notification no. 89/2018 f.no.500/124/97 ftd ii s.o. 6247 e

ु MINISTRY OF FINANCE (Department of Revenue) NOTIFICATION New Delhi, the 21st December, 2018 (INCOME TAX) S.O. 6247(E).—Whereas, an Agreement between the Government of the Republic of India and the Government of the Republic of the Hong Kong Special Administrative Region of People’s Republic of China for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income was signed at Hong Kong on the 19th March, 2018 as set out in the Annexure to this notification (hereinafter referred to as the Agreement); And whereas, the said Agreement entered into force on the 30th day of November, 2018, being the date of the later of the notifications of the completion of the procedures required by the respective laws for entry into force of the said Agreement, in accordance with paragraph 2 of Article 29 of the said Agreement; And whereas, sub-paragraph (b) of paragraph 3 of Article 29 of the said Agreement provides that the provisions of the Agreement shall have effect in India in respect of income derived in any fiscal year beginning on or after the first day of April following the date on which the Agreement enters into force; Now, therefore, in exercise of the powers conferred by sub-section (1) of section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that all the provisions of said Agreement, as annexed hereto, shall be given effect to in the Union of India. ANNEXURE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE’S REPUBLIC OF CHINA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME The Government of the Republic of India and the Government of the Hong Kong Special Administrative Region of the People’s Republic of China, desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, have agreed as follows: ¹Hkkx IIµ[k.M 3(ii)º Hkkjr dk jkti=k % vlk/kj.k 23 Article 1 Persons Covered This Agreement shall apply to persons who are residents of one or both of the Contracting Parties. Article 2 Taxes Covered 1. This Agreement shall apply to taxes on income imposed on behalf of a Contracting Party or of its political subdivisions or local authorities, irrespective of the manner in which they are levied. 2. There shall be regarded as taxes on income all taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property and taxes on the total amounts of wages or salaries paid by enterprises. 3. The existing taxes to which the Agreement shall apply are: (a) in the case of the Hong Kong Special Administrative Region, (i) profits tax; (ii) salaries tax; and (iii) property tax; whether or not charged under personal assessment; (b) in the case of India, the income tax, including any surcharge thereon. 4. The Agreement shall apply also to any identical or substantially similar taxes that are imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes, as well as any other taxes falling within paragraphs 1 and 2 which a Contracting Party may impose in future. The competent authorities of the Contracting Parties shall notify each other of any significant changes that have been made in their respective taxation laws. 5. The existing taxes, together with the taxes imposed after the signature of the Agreement, are hereinafter referred to as “Hong Kong Special Administrative Region tax” or “Indian tax”, as the context requires. However, the term “Hong Kong Special Administrative Region tax” or “Indian tax” shall not include any penalty or interest or fine imposed under the laws of either Contracting Party relating to the taxes to which the Agreement applies. Article 3 General Definitions 1. For the purposes of this Agreement, unless the context otherwise requires: (a) (i) the term “Hong Kong Special Administrative Region” means any place where the tax laws of the Hong Kong Special Administrative Region of the People’s Republic of China apply; (ii) the term “India” means the territory of India and includes the territorial sea and airspace above it, as well as any other maritime zone in which India has sovereign rights, other rights and jurisdiction, according to the Indian law and in accordance with international law, including the United Nations Convention on the Law of the Sea; (b) the term “company” means any body corporate or any entity that is treated as a body corporate for tax purposes; (c) the term “competent authority” means: (i) in the case of the Hong Kong Special Administrative Region: the Commissioner of Inland Revenue or his authorized representative; (ii) in the case of India: the Finance Minister, Government of India, or his authorized representative; (d) the term “Contracting Party” or “the other Contracting Party” means the Hong Kong Special Administrative Region or India, as the context requires; (e) the term “domestic law”, in relation to the Hong Kong Special Administrative Region means the internal law of the Hong Kong Special Administrative Region; 24 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)] (f) the terms “enterprise of a Contracting Party” and “enterprise of the other Contracting Party” mean respectively an enterprise carried on by a resident of a Contracting Party and an enterprise carried on by a resident of the other Contracting Party; (g) the term “international traffic” means any transport by a ship or aircraft operated by an enterprise of a Contracting Party, except when the ship or aircraft is operated solely between places in the other Contracting Party; (h) the term “national”, in relation to India means: (i) any individual possessing the nationality of India; and (ii) any legal person, partnership or association deriving its status as such from the laws in force in India; (i) the term “person” includes an individual, a company, a trust, a partnership and any other body of persons which is treated as a taxable unit under the taxation laws in force in the respective Contracting Parties; (j) the term “tax” means Hong Kong Special Administrative Region tax or Indian tax, as the context requires; (k) (i) the term “year of assessment”, in the case of the Hong Kong Special Administrative Region, means the period of 12 months commencing on the first day of April in any year; (ii) the term “fiscal year”, in the case of India, means the financial year commencing on the first day of April in one calendar year and ending on the thirty-first day of March in the following calendar year. 2. As regards the application of the Agreement at any time by a Contracting Party, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that Party for the purposes of the taxes to which the Agreement applies, any meaning under the applicable tax laws of that Party prevailing over a meaning given to the term under other laws of that Party. Article 4 Resident 1. For the purposes of this Agreement, the term “resident of a Contracting Party” means: