Double Taxation
Avoidance AgreementPolandAgreement between the
Government of the Republic of India and the Government of the Polish People's
Republic for the avoidance of double taxation and the prevention of fiscal
evasion with respect to taxes on IncomeNotification
No. G. S. R. 72(E), dtd. 12.02.1990.Whereas
the annexed Agreement between the Government of the Republic of India and the
Government of the Polish People's Republic for the avoidance of double taxation
and the prevention of fiscal evasion with respect to taxes on income has come
into force on the 26th October, 1989, after the notification by both the
Contracting States and communication to each other of the completion of
procedures required under their laws for bringing into force of the said
Agreement in accordance with article 30 of the said Agreement;Now,
therefore, in exercise of the powers conferred by 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 Agreement shall be given effect to in the Union of India.ANNEXUREAGREEMENT
BETWEEN THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE POLISH PEOPLE's
REPUBLIC 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 the Polish People's
Republic desiring to further develop and facilitate the economic relationship
between the two countries, and having decided to conclude an Agreement for the
avoidance of double taxation and the prevention of fiscal evasion with respect
to taxes on income, have agreed as followsArticle
1PERSONAL
SCOPEThis
Agreement shall apply to persons who are residents of one or both of the
Contracting States.Article
2TAXES
COVERED1. The taxes to which
this Agreement shall apply are:a. In India:i.
the
income-tax including any surcharge thereon imposed under the Income-tax Act,
1961;ii.
the
surtax imposed under the Companies (Profits) Surtax Act, 1964;(hereinafter
referred to as " Indian tax ").a.b. In Poland:i.
the
income-tax (podatek dechodowy);ii.
the
tax on wages and salaries (podatek od wynagrodzen');iii.
the
equalisation-tax (podatek wyrdwnawczy); andiv.
the
agriculture-tax (podatek rolny);(hereinafter
referred to as " Polish tax ").1.2. The Agreement 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 Agreement
in addition to, or in place of, the 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 which are
the subject of this Agreement.Article
3GENERAL
DEFINITIONS1. In this Agreement,
unless the context otherwise requires:a. the term " India
" means the Republic of India and, when used in a geographical sense means
the territory of the Republic of India and any maritime area adjacent to the
territorial waters of the Republic of India within which, under the laws of
India and in accordance with international law, the Republic of India has
sovereignty or sovereign and exclusive rights;b. the term "
Poland " means the Polish People's Republic and when used in a
geographical sense means the territory of the Polish People's Republic and any
maritime area adjacent to the territorial waters of the Polish People's
Republic within which, under the laws of the Polish People's Republic and in accordance
with international law, the Polish People's Republic has sovereignty or
sovereign and exclusive rights;c. the terms " a
Contracting State " and " the other Contracting State " mean
India or Poland, as the context requires;d. the term " tax
" means Indian tax or Polish 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 Agreement 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 Poland, the Minister of Finance
or his authorised representative;i. the term
"national" means any individual possessing the nationality of a
Contracting State and any legal person, partnership or association deriving the
status from the laws in force in the 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 Agreement 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 Agreement
applies.Article
4FISCAL
RESIDENCE1. For the purposes of
this Agreement, 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 a habitual abode;c. if he has a 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 the question of
residence cannot be determined according to the provisions of sub-paragraphs
(a) to (c), 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 Agreement, the term " permanent establishment " means a fixed
place of business through which the business of the 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 agriculture, forestry, plantation or related activities are
carried on;a.b.c.d.e.f.g.h.i. 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 or
construction, installation or assembly project or supervisory activities in
connection therewith, where such site, project or activities continue for a
period of more than six months.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 similar activities which have a
preparatory or auxiliary character for the 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; orb. he has no such
authority, but habitually maintains in the firstmentioned State a stock of
goods or merchandise from which he regularly delivers goods or merchandise on
behalf of the 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 enterprises controlling, controlled by, or subject to
the same common control, as that enterprise, he will not be considered an agent
of an independent status within the meaning of this paragraph.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 Contracting 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 for immovable 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 also 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.Articte
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; or (c) other business
activities carried on in that other State of the same or similar kind as those
effected through that permanent establishment.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. In any case where the
correct amount of profits attributable to a permanent establishment is
incapable of determination or the determination thereof presents exceptional
difficulties, the profits attributable to the permanent establishment may be estimated
on a reasonable basis.3. In the determination
of the profits of a permanent establishment, there shall be allowed as
deduction expenses which are incurred for the purposes of the business 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 (other 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 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 arty 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 a banking enterprise, by way of interest
on moneys lent to the head office of the enterprise or any of its other
offices.4. 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.5. 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.6. Where profits include
items of income which are dealt with separately in other articles of this
Agreement, 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. 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.4. 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 from the
operation of ships in international traffic shall be taxable only in the
Contracting State in which the place of effective management of the enterprise
is situated.2. If the place of
effective management of an enterprise carrying on shipping in international
traffic is aboard a ship, then it shall be deemed to be situated in the
Contracting State in which the home harbour of the ship is situated, or, if
there is no such home harbour, in the Contracting State in which the operator
of the ship is a resident.3. The provisions of
paragraph 1 shall also apply to profits derived from the participation in a
pool, a joint business or in an international operating agency.4. Notwithstanding
anything contained in paragraph 1 and article VIII of the agreement dated 27th
June, 1960, between the Government of India and the Government of the Polish
People's Republic regarding shipping co operation, income derived by an
enterprise of a Contracting State from the operation of ships from the ports of
the other Contracting State to the ports of third countries and from the ports
of third countries to the ports of the other Contracting State may be taxed in
the other Contracting State, but the tax imposed in that other Contracting
State shall be reduced by an amount equal to 50 per cent. thereof.Article
10ASSOCIATED
ENTERPRISESWhere:a. 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 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 15 per cent. of the gross amount of the dividends where such
dividends relate to contributions made after the entry into force of this
Agreement.The
paragraph shall not affect the taxation of the company in respect of the
profits out of which the dividends are paid.1. The term "
dividends " as used in this article means income from shares or other
rights, not being debt-claims, participating in profits, 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 resident.2. 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.3. 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 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.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 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 State if it is
beneficially owned by a resident of the other Contracting State and is derived
in connection with a loan or credit extended or endorsed by:i.
in
the case of Poland, Bank Handlowy w Warszawie SA to the extent such interest is
attributable to financing of exports and imports only;ii.
in
the case of India, the Export-Import Bank of India (Exim Bank) to the extent
such interest is attributable to financing of exports and imports only;iii.
any
institution of a Contracting State in charge of public financing of external
trade;iv.
any
other person provided that the loan or credit is approved by the Government of
the first-mentioned Contracting State.1.2.3.4. The term "
interest " as used in this article means income from debtclaims of every
kind, whether or not secured by mortgage and whether or not carrying a right to
participate in the debtor's profits, 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 situated 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 Contracting 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 Contracting 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 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 to the last mentioned
amount. In such 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 Agreement.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 if the
recipient is the beneficial owner of the royalties or fees for technical
services, the tax so charged shall not exceed 22.5 per cent. of the gross
amount of the royalties or fees for technical services.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 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.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 performs 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 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 person, 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, and in such 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 Agreement.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 (alone or together
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 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 paragraphs 1, 2, 3, 4
and 5 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 independent 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 the relevant " previous year " or "
year of income ", as the case may be; 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.1.2. The term "
professional services " includes 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 firstmentioned State if:a. the recipient is
present in the other State for a period or periods not exceeding in the
aggregate 183 days in the relevant "previous year" or "year of
income", as the case may be; andb. the remuneration is
paid by, or on behalf of, an employer who is not a resident of the other State;
andc. the remuneration is
not borne by 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.Article
17DIRECTORS'
FEES REMUNERATION OF TOP LEVEL MANAGERIAL OFFICIALS1. Directors' fees and
similar payments derived by a resident of a Contracting State in his capacity
as a member of the Board of Directors 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 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 paragraph 1, income derived by an entertainer or an athlete who
is a resident of a Contracting State from his personal activities as such
exercised in the other Contracting State, shall be taxable only in the
first-mentioned Contracting State, if the activities in the other Contracting
State are within the framework of cultural or sports exchange programmes agreed
to by both Contracting States and are supported wholly or substantially from
the public funds of the first-mentioned Contracting State, including any of its
political sub-divisions or local authorities.4. Notwithstanding the
provisions of paragraph 2 and articles 7, 15 and 16, where income in respect of
personal activities exercised by an entertainer or an athlete in his capacity
as such in a Contracting State accrues not to the entertainer or athlete
himself but to another person, that income shall be taxable only in the other
Contracting State, if the activities of that other person are within the
framework of cultural or sports exchange programmes agreed to by both
Contracting States and are supported wholly or substantially from the public
funds of that other State, including any of its political sub-divisions or
local authorities.Article
19REMUNERATION
AND PENSIONS IN RESPECT OF GOVERNMENT SERVICE1.a. Remuneration other
than 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
Contracting State or a political sub-division or local authority thereof in the
discharge of functions of a Governmental nature shall be taxable only in that
Contracting State.b. However, such
remuneration shall be taxable only in the other Contracting State, if the
services are rendered in that other 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 the individual is a
resident of, and a national of, that other State.1.2.3. The provisions of articles
16, 17 and 18 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 local authority thereof.Article
20NON-GOVERNMENT
PENSIONS AND ANNUITIES1. 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 only 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.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. Income derived by a
student or business apprentice in respect of activities exercised in a
Contracting State in which he is present solely for the purpose of his
education or training, shall not be taxable in that State, unless it exceeds
the amount necessary for his maintenance, education or training.3. The benefits of this
article shall extend only for such period of time as may be reasonable or
customarily required to complete the education or training undertaken, but in
no event shall any individual have the benefits of this article, for more than
five consecutive years from the date of his first arrival in that other
Contracting State.4. For the purposes of
this article and article 22, an individual shall be deemed to be a resident of
a Contracting State if he is resident in that Contracting State in the
"previous year" or the "year of income", as the case may
be, in which he visits the other Contracting State or in the immediately
preceding "previous year" or "year of income".Article
22PAYMENTS
RECEIVED BY PROFESSORS, TEACHERS AND RESEARCH SCHOLARS1. A professor or
teacher who is or was a resident of one of the Contracting States immediately
before visiting the other Contracting State for the purpose of teaching or
engaging in research, or both, at a university, college, school or other
approved institution in that other Contracting State shall be exempt from tax
in that other State or any remuneration for such teaching or research for a
period not exceeding two years from the date of his arrival in that other
State.2. This article shall
not apply to income from research if such research is not in public interest
but is undertaken primarily for the private benefit of a specific person or
persons.3. For the purposes of
paragraph 1, "approved institution" means an institution which has
been approved in this regard by the competent authority of the concerned
Contracting State.Article
23OTHER
INCOME1. Subject to the
provisions of paragraph 2, items of income of a resi dent of a Contracting
State, wherever arising, which are not expressly dealt with in the foregoing
articles of this Agreement, 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 of pro perty in respect of which the income is
paid is effectively connected with such permanent establishment or fixed base.
In such cases, 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 Agreement
and arising in the other Contracting State may be taxed in that other State.4. The competent
authorities of the Contracting States may communicate with each other directly
for the purpose of reaching an agreement in the sense of the preceding
paragraphs. The competent authorities shall through consultations develop,
appropriate bilateral procedures, conditions, methods and techniques for the
implementation of the mutual agreement procedure provided for in this article.Article
24ELIMINATION
OF DOUBLE TAXATION1. The laws in force in
either of the Contracting States will continue to govern the taxation of income
in the respective Contracting States except where provisions to the contrary
are made in this Agreement.2. In both the
Contracting States, double taxation will be avoided in the following manner:a. Where a resident of a
Contracting State derives income which, in accordance with the provisions of
this Agreement, may be taxed in the other Contracting State, the first-mentioned
State shall, subject to the provisions of sub-paragraph (b) of this paragraph,
exempt such income from tax but may, in calculating tax on the remaining income
of that person, apply the rate of tax which would have been applicable if the
exempted income had not been so exempted.b. Either of the
Contracting States when imposing taxes on its residents may include in the tax
base upon which such taxes are imposed the items of income which according to
the provisions of articles 11, 12 and 13 of this Agreement may also be taxed in
the other State but shall allow as a deduction from the amount of tax computed
on such a base an amount equal to the tax paid in the other Contracting State.
Such deduction shall not, however, exceed that part of tax leviable by the
first-mentioned State, as computed before the deduction is given, which is
appropriate to the income which, in accordance with the provisions of articles
11, 12 and 13 of this Agreement, may be taxed in the other State.1.2.3. For the purpose of
sub-paragraph (b) of paragraph 2 the term "tax paid in the other
Contracting State" shall be deemed to include. any amount which would have
been payable as tax but for any relief by way of a deduction allowed in
computing the taxable income or an exemption or a reduction of tax or otherwise
under the laws relating to taxation of income in force in that other
Contracting State.Article
25NON-DISCRIMINATION1. The nationals of a
Contracting State shall not be subjected in the other Contracting State to any
taxation or any requirement connected therewith which is other or more
burdensome than the taxation and connected requirements to which nationals of
that other State in the same circumstances and under the same conditions are or
may be subjected.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 other State
than the taxation levied on enterprises of that other State carrying on the
same activities in the same circumstances or under the same conditions.3. Nothing contained in
this article shall be construed as obliging a Contracting State to grant to
persons not resident in that State any personal allowances, reliefs, reductions
and deductions for taxation purposes which are by law available only to persons
who are so resident.4. Enterprises of a
Contracting State, the capital of which is wholly or partly owned or
controlled, directly or indirectly, by one or more residents of the other
Contracting State, shall not be subjected in the first-mentioned Contracting
State to any taxation or any requirement connected therewith which is other or
more burdensome than the taxation and connected requirements to which other
similar enterprises of that first-mentioned State are or may be subjected in
the same circumstances and under the same conditions.5. In this article, the
term "taxation" means taxes which are the subject of this Agreement.6. Except where the
provisions of article 11, paragraph 7 of article 12, or paragraph 7 of article
13 of this Agreement apply, interest, royalties and other disbursements paid by
an enterprise of a Contracting State to a resident of the other Contracting
State shall, for the purpose of determining the taxable profits of such
enterprise, be deductible under the same conditions as if they had been paid to
a resident of the first-mentioned State. Similarly, any debts of an enterprise
of a Contracting State to a resident of the other Contracting State shall, for
the purpose of determining the taxable capital of such enterprise, be
deductible under the same conditions as if they had been contracted to a
resident of the first-mentioned State.7. The exemptions,
reliefs, reductions, deductions and allowances for taxation purposes available
under the domestic laws of the two Contracting States shall not be adversely
affected by any provision of this Agreement.Article
26MUTUAL
AGREEMENT PROCEDURE1. Where a resident of a
Contracting State considers that the actions of one or both of the Contracting
States result or will result for him in taxation not in accordance with this
Agreement, he may, notwithstanding the remedies provided by the national laws
of those States, present his case to the competent authority of the Contracting
State of which he is a resident. This case must be presented within three years
of the date of receipt of notice of the action which gives rise to taxation not
in accordance with the Agreement.2. The competent
authority shall endeavour, if the objection appears to it to be justified and
if it is not itself able to arrive at an appropriate solution, to resolve the
case by mutual agreement with the competent authority of the other Contracting
State, with a view to avoidance of taxation not in accordance with the
Agreement. Any agreement reached shall be implemented notwithstanding any time
limits in the national laws of the Contracting States.3. The competent
authorities of the Contracting States shall endeavour to resolve by mutual
agreement any difficulties or doubts arising as to the interpretation or
application of the Agreement. They may also consult together for the
elimination of double taxation in cases not provided for in the Agreement.4. The competent
authorities of the Contracting States may communicate with each other directly
for the purpose of reaching an agreement in the sense of the preceding
paragraphs. When it seems advisable in order to reach agreement to have an oral
exchange of opinions, such exchange may take place through a Commission
consisting of representatives of the competent authorities of the Contracting
States.Article
27EXCHANGE
OF INFORMATION1. The competent
authorities of the Contracting States shall exchange such information
(including documents) as is necessary for carrying out the provisions of the
Agreement or of the domestic laws of the Contracting States concerning taxes
covered by the Agreement, in so far as the taxation thereunder is not contrary
to the Agreement, in particular for the prevention of fraud or evasion of such
taxes. Any information received by a Contracting State shall be treated as
secret in the same manner as information obtained under the domestic laws of
that State. However, if the information is originally regarded as secret in the
transmitting State, it shall be disclosed only to persons or authorities
(including courts and administrative bodies) involved in the assessment or
collection of, the enforcement or prosecution in respect of, or the
determination of appeals in relation to, the taxes which are the subject of the
Agreement. Such persons or authorities shall use the information only for such
purposes but may disclose the information in public court proceedings or in
judicial decisions. The competent authorities shall, through consultation,
develop appropriate conditions, methods and techniques concerning matters in
respect of which such exchange of information shall be made, including, where
appropriate, exchange of information regarding tax avoidance.2. The exchange of
information or documents shall be either on a routine basis or on request with
reference to particular cases or both. The competent authorities of the
Contracting States shall agree from time to time on the list of the information
or documents which shall be furnished on a routine basis.3. In no case shall the
provisions of paragraph 1 be construed so as to impose on a Contracting State
the obligation:a. to carry out
administrative measures at variance with the laws or administrative practice of
that or of the other Contracting State;b. to supply information
or documents which are not obtainable under the laws or in the normal course of
the administration of that or of the other Contracting State;c. to supply information
or documents which would disclose any trade, business, industrial, commercial
or professional secret or trade process or information the disclosure of which
would be contrary to public policy.Article
28ASSISTANCE
IN COLLECTION1. The Contracting
States undertake to lend assistance and support to each other, in the
collection of the taxes to which this Agreement relates, in the cases where the
taxes are definitely due according to the laws of the States making the
request.2. In the case of a
request for enforcement of collection, tax claims of either of the Contracting
States which have been finally determined will be accepted for enforcement by
the other Contracting State to which the request is made and collected in that
State in accordance with the laws applicable to the enforcement and collection
of its taxes.3. In the case of Indian
tax, the request will be sent by the Central Board of Direct Taxes, Department
of Revenue, Ministry of Finance, India to Minister of Finance, Poland or his
authorised representative and will be accompanied by such certificate as is
required by the laws of India to establish that the taxes have been finally
determined and are due from the taxpayer.4. In the case of Poland
tax, the request will be sent by the Minister of Finance, Poland or his
authorised representative to the Central Board of Direct Taxes, Department of
Revenue, Ministry of Finance, India and will be accompanied by such certificate
as is required by the laws of Poland to establish that the taxes have been
finally determined and are due from the taxpayer.5. Where the tax claim
has not become final by reason of its being subject to appeal or any other
proceeding, a Contracting State may, in order to protect its revenues, request
the other Contracting State to take such interim measures in this behalf as are
lawful under the laws of that other Contracting State.6. A request for
assistance in collection of taxes due from a taxpayer shall be made only if
adequate assets of that taxpayer are not available for recovering the taxes
from him in the Contracting State making the request.7. The Contracting State
in which tax is recovered in pursuance of paragraphs 1, 2 and 5 of this article
shall immediately thereafter remit the amount so recovered to the Contracting
State which made the request.Article
29DIPLOMATIC
AND CONSULAR ACTIVITIESNothing
in this Agreement shall affect the fiscal privileges of diplomatic or consular
officials under the general rules of international law or under the provisions
of special agreements.Article
30ENTRY
INTO FORCEEach
of the Contracting States shall notify to the other the completion of the
procedures required by its law for the bringing into force of this Agreement.
This Agreement shall enter into force on the date of the later of these
notifications and shall thereupon have effect:a. In India, in respect
of income arising in any previous year beginning on or after the first day of
April next following the calendar year in which the later of the notifications
is given;b. In Poland, in respect
of income arising in any year of income beginning on or after the first day of
January next following the calendar year in which the later of the
notifications is given.Article
31TERMINATIONThis
Agreement shall remain in force indefinitely but either of the Contracting
States may, on or before the thirtieth day of June in any calendar year
beginning after the expiration of a period of five years from the date of its
entry into force, give the other Contracting State through diplomatic channels,
written notice of termination and, in such event, this Agreement shall cease to
have effect:a. In India, in respect
of income arising in any previous year beginning on or after the 1st day of
April next following the calendar year in which the notice is given.b. In Poland, in respect
of income arising in any year of income beginning on or after the