.Article

25ELIMINATION

OF DOUBLE TAXATION1. The laws in force in

either of the Contracting States shall continue to govern the taxation of

income and capital in the respective Contracting States except where express

provision to the contrary is made in this Convention.2. Where a resident of

India derives income or owns capital which, in accordance with the provisions

of this Convention, may be taxed in Norway, India shall allow as a deduction

from the tax on the income of that resident an amount equal to the income-tax

paid in Norway, whether directly or by deduction; and as a deduction from the

tax on the capital of that resident an amount equal to the capital tax paid in

Norway. Such deduction in either case shall not, however, exceed that part of

the income-tax or capital tax (as computed before the deduction is given) which

is attributable, as the case may be, to the income or the capital which may be

taxed in Norway. Further, where such resident is a company by which surtax is

payable in India, the deduction in respect of income-tax paid in Norway shall

be allowed in the first instance from income-tax payable by the company in

India and as to the balance, if any, from surtax payable by it in India.3. Where a resident of

Norway derives income or owns capital which, in accordance with the provisions

of the Convention, may be taxed in India, Norway shall, subject to the

provisions of paragraphs 4, 5, 6 and 7, exempt such income or capital from tax.4. Where a resident of

Norway derives items of income which, in accordance with the provisions of

articles 9, 11, 12, 13, 14, paragraphs 5, 17, 22 and 23 may be taxed in India,

Norway shall allow as a deduction from the tax on the income of that person an

amount equal to the tax paid in India. Such deduction shall not, however,

exceed that part of the tax, as computed before the deduction is given, which

is attributable to such items of income derived from India.5. For the purposes of

the deduction referred to in paragraph 4, the term " income-tax paid in

India " shall be deemed to include any amount which would have been

payable as Indian tax under the law of India and in accordance with this

Convention for any year but for an exemption from, or reduction of, tax granted

for that year under:--a. sections 10(4),

10(4A), 10(4B), 10(6)(viia), 10(15)(iv) and 80L of the Income-tax Act, 1961 (43

of 1961), so far as they were in force on, and have not been modified since,

the date of the signature of this Convention, or have been modified only in

minor respects so as not to affect their general character; orb. any other provisions

which may be enacted after 11th November, 1983, granting a deduction in

computing the taxable income or an exemption or reduction from tax which the

competent authorities of the Contracting States agree to be for the purposes of

the economic development of India, if it has not been modified thereafter or

has been modified only in minor respects so as not, to affect its general

character.This

paragraph does not apply to article 17.1.2.3.4.5.6. For the deduction

indicated in paragraph 4, Indian tax on interest shall be considered as having

been paid at a rate of not less than 15 per cent.7. The provisions of

paragraphs 5 and 6 of this article shall apply for the first 10 years for which

this Convention is effective, but the competent authorities of the Contracting

States may consult each other to determine whether this period shall be

extended.8. Where, under this

Convention, a resident of a Contracting State is exempt from tax in that

Contracting State in respect of income derived or capital owned in the other

Contracting State, then the first-mentioned Contracting State may, in

calculating tax on the remaining income or capital of that person, apply the

rate of tax which would have been applicable if the income or capital exempted

from tax in accordance with this Convention had not been so exempted.