Double Taxation
Avoidance AgreementIncome-Tax Act, 1961:
Notification under section 90: Agreement Between the Government of Republic of
the India and the Government of the Russian Federation for the avoidance of
double taxation and the prevention of fiscal evasion with respect to taxes on
incomeNotification
No. G. S. R. 507(E), dtd. 21.8.1998Whereas
the annexed agreement between the Government of the Russian Federation and the
Government of the Republic of India for the avoidance of double taxation with
regard to taxes on income has entered into force on the eleventh day of April,
1998, thirty days after the receipt of the later of the notifications by both
the Contracting States to each other of the completion of the procedures required
under their respective laws for entry into force of the said agreement in
accordance with Article 28 of the said agreement;Now,
therefore, in exercise of the powers conferred by section 90 of the Income-tax
Act, 1961 (43. of 1961), the Central Government hereby directs that all the
provisions of the said agreement shall be given effect to in the Union of
India.ANNEXUREDOUBLE
TAXATION AVOIDANCE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA
AND THE GOVERNMENT OF THE RUSSIAN FEDERATION FOR THE AVOIDANCE OF DOUBLE
TAXATION WITH RESPECT TO TAXES ON INCOMEThe
Government of the Republic of India and the Government of the Russian
Federation, desiring to conclude an Agreement for the avoidance of double
taxation with respect to taxes on income and with a view to promoting economic
co-operation between the two countries, have agreed as follows:Article
1PERSONAL
SCOPEThis
Agreement shall apply to persons who are residents of one or both of the
Contracting States.Article
2TAXES
COVERED1. This Agreement shall
apply to taxes on income imposed in each Contracting State.2. The taxes to which
this Agreement shall apply are in particular:a. In the case of the
Russian Federation:i.
taxes
on profits (income) of enterprises and organisations; andii.
the
income tax on individuals.(hereinafter
referred to as "Russian tax")a.b. In the case of India:Income-tax,
including any surcharge thereon.(hereinafter
referred to as "Indian tax").1.2.3. This Agreement shall
apply also to any identical or substantially similar taxes on income which are
imposed by either Contracting State after the date of signature of this
Agreement in addition to, or in place of, the taxes referred to in paragraph 2.
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 Agreement,
unless the context otherwise requiresa. the term "the
Russian Federation (Russia)" means the territory of the Russian Federation
and includes its internal waters, territorial sea and air space above them as
well as exclusive economic zone and continental shelf within which the Russian
Federation has and exercises sovereign rights and jurisdiction in accordance
with its national legislation and international law including the 1982 United
Nations Convention on the Law of the Sea, and where its tax legislation is
applicable;b. the term
"India" means the territory of India and includes its internal
waters, territorial sea and air space above them as well as exclusive economic
zone and continental shelf within which the Republic of India has and exercises
sovereign rights and jurisdiction in accordance with its national legislation
and international law including the 1982 United Nations Convention on the Law
of the Sea, and where its tax legislation is applicable;c. the terms "a
Contracting State:, and "the other Contracting State" means the
Russian Federation or India, as the context requires;d. the term
"person" includes an individual, an enterprise, a company and any
other entity which is treated as a taxable unit under the taxation laws in
force in a Contracting State;e. the term
"company" means any body corporate or any entity which is treated as
a company or body corporate under the taxation laws in a Contracting State;f. 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;g. the term
"national" means:i.
in
the case of the Russian Federation, any individual possessing the citizenship
of the Russian Federation, and in the case of India, any individual possessing
the nationality of India;ii.
any
person, partnership and association deriving its status as such from the laws
in force in a Contracting State;a.b.c.d.e.f.g.h. the term
"international traffic" means any transportation 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;i. the term
"tax" means Russian tax or Indian tax, as the context requires, but
shall not include any penalty or interest imposed under the laws of either
Contracting State in relation to the taxes which are the subject of this
Agreement;j. the term "fiscal
year" means:i.
in
the case of the Russian Federation, the financial year, beginning on the 1st of
January;ii.
in
the case of India, the financial year beginning on the 1st of April;a.b.c.d.e.f.g.h.i.j.k. the term
"competent authority" means:i.
in
the case of the Russian Federation-the Ministry of Finance or its authorised
representative;ii.
in
the case of India-the Central Government in the Ministry of Finance (Department
of Revenue) or their authorised representative.1.2. As regards the
application of this Agreement by a Contracting State, any term not defined
therein shall, unless the context otherwise requires, have the meaning which it
has under the laws of that State primarily concerning the taxes to which the
Agreement applies.Article
4RESIDENT1. 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 registration, place of management or any
other similar criterion.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 Contracting State in which he has a permanent home
available to him; if he has a permanent home 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 Contracting 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 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. 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. an installation or
structure used for the exploration or exploitation of natural resources;h. a farm, plantation or
other place where agriculture, forestry, plantation or related activities are
carried on;i. a premises used as a
sales outlet or for receiving or soliciting orders;j. a building site or
construction; installation or assembly project or supervisory activities in
connection therewith, but only if such site, project or activities continue for
a period of more than 12 months.However,
the competent authorities of the Contracting States may, in particular cases,
agree by mutual agreement to consider the supervisory activities in connection
with a building site or construction, installation or assembly project as not
constituting a permanent establishment also in the cases in which the duration
or work on a building site or construction, installation or assembly project
exceeds 12 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 enterprises solely for the
purposes of storage or display;c. he maintenance of a
stock of goods or merchandise belonging to the enterprises solely for the
purposes 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 an auxiliary character;f. the maintenance of a
fixed place of business solely for any combination of activities mentioned in
sub-paragraphs (a) to (e).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
Contracting State in respect of any activities which that person undertakes for
the enterprise, if-a. he has, and
habitually exercises in that State, an authority to conclude contracts or carry
on any business activities on behalf of the enterprise, unless his activities
are limited to those specified in paragraph 3 of this Article; orb. he habitually secures
orders for the sale of goods or merchandise in that State exclusively or almost
exclusively on behalf of the enterprise or other enterprise controlled by it or
which have a controlling interest in it; orc. 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; ord. in acting as
described in (b) above he manufactures or process in that State for the
enterprise, goods or merchandise belonging to 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 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 also
taxed in that other State.2. The term
"immovable property" shall have the meaning which it has under the
laws of the Contracting State in which the property in question is situated.
Ships, boats, aircraft and road vehicles shall not be regarded as immovable
property.The
term "immovable property" shall in any case include property
accessory to immovable property, livestock and equipment used in agriculture
and forestry, rights to which the provisions of 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.1.2.3. 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
paragraph 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 derived
in a Contracting State by an enterprise of the other Contracting State may be
taxed in the first-mentioned State only if it is derived through a permanent
establishment situated therein and only so much of them as is attributable to the
activity of such 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.3. In determining 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.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 of this Article, the profits to be attributed to the
permanent establishment shall be determined by the same method every 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
8INCOME
FROM INTERNATIONAL TRANSPORT1. Income derived by an
enterprise of a Contracting State from the operation or rental of ships or
aircraft in international traffic and the rental of containers and related
equipment which is incidental to the operation of ships or aircraft in
international traffic shall be taxable Only in that Contracting State.2. The provisions of
paragraph 1 shall also apply to income from the participation in a pool, joint
business or an international operating agency.3. For the purposes of
this Article, interest on funds connected directly with the operation. of ships
or aircraft in international traffic shall be regarded as income derived from
the operation of such ships or aircraft; and the provisions of Article 11 shall
also not apply in relation to such interest, provided that such funds are
incidental to that operation.4. Notwithstanding the
preceding provisions of this Article, income derived by an enterprise of a
Contracting State from the operation of ships between the ports of the other
Contracting State and the ports of third countries may be taxed in that other
Contracting State, but the tax imposed in that other State shall be reduced by
an amount equal to two thirds thereof.Article
9ASSOCIATED
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
10DIVIDENDS1. 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
beneficial owner of the dividends is subject to tax thereon in the other State,
the tax so charged shall not exceed 10 per cent. of the gross amount of the
dividends.This
paragraph shall not affect 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, 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 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, or performs independent personal services
from a fixed base situated therein and the dividends are attributable to such
permanent establishment or fixed base. In such case the provisions of Article 7
or 14 of this Agreement, 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 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
11INTEREST1. 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 10 per cent. of the
gross amount of the interest.1.2.3. Notwithstanding the
provisions of paragraph 2, 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; ori.ii.iii.
the
other Governmental agencies or financial institutions as may be specified and
agreed to in an exchange of notes between the competent authorities of the
Contracting States.1.2.3.4. The term
"interest" as used in this Article means income from debt claims of
every kind, and in particular income from Government securities, 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 or performs 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 Articles 7 or 14 of this Agreement, as the case may be,
shall apply.6. Interest shall be
deemed to arise in a Contracting State when the payer is the Contracting State
itself, a political sub-division, a local authority thereof or a resident of
that Contracting 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 a 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 of interest 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 only 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
12ROYALTIES
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 10 per cent. of the gross amount
of the royalties or fees for technical services.3. The term
"royalties" as used in this Article means:a. 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 cinematography films or
recording on any means of reproduction for use in connection with radio or
television broadcasting, any patent, trade mark, design or model, plan,
know-how, computer software programme, secret formula or process, or for
information concerning industrial, commercial or scientific experience.b. payments of any kind
received as consideration for the use of, or the right to use, any industrial,
commercial or scientific equipment.1.2.3.4. For the purposes of
this Article, "fees for technical services" means payments of any
kind in consideration for the rendering of any managerial, technical or
consultancy services including the provision of services by technical or other
personnel but does not include payments for services mentioned in Articles 14
and 15 of this Agreement.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 of the 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 14, 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 fee's 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 a
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. 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
13CAPITAL
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 also
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 derived from
the alienation of ships or aircraft operated in international traffic or
movable property pertaining to such operation shall be taxable only in the
Contracting State of which the alienator is a resident.4. Gains from the
alienation of shares of a company, which is a resident of a Contracting State
may be taxed in that State.5. Gains from the
alienation of any property other than that mentioned in paragraphs 1, 2, 3 and
4 shall be taxable only in the Contracting State of which the alienator is a
resident.Article
14INDEPENDENT
PERSONAL SERVICES1. Income derived by a
resident of a Contracting State from the performance of professional services
or other activities of an independent character in the other Contracting State
shall be taxable only in the first mentioned State, unless:a. such services are
performed or were performed in the other Contracting State and the income is
attributable to a fixed base which the individual has or had regularly
available to him in that other Stateb. the recipient is
present in the other Contracting State for a period or periods exceeding in the
aggregate 183 days in any 12 month period.1.2. The term
"professional services" includes especially independent scientific,
literary, artistic, educational or teaching activities as well as independent
activities of physicians, surgeons, dentists, engineers, architects, lawyers
and accountants.Article
15DEPENDENT
PERSONAL SERVICES1. Subject to the
provisions of Articles 16, 18 and 19 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 there from 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 in the first mentioned State if:a. the recipient is
present in the other Contracting State for a period or periods not exceeding in
the aggregate 183 days in any 12 month period; andb. the remuneration is
paid by, or on behalf of, an employer who is not a resident of the other
Contracting State; andc. the remuneration is
not borne by a permanent establishment or fixed base which the employer has in
the other Contracting State.1.2.3. Notwithstanding the
preceding provisions of this Article, the remuneration derived in respect of an
employment exercised aboard a ship or aircraft operated in international
traffic by the enterprise of a Contracting State may be taxed in that State.Article
16DIRECTORS'
FEESDirectors'
fees and other 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.Article
17INCOME
OF ENTERTAINERS AND SPORTSMEN1. Notwithstanding the
provisions of Articles 7, 14 and 15, 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 a sportsman 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 a sportsman in
his capacity as such accrues not to the entertainer or sportsman himself but to
another person, that income may, notwithstanding the provisions of Articles 7,
14 and 15 be taxed in the Contracting State in which the activities of the
entertainer or sportsman are exercised.3. Notwithstanding the
provisions of paragraphs 1 and 2, income derived by an entertainer or a sportsman
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 financed wholly or substantially by the first-mentioned Contracting
State, including any of its political sub-divisions or local authorities.Article
18INCOME
FROM GOVERNMENT SERVICE1.a. Remuneration, other
than pension, paid by a Government of a Contracting State, a political
sub-division or a local authority thereof to an individual in respect of
services rendered to that State, political subdivision or local authority
thereof 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 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 sole 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 thereof 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 15, 16 and 19 shall apply to remuneration and pension 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
19PENSIONS
AND ANNUITIES1. Pensions, other than
those referred to in Article 18, and other similar remuneration paid in
consideration of past employment to resident of a Contracting State and any
annuity paid to such a resident shall be taxable only in the State where such
income is derived.2. 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 payments in return for adequate and full consideration in money or
money's worth.Article
20STUDENTS
AND TRAINEES1. A student or business
apprentice who immediately before visiting a Contracting State is or was 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, shall be
exempted from tax in that first-mentioned State, provided that such payments
are received from outside that State.2. An individual who
immediately before visiting a Contracting State, is or was a resident of the
other Contracting State and who is present in the first-mentioned State for a
period not exceeding two years solely for the purpose of study, research or
training as a recipient of a grant, allowance or award from a scientific,
educational, religious or charitable organisation or under a technical
assistance programme entered into by the Government of that other Contracting
State shall, from the date of his arrival in the first-mentioned State in
connection with that visit, be exempt from tax in the first-mentioned State.Article
21PROFESSORS,
TEACHERS AND RESEARCHERS1. A professor, teacher
or researcher who visits one of the Contracting States for the purpose of
teaching or engaging in research at a university or any other educational
institution approved by the Government in that State and who, immediately
before that visit, was a resident of the other Contracting State shall be
exempted from tax by the first-mentioned State in respect of any remuneration
received for such teaching or research for a period not exceeding two years
from the date of his first arrival in that State for such purpose.2. This article shall
not apply to income from research if such research is undertaken not in the
public interest but primarily for the benefit of a specific person or persons.Article
22OTHER
INCOME1. Items of income of a
resident of a Contracting State, wherever arising which are not dealt with in
the foi.egoing'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 beneficial owner 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 case the provisions of Article 7 or Article 14, as the case may be,
shall apply.1.2.3. Notwithstanding the
provisions of paragraphs 1 and 2, any income in the form of winnings or prizes
from lotteries, crossword puzzles, races including horse races, card games and
other games of any form or nature whatsoever may be taxed in the Contracting State
where they arise.Article
23METHODS
OF ELIMINATION OF DOUBLE TAXATION1.
In
the case of Russia double taxation is eliminated as follows:Where
a resident of Russia derives income which in accordance with the provisions of
this Agreement, may be taxed in India, the amount of tax on that income payable
in India may be credited against the tax imposed on that resident of Russia.
The amount of credit, however, shall not exceed the amount of the tax on that
income computed in accordance with the taxation laws and regulations of Russia.2.
In
the case of India, double taxation shall be eliminated as follows:Where
a resident of India derives income which in accordance with the provisions of
this Agreement, may be taxed in Russia, India shall allow as a deduction from
the tax on the income of that resident an amount equal to the income-tax paid
in Russia whether directly or by deduction at source. Such deduction in either
case shall not, however, exceed that part of the income-tax (as computed before
the deduction is given) which is attributable to the income which may be taxed
in Russia.3.
For
the purposes of this article the term "tax" paid or payable as
mentioned in paragraphs 1 and 2 of this article shall be deemed to include the
tax which would have been paid but for any exemption or reduction of tax
granted under incentive provisions contained in the law of a Contracting State
designed to promote economic development to the extent that such exemption or
reduction is granted for profits from industrial construction, manufacturing or
agricultural activities provided that the activities have been carried out
within the Contracting State.The
competent authorities may agree to extend the application of this provision
also to other activities.The
provisions of this paragraph shall apply only for the first ten years during
which this Agreement is effective. This period may be extended by a mutual
agreement between the competent authorities.Article
24NON-DISCRIMINATION1. 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, in particular with respect to
residence, are or may be subjected. This provision shall, notwithstanding the
provisions of Article 1 also apply to persons who are not residents of one or
both of the Contracting States.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 and under the same conditions.3. Nothing contained in
this Article shall be construed as obliging a Contracting State to grant to
residents of the other Contracting State any personal allowances, reliefs and
reductions for taxation purposes on account of civil status or family
responsibilities which it grants to its own.4. Except where the
provisions of Article paragraph 7 of Article 11 or paragraph 6 of Article 12,
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, he deductible
under the same conditions as if they had been paid to a resident of the
first-mentioned State.5. 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 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 the
first-mentioned State may be subjected in the same circumstances and under the
same conditions.6. The provisions of
this Article, shall apply to taxes which are the subject of this Agreement.Article
25MUTUAL
AGREEMENT PROCEDURE1. Where a person
considers that the actions of one or both of the Contracting States result or
will result for him in taxation not in accordance with the provisions of this Agreement,
he may, irrespective of the remedies provided by the domestic law of those
States, present his case to the competent authority of the Contracting State of
which he is a resident or a national. The case must be presented within three
years from the date of the first notification of the action resulting in
taxation not in accordance with the provisions of this Agreement.2. The competent
authority shall end over, if the objection appears to it to be justified and if
it is not itself able to arrive at a satisfactory solution, to resolve the case
by mutual agreement with the competent authority of the other Contracting State
with a view to the avoidance of taxation which is not in accordance with the
Agreement. Any agreement reached shall be implemented notwithstanding any time
limits provided in the domestic 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 with each other for the elimination of
double taxation in cases not provided for in this 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.Article
26EXCHANGE
OF INFORMATION1. The competent
authorities of the, Contracting States shall exchange such information
(including documents) as is necessary for carrying out the provisions of this
Agreement or of the domestic laws of the Contracting States concerning taxes
Covered by the Agreement, in so far as the taxation there under 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
confidential in the same manner as information obtained under the domestic laws
of that State and 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 covered by the Agreement. Such persons or authorities
shall use the information only for such Purposes, but may disclose the
information in Public court proceedincial decisions.2. The exchange of
information or documents shall be either on a routine basis or on request with
reference to particular cases of 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 bases.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 and administrative practice of that or the
other Contracting State;b. to supply information
which is not obtainable under the laws or' in the normal course of the
administration of that or of the other Contracting Statec. to supply information
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
27MEMBERS
OF DIPLOMATIC MISSIONS AND CONSULAR POSTSNothing
in this Agreement shall affect the fiscal privileges of diplomatic missions or
consular posts or other persons for whom they are provided under the rules of
international law, or under the provisions of special agreements.Article
28ENTRY
INTO FORCE1. The Contracting
States shall notify each other in writing, through diplomatic channels, of the
completion of the procedure required by the respective laws for the entry into
force of this Agreement.2. This Agreement shall
enter into force thirty days after the receipt of the later of the
notifications referred to in paragraph 1 of this Article.3. The provisions of
this Agreement shall have effect:a. In Russia:i.
in
respect of taxes withheld at sources, to income arising on or after the first day
of January in the calendar year next following the year in which this Agreement
enters into force;ii.
in
respect of other taxes on income, to taxes arising for any fiscal year
beginning on or after the first day of January next following the calendar year
in which this Agreement enters into force.a.b. In India:in
respect of income arising in any fiscal year beginning or after the first day
of April next following the calendar year in which the Agreement enters into
force;1.2.3.4. The provisions of the
Agreement between the Government of the Union of the Soviet Socialist Republics
and the Government of the Republic of India for the avoidance of double
taxation of income signed in New Delhi on 20th of November, 1988, and
subsequently ex tended to the Russian Federation on the basis of mutual
agreement of the Contracting States shall cease to have effect on the date of
coming into force of this Agreement.Article
29TERMINATION1. This Agreement shall
remain in force unless terminated by a Contracting State. Either Contracting
State may terminate this Agreement, through diplomatic channels, by giving
notice of termination at least six months before the end of any calendar year
after the expiration of a period of five years from the date of its entry into
force.2. This Agreement shall
cease to have effect:a. In Russia:i.
in
respect of taxes withheld at source, to income arising on or after the first
day of January in the calendar year next following the year in which the notice
of termination is given;ii.
in
respect of other taxes on income, to taxes arising for any fiscal year
beginning on or after the first day of January in the calendar year next
following the year in which the notice of termination is given.a.b. In India:in
respect of income arising in any fiscal year beginning on or after the first
day of April next following the calendar year in which the notice of
termination is given.Done
at Moscow