United Arab Republic - Legal Draft

Double Taxation

Avoidance AgreementCONVENTION BETWEEN

THE GOVERNMENT OF INDIA AND THE GOVERNMENT OF THE UNITED ARAB REPUBLIC FOR THE

AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOMENotification

No. G.S.R. 2363, dtd. 30.9.1969.Whereas

the annexe Convention between the Government of India and the Government of the

United Arab Republic for the avoidance of double taxation with respect to taxes

on income has been ratified and the instruments of ratification exchanged, as

required by Article 29 of the said Convention:Now,

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

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

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

of the said Convention shall be given effect in to the Union of India.ANNEXURECONVENTION

BETWEEN THE GOVERNMENT OF INDIA AND THE GOVERNMENT OF THE UNITED ARAB REPUBLIC

FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOMEThe

Government of India and the Government of the United Arab Republic,Desiring

to conclude a Convention for the avoidance of double taxation with respect to

taxes on income,Have

agreed as follows:CHAPTER

ISCOPE

OF THE CONVENTIONARTICLE

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 imposed on behalf of each Contracting State or of its

political sub-divisions or local authorities, where, they have the authority,

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 all

elements of income including taxes on gains from the sale, exchange or transfer

of movable or immovable property and taxes on the total amounts of wages or

salaries paid by enterprises.3. The existing taxes to

which the Convention shall apply, are, in particular:a. In the case of India:1. the income-tax, including

super tax and the surcharge imposed under the Income-tax Act, 1961 (43 of

1961); and2. the surtax imposed

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

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

United Arab Republic:1. tax on income derived

from immovable property (including the land tax, the buildings tax and the

ghaffir tax);2. tax on income from

movable capital;3. tax on commercial and

industrial profits;4. tax on wages,

salaries, indemnities and pensions (as mentioned in book III of Law (14 of

1939);5. tax on profits from

liberal professions and all non-commercial professions;6. general income-tax;7. defence tax (imposed

on income);8. national security tax

(imposed on income); and9. supplementary taxes

imposed as percentage of taxes mentioned above;(hereinafter

referred to as " United Arab Republic tax ").1. The Convention shall

also apply to any identical or substantially similar taxes which are

subsequently imposed in addition to, or in the place of, the existing taxes.2. At the end of each

year, the competent authority of the Contracting States shall notify to each

other any singnificant changes which have been made in their respective

taxation laws.CHAPTER

IIDEFINITIONSArticle

3General

definitions1. In this Convention,

unless the context otherwise requires;a. the term " India

" shall have the meaning assigned to it in Article 1 of the Constitution

of India;b. the term "

United Arab Republic " means Egypt;c. the terms " a

Contracting state " and " the other Contracting state " mean India

or the United Arab Republic, as the context requires;d. the term " tax

" means Indian tax or United Arab republic tax, the context requires;e. the term "

person " includes individuals, companies and all other entities which are

treated as taxable units under the tax laws in force in either Contracting

state;f. the term "

company " for tax purposes means any entity which is treated as a company

under the Indian tax law or any entity which is treated as a body corporate

under the United Arab Republic tax law;g. 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;h. the term "

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

the Ministry of Finance (Department of Revenue and Insurance); and in the case

of the United Arab Republic, the Minister of Treasury or his authorised representative.1.2. In the application of

the provisions of this Convention by one of the Contracting States any term not

otherwise defined shall, unless the context otherwise requires, have the

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

which are the subject of this Connvention.Article

4Fiscal

Domicile1. For the purposes of

this Convention the term " resident of a Contracting State " means

any person who under the law of the State, is resident of that State for the

purposes of taxation therein by reason of his domicile, residence, place of

management or any other criterion applied under the tax laws of that State.2. Where by reason of

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

States, then his case shall be determined in accordance with the followiing

rules:a. He shall be deemed to

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

available to him. If he has permanent home available to him in both Contracting

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

his personal and economic relations are closest (Centre of vital interest):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 either Contracting State, he

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

habitual abode;c. If he has an habitual

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

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

of both Contracting States or if 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

Contracting 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 in which the business of the enterprise is wholly or partly

carried on.2. The term

"permanent establishment" shall include:a. a place of

management;b. a branch;c. an office;d. a factory;e. a workshop or a

warehouse;f. a mine, a quarry, an

oilfield or other place of extraction of natural resources;g. a permanent sales

exhibition;h. a building site or

construction or assembly project which exists for more than ninety days.1.2.3. The term

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

solely for the purpose of storage or display of goods or merchandise belonging

to the enterprise;b. the maintenance of a

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

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

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

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

fixed place of business solely for the purpose of advertising or for scientific

research, for the enterprise.1.2.3.4. A person acting in

one of the Contracting States for or on behalf of an enterprise of the other

Contracting State, shall be deemed to be a permanent establishment of that

enterprise, or in the first mentioned State if:i.

he

has and habitually exercises in that State a general authority to negotiate and

enter into contracts for or on behalf of the enterprise, unless the activities

of the person are limited to the purchase of goods or merchandise for the

enterprise, orii.

he

habitually maintains in the first-mentioned Contracting State a stock of goods

or merchandise belonging to the enterprise from which the person regularly

delivers goods or merchandise for or on behalf of the enterprise, oriii.

he

habitually secures orders in the first-mentioned Contracting State exclusively

or almost exclusively, for the enterprise itself or for the enterprise and

other enterprises whcih are controlled by it or have a controlling interest in

it.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 of a genuinely independent status.6. The fact that a

company, which is a resident of one of the Contracting states, has a subsidiary

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

a trade or business in that other Contracting State (whether through a permanent

establishment or otherwise) shall not, of itself, constitute that subsidiary

company a permanent establishment of its parent company.CHAPTER

IIITAXATION

OF INCOMEARTICLE

6INCOME

FROM IMMOVABLE PROPERTY1. Income from immovable

property shall be taxable only in the Contracting state in which such property

is situated.2. The term "

immovable property " shall be defined in accordance with the law and usage

of the Contracting state in which the property in question is situated. The

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

live-stock and equipment used in agriculture and foresrty, 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 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

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

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

professional services.ARTICLE

7BUSINESS

PROFITS1. The profits of an

enterprise of a Contracting State shall be taxable only in that 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. 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 attributted to that permanent establishment that 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 independent with the enterprise of which it is a

permanent establishment.3. In the determination

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

deductions expenses which are incurred for the purposes of the permanent

establishment including executive and general administrative expense so

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

or elsewhere.4. Insofar 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 vairous 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 laid down in this Article.5. No profits shall be

attributable to a permanent establishment by reason of the mere purchase by

that permanent establishment of goods or merchandise for the purpose of export

to the enterprise of which it is the permanent establishment.6. 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 the present Article.ARTICLE

8Air

Transport1. Income derived from

the operation of aircraft by an enterprise of one of the Contracting States

shall not be taxed in the other Contracting State unless the aircraft is

operated wholly or mainly between places within that other Contracting State.2. Paragraph 1 shall

likewise apply in respect of participations in pools of any kind by enterprises

engaged in air-transport.Article

9ShippingIncome

derived from the operation of ships by an enterprise of one of the Contracting

States shall not be taxed in the other Contracting State unless the ships are

operated wholly or mainly between places within that other Contracting State.ARTICLE

10Associated

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.1.2. If the information

available to the taxation authority concerned is inadequate to determine, for

the purposes of paragraph 1 of this Article, the profits which might be

expected to accrue to an enterprise, nothing in that paragraph shall affect the

application of the law of either Contracting State in relation to the liability

of that enterprise to pay tax on an amount determined by the exercise of a

discretion or the making of an estimate by the taxation authority of that

State.Provided

that such discretion shall be exercised or such estimate shall be made, so far

as the information available to the taxation authority permits, in accordance

with the principle stated in that paragaph.Provided

further that the amount so determined or the estimate so made may be amended or

revised when adequate information is furnished to the taxation authority

concerned.Article

11Dividends1. Dividends paid by a

company which is a resident of the to a resident of the United Arab Republic

may be taxed in India.2. Dividends paid by a

company which is a resident of the United Arab Republic to a resident of India

may be taxed in the United Arab Republic. But such dividends shall only be

subject to the tax on income derived from movable capital, the defence tax, the

national security tax and the supplementary taxes (which taxes shall be

deducted at the source). If paid to a natural person, the general income-tax

levied on the net total income may also be imposed. Dividends paid shall be

deducted from the amount of the distributing company's taxable income or

profits subject to the tax chargeable in respect of its industrial and

commercial profits if such dividends are distributed out of the taxable profits

of the same taxable year but not distributed out of accumulated reserves or

other assets.3. Dividends paid by a

company which is a resident of India whose activities lie solely or mainly in

the United Arab Republic shall, in the United Arab Republic, be treated as

mentioned in paragraph 2 of this Article when such dividends are distributed in

the United Arab Republic.4. Dividends paid by a

company which is a resident of the United Arab Republic whose activities lie

solely or mainly in India shall, in India, be treated as mentioned in paragraph

1 of this Article when such dividends are distributed in India.5. Dividends, deemed

under Article 11 of United Arab Republic Law 14 of 1939 to be paid out of the

yearly profits of a permanent establishment maintained in the United Arab

Republic by an Indian company whose activities extend to countries other than

the United Arab Republic shall, in the United Arab Republic, be treated as

mentioned in paragraph of this Article.The

permanent establishment shall be considered to have distributed as dividends in

the United Arab Republic within 60 days from the closing of its financial year,

an amount equivalent to 90 per cent of its total net profits liable to the tax

on industrial and commercial profits without applying the provisions of Article

36 of Law 14 of 1939, provided that the remaining 10 per cent of the net

profits shall be set aside to form a special reserve which shall be entered in

the local balance-sheet submitted annually to the United Arab Repubic tax

authorities. Such amount shall only be subject to the tax on commercial and

industrial profits.All

amounts deducted from the aforesaid 10 Per cent set aside to form the special

reserve for purposes other than the redemption of losses incurred in the trade

or business carried on by that permanent establishment situated in the United

Arab Republic shall be deemed to have been distributed in the United Arab

Republic and shall be taxed accordingly.1.2.3.4.5.6. The provisions of

paragraphs 1 and 4 of this Article, in the case of the United Arab Republic,

shall not affect application of Article 4 of Law 14 of 1939, but the provisions

of those paragraphs will be applied for the purpose of elimination of double

taxation in accordance with provisions of paragraph 2 of Article 24 of this

Convention.Article

12Interest1. Interest paid by a resident

of India to a resident of the United Arab Republic may be taxed in India.2. Interest paid by a

resident of the United Arab Republic to a resident of India may be taxed in the

United Arab Republic. But such interest shall only be subject to the tax on

income derived from movable capital, the defence tax, the national security tax

and the supplementary taxes (which taxes shall be deducted at the source. If

paid to a natural person, the general income-tax levied on the net total income

may also be imposed.3. The term "

interest " as used in this Article includes income from Government

securities, bonds or debentures (exclusive of interest on debts secured by

mortgages on real estate, in which case Article 6 shall apply) and whether or

not carrying a right to participate in profits, and debt-claims of every kind

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

taxation law of the State in which the income arises.4. 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 Contracting

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

with which the indebtedness on which the interest is paid was incurred, and

such interest is borne by such permanent establishment then such interest shall

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

establishment is situated.5. The provisions of

paragraph 1 of this Article in the case of the United Arab Republic shall not

affect the application of Article 4 of Law 14 of 1939, but the provisions of

that paragraph will be applied for the purpose of elimination of double

taxation in accordance with provisions of paragraph 2 of Article 24 of this

Convention.Article

13Royalties1. Royalties arising in

a Contracting State and paid to a resident of the other Contracting State shall

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

royalties " is 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 scientfic work, 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 but does not include any royalty or other

like amount in respect of the operation of mines, quarries or any other place

of extraction of natural resources.3. Rents and royalties

arising in a Contracting State in respect of cinematographic films and paid to

a resident of the other Contracting State shall be taxable only in the first

mentioned State according to the tax laws of that State.4. The provisions of

this Article shall not apply where founders' shares are issued in the United

Arab Republic as a consideration for the rights mentioned in paragraph 2 of

this Article and taxed in accordance with the provisions of Article 1 of Law 4

of 1939. In such event Article 11 of this Convention shall be applicable.5. Royalty 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.ARTICLE

14Capital

gains1. Subject to the

provisions of paragraph 3, gains from the sale, exchange or transfer of a

capital asset being immovable property, as defined in paragraph 2 of Article 6,

or movable property shall be taxable only in the Contracting State in which

such property is situated.2. For the purpose of

this Article the situs of the shares of a company shall be deemed to be in the

Contracting State where the company is incorporated.3. Capital gains derived

from the sale, exchange or transfer of a capital asset being a ship or aircraft

shall be taxable only in the Contracting State in which such ship or aircraft

is registered.ARTICLE

15Independent

personal services1. Income derived by a

resident of the United Arab Republic in respect of professional services

rendered or other independent activities of a similar character performed in

India may be taxed in India only if he is present in India for a period or

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

year " and only to the extent the income is attributable to such services

or activities in India.2. Income derived by a

resident of India in respect of professional services rendered or other

independent activities of a similar character performed in the United Arab

Republic may be taxed in the United Arab Republic only if he is present in the

United Arab Republic for a period or periods excceding in the aggregate 183

days during the relevant " fiscal year ", and only to the extent the

income is attributable to such services or activities in the United Arab

Republic.3. The term

"professional services" includes independent scientific, literary,

artistic, educational or teaching activities as well as the independent

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

accountants.Article

16Dependent

personal services1. Subject to the

provisions of Articles 17, 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 the United

Arab Republic in respect of an employment exercised in India shall not be taxed

in India if:a. he is present in

India for a period or periods not exceeding in the aggregate 183 days during

the relevant " previous year ", andb. the remuneration is

paid by, or on behalf of an employer who is not resident of lndia;c. the remuneration is

subject to United Arab Republic tax, andd. the remuneration is

not deducted in computuing profits of an enterprise chargeable to Indian tax.1.2.3. Notwithstanding the

provisions of paragraph 1, remuneration derived by a resident of India in

respect of an employment exercised in the United Arab Republic shall not be

taxed in the United Arab Republic if:a. he is present in the

United Arab Republic for a period or periods not exceeding in the aggregate 183

days during the relevant " fiscal year ", andb. the remuneration is

paid by, or on behalf of an employer who is not resident of the United Arab

Republic, andc. the remuneration is

subject to Indian tax, andd. the remuneration is

not deducted in computing profits of an enterprise chargeable to United Arab

Republic tax.1.2.3.4. Notwithstanding the

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

exercised aboard a ship or aircraft in international traffic, may be taxed in

the Contracting State in which the place of effective management of the

enterprise is situated.Article

17Directors'

FeesDirectors'

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

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

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

18Artistes

and Athletes1. Notwithstanding

anything contained in Articles 15 and 16 income derived by public entertainers,

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

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

Contracting State in which these activities are exercised.2. The provisions of

paragraph 1 shall apply only if the personal activities are exercised in the

Contracting State for a period or periods in the aggregate exceeding 15 days

during the relevant " previous year " or, as the case may be, "

fiscal year ", and only in respect of the income attributable to the

personal activities exercised in that State.ARTICLE

19PensionsSubject

to the provisions of paragraph 1 of Article 20, pensions and other similar

remuneration paid to a resident of a Contracting State in consideration of past

employment shall be taxable only in that State.ARTICLE

20Government

functions1. Remuneration,

including pensions, paid by, or out of funds created by, a Contracting State or

a political sub-division or a local authority thereof, to any individual in

respect of services rendered to that State or sub-division or local authority

thereof in the discharge of functions of a governmental nature may be taxed in

that State.2. The provisions of

paragraph 1 of this Article shall also apply to remuneration including

pensions, paid by the Central Bank, the Post, Railways, Telephone and

telegraph, Radio and Television organisations of the United Arab Republic and

by the Reserve Bank of India, Postal Administration, the Public Railway

Authorities and the All India Radio Organisation of India.3. The provisions of

Articles 16, 17 and 19 shall apply to remuneration or pensions in respect of

services rendered in connection with any trade or business other than those

mentioned in paragraph 2 carried on by any of the legal entities mentioned in

this Article.ARTICLE

21StudentsAn

individual of one of the Contracting States, who is temporarily present in the

other Contracting State solely: -a. as a student at a

university, college or school in the other Contracting State,b. as a business or

technical apprentice, orc. as the recipient of a

grant, allowance or award for the primary purpose of study or research from a

religious, charitable, scientific or educational organisation.shall

not be taxed in the other Contracting State in respect of remittances from

abroad for the purposes of his maintenance, education or training or in respect

of a scholarship grant. The same shall apply to any amount representing

remuneration for services rendered in that other State, provided that such

services are in connection with his studies or practical training or are

necessary for the purpose of his maintenance.ARTICLE

22Professors,

Teachers and ResearchersA

professor or a teacher from one of the Contracting States who receives remuneration

for teaching or scientific research, during a period of temporary residence not

exceeding two years, at a university, college, technical school or other

institution for higher education in the other Contracting State, shall not be

taxed in that other Contracting State in respect of that remuneration.ARTICLE

23Income

not expressly mentionedThe

laws in force in either of the Contracting States will continue to govern

assessment and taxation of income in the respective Contracting States except

where express provision to the contrary is made in this Convention.CHAPTER

IVMETHOD

FOR ELIMINATION OF DOUBLE TAXATIONARTICLE

24Exemption

and credit methods1. Where a person being

a resident of a Contracting State derives income from the other Contracting State

and that income, in accordance with the provisions, of this Convention, shall

be taxable only in that other Contracting State, or may be taxed in that other

Contracting State, the first-mentioned State shall, subject to the provisions

of paragraph 2, 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.2. Where a person being

a resident of a Contracting State derives income from the other Contracting

State and that income, in accordance with the provisions of Articles 11 and 12

may be taxed in that other Contracting State, the first-mentioned State shall

allow as a deduction from the tax on the income of that person on amount equal

to the tax paid in that other Contracting State. Such deduction shall not,

however, exceed that part of the tax, as computed before the deduction is

given, which is appropriate to the income derived from that other Contracting

State.CHAPTER

XSPECIAL

PROVISIONSARTICLE

25Non-discrimination1. The nationals of a

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

taxation or any requirement connected therewith which is other or more

burdensome than the taxation and connected requirements to which nationals of

that other State in the same circumstances and under the same conditions are or

may be subjected.2. The term "

nationals " means:a. all individuals

possessing the nationality of a Contracting State;b. all legal persons,

partnerships and associations deriving their status as such from the law in

force in a Contracting State.1.2.3. The taxation on a

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

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

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

same activities.This

provision shall not be 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.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 and under the same conditions.5. The provisions of

this Article shall not be construed as affecting the application in the United

Arab Republic of the exemptions conferred in the United Arab Republic by

Articles 5 and 6 of Law 14 of 1939.6. In this Article the

term " taxation " means taxes of every kind as specified in 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 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

Convention.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. The may also consult together for the

elimination of double taxation in cases not provided for in 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. When it seems advisable in order to reach agreement to have an oral

exchange of opinions, such exchange may take place through representatives of

the competent authorities of the Contracting States.ARTICLE

27Exchange

of information1. The competent

authorities of the Contracting States shall exchange such information as is

necessary for the carrying out of this Convention and of the domestic laws of

the Contracting States concerning taxes covered by this Convention in so far as

the taxation thereunder is in accordance with this Convention. Any information

so exchanged shall be treated as secret and shall not be disclosed to any

persons or authorities other than those concerned with the assessment including

judicial determination, or collection of the taxes which are the subject of

this convention.2. In no case shall the

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

States the obligation:a. to carry out

administrative measures at variance with the laws or the administrative

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

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

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

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

would be contrary to public policy (order public).ARTICLE

28Diplomatic

and Consular PrivilegesNothing

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.CHAPTER

VIFINAL

PROVISIONSARTICLE

29Entry

into force1. This Convention shall

be ratified and the instruments of ratification shall be exchanged at New Delhi

as soon as possible.2. This Convention shall

enter into force on the date of the exchange of the instruments of ratification

and its provisions shall have effect:a. In India:i.

in

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

8), as respects such income derived during any " previous year "

beginning on or after the first day of January, 1961;ii.

in

the case of any other income, as respects income derived during any "

previous year " beginning on or after the first day of January of the

calendar year in which the exchange of the instruments of ratification takes

place.a. In the United Arab

Republic:i.

in

the case of income from operation of aircraft (referred to in Article 8), as

respects such income derived during any accounting period ending on or after

the first day of January, 1961;ii.

in

the case of any other income,-1. as respects tax on

income from movable capital and tax on wages, salaries, indemnities, and

pensions, which taxes are due on or after the date on which the exchange of the

instruments of ratification takes place;2. as respects tax on

commercial and industrial profits for any accounting period ending on or after

the date on which the exchange of the instruments of ratification takes place;3. as respects tax on

income derived from immovable property (including the land tax, the building

tax and the ghaffir tax), tax on profits from liberal professions and all other

non-commerical professions and the general income-tax for the calendar year in

which the exchange of the instalments of ratification takes place.The

rules in sub-paragraph (b) of this paragraph shall be correspondingly

applicable respectively to the defence tax, national security tax and to the

supplementary taxes.ARTICLE

30Termination1. Either of the

Contracting States may terminate this Convention after a period of five years

from the date on which this Convention enters into force, by giving to other

Contracting State, through the diplomatic channels, written notice of

termination, provided that such notice shall be given only on or before the

thirtieth day of June in any calendar year, and in such event, this Convention

shall cease to be effective:a. In India:As

respects income derived during any " previous year " beginning on or

after the first day of January of the calendar year next following that in

which the notice is given.a.b. In the United Arab

Republic:a. as respects tax on

income from movable capital and tax on wages, salaries, indemnities and

pensions, which taxes are due on or after the first day of July in the calendar

year next following that in which the notice is given;b. as respects tax on

commercial and industrial profits for any accounting period ending on or after

the first day of July in the calendar year next following that in which the

notice is given.c. is respects tax on

income derived from immovable property (including the land tax, the buildings

tax and ghaffir tax), tax on profits from liberal professions and all other

non-commercial professions and the general income-tax for the calendar year

next following that in which the notice is given.The

rules in sub-paragraph (b) of this paragraph shall be respondingly applicable

respectively to the defence tax, national security tax and to the supplementary

taxes.IN

WITNESS WHEREOF

the undersigned, being duly authorised thereto, have signed this Convention.Done

in duplicate at Cairo this Twentieth day of February, 1969 in the English

language.Sd./-

APA B. PANT, Sd/- AHMED EL. SAYED SHABAN,For

the Government of India:For

the Government of United Arab RepublicCairo,

the 20th February, 1969.Dear

Sir,The

Convention between the Government of India and the Government of United Arab

Republic for the avoidance of double taxation with respect to taxes on income

being signed today, I have the honour on behalf of the Government of India, to

inform you that the two Contracting States have agreed as follows:The

provisions of Article 8 (Air transport) of the said Convention being operative

under the terms of Article 29 (Entry into force) of the Convention, in the case

of India, as respects income derived from operation of aircraft during any

" previous year " beginning on or after the first day of January,

1961, and in the case of the United Arab Republic, as respects such income

derived during any accounting period ending on or after the first day of

January, 1961:Where

any taxes covered by this Convention have been paid or are payble in one of the

Contracting States by a designated airline of the other Contracting State as

respects such income derived by it during any " previous year " or

accounting period aforesaid, the first mentioned Contracting State shall refund

such taxes to or, as the case may be, refrain from charging such taxes from the

designated airline.The

designated airline aforesaid shall, in the case of India, be the Air India, and

in the case of the United Arab Republic, be the United Arab Airlines.1.2. I should be grateful

if you confirm your agreement to the above understanding of the provisions of

Article 8 read with Article 29 of the said Convention, and that in such case,

this note and your reply thereto shall be deemed to be part of the Convention.3. Please accept, Your

Excellency, the assurances of my highest, consideration.Sd./-

Apa B. PantHis

Excellency Mr. Ahmed El Sayed Shaban, Under Secretary for the Taxation

Department, Ministry of Treasury, Government of the United Arab Republic,

Cairo.Cairo,

the 20th February, 1969.Dear

Sir,With

reference to the Convention signed to-day between the Government of the United

Arab Republic and the Government of India for the avoidance of double taxation

with respect to taxes on income, you, on behalf of the Government of India,

informed me of the following:The

convention between the Government of lndia and the Government of the United

Arab Republic for the avoidance of double taxation with respect to taxes on

income being signed to-day, I have the honour, on behalf of the Government of

India, to inform you that the two Contracting States have agreed as follows:The

provisions of Article 8 (Air Transport) of the said Convention being operative

under the terms of Article 29 (Entry into force) of the Convention, in the case

of India, as respects income derived from operation of aircraft during any

" previous year " beginning on or after the first day of January,

1961, and in the case of the United Arab Republic, as respects such income

derived during any accounting period ending on or after the first day of

January, 1961:Where

any taxes covered by this Convention have been paid or are payable in one of

the Contracting States by a designated airline of the other Contracting State

as respects such income derived by it during any " previous year " or

accounting period aforesaid, the first-mentioned Contracting State shall refund

such taxes to or, as the case may be, refrain from charging such taxes from the

designed airline.The

designated airline aforesaid shall, in the case of India, be the Air India, and

in the case of the United Arab Republic, be the United Arab Airlines.1. I should be grateful

if you confirm your agreements to the above understading of the provisions of

Article 8 read with Article 29 of the said Convention, and that in such case,

this note and your reply thereto shall be deemed to be part of the Convention.

"2. I have the honour to

confirm that the above-mentioned proposal meets with the approval of the

Government of the United Arab Republic.Your

Note of today's date and my reply thereto shall, therefore be part of the

Convention.1.2.3. Please accept, your

Excellency, the assurances of my highest consideration.Sd/--

His Excellency Mr. Apa B. Pant, AHMED EL SAYED SHABAN Ambassador of India,

Cairo