Syria - Legal Draft

Double Taxation

Avoidance AgreementSyriaAgreement between the

Government of India and the Government of the Syrian Arab Republic for the

avoidance of Doub]le Taxation and the prevention of Fiscal evasion with respect

to taxes on IncomeNotification

No.G.S.R. 508(E) dtd. 25.6.1985Whereas

the annexed Agreement between the Government of India and the government of the

Syrian Arab Republic for the avoidancc of double taxation and the prevention of

fiscal evasion with respect to taxes on income has entered into force on the

notification by both the Contracting States to each other of completion of the

procedures required by their respective laws, as required by Article 29 of the

said Agreement.Now,

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

Act, 1961 (43 of 1961) and section 24A of the Companies (Profits) Surtax Act,

1964 (7 of 1964), the Central Government hereby directs that all the provisions

of the said Agreement shall be given effect to in the Union of India.AGREEMENT

BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE

SYRIAN ARAB REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF

FISCAL EVASION WITH RESPECT TO TAXES ON INCOME.The

Government of the Republic of India and the Government of the Syrian Arab

Republic-Desiring

to conclude an Agreement for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income;Have

agreed as follows:CHAPTER

ISCOPE

OF THE AGREEMENTArticle

1PERSONAL

SCOPEThis

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

Contracting states.Article

2TAXES

COVERED1. The taxes to which

this Agreement shall apply are:a. In the case of India;1. the income-tax

including any surcharge thereon imposed under the Income-tax act, 1961 (43 of

1961);2. the Surtax imposed

under the Companies (Profits) Surtax Act, 1964 (7 of 1964); (hereinafter

referred to as " Indian tax ").a.b. In the case of the

Syrian Arab Republic;The

income-tax imposed by the Legislative Decree No. 85 of 1949 and its amendments

(hereinafter referred to as " Syrian tax ").1.2. The Agreement shall

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

either Contracting State the date of signature of the present in addition to,

or in place of, the taxes referred to in paragraph 1 of this Article. The

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

substantial changes which are made in their respective taxation laws.CHAPTER

IIDEFINITIONSArticle

3GENERAL

DEFINITIONS1. In this Agreement,

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

means the territory of India and includes the territorial sea and air-space

above it as well as any other maritime zone referred to in the Territorial

Waters Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act

1976 (Act No. 80 of 1976), in which India has sovereign rights and to the

extent that these rights can be exercised therein as if such maritime zone is a

part of the territory of India;b. the term 'Syria'

means the territory of Syria and includes the territorial waters adjacent to

and the airspace above it;c. The term " a

Contracting State " and " the other Contracting State " mean

India or Syria as the context requires;d. the term " tax

" means Indian tax or Syrian tax, as the context requires, but shall not

include any amount which is payable in respect of any default or omission in

relation to the taxes to which this Agreement applies or which represents a

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

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

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

Contracting States;f. the term " company

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

under the taxation laws in force in the respective Contracting States;g. the term "

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 resident of the

other Contracting State;h. the term "

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

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

representative; and in the case of Syria, the Ministry of Finance or their

authorised representative;i. the term "

national " means any individual possessing the nationality of a

Contracting State and any legal person, partnership or association deriving its

status from the laws in force in the Contracting State.1.2. In the application of

the provisions of this Agreement by a Contracting State, any term not defined

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

has under the laws in force in that State relating to the taxes which are the

subject of this Agreement.Article

4Fiscal

Domicile1. For the purposes of

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

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

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

of a similar nature.2. Where by reason of

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

states then his residential status for the purposes of this agreement shall be

determined in accordance with the following rules:---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 available to him in both

Contracting States he shall be deemed to be a resident of the Contracting State

with which his personal and economic relations are closer (hereinafter referred

to as his " centre of vital interests ");b. if the Contracting

State in which he has his centre of vital interests cannot be determined, or if

he does not have a permanent home available to him in either Contracting State,

he shall be deemed to be a resident of the Contracting State in which he has an

habitual abode;c. if he has an habitual

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

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

of both Contracting 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 a individual is a resident

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

State in which its place of effective management is situated.Article

5Permanent

Establishments1. For the purposes of

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

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

partly carried on.2. The term "

permanent establishment " includes especially:----a. a place of

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

oilfield or other place of extraction of natural resources;g. a farm, plantation or

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

carried on;h. a building site or

construction or assembly project or supervisory activities in connection

therewith, where such site project or supervisory activity continues for a

period of more than twelve months.1.2.3. Notwithstanding the

proceeding provisions of this Article, the term " pemanent 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 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 or for scientific research, being activities solely of a

preparatory or auxiliary character in the trade or business of the enterprise.1.2.3.4. Notwithstanding the

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

independent status to whom paragraph 5 applies----is acting on behalf of an

enterprise and has, and habitually exercise, in a Contracting State, an

authority to conclude contracts for or on behalf 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 the purchase of goods or

merchandise for the enterprise.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, where 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, he will not be considered an

agent of an independent status within the meaning of this paragraph.6. The fact that a

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

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

on business in that other Contracting State (whether through a permanent

establishment or otherwise), shall not of itself constitute for either company

a permanent establishment of the other.7. An enterprise of a

Contracting State shall be deemed to have a permanent establishment in the

other Contracting State if it carries on a business which consists of providing

the services of Public entertainers (such as theatre, motion picture, radio or

television artistes and musicians) or athletes in that other Contracting State

unless the enterprise is directly or indirectly supported wholly or

substantially, from the public funds of the Goverment of the first-mentioned

Contracting State in contracting with the provision of such services.CHAPTER

IIITAXATION

OF INCOMEArticle

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 accodance with the law and usage

of the Contracting Sate in which the property is situated. The term shall in

any case include property accessory to immovable property, livestock 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, oil wells, quarries and other places of extraction of

natural resources. Ships and airccraft shall not be regarded as immovable

property.3. The provisions of

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

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

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

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

professional services.Article

7Business

profits1. The profits of an

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

State. However, if the enterprise carries oil business in the other Contracting

State through a permanent establishment situated therein the profits of the

enterprise may be taxed in the other Contracting State but only so much of them

as is attributable to that permanent establishment. This is without prejudice

to the right of taxation of such profits by the first-mentioned Contracting

State according to its tax laws.2. 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 district 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. Where the correct amount of profits attributable to

a permanent establishment cannot be determined or the determination thereof

presents exceptional difficulties, the profits attributable to the permanent

establishment may be estimated on reasonable basis.3. In the determination

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

reasonable expenses which are incurred for the purposes of the business of the

permanent establishment including executive and general administrative expenses

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

situated or elsewhere.4. No profits shall be

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

permanent establishment of goods or merchandise for the enterprise.5. For the purposes of

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

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

is good and sufficient reason to the contrary.6. Where income or

profits include items of income which are dealt with separately in other

Articles of this Agreement, then the provisions of those Articles shall not be

affected by the provisions of this Article.Article

8Air

Transport1. Profits derived by an

enterprise of a Contracting State from the operation of aircraft in

international traffic shall be taxable only in the Contracting State in which

the place of effective management of the enterprise (that is, the head office)

is situated.2. The provisions of

paragraph shall also apply to a share of profits from the operation of aircraft

in international traffic derived by an enterprise of a Contracting State

through participation in a pool, a joint business or an international operating

agency.3. For the purposes of

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

international traffic shall be regarded as profits derived from the operation

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

to such interest.4. The term "

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

persons and their luggage, livestock, goods or mail, carried on by the carriers

or lessees or charterers of aircraft, including the sale of tickets for such

transportation on behalf of other enterprises, the incidental lease of aircraft

and other activity directly connected with such transportation.Article

9Shipping1. Profits derived by an

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

traffic shall be taxable only in the Contracting State in which the place of

effective management of the enterprise (that is, the head office) is situated.2. The provisions of

paragraph 1 shall also apply to a share of profits from the operation of ships

in international traffic derived by an enterprise of a Contracting State

through participation in a Pool, a joint business or an international operating

agency.3. Paragraph 1 shall not

apply to profits arising as a result of coastal traffic.Article

10Associated

EnterprisesWhere:a. an enterprise of a

Contracting State participates dicectly or indirectly in the management,

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

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

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

state.and

in either case conditions are made or imposed between the two enterprises in

their commercial or financial relations which differ from those which would be

made between independent enterprises, then any profits which would, but for

those conditions, have accrued to one of the enterprises, but, by reason of

those conditions, have not so accrued, may be included in the profits of that

enterprise and taxed accordingly.Article

11Dividends1. Dividends paid by a

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

Contracting State shall not be taxable in the first-mentioned Contracting

State.2. 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 assimilated to income from shares or any other income

which is deemed to be a dividend or distribution of a company by the taxation

laws of the Contracting State of which the company making the distribution is a

resident.3. The provisions of

paragraph 1 shall not apply if the recipient of the dividends, being a resident

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

which the company paying the dividends is a resident, through a permanent

establishment situated therein, or performs in that other State independent

personal services from a fixed base situated therein, and the holding in

respect of which the dividends are paid is effectively connected with such

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

Article 7 or Article 15, as the case may be, shall apply.4. 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 to persons who are not resident of that other State, or

subject the company's undistributed profits to a tax on undistributed profits

even if the dividends paid or the distributed profits consists wholly or partly

of profits or income arising in that 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 the tax so charged shall not exceed

1. 5 per cent of the gross amount of the interest.3. Notwithstanding the

provisions of paragraph 2, interest arising in a Contracting State and paid to

the Government of the other Contracting State or a local authority thereof, the

Central Bank of that other Contracting State or any agency wholly owned by that

Government or local authority shall be exempt from tax in the first-mentioned

Contracting State. The competent authorities of the Contracting State may

determine by mutual agreement any other Government institution to which this

paragraph shall apply.4. The term "

interest " as used in this Article means income from Government securities,

bonds or debentures, whether or not secured by mortgage and whether or not

carrying a right to participate in profits, and other debt-claims of every kind

as well as other income assimilated to income from money lent by the taxation

laws of the Contracting State in which the income arises.5. The provisions of

paragraph 1 and 2 shall not apply if the recipient of the interest, being a

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

State in which the interest arises, through a permanent establishment situated

therein, or performs in that other State independent personal services from a

fixed base situated therein, and the debt-claim in respect of which the

interest is paid is effectively connected with such permanent establishment or

fixed base. In such case, the provisions of Article 7 or Article 15, as the

case may be, shall apply.6. Interest shall be

deemed to arise in a Contracting State which the payer is the Government of

that Contracting State or a local authority or a resident of that State. Where,

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

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

in connection with which the indebtedness on which the interest is paid was

incurred, and such interest is borne by that permanent establishment, then such

interest shall be deemed to arise in the Contracting State in which the

permanent establishment is situated.7. Where, owing to

special relationship between the payer and the recipient 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 recipient in the absence of such relationship,

the provisions of this Article shall apply only to the last mentioned amount.

In that case, 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 Agreement.8. For the purposes of

this Article and Article 13, the term " Government " shall include,

in the case of India, any State Government.Article

13Royalties1. Royalties 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 may also be taxed the Contracting State in which they arise and

according to the law of that State, but the tax so charged shall not exceed 10

per cent of the gross amount of the royalties.3. The term " royalties

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

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

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

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

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

industrial, commercial or scientific equipment, or for information concerning

industrial, commercial or scientific experience.4. The provisions of

paragraphs 1 and 2 shall not apply if the recipient of the royalties, being a

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

State in which the royalties arise, through a permanent establishment situated therein,

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

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

are paid is effectively connected with such permanent establishment or fixed

base. In such a case, the provisions of Article 7 or Article 15, as the case

may be, shall apply.5. Royalties shall be

deemed to arise in a Contracting State when the payer is the Government of that

Contracting State or a local authority or a resident of that State. Where,

however, the person paying the royalties, 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 was

incurred, and such royalties are borne by such permanent establishment or fixed

base, then such royalties shall be deemed to arise in the Contracting State in

which the permanent establishment or fixed base is situated.6. Where, owing to a

special relationship between the payer and the recipient or between both of

them and some other person, the amount of royalties 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 that case, the excess par 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

1. Gains from the

alienation of immovable property, as defined in paragraph 2 of Article 6, may

be taxed in the Contracting State in which such property is situated.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 a fixed base, may be taxed in that other

State.3. Notwithstanding the

provisions of paragraph 2, gains derived by an enterprise of a Contracting

State from the alienation of ships or aircraft which it operates in

international traffic and movable property pertaining to the operation of such

ships or aircraft shall be taxable only in that State.4. Gains derived by a

resident of a Contracting State from the alienation of any property other than

that mentioned in paragraphs 1, 2 and 3 shall be taxable only in that State.5. The term "

alienation " means the sale, exchange, transfer, or relinquishment of the

property or the extinguishment of any rights therein or the compulsory

acquisition thereof under any law in force in the respective Contracting

States.Article

15Independent

Personal Services1. Income derived by a

resident of a Contracting State in respect of professional services or other

independent activities of a similar character shall be taxable only in that

State unless:---a. he has a fixed base

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

performing his activities; in that case, only so much of the income may be

taxed in that other State as is attributable to that fixed base; orb. he is present in the

other Contracting State for the purpose of performing his activities for a period

or periods exceeding in the aggregate 183 days in the relevant " previous

year " or " year of income ", as the case may be; in that case,

only so much of the income may be taxed in that other State as is attributable

to the activities performed in that other State.The

term " professional services " includes independent scientific,

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

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

dentists and accountants.Article

16Dependent

Personal Services1. Subject to the

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

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

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

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

such remuneration as is derived therefrom may be taxed in that other

Contracting State.2. Notwithstanding the

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

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

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

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

aggregate 183 days in the relevant " previous year " or " year

of income ", as the case may be, andb. the remuneration is

paid by, or on behalf of, an employer who is not a resident of the other State,

andc. the remuneration is

not borne by a permanent establishment or a fixed base which the employer has

in the other State.1.2.3. Notwithstanding the

preceding provisions of this Article, remuneration in respect of an employment

exercised abroad a ship or aircraft operated in international traffic shall be

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

management of the enterprise is situated.Article

17Directors'

FeesDirectors'

fees and similar payments derived by a resident of a Contracting State in his

capacity as a member of the Board of Directors of a company which is a resident

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

18Artistes

and Athletes1.

Notwithstanding

the provisions of Articles 15 and 16, income derived by public entertainers

(such as theatre, motion picture, radio or television artistes and musicians)

or athletes from their personal activities as such may be taxed in the

Contracting State in which these activities are exercised:-Provided

that such income shall not be taxed in the said Contracting State if the visit

of the public entertainers or athletes to that State is directly or indirectly

supported, wholly or substantially from the public funds of the Government of

the other Contracting State.1.2. For the purpose of

this Article, the term " Government " shall include any local or

statutory authority of either Contracting State and, in the case of India, any

State Government also.Article

19Government

Functions1. Remuneration (not

being a pension) paid by the Government of a Contracting State to any

individual who is a citizen of that State in respect of services rendered in

the discharge of governmental functions in the other Contracting State shall be

taxable only in the first-mentioned Contracting State.2. Any pension paid by

the Government of one of the Contracting States to any individual who is a

citizen of either of the two Contracting States shall be taxable only in the

Contracting State which is paying the pension.3. The provisions of

paragraphs 1 and 2 shall not apply to remuneration and pensions in respect of

services rendered in connection with any business carried on by the Government

of either of the Contracting States for the purposes of profit.4. For the purposes of

this Article, the term " Government " shall include any local or

statutory authority of either Contracting State and in particular the Reserve

Bank of India and the Central Bank of Syria. In the case of India, it shall

also include any State Government.Article

20Non-Government

Pensions and Annuities1. Any pension (other

than a pension referred to in Article 19) or annuity derived by a resident of a

Contracting State from sources within the other Contracting State may be taxed

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

pension " means a periodic payment made in consideration of services

rendered in the past or by way of compensation for injuries received in the

course of performance of services.3. The term "

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

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

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

money's worth.Article

21Students

and Apprentices1. A student or business

apprentice who is or was immediately before visiting a Contracting State a

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

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

training, shall be exempt from tax in the first-mentioned Contracting State on:a. payments made to him

by persons residing outside that first-mentioned Contracting State for the

purposes of his maintenance, education or training; andb. remuneration from

employment in that first-mentioned Contracting State, in an amount not in

excess of Rs. 15,000 or its equivalent in Syrian currency during any "

previous year " or the " year of income ", 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

Article shall extend only for such period of time as may be reasonable or

customarily 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 the first-mentioned

Contracting State.Article

22Professors

and Teachers1. A professor or

teacher who visits a Contracting State for the purpose of teaching or engaging

in research, or both, at a university, college, school or other approved

institution in that Contracting State and who is, or was immediately before

such visit, a resident of the other Contracting State, shall be exempt from tax

in the first-mentioned Contracting State on any remuneration for such teaching

or research for a period not exceeding 12 months from the date of his arrival

in that Contracting State.2. This Article shall

not apply to income from research if such research is undertaken primarily for

the private benefits of a specific person or persons.3. For the purposes of

this Article and Article 21, an individual shall be deemed to be a resident of

Contracting State if he is resident in that Contracting State in the "

previous year " or the " year of income " as the case may be, in

which he visits the other Contracting State or in the immediately preceding

" previous year " or the " year of income ".4. For purpose of

paragraph 1, " approved institution " means an institution which has

been approved in this regard by the competent authority of the concerned

Contracting State.Article

23Income

not Expressly MentionedItems

of income of a resident of a Contracting State, wherever arising, not dealt

with in the foregoing Articles of this Agreement, shall be taxable only in that

State.CHAPTER

IVMETHODS

FOR ELIMINATION OF DOUBLE TAXATIONArticle

24Elimination

of Double Taxation1. The laws in force in

either of the Contracting State, shall continue to govern the taxation of

income in the respective Contracting State except where provisions to the

contrary are made in this Agreement.2. Where a resident of India

derives income which in accordance with the provisions of this Agreement, may

be taxed in Syria, India shall allow as a deduction from the tax on the income

of that resident, an amount equal to the income-tax paid in Syria, whether

directly or by deduction. Such deduction shall not, however, exceed that part

of the Indian tax (as computed before the deduction is given) which is

attributable to the income which may be taxed in Syria. Further, where such

resident is a company by which surtax is payable in India, the deduction

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

company in India and as to the balance, if any, from surtax payable by it in

India.3. For the purposes of

the deduction referred to in paragraph 2, " income-tax paid in Syria

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

Syrian tax but for a deduction allowed in computing the taxable income or an

exemption or reduction from tax granted for that year under:i.

the

Legislative Decree 103 of 1952 regarding ex-computing the taxable income or an

exemption or Law No. 44 of 1959 regarding relief to contractors engaged in

development projects during the period of execution, so far as the aforesaid

Legislative Decree and Article were in force on, and have not been modified

since, the date of the signature of this Agreement, or have been modified only

in minor respects so as not to affect their general character; orii.

any

other provision which may be enacted after the fifth day of March, 1982 granting

a deduction in computing the taxable income or an exemption or reduction from

tax which the competent authorities of the Contracting States agree to be for

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

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

character.1.2.3.4. Where as resident of

Syria derives income which, in accordance with the provisions of this

Agreement, may be taxed in India, Syria shall allow as a deduction from the tax

on the income of that resident, an amount equal to the income-tax paid in

India, whether directly or by deduction. Such deduction shall not, however,

exceed that part of the Syrian tax (as computed before the deduction is given)

which is attributable to the income which may be taxed in India.5. For the purposes of

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

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

Indian tax but for a deduction allowed in computing the taxable income or an

exemption or reduction from tax granted for that year under:i.

sections

10(4), 10(4A), 10(6)(viia), 10(15)(iv), 10(28), 10A, 32A, 33A, 35P, 54E, 80HH,

80HHA, 80-1, 80L of the Income-tax Act, 1961 (43 of 1961)), so far as they were

in force on, and have not been modified since, the date of the signature of

this Agreement, or have been modified only in minor respects so as not to

affect their general character, orii.

any

other provision which may be enacted after the fifth day of March, 1982

granting a deduction in computing the taxable income or an exemption or

reduction from tax which the competent authorities of the Contracting States

agree to be for the purposes of the economic development, if it has not been

modified thereafter or has been modified only in minor respects so as not to

affect its general character.1.2.3.4.5.6. Where under this

Agreement a resident of a Contracting State is exempt from tax in that

Contracting State in respect of income derived from the other Contracting

State, then the first-mentioned Contracting State may, in calculating tax on

the remaining income of that person, apply the rate of tax which would have

been applicable if the income exempted from tax in accordance with this

Agreement had not been so exempted.CHAPTER

VSPECIAL

PROVISIONSArticle

25Non-Discrimination1. The nationals of a

Contracting State shall not be subjected in the other Contracting State to any

taxable 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 are or may be subjected.2. The taxation on a

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

other Contracting State shall not be less favourably levied in that other State

than the taxation levied on enterprises of that other State carrying on the

same activities in the same circumstances.3. Nothing contained in

this Article shall be construed as obliging a Contracting State to grant to

persons not resident in that State any personal allowances reliefs and

reduction for taxation purposes which are by law available only to persons who

are so resident.4. Enterprises of a

Contracting State, the capital of which is wholly or partly owned or

controlled, directly or indirectly, by one or more residents of the other

Contracting State, shall not be subjected in the first-mentioned Contracting

State to any taxation or any requirement connected therewith which is other or

more burdensome than the taxation and connected requirements to which other

similar enterprises of that first-mentioned State are or may be subjected in

the same circumstances.5. In this Article, the

term " taxation " means taxes which are the subject of this

Agreement.Article

26Mutual

Agreement procedure1. Where a resident of a

Contracting State considers that the actions of one or both of the Contracting

States result or will result for him in taxation not in accordance with this

Agreement, he may, notwithstanding the remedies provided by the national laws

of those States, present his case to the competent authority of the Contracting

State of which he is a resident. This case must be presented within three years

of the date of receipt of notice of the action which gives rise to taxation not

in accordance with the Agreement.2. The competent

authority shall endeavour, if the objection appears to it to be justified and

if it is not itself able to arrive at an appropriate solution, to resolve the

case by mutual agreement with the competent authority of the other Contracting

State with a view to the avoidance of taxation not in accordance with this

Agreement. Any agreement reached shall be implemented notwithstanding any time

limits in the national laws of the Contracting States3. The competent

authorities of the Contracting States endeavour to resolve by mutual agreement

any difficulties or doubts arising as to the interpretation or application of

the Agreement. They may also consult together for the elimination of double

taxation in cases not provided for in the Agreement.4. The competent

authorities of the Contracting States communicate with each other directly for

the purpose of reaching an agreement in the sense of the preceding paragraphs.

When it seems advisable in order to reach agreement to have an oral exchange of

opinions, such exchange may take place through a commission consisting of

representatives of the competent authorities of the Contracting States.Article

27Exchange

of Information1. The competent

authorities of the Contracting States shall exchange such information or

document as is necessary for carrying out the provisions of this Agreement or

for the prevention of evasion of taxes which are the subject of this Agreement.

Any information or document so exchanged shall be treated as secret but may be

disclosed to persons (including a court or other authorities) concerned with

the assessment, collection, enforcement, investigation or prosecution in

respect of the taxes which are the subject of this Agreement, or the persons

with respect to whom the information or document relates.2. The exchange of

information or documents shall be on a routine basis or on request with

reference to particular cases or both. The competent authorities of the

contracting States shall agree from time to time on the list of the information

or documents which shall be furnished on a routine basis.3. In no case shall be

the provisions of paragraph I be construed so as to impose on a Contracting

State the obligation:a. to carry out

administrative measures at variance with the laws or administrative practice of

that or of the other Contracting State;b. to supply information

or documents which are not obtainable under the laws or in the normal course of

the administration of that or of the other Contracting State;c. to supply information

or documents which would disclosed any trade business, industrial commercial or

professional secret or trade process or information the disclosure of which

would be contrary to public policy.Article

28Diplomatic

and Consular ActivitiesNothing

in this Agreement shall affect the fiscal privileges of diplomatic or consular

officials under the general rules of international law or under the provisions

of special agreements.CHAPTER

VIFINAL

PROVISIONSArticle

29Entry

into ForceEach

of the Contracting States shall notify to the other the completion of the

procedures required by its law for the bringing into force of this Agreement.

The Agreement shall enter into force on the date of the latter of these

notifications and shall thereupon have effect:a. In India:i.

in

the case of profits derived from operation of aircraft (referred to in Article

8), as respects such profits as are derived after the first day of April, 1975;ii.

in

the case of any other income, as respects income assessable for any assessment

year commencing on or after the first day of April, 1983.a.b. In Syria:i.

in

the case of profits derived from operation of aircraft (referred to in Article

8) as respect such profits as are derived after the first day of April, 1975;ii.

in

the case of any other income, as respects income assessable for any assessment

year commencing on or after the first day of January, 1983.Article

30TerminationThis

Agreement shall continue in effect indefinitely but either of the Contracting

States may, on or before the thirtieth day of June in any calendar year

beginning after the expiration of a period of five years from the date of its

entry into force, give the other Contracting State through diplomatic channels,

written notice of termination and, in such event, this Agreement shall cease to

be effective:a. in India, in respect

of income assessable for the assessment year commencing on the 1st day of April

in the second calendar year next following the calendar year in which the

notice is given, and subsequent years;b. in Syria, in respect

of income assessable for any assessment year commencing on the 1st day of

January in the second calendar Year next following the calendar year in which

the notice is given, and subsequent years.In

witness whereof the undersigned, being duly authorised thereto, have signed the

present Agreement.Done

on this Sixth day of February one thousand nine hundred and eighty four in New

Delhi on two original copies each in the Arabic, Hindi 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.Sd/--

Sd/-PRANAB

MUKHERJEEDr.

HAMDI-AL-SAQAFor

the Government of IndiaFor

the Government of the Republic of SyriaSd/--

M. S. NARAYANAN,Addl.

Secy[F.

No. 501/1/75-FTD]