Double Taxation
Avoidance AgreementCONVENTION BETWEEN
THE GOVERNMENT OF REPUBLIC OF INDIA AND THE GOVERNMENT OF THE REPUBLIC OF KOREA
FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH
RESPECT TO TAXES ON INCOME. NOTIFICATIONNotification
No.G.S.R. 1111(E), dtd. 26.9.1986.Whereas
the annexed Convention between the Government of the Republic of India and the
Government of the Republic Korea for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income has been ratified
and the instruments of ratification exchanged, as required by paragraph 1 of
Article 29 of the said Convention, on 1st August 1986;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 Convention shall be given effect to in the Union of India.CONVENTION
BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE
REPUBLIC OF KOREA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF
FISCAL EVASION WITH RESPECT TO TAXES ON INCOMEThe
Government of the Republic of India and the Government of the Republic of
Korea,Desiring
to conclude a Convention for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income,Have
agreed as follows:Article
1PERSONAL
SCOPEThis
Convention shall apply to persons who are residents of one or both of the
Contracting States.Article
2TAXES
COVERED1. The Convention shall
apply to taxes on income imposed on behalf of each Contracting State
irrespective of the manner in which they are levied.2. There shall be
regarded as taxes on income all taxes imposed on total income, or on elements
of income, including taxes on gains from the alienation of movable or immovable
property and taxes on the total amounts of wages or salaries paid by
enterprises.3. The existing taxes to
which the Convention shall apply are:a. In the case of Korea:i.
the
income-tax;ii.
the
corporation tax; andiii.
the
inhabitant tax; (hereinafter referred to as " Korean tax ")a.b. In the case of India:i.
the
income-tax including any surcharge thereon imposed under the Income-tax Act, 1961
(43 of 1961);ii.
the
surtax imposed under the Companies (Profits) Surtax Act, 1964 (7 (of 1964);
(hereinafter referred to as " Indian tax ").1.2.3.4. The Convention shall
apply also to any identical or substantially similar taxes which are imposed
after the date of signature of this Convention in addition to, or in place of,
the existing taxes. The Competent authorities of the Contracting States shall
notify each other of any substantial changes which have been made in their
respective taxation laws.Article
3GENERAL
DEFINITIONS1. In this Convention
unless the context otherwise requires:a. the term " a
Contracting State " and " the other Contracting State " mean
Korea or India as the context requires;b. the term " tax
" means Korean tax or Indian tax, as the context requires;c. the term "
Person " includes an individual, a company and any other body of persons
which is treated as an entity for tax purposes;d. the term "
company " means any body corporate or any entity which is treated is a
corporate for tax purposes;e. 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:f. the term "
competent authority " means, in the case of Korea the Minister of Finance
or his authorised representative; and in the case of India, the Central
Government in the Ministry of Finance (Department of Revenue) or its authorised
representative;g. the term "
national " means any individual possessing the nationality of a
Contracting State and any legal person, partnership, association or other
entity deriving its status as such from the laws in force in the Contracting
State;h. 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 this Convention by either Contracting State any term not
otherwise defined shall, unless the Context otherwise requires, have the
meaning which it has under the laws of that Contracting State relating to the
taxes which are the subject of this Convention.Article
4FISCAL
DOMICILE1. For the purposes of
the Convention the term " resident of a Contracting State " means any
person who under the laws of that State is liable to taxation therein by reason
of his domicile, residence, place of head or main office, place of management
or any other criterion of a similar nature.2. Where by reason of
the provisions of paragraph 1, an individual is a resident of both Contracting
States, then his status shall be determined as follows:a. he shall be deemed to
be a resident of the State in which he has a permanent home available to him,
if he has a permanent home available to him in both States, he shall be deemed
to be a resident of the State with which his personal and economic relations
are closer (centre of vital interests);b. if the State in which
he has his centre of vital interests cannot be determined, or if he has not a
permanent home available to him in either State, he shall be deemed to be a
resident of the State in which he has an habitual abode;c. if he has an habitual
abode in both States or in neither of them, he shall be deemed to be a resident
of the State of which he is a national;d. if he is a national
of both States or of neither of them, the competent authorities of the
Contracting States shall settle the question by mutual agreement.Where
by reason of the provisions of paragraph 1 a persons other than an individual
is a resdent 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.
In case of doubt the competent authorities of the Contracting States shall
settle the question by mutual agreement.Article
5PERMANENT
ESTABLISHMENT1. For the purposes of
this Convention, the term "permanent establishment" means a fixed
place of business through which the business of an enterprise is wholly or
partly carried on.2. The term
"permanent establishment" shall include especially:a. a place of
management;b. a branch;c. an office;d. a factory;e. a workshop; andf. a mine, an oil or gas
well, a quarry or any other place of extraction of natural resources.1.2.3. The term
"permanent establishment" likewise encompasses a building site, a
construction assembly or installation project or supervisory activities in
connection therewith, but only where such site project or activities continue
for a period of more than nine months.4. 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, display or delivery 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 display or, delivery;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 for collecting information, for the enterprisee. the maintenance of a
fixed place of business solely for the purpose of advertising, the supply of
information, scientific research, or any other activity, if it has a
preparatory or auxiliary character in the trade or business of the enterprise;f. the maintenance of a
fixed place of business solely for any combination of activities mentioned in
sub-paragraphs (a) to (e) of this paragraph, provided that the overall activity
of the fixed place of business resulting from this combination is of a
preparatory or auxiliary character.1.2.3.4.5. Notwithstanding the
provisions of paragraphs 1 and 2 if a person--other than an agent of
independent status to whom paragraph 6 applies--is acting on behalf of an
enterprise and has, and habitually exercise, in a Contracting State an
authority to conclude contracts in the name of the enterprise, that enterprise
shall be deemed to have a permanent establishment in that State in respect of
any activities which that person undertakes for the enterprise unless the activities
of such person are limited to those mentioned in paragraph 4 which, if exercise
through a fixed place of business, would not make this fixed place of business
a permanent establishment by virtue of that paragraph.6. An enterprise shall
not be deemed to have a permanent establishment in a Contracting State merely
because it carries on business in that State through a broker, general
commission agent or any other agent of an independent status, where such
persons are acting in the ordinary course of their business.7. 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 from immovable
property may be taxed in the Contracting State in which such property is
situated.2. The term
"immovable property" shall be defined in accordance with the law of
the Contracting State in which the property in question is situated. The term
shall in any case incrude property accessory to immovable property, livestock
and equipment used in agriculture and forestry, rights to which the provisions
of general law respecting landed property apply, usufruct of immovable property
and rights to variable or fixed payments as consideration for the working of,
or the right to work mineral deposits, sources and other natural resources;
ships boats, and aircraft shall riot be regarded as immovable property.3. The provisions of
paragraph 1 shall apply to income derived from the direct use, letting, or use
in any other form of immovable property.4. The provisions of
paragraphs 1 and 5 shall also apply to the income from immovable property of an
enterprise and to income from immovable property used for the peformance of
independent personal services.Article
7BUSINESS
PROFITS1. The profits of an
enterprise of a Contracting State shall be taxable only in that State unless
the enterprise carries in 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 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
permament establishment the profits which it might be expected to make if it
were a distinct and separate enterprise engaged in thesame or similar acivities
under the same or similar conditions and dealing wholly independently with the
enterprise of which it is a permanent establishment.3. In the determination
of the profits of a permanent establishment, there shall be allowed as
deductions expenses which are incurred for the purposes of the permanent
establishment including executive and general administrative expenses so
incurred, whether in the State in which the permanent establishment is situated
or elsewhere which are allowed under the provisions of the domestic law of the
Contracting State in which the permanent establishment is situated.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 here
is good and sufficient reason to the contrary.6. Where income or
profits include items of income which are dealt with separately in other
Articles of this Convention, then the provisions of those Articles shall not be
effected by the provisions of this Article.Article
8AIR
TRANSPORT1. Profits from the
operation of aircraft in international traffic carried on by an enterprise of a
Contracting State shall be taxable only in that State.2. 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.3. For the purposes of
this Article the term " operation of aircraft " shall include
transportation by air of persons, livestock, goods or mail carried on by the
owners or lessees or characters, of aircraft including the sale of tickets for
such transportation on behalf of other enterprises the incidental lease of
aircraft on a character basis and any other activity directly connected with
such, transportation.Article
9SHIPPING
TRANSPORT1. Profits derived by an
enterprise of a Contracting State from the operation of ships in international
traffic shall be taxable only in that State.2. Notwithstanding the
provisions of paragraph 1 of this Article, profits derived from the operation
of ships in international traffic may be taxed in the Contracting State in
which such operation is carried on; but the tax so charged shall not exceed 50
per cent, of the tax otherwise imposed by the internal law of that state.3. The provisions of
paragraphs 1 and 2 of this Article shall also apply to profit derived from the
participation in a pool, a joint business or an international operating agency.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 indirectely 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 relation 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 erterprises, but, by reason of
those conditions, have not so accrucd, may he included in the profits of that
enterprise and taxed accordigly.Article
11DIVIDENDS1. Dividends paid by a
company which is a resident of a Contracting State to a resident of the other
Contracting Stay 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 he recipion is the beneficial owner of the dividends, the tax so charged
shall not exceed:a. 15 per cent of the
gross amount of the dividends the beneficial owner is a company which owns
directly at least 20 per cent of the capital of the company paying the
dividends;b. 20 per cent of the
gross amount of the dividends in all other cases.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 rsident
through a permanent establishment situated therein or perfoms 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 cases the provisions
of Article 7 or Article 15, as the case may be shall apply.5. Where a company which
is a resident of a Contracting State derives profits or income from the other
Contracting State that other State may not impose any tax on the dividends paid
by the company, except insofar as such dividends are paid to a resident of that
other state or insofar 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 he 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 of this Article:a. where the interest is
paid to a bank carrying on a bona fide banking business which is a resident of
the other Contracting State and is the beneficial owner of the interest, the
tax charged in the Contracting State in which the interest arises shall not
exceed 10 per cent of the gross amount of the interest;b. where the interest is
paid to the Government of on of the Contracting States or a political
sub-division or local authority or the Central Bank or the Export Import Bank
of that State, it shall not be subjected to tax by the State in which it
arises.1.2.3.4. The term "interest"
as used in this Article mean income from debt-claims 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.5. The provisions of
paragraphs 1, 2 and 3 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-claims in
respeot of which the interest 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.6. Interest shall be
deemed to arise in a Contracting State When the payer is that State itself,
apolitical sub-division, a local authority or a resident of that Sate. Where,
however, the person paying the interest, whether he is a resident of a
Contracting State or not has in a Contracting State a permanent establishment
or a fixed base in connection with which the indebtedness on which the interest
is paid was incurred, and such interest is borne by such permanent
establishment or fixed base, then such interest shall be deemed to arise in the
state in which the permanent establlishment or the fixed base is situated.7. Where, owing to 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 amount. In such cases, the
shall remain taxable according to the due regard being had to the other
provisions of this Convention.Article
13ROYALTIES
AND FEES FOR TECHNICAL SERVICES1. Royalties and fees
for technical services arising in a Contracting State and paid to a resident of
the other Contracting State may be taxed in that other State.2. However, such
royalties and fees for technical services may also be taxed in the Contracting
State in which they arise and according to the laws of that State, but if the
recipient is the beneficial owner of the royalties or fees for technical
services, the tax so charged shall not exceed 15 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 film, or films or tapes
used for radio or television broadcasting, any patent, trade mark, design or
model, plan, secret formula or process, or for the use of, or the right to use,
industrial, commercial or scientific equipment, or for information concerning
industrial, commercial or scientific experience.4. The term " fees
for technical services " as used in this Article means payments of any
kind to any person, other than payments to an employee of the person making the
payments and to any individual for independent personal services mentioned in
Article 15, in consideration for services of managerial, technical or
consultative nature, including the provison of services of technical or other
personnel.5. The provisions of
paragraphs 1 and 2 of this Article shall not apply if the benecficial 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 there or perform in that other State independent
personal services from a fixed base situated therein, and the right, property
or contract in respect of which the royalties or fees for technical services
and 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.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 obligation to make the payments was incurred and the
payments are borne by the permanent establishment or fixed base, then the
royalties or fees for technical services shall be deemed to arise in the
Contracting State in which the permanent estiblishment or fixed base is
situated.7. Where, owing to a
special relationship between the payer and the beneficial owner or between both
of them and some other person, the amount of the royalties or fees for
technical services paid, having regard to the use, right or information for
which they are paid, exceeds the amount which would have been agreed upon by
the payer and the recipient in the absence of such relationship, the provisions
of this Article shall apply only to the last-mentioned amount. In such cases,
the excess part of the payments shall remain taxable according to the law of
each Contracting State due regard being had to the other provisions of this
Convention.Article
14CAPITAL
GAINS1. Capital gains from
the alienation of immovable property as defined in paragraph 2 of Article 6 or
from the alienation of shares in a company the assets of which consist
prinicpally of immovable property, may be taxed in the State in property is
situated.2. Gains from the
alienation of movable Property forming part of the business property of a
permanent estabilishment 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 purposes of performing professional services including such gains from
the alienation of such a permanent establishment (alone or together with the
whole enterprise) or of such a fixed' base may be taxed in the other State.3. Notwithstanding the
provisions of pagraph 2, gains by an enterprise of a Contracting State from
alienation of ships and aircraft which it operates in international traffic and
movable property pertaining to the operation of such ships and aircraft shall
be taxable only in that State.4. Gains from the
alienation of any property, other than those mentioned in preceding paragraphs
of this Article, shall be taxable only in the Contracting State of which the
alienator is a resident.5. The term ' alienation
"shall mean alienation in accordance with the law of the Contracting State
in which the property question is siutated.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 unless he has a fixed based regularly
available to him in the other Contracting State for the purpose of performing
his activities. If he has such a fixed base, the income may be taxed in the
other contracting State but only so much of it as it attributable to that fixed
base.2. The term "professional
services " includes especially iudependent 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, 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 exericed,
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 in employment exercised in the other Contracting State
shall be taxable only in the first-mentioned 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 " previous year " or " taxation year
" concerned, as the case may be; andb. the remuneration is
paid by, or on behalf of, an employer who is not a resident of the 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 by a resident of a
Contracting State into respect of an employment exercised abroad a ship or
aircraft operated in international traffic shall be taxable only in that State.Article
17DIRECTORS'
FEES AND REMUNERATIOIN OF TOP LEVEL MANAGERIAL OFFICIALS1. Directors' 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 theother 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
18ARTISTES
AND ATHLETES1. Notwithstanding the
provisions of Article 15, income derived by a resident of a Contractins State
as an entertainer such as a theatre, motion pictures, 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 activites 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 and 15, be taxed
in the Contracting State in which the activities of the entertainer or athlete
are exercised.3. The provisions of
paragraphs 1 and 2 shall not apply to remuneration or profits, salaries, wages
and similar income derived from activities performed in a Contracting State by
entertainers or athletes if their visit to that State is substantially
supported from the public funds of the other Contracting State, a political
sub-division or a local authority thereof.Article
19PENSIONSSubject
to the provisions of paragrapha 2 and 3 of Article 20. pensions and other
similar remuneration paid to a resident of a Contracting State in consideration
of past employment shall be taxable only in that State.Article
20GOVERNMENT
FUNCTIONS1.a. Remuneration, other
than a pension, paid by a Contracting State or a political sub-division or a
local authority thereof, to an individual in respect of service rendered to
that State or sub-division or authority shall be taxable only in that State.b. However, such
remuneration shall be taxable only in the other Contracting State if the
services are rendered in that State and the individual is a resident of that
State who:i.
is
a national of that State; orii.
did
not become a resident of that State solely for the purpose of rendering the
services,1.2.a. Any pension paid by
or out of funds created by, a Contracting State or a political sub-division or
a local authority thereof to an individual in respect of services rendered to
that State or sub-division or authority shall be taxable only in that State.b. However such pensions
shall be taxable only in the other Contracting State if the individual is a
resident of, and a national of, that State.1.2.3. The provisions of
Article 16, 17 and 19 shall apply to remuneration and pensions in respect of
services rendered in connection with a business carried on by a Contracting
State or a political Sub-division or a local authority thereof.4. The provisions of
paragraph 1 of this Article shall likewise apply in respect of remuneration or
pensions paid, in the case of Korea, by the Bank of Korea, the Export-Import
Bank of Korea and the Korea Trade Promotion Corporation and in the case of
India, by the Reserve Bank of India and the EXIM Bank of India, and by
organizations recognised by and agreed between the competent authorities of the
Contracting States.ARTICLE
21PAYMENTS
RECEIVED BY STUDENTS AND APPRENTICES1. A student or business
apprentice who is or was a resident of one of the Contracting States
immediately before visiting the other Contracting State and who is present in
that other State solely for the purpose of his education or training shall be
exempt from tax in that other State on:a. payments made to him
by persons residing outside that other State for the purposes of his
maintenance, education or training; andb. remuneration from
employment in that other State, in an amount not exceeding one million and
seven hundred thousand Korean Won or its equivalent in Indian currency during
any " previous year " or the " taxation year ", as the case
may be, provided that such employment is directly related to his studies or is
undertaken for the purpose of his maintenance.1.2. 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.ARTICLE
22PROFESSORS,
TEACHERS AND RESEARCH SCHOLARS1. An individual who is
or was a resident of a Contracting State immediately before making a visit to
the other Contracting State, and who, at the invitation of any university,
college, school or other similar educational institution, which is recognised
by the competent authority in that other State, visits that other State solely
for the purpose of teaching or research or boh at such educational institution
shall be exempt from tax in that other State on his remuneration for such
teaching or research, for a period not exceeding two consecutive years from the
date of his first arrival in that other State.2. This Article shall
not apply to income from rearch if such research is undertaken primarily for
the private of a specific person or persons.ARTICLE
23OTHER
INCOMEItems
of income of a resident of a Contracting State, whereever arising, not dealt
with in the foregoing Articles of this Convention shall be taxable only in that
State.ARTICLE
24ELIMINATION
OF DOUBLE TAXATION1.
In
the case of a resident of Korea, double taxation shall be avoided as follows:Subject
to the provisions of Korean tax law regarding the allowance as a credit against
Korean tax of tax payable in any country other than Korea (which shall not
affect the general Principle hereof), the Indian tax payable (excluding in the
case of a dividend, tax payable in respect of the profits out of which the
dividend is paid) under the laws of India and in accordance this Convention,
whether directly or by deduction, in respect of income from sources within
India shall be allowed as a credit against Korean tax payable in respect of
that income. The credit shall not however, exceed that proportion of Korean tax
which the income from sources within India bears to the entire income subject
to Korean tax.1.2. For the purposes of
paragraph 1, the term " Indian tax payale " shall be deemed to
include the amount of Indian tax which would have been payable in accordance
with Indian tax laws but for the exemption or reduction of Indian tax in
accordance with the laws relating to incenitves for the promotion of economic
development in India which were in force on the date, of signature of this
Convention or any other provisions which may subsequently be introduced in
India in modification of, or in addition to, those laws so far as they are
agreed by the competent authorities of the Contracting States, provided that
the amount of the tax referred to in this paragraph shall not, however, exceed:a. in the case of
dividends referred to in paragraph 2 (a) of Article 11 an amount of 15 per cent
of the gross amount of such dividends and, in the case of dividends referred to
in paragraph 2 (b) of Article 11 an amount of 20 per cent of the gross amount of
such dividends;b. in the case of
interest referred to in paragraph 2 of Article 12 an amount of 15 per cent of
the gross amount of such interest and in the case of interest referred to in
paragraph 3 (a) of Article 12 an amount of 10 per cent of the gross amount of
such inerest; and...c. in the case of
royalties referred to in paragraph 2 of Article 12 an amount of 15 per cent of
the gross amount of such royalties.1.2.3. In the case of a
resident of India, double taxation shall be avoided as follows: -Subject
to the provisions of Indian tax law regarding the allowance as a credit against
lndian tax of tax payable in any country other than India (which shall not
affect the general principle hereof), the Korean tax payable (excluding in the
case of a dividend, tax payable in respect of the profits out of which the
dividend is paid) under the laws of Korea and in accordance with this
convention, whether directely or by deduction, in respect of income from
sources within Korea shall be allowed as a credit against Indian tax payable in
respect of that income.The credit shall not, however,exceed that proportion of
Indian tax which the income from sources to the entire income subject to Indian
tax.4. For the purposes of
paragraph 3, the term " Korean tax payable " shall be deemed to
include the amount of Korean tax which would have been payable in accordance
with Korean tax laws but for the exemption or reduction of Korean tax in
accordance with the laws relating to incentives for the promotion of economic
development in Korea which were in force on the date of signature of this
Convention or any other Provisions which may subsequently be introduced in
Korea in modification of or if addition to those laws so far as they are agreed
by the competent authorities of the Contracting States, provided that the
amount of the tax referred to in this paragraph shall not, however, exceed:a. in the case of
dividends referred to in paragraph 2 (a) of Article 11 an amount of 15 per cent
of the gross amount of such dividends and, in the case of dividends referred to
in paragraph 2 (b) of Article11 an amount of 20 per cent of the gross amount of
such dividends;b. in the case of
interest referred to in paragraph 2 of Article 12 an amount of 15 per cent of
the gross amount of such interest and in the case of interest referred to in
paragraph 3 (a) of Article 12 an amount of 10 per cent of the gross amount of
such interest; andc. in the case of
royalties referred to in paragraph 2 of Article 13 an amount of 15 per cent of
the gross amount of such royalties.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 burden
some than the taxation and connected requirements to which nationals of that
other State in the same 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.This
provision shall not be constituted 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 residents.1.2.3. Except where the
provisions of Article 10, paragraph 7 of Article 12, or paragraph 7 of Article
13 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 enterprises, be deductible
under the same condition as if they had been paid to a resident of the
first-mentioned State.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 of any requirement connected therewith which is other or
more burdensome the in the taxation and connected requirements to other similar
enterprises of that first-mentioned State are or may be subjected.5. provisions of this
Article shall, notwithstanding the of Article 2, apply to taxes of every kind
and description.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
Convention 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 of it has case comes under paragraph 1 of
Article 25, to that of the Contracting State of which he is a national. This
case must be presented within three years from the first Notification of the
action giving rise to taxation not in with the Convention.2. The competent
authority shall endeavour, if the objection appears to it to be justified and
if it is not itself about to arrive at an apropriate solution, to resolve the
case by mutual agreement with the competent authority of the other Contracting
State, with a view to the avoidance of the taxation which is not in accordance
with the Convention. Any agreement reached shall be implemented notwithstanding
any time limits in the national laws of the Contracting States.3. The competent
authoritys of the Contracting states shall endeavour to resolve by mutual
agreement any difficulties or doubts arising as to the interpretation or
application of the Convention. The may also consult together for the
elimination of double taxotion in cases not provided for in the Convention.4. The conmpetent
authorities of the Contracting States may communicate with each other directly
for the purpose of reaching an agreement in the sense of the preceeding
paragraphs.When
it seems advisiable 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 State.Article
27EXCHANGE
OF INFORMATION1.
The
competent authorities if the Contractiong States shall exchange such
information (including documents) as is necessary for carrying out the
provisions of this Convention or of the domestic laws of the Contracting States
concerning taxes covered by the Convention, in so far as the taxation
thereunder is not contrary to the Convention in particular for the prevention
of fraud or evasion of such taxes. The exchange of information is not
restricted by Article 1. Any information received by a Contracting State shall
be treated to secret in the same manner as information obtained under the
domestic laws of that State.However,
if the information originally regarded as secret in the transmitting State it
shall be disclosed enjoy to persons or authorities (including courts and
administrative bodies) involed in the assessment, or collection of, the
enforcement orm prosecution in respect on the determination of appeils in
relation to, the taxes which are the subject of the Convention. Such persons or
authorities shall use the information only for such purposes but may disclose
the informationin public court, proceedings or in judicial decisions. The
competent authorities shall, through consultation, develop appropriate
conditions, methods and techniques concerning the matters in respect of which such
exchanges of information shall be made including where appropriate, exchanges
of information regarding tax avoidance.1.2. In no case shall the
provision 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 of
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 State;c. 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 (order public).Article
28DIPLOMATIC
AGENTS AND CONSULAR OFFICERSNothing
in this Convention shall affect the fiscal privileges of diplomatic agents and
consular officers under the general rules of international law or under the
provisions of special agreements.Article
29ENTRY
INTO FORCE1.
This
Convention shall be ratified and the instruments of ratification shall be
exchanged at Seoul as soon as possible.The
Convention shall enter into force on the thirtieth day after the date of
exchange of the instruments of ratification.This
Convention shall have effect:a. In Korea:i.
in
respect of tax withheld at the source on amounts paid or credited to
non-residents on or after the first day of January of the calendar year next
following that in which the Convention is initialled; andii.
in
respect of other taxes for taxation years beginning on or after the first day
of January of the calendar year next following that in which the Convention is
initialled.a.b. In India:i.
in
respect of tax withheld at the source on amounts paid or credited to non-residents
on or after the first day of April of the calendar year next following that in
which the Convention is initialled; andii.
in
respect of other taxes for previous years beginning on or after the first day
of April of the calendar year next following that in which the Convention is
initialled.Article
30TERMINATIONThe
Convention 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 Convention shall cease
to have effect:a. In Korea:i.
in
respect of tax withheld at the source on amounts paid or credited to
non-residents on or after the first day of January next following the calender
year in which the notice of termination is given; andii.
in
respect of other taxes for taxation years beginning on or after the first day of
January next following the calendar year in which the notice of termination is
given.a.b. In India:i.
in
respect of tax withheld at the source on amounts paid or credited to
non-residents on or after the first day of April next following the calendar
year in which the notice of termination is given; andii.
in
respect of other taxes for previous beginning on or after the first day of
April next following the calendar year in which the notice of termination is
given.In
witness whereof the undersigned, being duly authorsed thereto, have signed the
present Convention.Done
in duplicate at New Delhi this 19th day of July one thousand nine hundred and
eighty-five on three original each in the Hindi, Korean and English languages,
all the texts being equally authentic. In case of divergence between the three
texts, the English text shall be the operative one.For
the Government of the Republic of IndiaFor
the Government of the Republic of Korea(Vishwanath
Pratap Singh) (Won Kyung Lee)Minister
Of Foreign Affairs,Minister
Of Finance Embassy Of India SeoulPROTOCOLAt
the moment of signing the Convention between the Govenment of the Republic of
India and the Government of the Repiablic of Korea for the Avoidance of Double
Taxation and the Prevention of Fiscal Evasion with respect to Taxes on income
the undersigned have agreed that the following provisions form an integral part
of the convention.1. In respect of
sub-paragraph (a) of paragraph 3 of Article 2 of the convention it is
understood that the Convention shall also apply to the Korean defence tax where
charged by reference to the income-tax for the corporation tax.2. for the purposes of
Articles 8 and 9 of the Convention it is understood that:i.
interest
on funds connected with the operation of aircraft and ships in international
traffic sh