Ukraine Legal Draft Template

Notification

No. G. S. R.... (E), dated 11th January, 2002.Whereas

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

Government of Ukraine for the avoidance of double taxation and the prevention

of fiscal evasion with respect to taxes on income and on capital, shall enter

into force, on the 31st October, 2001, on the date of the later of

notifications by each of the Contracting States to each other, of the

completion of the procedures required under their respective laws, as required

by article 30 of the said Convention;Now,

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

Act, 1961 (43 of 1961), the Central Government hereby directs that all the

provisions of the said Convention shall be given effect to in the Union of

India.ANNEXURECONVENTION

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

FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH

RESPECT TO TAXES ON INCOME AND ON CAPITAL.THE

GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF UKRAINEDESIRING

to conclude a Convention for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on income and on capital and

confirming their aspiration for the development and strengthening of bilateral

relationsHAVE agreed as followsArticle

1PERSONAL

SCOPEThis

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

Contracting States.Article

2TAXES

COVERED1. This Convention shall

apply to taxes on income and on capital imposed on behalf of a Contracting

State or of its political sub-divisions or local authorities, irrespective of

the manner in which they are levied.2. There shall be

regarded as taxes on income and on capital all taxes imposed on total income,

on total capital, or on elements of income or of capital including taxes on

gains from the alienation of movable or immovable property and taxes on the

total amounts of wages or salaries paid by enterprises, as well as taxes on

capital appreciation.3. The existing taxes to

which this Convention shall apply are in particulara. In Ukraine:i.

the

profits tax of enterprises;ii.

the

individual income-tax;iii.

tax

on property of enterprises;iv.

tax

on immovable property of citizens; (hereinafter referred to as "Ukrainian

tax").a.b. in India:i.

the

income-tax, including any surcharge thereon;ii.

the

wealth-tax; (hereinafter referred to as "Indian tax").1.2.3.4. This Convention shall

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

either Contracting State after the date of signature of this Convention in

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

the Contracting States shall notify each other of any substantial changes which

are made in their respective taxation laws.Article

3GENERAL

DEFINITIONS1. For the purposes of

this Convention, unless the context otherwise requires:a. the term

"Ukraine" means the territory of Ukraine, its continental shelf and

its exclusive economic (maritime) Zone, including any territory outside the

territorial sea of Ukraine which, according to international law, is specified

or may be specified, in line with the Ukrainian law, as the territory within

which the rights of Ukraine relating to seabed and natural resources are

effective;b. 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/U. N. Convention on the law of the

sea;c. the terms 'a

Contracting State" and "the other Contracting State" mean

Ukraine or India as the context requires;d. the term

"tax" means Ukrainian or Indian tax, as the context requires, but

shall not include any amount which is payable in relation to the taxes, to

which this Convention 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 State;f. the term

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

body corporate for tax purposes under the taxation laws in force in the

respective Contracting States;g. the terms "enterprise

of a Contracting State" and 'enterprise of the other Contracting

State" means respectively an enterprise carried on by a resident of a

Contracting State and an enterprise carried on by a resident of the other

Contracting State;h. the term 'competent

authority' means in the case of Ukraine-the State Tax Administration of,

Ukraine or its authorised representative; and in the case of India-the Ministry

of Finance (Department of Revenue) or its authorised representativei. the term 'national'

means:a. any individual

possessing the citizenship of a Contracting State;b. an), legal person,

partnership or association deriving its status as such from the laws in force

in a Contracting State.a.b.c.d.e.f.g.h.i.j. the term

'international traffic" means any transport by a ship or aircraft operated

by an enterprise which has its place of effective management in a Contracting

State, except when the ship or aircraft is operated solely between places in

the other Contracting State;k. The term 'fiscal

year" means:i.

in

the case of Ukraine, the calendar year from the first of January to the 31st of

December of the year under review;ii.

in

the case of India, the "previous year" as defined under section 3 of

the Income-tax Act, 1961.1.2. As regards the

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

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

has under the law of that State concerning the taxes to which the Convention

applies.Article

4RESIDENT1. For the purposes of

this Convention, 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, place of registration or any other

criterion of a similar nature. But this term does not include any person who is

liable to tax in that State in respect only of income from sources or capital

situated in the Contracting State.2. Where by reason of

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

States, then his status shall be determined as follows:a. he shall be deemed to

be a resident of the Contracting State in which he has a permanent home

available to him; if he has a permanent home available to him in both

Contracting 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 Contracting

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 the other 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 a resident of the 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 an individual is a resident

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

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

5PERMANENT

ESTABLISHMENT1. For the purposes of

this Convention, the term "permanent establishment" means a fixed place

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

carried on.2. The term 'permanent

establishment" includes especially:a. a place of

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

well, a quarry or any other place of extraction of natural resources;g. a warehouse in

relation to a person providing storage facilities for others;h. a premises or

warehouse used as a sales outlet or for receiving or soliciting orders;i. an installation or

structure used for the exploration or exploitation of natural resources;j. 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.1.2.3. An enterprise shall

be deemed to have a permanent establishment in a State and to carry on business

through that permanent establishment if it provides services or facilities in

connection with, or supplies plant and machinery on hire used or to be used in,

the prospecting for, extraction or production of mineral oils or in connection

with such extraction or production of mineral oils in the State. 4.

Notwithstanding the preceding provisions of this article, the term

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

solely for the purpose of storage, display or unloading of goods or merchandise

belonging to the enterprise;b. the maintenance of a

stock of goods or merchandise belonging to the enterprise solely for the

purpose of storage or display;c. the maintenance of a

stock of goods or merchandise belonging to the enterprise solely for the

purpose of processing by another enterprise;d. the maintenance of a

fixed place of business solely for the purpose of purchasing goods or merchandise

or of collecting information, for the enterprise;e. the maintenance of a

fixed place of business solely for the purpose of advertising, for the supply

of information, for scientific research or for similar activities which have a

preparatory or auxiliary character, for the enterprise.However,

the provisions of sub-paragraphs (a) to (e) shall not be applicable where the

enterprise maintains only other fixed place of business in the other

Contracting State for any purposes other than the purposes specified in the

said sub-paragraphs.1.2.3.4.5. Notwithstanding the

provisions of paragraphs 1 and 2 where a person being a resident of a

Contracting State-other than an agent of an independent status to whom

paragraph 6 applies, is acting on behalf of an enterprise of the other

Contracting State that enterprise shall be deemed to have a permanent

establishment in the first-mentioned State, if-a. he has and habitually

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

enterprise, unless the activities of such person 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 or almost 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;d. in so acting, he

manufactures or processes in that State for the enterprise goods or merchandise

belonging to the enterprise.1.2.3.4.5. An enterprise of a

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

Contracting State merely because it carries on business in that State through a

broker, general commission agent or any other agent of an independent status, provided

that such persons are acting in the ordinary course of their business. However,

when the activities of such an agent are devoted wholly or almost wholly on

behalf of that enterprise itself or on behalf of the enterprise and other

enterprises controlling, controlled by, or subject to the same common control,

as that of the enterprise, he will not be considered an agent of an independent

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

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

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

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

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

of the other.Article

6INCOME

FROM IMMOVABLE PROPERTY1. Income derived by a

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

agriculture or forestry) situated in the other Contracting State may be taxed

in that other State.2. The term

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

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

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

livestock and equipment used in agriculture and forestry, rights to which the

provisions of general law respecting landed property apply, usufruct 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 also apply to income derived from the direct use, letting, or

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

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

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

independent personal services.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 directly or indirectly

to that permanent establishment.The

words "directly or indirectly" mean, for the purposes of this

article, that where a permanent establishment takes an active part in

negotiating, concluding or fulfilling contracts entered into by the enterprise,

then notwithstanding that other parts of the enterprise have also participated

in those transactions, there shall be attributed to the permanent establishment

that proportion of profits of the enterprise arising out of those contracts as

the contribution of the permanent establishment to those transactions bears to

that of the enterprise as a whole.1.2. Subject to the

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

on business in the other Contracting State through a permanent establishment

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

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

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

activities under the same or similar conditions and dealing wholly

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

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

expenses which are incurred for the purposes of the 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 tax laws of that State.4. In so far as it has

been customary in a Contracting State to determine the profits to be attributed

to a permanent establishment on the basis of an apportionment of the total

profits of the enterprise to its various parts, nothing in paragraph 2 shall

preclude that Contracting State from determining the profits to be taxed by such

an apportionment as may be customary, the method of apportionment adopted shall

however, be such that the result shall be in accordance with the principles

contained in this article.5. 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.6. 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.7. Where profits include

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

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

provisions of this article.Article

8SHIPPING

AND AIR TRANSPORT1. Profits derived by an

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

international traffic shall be taxable only in that State.2. The provisions of

paragraph 1 shall also apply to profits from the participation in a pool, a

joint business or an international operating agency engaged in the operation of

aircraft or ships.3. For the purposes of

this article, interest on amounts connected with the operation of aircraft or

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

operation of such aircraft or ships; and the provisions of article 11

(interest) shall not apply in relation to such interest.4. For the purposes of

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

traffic shall mean profits derived by an enterprise from transportation by air

or sea respectively of passengers, mail, livestock, goods or cargoes of every

description carried on by the owners or lessees or charterers of aircraft or

ships. This will also include profit froma. the sale of tickets

for such transportation on behalf of other enterprises;b. the rental on a

bareboat ship or aircraft;c. the use, maintenance

or rental of containers (including trailers and related equipment for the

transport of containers) in connection with the transport of goods or

merchandises in international traffic.Article

9ASSOCIATED

ENTERPRISES1. Wherea. an enterprise of a

Contracting State participates directly or indirectly in the management,

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

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

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

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

enterprises in their commercial or financial relations which differ from those

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

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

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

profits of that enterprise and taxed accordingly.Article

10DIVIDENDS1. Dividends paid by a

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

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

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

paying the dividends is a resident and according to the laws of that State, but

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

shall not exceed:a. 10 per cent. of the

gross amount of the dividends if the beneficial owner is a company (other than

a partnership) which holds directly at least 25 per cent. of the share capital

of the company paying the dividends;b. 15 per cent. of the

gross amount of the dividends in all other cases. This paragraph shall not

affect the taxation of the company in respect of the profits out of which the

dividends are paid.1.2.3. The term

"dividends" as used in this article means income from shares or other

rights not being debt-claims, participating in profits, as well as income from

other corporate rights which is subjected to the same taxation treatment as

income from shares by the laws of the State of which the company making the

distribution is a resident.4. The provisions of

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

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

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

permanent establishment situated therein, or performs in that other State

independent personal services from a fixed base situated therein, and the

holding in respect of which the dividends are paid is effectively connected

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

article 7 or article 14, as the case may be, shall apply.5. Where a company which

is a resident of a Contracting State derives profits or income from the other

Contracting State, that other State may not impose any tax on the dividends

paid by the company, except in so far as such dividends are paid to a resident

of that other State or so far as the holding in respect of which the dividends

are paid is effectively connected with a permanent establishment or a fixed

base situated in that other State, nor subject the company's undistributed

profits to a tax on the company's undistributed profits, even if the dividends

paid or the undistributed profits consist wholly or partly of profits or income

arising in such other State.Article

11INTEREST1. Interest arising in a

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

taxed in that other State.2. However, such

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

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

of the interest the tax so charged shall not exceed 10 per cent. of the gross

amount of the interest. The competent authorities of the Contracting State

shall by mutual agreement settle the mode of application of this limitation.3. 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 and prizes

attaching to such securities, bonds or debentures.4. The provisions of

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

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

Contracting State in which the interest arises, through a permanent

establishment situated therein, or performs in that other State independent

personal services from a fixed base situated therein, and the debt-claim in

respect of which the interest is paid is effectively connected with such

permanent establishment or fixed base. In such case the provisions of article 7

or article 14 as the case may be, shall apply.5. 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 in connection with which the indebtedness on which the interest

is paid was incurred, and such interest is borne by such permanent

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

State in which the permanent establishment or fixed base is situated.6. 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 Convention.7. The provisions of

this article shall not apply if it is the main purpose or one of the main

purposes of any persons concerned with the creation or assignment of the

debt-claim in respect of which the interest is paid to take advantage of this

article by means of that creation or assignment.8. Notwithstanding the

provisions of paragraph 2- (a) interest arising in a Contracting State shall be

exempt from tax in that State provided it is derived and beneficially owned by:a. the Government, a

political sub-division or a local authority of the other Contracting State; or

the Central Bank of the other Contracting State;b. interest arising in a

Contracting State shall be exempt from tax in that Contracting State if it is

derived and beneficially owned by any person (other than a person referred to

in sub-paragraph (a)) who is a resident of the other Contracting State provided

that the transaction giving rise to the debt-claim, has been approved in this

regard by the Government of the first-mentioned Contracting State.Article

12ROYALTIES

AND FEES FOR TECHNICAL SERVICES1. Royalties and fees

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

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

royalties and fees 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 10 per cent. of the gross amount of the royalties or

fees for technical services.3. The term

"royalties" as used in this article means 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 term "fees

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

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

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

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

personnel.5. The provisions of

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

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

on business in the other Contracting State, in which the royalties or fees for technical

services arise, through a permanent establishment situated therein, or performs

in that other State independent personal services from a fixed base situated

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

or fees for technical services are paid is effectively connected with such

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

7 or article 14, as the case may be, shall apply.6. Royalties and fees

for technical services shall be deemed to arise in a Contracting State when the

payer is the State itself, a political sub-division, a local authority or a

resident of that State. Where, however, the person paying the royalties or fees

for technical services, whether he is a resident of a Contracting State or not,

has in a Contracting State a permanent establishment or a fixed base in

connection with which the liability to pay the royalties or fees for technical

services was incurred, and such royalties or fees for technical services are

borne by such permanent establishment or fixed base, then such royalties or

fees for technical services shall be deemed to arise in the State in which the

permanent establishment or fixed base is situated.7. Where, by reason of 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, exceeds the amount which would have been paid in the

absence of such relationship, the provision 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 Convention.8. The provisions of

this article shall not apply if it is the main purpose or one of the main

purposes of person concerned with the creation or transfer of the rights or

rendering of services in respect of which the royalties or fees are paid to

take advantage of this article by means of that creation or assignment.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 fixed base, may be taxed in that other State.3. Gains from the

alienation of ships or aircraft operated in international traffic by an

enterprise of a Contracting State or movable property pertaining to the

operation of such ships or aircraft, shall be taxable only in that Contracting

State.4. Gains from the

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

consists directly or indirectly of immovable property and of an interest in a

partnership the assets of which consists principally of immovable property

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

alienation of shares of a company and an interest in a partnership other than

those mentioned in paragraph 4, may be taxed in the Contracting State of which

the company or partnership is resident.6. Gains from the

alienation of any property other than that mentioned in paragraphs 1, 2, 3, 4

and 5, shall be taxable only in the Contracting State of which the alienator is

a resident provided that those gains are subject to tax in that Contracting

State.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 Stateb. 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 fiscal year, 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, surgeons, 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 any twelve month period commencing or ending in the

fiscal year concerned, 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, or aboard a boat engaged in inland waterways transport, may be taxed

in the Contracting State of which the enterprise operating the ship or aircraft

is a resident.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

17ARTISTES

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 the 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. Notwithstanding the

provisions of paragraphs 1 and 2, income mentioned in this article, will be

exempt from taxation in the State in which the activity of an actor or

sportsperson is financed from the public funds of this and other State, or if

such activity is carried out according to the agreement on cultural

co-operation concluded between the Contracting States.4. Notwithstanding the

provisions of paragraph 2 and articles 7, 14 and 15, where income in respect of

personal activities exercised by an actor or sportsperson in his capacity as

such in a Contracting State accrues not to the actor or sportsperson himself

but to another person, that income shall be taxable only in the other

Contracting State, if that other person is supported wholly or substantially

from the public funds of that other State, including any of its political

sub-divisions or local authorities.Article

18REMUNERATION

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 State and the individual is a resident of that

State who:i.

is

a national of that State; orii.

did

not become a resident of that State solely for the purpose of rendering the

services.1.2. The provisions of

articles 15 and 16 shall apply to remuneration and pensions in respect of

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

State or political subdivision or local authority thereof.Article

19NON-GOVERNMENT

PENSIONS AND ANNUITIES1. Any pension, other

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

of a Contracting State from sources within the other Contracting State may be

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

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

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

services.3. The term

"annuity" means a stated sum payable periodically at stated time

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's worth.Article

20PAYMENTS

RECEIVED BY STUDENTS AND APPRENTICES1. A student or business

apprentice who is or was a resident of a Contracting State immediately before

visiting the other Contracting State and who is present in that other

Contracting State solely for the purpose of his education or training shall be

exempt from tax in that other State on:a. payments made to him

by persons residing outside that other State for the purposes of his

maintenance, education or training; andb. remuneration from

employment in that other State in an amount not exceeding US $500 or its

equivalent amount in Ukrainian and Indian currency during any fiscal year, as

the case may be, provided that such employment is directly related to his

studies or is undertaken for the purpose of his maintenance.1.2. The benefits of this

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

customarily required to complete the education or training undertaken, but in

no event shall any individual have the benefits of this article, for more than

five consecutive years from the date of his first arrival in that other Contracting

State.Article

21PAYMENTS

RECEIVED BY PROFESSORS, TEACHERS AND RESEARCH SCHOLARS1. A professor or a

teacher who is or was a resident of the Contracting State immediately before

visiting the other Contracting State for the purpose of teaching or engaging in

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

institution in, that other Contracting State shall be exempt from tax in that

other State on any remuneration for such teaching or research for a period not

exceeding two years from the date of his arrival in that other State.2. This article shall

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

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

this article and article 20, an individual shall be deemed to be a resident of

a Contracting State if he is resident in that State in the fiscal year in which

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

year.4. For the purposes of

paragraph 1 "approved institution" means an institution which has

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

Contracting State.Article

22OTHER

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 Convention, shall be taxable only in that Contracting State.2. The provisions of

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

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

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

other Contracting State through a permanent establishment situated therein, or

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

situated therein, and the right of property in respect of which the income is

paid is effectively connected with such permanent establishment or fixed base.

In such case the provisions of article 7 or article 15, as the case may be,

shall apply.3. Notwithstanding the

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

Contracting State not dealt with in the foregoing articles of this Convention,

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

Contracting State.Article

23CAPITAL1. Capital represented

by immovable property referred to in article 6, owned by a resident of a

Contracting State and situated in the other Contracting State, may be taxed in

that other State.2. Capital represented

by 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 by movable property pertaining to the fixed base available

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

purpose of performing independent personal services may be taxed in that other

State.3. Capital represented

by ships, aircraft or motor vehicle operated in international traffic and by

movable property pertaining to the operation of such ships, aircraft or motor

vehicle, shall be taxable only in the Contracting State of which the enterprise

owning such property is a resident.4. All other elements of

capital of a resident of a Contracting State shall be taxable only in that

State.Article

24AVOIDANCE

OF DOUBLE TAXATION1. The laws in force in

either of the Contracting States will continue to govern the taxation of income

and capital in the respective Contracting States except where provisions to the

contrary are made in this Convention.2. Where a resident of

India derives income or owns capital which, in accordance with the provisions

of this Convention, may be taxed in Ukraine, India shall allow as a deduction

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

paid in Ukraine, whether directly or by deduction; and as a deduction from the

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

Ukraine. Such deduction in either case shall not, however, exceed that part of

income-tax or tax on capital (as paid before the deduction is given), which is attributable

to the income or the capital which may be taxed in Ukraine.3. Taking into account

the Ukrainian law on exemption from tax paid outside Ukraine (not being

contrary to the provisions of this article), the Indian tax paid pursuant to

the Indian law and this Convention either directly or by deduction from profit,

income, or capital, would be allowed as credit against Ukrainian tax in respect

of profit, income, or capital imposed under Ukrainian law. In any such case,

the credit shall not exceed that part of Ukrainian tax (as was determined

before the deduction) which pertains to the profit, income, or capital which

may be taxed in India.4. The tax payable in

the Contracting State mentioned in paragraphs 2 and 3 of this article shall be

deemed to include the tax which would have been payable but for the tax

incentives granted under the laws of the Contracting State and which are

designed to promote economic development.5. Income which in

accordance with the provisions of this Convention, is not to be subjected to

tax in a Contracting State may be taken into account for calculating the rate

of tax to be imposed in that Contracting State.Article

25NON-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 or

that other State in the same circumstances are or may be subjected. This

provision shall, notwithstanding the provisions of article 1, also apply to

persons who are not residents of one or both of the Contracting States.2. The taxation on a

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

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

than the taxation levied on enterprise of that other State carrying on the same

activities in the same circumstances. 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 Contracting State at a rate higher than that imposed on the profits

of a similar enterprise of the first mentioned State, nor as being in conflict

with the provisions of paragraph 3 of article 7 of this Agreement.3. Nothing contained in

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

persons not resident in that State any personal allowances, reliefs, reductions

and deductions for taxation purposes which are by law available only to persons

who are so resident.4. Enterprises of a

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

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

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

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

more burdensome than the taxation and connected requirements to which other

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

the same circumstances.5. In this article, the

term "taxation" means taxes which are the subject of this Convention.Article

26MUTUAL

AGREEMENT PROCEDURE1. Where a resident of a

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

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

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

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

which he is a resident. The case must be presented within three years from the

date of receipt of the first notice of the action resulting in taxation not in

accordance with the provisions of the Convention.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 a satisfactory solution, to resolve the

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

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

Convention. Any agreement reached shall be implemented notwithstanding any time

limits in the national laws of the Contracting State.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 Convention.4. The competent

authorities of the Contracting States may communicate with each other directly

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

paragraphs.Article

27EXCHANGE

OF INFORMATION1. The competent

authorities of the Contracting States shall exchange such information

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

Convention or of the domestic laws of the Contracting States, concerning taxes

covered by the Convention, in so far as the taxation thereunder is not contrary

to the Convention, in particular for the prevention of fraud or evasion of such

taxes. 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

Convention. 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. The exchange of

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

reference to particular cases or both.3. In no case shall 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 and administrative practice

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

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

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

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

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

which would be contrary to public policy.Article

28ASSISTANCE

IN COLLECTION1. The Contracting

States undertake to lend assistance and support to each other, in the

collection of taxes to which this Convention relates, in the cases where the

taxes are definitely due according to the laws of the State making the request.2. In the case of a

request for enforcement of collection, tax claims of either of the Contracting

States which have been finally determined will be accepted for enforcement by

the other Contracting State to which the request is made and collected in that

State in accordance with the laws applicable to the enforcement and collection

of its taxes.3. In the case of Indian

tax, the request will be sent by the Central Board of Direct Taxes, Department

of Revenue to the State Tax Administration of Ukraine and will be accompanied

by such certificate as is required by the laws of India to establish that the

taxes have been finally determined and are due from the taxpayer.4. In the case of

Ukrainian tax, the request will be sent by the State Tax Administration of

Ukraine to the Central Board of Direct Taxes, Department of Revenue, in India

and will be accompanied by such certificate as is required by the laws of

Ukraine to establish that the taxes have been finally determined and are due

from the taxpayer.5. Where the tax claim

has not become final by reason of its being subject to appeal or any other

proceeding, a Contracting State may, in order to protect its revenues, request

the other Contracting State to take such interim measures in this behalf as are

lawful under the laws of that other Contracting State.6. A request for

assistance in collection of taxes due from a taxpayer shall be made only if

adequate assets of that taxpayer are not available for recovering the taxes

from him in the Contracting State making the request.7. The Contracting State

in which tax is recovered in pursuance of paragraphs 1, 2 and 5 of this article

shall immediately thereafter remit the amount so recovered to the Contracting

State which made the request but it shall be entitled to reimbursement of

costs, if any, incurred in the course of rendering such assistance to the

extent mutually agreed between the competent authorities of the two Contracting

States.Article

29DIPLOMATIC

AND CONSULAR OFFICIALSNothing

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

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

of special agreements.Article

30ENTRY

INTO FORCEEach

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

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

This Convention shall enter into force on the date of the later of these

notifications and shall thereupon have effect:a. in India, in respect

of income arising in any previous year beginning on or after the first day of

April next following the calendar year in which the Convention enters into form

and in respect of capital which is held at the expiry of the previous year

following that in which the Convention enters into force or subsequent years.b. in Ukraine: