Turkey Legal Draft Template

Double Taxation

Avoidance AgreementIncome-tax Act, 1961:

Notification under section 90: Agreement between the Government of the Republic

of India and the Government of the Republic of Turkey for the avoidance of

double taxation and the prevention of fiscal evasion with respect to taxes on

incomeNotification

No. S. O. 74(E), dtd. 3rd February, 1997Whereas

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

Government of the Republic of Turkey for the avoidance of double taxation and

the prevention of fiscal evasion with respect to taxes on income has come into

force on the first day of February, 1997, after the notification by the

Contracting States to each other of the completion of the procedures required

for bringing into force the said Agreement in accordance with paragraph 1 of

Article 27 of the said Agreement.Now,

therefore, in exercise of the powers conferred under section 90 of the

Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that

all the provisions of the said Agreement shall be given effect to in the Union

of India.ANNEXUREAGREEMENT

BETWEEN THE REPUBLIC OF INDIA AND THE REPUBLIC OF TURKEY 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 Republic of

Turkey,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:Article

1PERSONAL

SCOPEThis

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

Contracting States.Article

2TAXES

COVERED1. This Agreement shall

apply to taxes on income imposed on behalf of a 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, taxes on the total amounts of wages or salaries paid by enterprises

as well as taxes on capital appreciation.3. The existing taxes to

which the Agreement shall apply are in particular:a. In the case of

Turkey:i.

the

income-tax (gelir vergisi);ii.

the

corporation tax (kurumlar vergisi);iii.

the

levy imposed on the income-tax and the corporation tax;(hereinafter

referred to as "Turkish tax");a.b. In the case of India:i.

the

income-tax including any surcharge thereon;(hereinafter

referred to as "Indian tax").1.2.3.4. The Agreement shall

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

either Contracting State after the date of signature of the Agreement in

addition to or in place of, the existing taxes. The competent authorities of

the Contracting States shall notify each other of significant changes which

have been made in their respective taxation laws.Article

3GENERAL

DEFINITIONS1. For the purposes of

this Agreement, unless the context otherwise requires:a.i.

the

term "Turkey" means the territory of the Republic of Turkey including

any area in which the laws of Turkey are in force, as well as the maritime

zones over which Turkey is entitled to sovereign rights and exercises

jurisdiction in accordance with international law and Turkish law;ii.

the

term "India" means the territory of India and includes the

territorial sea and airspace above it, as well as any other maritime zone in

which India has sovereign rights, other rights and jurisdictions, according to

the Indian law and in accordance with international law;a.b. the terms "a Contracting

State" and "the other Contracting State" mean Turkey or India as

the context requires;c. the term

"tax" means Indian tax or Turkish tax as the context requires;d. 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:e. the term

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

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

Contracting States;f. the term

"registered office" shall have the same meaning which it has under

the laws of each Contracting State;g. the term

"national" means any individual possessing the nationality of a

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

status as such from the laws in force in a Contracting State;h. 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;i. the term

"competent authority" means:i.

in

Turkey, the Minister of Finance or his authorised representative;ii.

in

India, the Central Government in the Ministry of Finance (Department of

Revenue) or its authorised representative;a.b.c.d.e.f.g.h.i.j. the term

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

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

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

application of the Agreement by a Contracting State any term not defined

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

has under the laws of that State concerning the taxes to which the Agreement

applies.Article

4RESIDENT1. For the purposes of

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

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

his domicile, resident, legal head office (registered 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 Contracting State in which he has a habitual abode;c. if he has a habitual

abode in both Contracting States or in neither of them, the competent

authorities of the Contracting States shall settle the question by mutual

agreement.1.2.3. Where by reason of

the provisions of paragraph 1 a person other than an individual is a resident

of both Contracting States, the competent authorities of the Contracting States

shall settle the question by mutual agreement in accordance with Article 25 of

this Agreement.Article

5PERMANENT

ESTABLISHMENT1. For the purposes of

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

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

partly carried on.2. The term

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

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

well, a quarry or any other place of extraction of natural resources;g. an installation or

structure used for the exploration or exploitation of natural resources;h. a warehouse in

relation to a person providing storage facilities for others;i. premises used as a

sales outlet or for receiving or soliciting orders;a.b.c.d.e.f.g.h.i.j.i.

a

building site or construction, installation or assembly project or supervisory

activities in connection therewith, where such site, project or activities

(together with other such sites, projects or activities, if any) continue for a

period of more than six months; orii.

where

such project or supervisory activity, being incidental to the sale of machinery

or equipment, continues for a period not exceeding six months and the charges

payable for the project or supervisory activity exceed 10 per cent. of the sale

price of the machinery and equipment:Provided

that for the purpose of this paragraph an enterprise shall be deemed to have a

permanent establishment in a Contracting State and to carry on business through

that permanent establishment if it provides services or facilities in that

Contracting State for more than six months in connection with or supplies plant

and machinery on hire used or to be used in, the prospecting for, or extraction

or production of mineral oils in the State.1.2.3. Notwithstanding the

preceding provisions of this article, the term "permanent

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

solely for the purpose of storage, display or occasional 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 occasional 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, for scientific research, or for similar activities which have a

preparatory or auxiliary character for the enterprise;f. the selling of goods

or merchandise belonging to the enterprise displayed in an occasional temporary

fair or exhibition in the process of closing down of such fair or exhibition;g. the maintenance of a

fixed place of business solely for any combination of activities mentioned in

sub-paragraphs (a) to (f).1.2.3.4. Notwithstanding the

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

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

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

enterprise shall be deemed to have a permanent establishment in the

first-mentioned State, ifa. he has and habitually

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

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

merchandise for the enterprise,b. he has no such

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

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

behalf of the enterprise, orc. he habitually secures

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

the enterprise and other enterprises controlling, controlled by, or subject to

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

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

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

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

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

course of their business.6. The fact that a

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

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

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

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

establishment of the other.Article

6INCOME

FROM IMMOVABLE PROPERTY1. Income derived by a

resident of a Contracting State from immovable property (including income from

forestry) situated in the other Contracting State may be taxed in that other

State.2. The term

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

law of the Contracting State in which the property in question is situated. The

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

livestock and equipment used in agriculture and forestry, fishing places of

every kind, rights to which the provisions of general law respecting landed

property apply, usufruct of immovable property and rights to variable or fixed

payments as consideration for the working of, or the right to work, mineral

deposits, sources and other natural resources. Ships, boats and aircraft shall

not be regarded as immovable property.3. The provisions of

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

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

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

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

independent personal services.Article

7BUSINESS

PROFITS1. The profits of an

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

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

permanent establishment situated therein. If the enterprise carries on business

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

only so much of them as is attributable to that permanent establishment.2. Subject to the

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

on business in the other Contracting State through a permanent establishment

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

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

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

activities under the same or similar conditions and dealing wholly

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

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

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

establishment, including executive and general administrative expenses so

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

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

limitations of the taxation laws of that State.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. 6.Where profits

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

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

provisions of this article.Article

8SHIPPING

AND AIR TRANSPORT1. Profits derived by an

enterprise of a Contracting State from the operation of ships or aircraft in

international traffic shall be taxable only in that State.2. For the purposes of

this article, profits from the operation of ships or aircraft in international

traffic shall mean profits derived by an enterprise described in paragraph 1

from the transportation by sea or air respectively of passengers, mail,

livestock or goods carried on by the owners or lessees or charterers of ships

or aircraft including:a. the sale of tickets

for such transportation on behalf of other enterprises;b. other activity

directly connected with such transportation; andc. the rental of ships

or aircraft incidental to any activity directly connected with such

transportation.1.2.3. Profits of an

enterprise of a Contracting State described in paragraph 1 from the use,

maintenance or rental of containers (including trailers, barges, and related

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

operation of ships or aircraft in international traffic shall be taxable only

in that State.4. The provisions of

paragraphs 1 and 3 shall also apply to profits from participation in a pool, a

joint business or an international operating agency.5. For the purposes of

this article interest on funds connected with the operation of ships or

aircraft in international traffic shall be regarded as profits derived from the

operation of such ships or aircraft, and the provisions of Article 11

(Interest) shall not apply in relation to such interest.Article

9ASSOCIATED

ENTERPRISES1. Where,a. an enterprise of a

Contracting State participates directly or indirectly in the management,

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

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

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

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

enterprises in their commercial or financial relations which differ from those

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

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

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

profits of that enterprise and taxed accordingly.1.2. Where a Contracting

State includes in the profits of an enterprise of that State - and taxes

accordingly - profits on which an enterprise of the other Contracting State has

been charged to tax in that other State and the profits so included are by the

first-mentioned State claimed to be profits which would have accrued to the enterprise

of the first-mentioned State if the conditions made between the two enterprises

had been those which would have been made between independent enterprises, then

that other State shall make an appropriate adjustment to the amount of the tax

charged therein on those profits, where that other State considers the

adjustment justified. In determining such adjustment, due regard shall be had

to the other provisions of this Agreement and the competent authorities of the

Contracting State shall if necessary consult each other.Article

10DIVIDENDS1. Dividends paid by a

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

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

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

paying the dividends is a resident, in accordance with the laws of that State,

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

charged shall not exceed 15 per cent. of the gross amount of the dividends.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,

"jouissance" share or "jouissance" rights, founders' 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, and income derived from an investment

fund and investment trust.4. Profits of a company

of a Contracting State carrying on business in the other Contracting State

through a permanent establishment situated therein may, after having been taxed

under article 7 be taxed on the remaining amount in the Contracting State in

which the permanent establishment is situated and in accordance with paragraph

2 of this article.5. The provisions of

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

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

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

through a permanent establishment situated therein, and the holding in respect

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

establishment. In such case the provisions of Article 7 shall apply.Article

11INTEREST1. Interest arising in a

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

taxed in that other State.2. However, such

interest may also be taxed in the Contracting State in which it arises and

according to the laws of that State, but if the recipient is the beneficial

owner of the interest the tax so charged shall not exceed:a. 10 per cent. of the

gross amount, if such interest is paid on any loan of whatever kind granted by

a bank or a financial institution; andb. 15 per cent. of the

gross amount in all other cases.1.2.3. Notwithstanding the

provisions of paragraph 2, interest arising in a Contracting State shall be

exempt from tax in that State, provided that it is derived and beneficially

owned by:a. the Government, a

political sub-division or a local authority of the other Contracting State;b. the Central Bank of

the other Contracting State; orc. the Turkish

Export-Import Bank (Eximbank) and the EXIM Bank of India.1.2.3.4. The term

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

every kind, whether or not secured by mortgage and 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

attaching to such securities, bonds or debentures, and other income assimilated

to income from money lent which is treated as interest.5. The provisions of

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

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

Contracting State in which the interest arises, through a permanent

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

interest is paid is effectively connected with such permanent establishment. In

such case, the provisions of Article 7 shall apply.6. Interest shall be

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

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

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

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

a fixed base and such interest is borne by such permanent establishment or

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

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

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

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

debt-claim for which it is paid, exceeds the amount which would have been

agreed upon by the payer and the beneficial owner in the absence of such

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

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

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

being had to the other provisions of this Agreement.Article

12ROYALTIES

AND FEES FOR TECHNICAL SERVICES1. Royalties and fees

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

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

royalties or 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 and 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 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 experiment.4. The term "fees

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

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

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

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

personnel.5. The provisions of

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

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

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

technical services arise, through a permanent establishment situated therein,

and the right or property or contract in respect of which the royalties or fees

for technical services are paid is effectively connected with such permanent

establishment. In such case the provisions of Article 7 shall apply.6. Royalties or 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 right or property or contract giving rise to the

royalties or fees for technical services is effectively connected, and such

royalties or fees for technical services are borne by such permanent

establishment or fixed base then such royalties or fees for technical services

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

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

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

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

technical services paid, having regard to the use, right, information or

technical services for which they are paid, exceeds the amount which would have

been agreed upon by the payer and the beneficial owner in the absence of such

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

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

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

being had to the other provisions of this Agreement.Article

13CAPITAL

GAINS1. Gains derived by a

resident of a Contracting State from the alienation of immovable property

referred to in Article 6 and situated in the other Contracting State may be

taxed in that other State.2. Gains from the

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

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

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

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

for the purpose of performing independent personal services, including such

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

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

alienation of ships or aircraft operated in international traffic or movable

property pertaining to the operation of such ships or aircraft shall be taxable

only in the Contracting State in which the registered office of the enterprise

is situated.4. Gains from the

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

consists directly or indirectly principally of immovable property situated in a

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

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

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

alienation of any property other than that referred to in paragraphs 1 to 5

shall be taxable in the Contracting State of which the alienator is a resident.

However, the capital gains mentioned in the foregoing sentence and derived from

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

the time period does not exceed one year between acquisition and alienation.Article

14INDEPENDENT

PERSONAL SERVICES1. Income derived by an

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

professional services or other independent activities of a similar character

shall be taxable only in that State except in the following circumstances, when

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

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

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

attributable to that fixed base may be taxed in that other Contracting State;

orb. if his stay in the

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

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

of income", as the case may be; in that case, only so much of the income

as is derived from his activities performed in that other State may be taxed in

that other State.1.2. The term

"professional services" includes especially independent scientific, literary,

artistic, educational or teaching activities as well as the independent

activities of physicians, lawyers, engineers, architects, dentists and

accountants.Article

15DEPENDENT

PERSONAL SERVICES1. Subject to the

provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar

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

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

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

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

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

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

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

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

aggregate 183 days in the calendar year concerned in the case of Turkey and 183

days in the financial year concerned in the case of India, andb. the remuneration is

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

andc. the remuneration is

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

in the other State.1.2.3. Notwithstanding the

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

employment exercised aboard a ship or aircraft operated in international

traffic, may be taxed in the Contracting State in which the registered office

of the enterprise is situated.Article

16DIRECTORS'

FEESDirectors'

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

his capacity as a member of the board of directors of a company which is a

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

1 7ARTISTES

AND SPORTSPERSONS1. Notwithstanding the

provisions of Articles 14 and 15, income derived by a resident of a Contracting

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

artiste, or a musician, or as a sportsperson, from his personal activities as

such exercised in the other Contracting State, may be taxed in that other

State.2. Where income in

respect of personal activities exercised by an entertainer or a sportsperson in

his capacity as such accrues not to the entertainer or sportsperson himself but

to another person, that income may, notwithstanding the provisions of Articles

7, 14 and 15, be taxed in the Contracting State in which the activities of the

entertainer or sportsperson are exercised.3. The provisions of

paragraphs 1 and 2 shall not apply to income derived from activities performed

in a Contracting State by artistes or sportspersons if the visit to that State

is substantially supported directly or indirectly by public funds of the other

Contracting State or a political sub-division or a local authority thereof. In

such circumstances such income shall be taxable only in the other State.Article

18NON-GOVERNMENT

PENSIONS1. Any pension, other

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

of a Contracting State from sources within the other Contracting State for his

past employment may be taxed only in the first-mentioned Contracting State.

This provision shall also apply to life annuities paid to a resident of a

Contracting State.2. Pensions and life

annuities paid, and other periodical or occasional payments made by a

Contracting State, or one of its political sub-divisions in respect of insuring

personal accidents, may be taxed only in that State.3. The term

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

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

performance of services.4. 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

19REMUNERATION

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

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

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

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

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

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

that State whoi.

is

a national of that State; orii.

not

being the national of the first-mentioned State, did not become a resident of

that State solely for purpose of rendering the services.1.2.a. Any pension paid by,

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

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

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

shall be taxable only in the other Contracting State if the individual is a

resident of, and a national of that other State.1.2.3. The provisions of

Articles 15, 16 and 18 shall apply to remuneration and pensions in respect of

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

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

20TEACHERS

AND STUDENTS1. Payments which a

student or business apprentice who is a national of a Contracting State and who

is present in the other Contracting State solely for the purpose of his

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

training shall not be taxed in that other State, provided that such payments

arise from sources outside that other State.2. Likewise,

remuneration received by a teacher or by an instructor who is a national of a

Contracting State and who is present in the other Contracting State for the

primary purpose of teaching or engaging in scientific research for a period or

periods not exceeding two years shall be exempt from tax in that other State on

his remuneration from personal services for teaching or research, provided that

such payments arise from sources outside that other State.3. Remuneration which a

student or a trainee who is a national of a Contracting State derives from an

employment which he exercises in the other Contracting State for a period or

periods not exceeding 183 days in a calendar year in the case of Turkey and 183

days in a financial year in the case of India, in order to obtain practical

experience related to his education or training shall not be taxed in that

other State.Article

21OTHER

INCOME1. Subject to the

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

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

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

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

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

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

other Contracting State through a permanent establishment situated therein, and

the right or property in respect of which the income is paid is effectively

connected with such permanent establishment. In such case, the provisions of

Article 7 shall apply.3. Notwithstanding the

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

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

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

State.Article

22ELIMINATION

OF DOUBLE TAXATION1. The laws in force in

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

income in the respective Contracting States except where express provisions to

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

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

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

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

Turkey, whether directly or by deduction. Such deduction in either case shall

not, however, exceed that part of the income-tax (as computed before the

deduction is given) which is attributable, to the income which may be taxed in

Turkey.b. Where a resident of

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

shall be taxable only in Turkey, India may include this income in the tax base

but shall allow as a deduction from the income-tax that part of the income-tax

which is attributable to the income derived from Turkey.1.2.3. Double taxation for

the residents of Turkey shall be eliminated as follows:a. Where a resident of

Turkey derives income covered by sub-paragraph (b) which, in accordance with

the provisions of this Agreement, may be taxed in India, Turkey shall exempt

such income from tax but may, in calculating tax on the remaining income of

that person, apply the rate of tax which would have been applicable if the

exempted income had not been so exempted.b. Where a resident of

Turkey derives income which in accordance with the provisions of Articles 10,

11, 12 and paragraph 6 of Article 13 of this Agreement, may be taxed in India,

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

amount equal to the tax paid in India.Such

deduction shall not, however, exceed that part of the income-tax computed

before the deduction is given, which is appropriate to the income which may be

taxed in India.Article

23NON-DISCRIMINATION1. Nationals of a

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

taxation or any requirement connected therewith, which is other or more

burdensome than the taxation and connected requirements to which nationals of

that other State in the same circumstances are or may be subjected.2. Subject to the

provisions of paragraph 4 of Article 10 the taxation of a permanent

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

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

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

activities in the same circumstances or under the same conditions. This

provision shall not be construed as preventing a Contracting State from

charging the profits of a permanent establishment which an enterprise of the

other Contracting State has in the first-mentioned State at a rate of tax which

is higher than that imposed on the profits of a similar enterprise of the

first-mentioned Contracting State, nor as being in conflict with the provisions

of paragraph 3 of Article 7 of this Agreement.3. Enterprises of a

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

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

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

taxation or any requirement connected herewith which is other or more

burdensome than the taxation and connected requirements to which other similar

enterprises of the first-mentioned State are or may be subjected in the same

circumstances or under the same conditions.4. These provisions

shall not be construed as obliging a Contracting State to grant to residents of

the other Contracting State any personal allowances, reliefs and reductions for

taxation purposes on account of civil status or family responsibilities which

it grants to its own residents.Article

24EXCHANGE

OF INFORMATION1. The competent

authorities of the Contracting States shall exchange such information

(including documents) as is necessary for carrying out the provisions of this

Agreement or of the domestic laws of the Contracting States concerning taxes

covered by the Agreement insofar as the taxation thereunder is not contrary to

the Agreement, in particular for the prevention of fraud or evasion of such

taxes. Any information received by a Contracting State shall be treated as

secret in the same manner as information obtained under the domestic laws of

that State. However, if the information is originally regarded as secret in the

transmitting State, it shall be disclosed only to persons or authorities

(including courts and administrative bodies) involved in the assessment or

collection of, the enforcement or prosecution in respect of, or the

determination of appeals in relation to, the taxes which are the subject of the

Agreement. Such persons or authorities shall use the information only for such

purposes but may disclose the information in public court proceedings or in

judicial decisions. The competent authorities shall, through consultation,

develop appropriate conditions, methods and techniques concerning the matters

in respect of which such exchange of information shall be made, including where

appropriate, exchange of information regarding tax avoidance.2. In no case shall the

provisions of paragraph 1 be construed so as to impose on a Contracting State

the obligation:a. to carry out

administrative measures at variance with the laws and the administrative

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

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

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

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

or professional secret or trade process, or information, the disclosure of which

would be contrary to public policy.Article

25MUTUAL

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 the provisions

of 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.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 the

Agreement. Any agreement reached shall be implemented notwithstanding any time

limits or other procedural limitations in the domestic law of the Contracting

States, provided that the competent authority of the other Contracting State has

received notification that such a case exists within five years from the end of

the taxable year to which the case relates.3. The competent

authorities of the Contracting States shall endeavour to resolve by mutual

agreement any difficulties or doubts arising as to the interpretation or

application of the Agreement. They may also consult together for the

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

authorities of the Contracting States may communicate with each other directly

for the purpose of reaching an agreement in the sense of the preceding

paragraphs. When it seems advisable in order to reach agreement to have an oral

exchange of opinions, such exchange may take place through a Commission

consisting of representatives of the competent authorities of the Contracting

States.Article

26DIPLOMATIC

AND CONSULAR OFFICIALSNothing

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

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

of special agreements.Article

27ENTRY

INTO FORCE1. Each Contracting

State shall notify to the other the completion of the procedure required as far

as it is concerned for the bringing into force of this Agreement. This

Agreement shall enter into force on the first day of the following month when

the latter of those notifications has been received.2. Its provisions shall

have effect:a. in Turkey, for taxes

with respect to every taxable year beginning on or after the first day of

January of the year Nineteen Hundred Ninety-four;b. in India, for taxes

with respect to every previous year beginning on or after the first day of

April of the year Nineteen Hundred Ninety-four.Article

28TERMINATIONThis

Agreement shall remain in force until terminated by a Contracting State. Either

Contracting State may terminate the Agreement through diplomatic channels, by

giving notice of termination at least six months before the end of any calendar

year after expiration of a period of five years from the date of its entry into

force.