notification no. 282/2007 f.no.503/5/2004 ftd / so 2001 e · 28 Nov 2007

[~II ~~3~(~m~]============~~~~~~(~I~~q~~:~~~~I~~1~(U~I======================~7 MINISTRY OF FINANCE (IDepartment of Revenue) NOTIFICATION New Delhi, the 28th November, 2007 (INCOME TAX) 8.0. 2001(E).- Whereas the annexed Protocol amending the Agreement between the Government of tlhe United Arab Emirates and the Govemment of the Republic of India for the avoidance of double taxation and the prevention of fiscal . evasion with respect to taxes cln income Which was published in the Gazette of India, EXitraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R 710 (E), dated the, 18th November, 1993 shall enter into force on the 3m day of October, 2007, being the date of receipt of the later of the notifications after completion of the procedures as required by the respective laws for the entry into force of this Protocol, in accordance with Article 8 of the said Protocol. 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 Protocol annexed hereto amending the Agreement belween the Government of the United Arab Emirates and the Government of the Republic of India for the avoidance of double taxation and the prevention of fiscal eVllsion with respect to taxes on income shall be given effect to in the Union of India with effect from thJ1 st day of April, 2008. [Notification No. 28212007-FTD/F.No. 503/5/2004-FTDJ POONAM DUTT, Jt. Secy. ANNEXURE PROTOCOL AMENDING THE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE G()VERNMENT OF THE UNITED ARAB EMIRATES FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME SIGNED IN INDIA ON 29th APRIL 1992 The Govemment of the Republic of India and the Govemment of the United Arab Emirates, Desiring to conclude a Protocol to amend the Agreement between the Govemment of the Republic of India and the Govemment of the United Arab 8 THE GAZE'ITE OF INDIA : EXTRAORDINARY [PARr n-ssc. 3(ii)] Emirates for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income signed in India on 29th APRIL 1992 (hereinafter referred to as "the Agreement"), have agreed upon the following provisions which shall form an integral part of the , Agreement: ARTICLE 1 Paragraph 1 of Article 4 (Resident) shall be replaced by the following: "1. For the purposes of this Agreement the term "resident of a Contracting State" means: (a) in the case of India: any person who,under the laws of India, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. This term, however, does not include any person who is liable to tax in India in respect only of income from sources in India; and (b) in the case of the United Arab Emirates: an individual who is present in the UAE for a period or periods totaling in the aggregate at least 183 days in the calendar year concerned, and a company which is incorporC\L6d in the UAE and which is managed and controlled wholly in UAE. 2. , Forthe purposes of pa~agraph 1: (a) The Republic of India, its political subdivisions or local authority thereof shall be deemed to be resident of the Republic of India; (b) The United Arab Emirates and its political subdivisions or local governments shall be deemed to be resident of the United Arab Emirates; [Ill'! II--~!~: 3l!(I1~")~]=======~'lmI~~1Iil~(~I.,~q~" ~:~""~~~liiI~I~(O~1 ============~9 (c) Government institutiClns shall be deemed, according to affiliation, to be resident of the Reput'lic of India or the United Arab Emirates. Any institution shall be deemed to be a govemment institution which has been created by the government of one of the Contracting States or of its political subdivisions or local authority I governments, which are wholly owned and controlled directly or indirectly by the government of the Contracting State or political subdivision or local authority "/ glovernments which are recognized as such by mutual agreement of the competent authorities of the Cqntracting States. (d) For the purposes of tl,is Article, Abu Dhabi Investment Authority is recognized as a resident of the United Arab Emirates." Paragraphs 2 and 3 s.hall be renumbered as 3 and 4 respectively. ARTICLE 2 Paragraph 3 of Article 7 {Business profits) shall be replaced by the following. "~I. In' determining the pro-fits qf a permanent E1stablishment, there shall be aillowed as deductions expense:s which are incurred for the purposes of the business olf the permanent establishment, induding executive and general adminislfative expenses so incurred, whether in the ~tate in which the permanent establishment is situatEld or elsewhere, in accordance with the provisions of and subject to the limitabon s of the tax laws of thalt State." ARTICLE 3 Paragraph 2 of Article 1 0 (Dividends) shall be replaced by the following: "2. However, such dividends may also be taxed in the Contracting State of which the .c()mpany paying the dividends is a resident and according to the laws of that State, but if the reCipient is the! ber,teficial owner of the dividends, the tax sO charged shall not exceed 10%." 10 TIlE GAZETIE OF INDIA: EXfRAORDINARY [PARr n-8oc. 3(ii}] ARTICLE 4 Paragraph 3 of Article 13 (Capital Gains) of the Agreement shall be replaced by the following: "3. Gains from the alienation of shares of the capital stock of a company the property of which consists directly or indirectly principally of immovable property situated in a Contracting State may be taxed in that State. 4. Gains from the alienation of shares other than those mentioned in paragraph 3 in a company which is a resident of a Contracting State may be taxed in that State. 5. Gains from the alienation of any property other than that referred to in paragraphs 1,2,3 and 4 above shall be taxable only in the Contracting State of which the alienator is a resident." ARTICLE 5 , Paragraph 1 of Article 24 (Income of Govemment and Institutions) Shall be replaced by the following: "1. Not withstanding the provisions of Article 13, the Government of one Contracting State shall be exempt from tax, including capital gains tax, in the other Contracting State in respect of any income derived by such Government from that other Contracting State." ARTICLE 6 Paragraph 2 of Article 26 (Nondiscrimination) shall be replaced by the following "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 • • I otller Contracting State th,an the taxation levied on enterprises of that Contracting State carrying on the samEl activities in the same circumstances or under the same , condit~ons. This provision shall not be construed as preventing a Contracting State from charging the profits of a permanent establishment which a company of the other • Contracting State has in th~~ firs(mentioned State at a rate of tax which is higher than that imposed on the profits of a Similar cOl)lpany of the first mentioned Contracting State, nor as being in confHct with the provisions of paragraph 3 of Article 7." ARTICLE 7 An Article on . Limitation of Benefits' (Article 29) shall be included in the Agreement, as under: "An entity which is a resident of a Contracting State shall not be entitled to the benefits of this Agreemnntif the main purpose or one of ,the main purposes of the . cretation of such entity was to obtain the benefits of this Agr~ement that would riot be ot~lerwise available, The cases of legal entities not having bonafide business aCtivities shall be covered by this Article." Articles 29, 30 and 31 shall be renumbered as Articles 30, 31 and 32 respectively, ARTICLES This Protocol shall form an integral part of the Agreement. Each of the Contracting States shall notify to the other the completion of the proceedings required by its law for the bringing into force of this Protocol. The ProtOCol shall enter into force on the date of the later of these notifications and shall thereupon have eft'Bc\:- (a) in the United Arab Emirates: in respect of incomEl derived on or after the 1 st January next following the calendar year in Which the Protocol enters into force