MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, the 21st December, 2015
S.O. 3499(E).—Whereas, an Agreement was entered into between the Government of the Republic of India and
the Government of the Republic of Macedonia for the avoidance of double taxation and the prevention of fiscal evasion
with respect to taxes on income that was signed at Delhi on the 17th December, 2013 as set out in the Annexure to this
notification (hereinafter referred to as the said Agreement);
And whereas, the date of entry into force of the said Agreement is the 12th September, 2014, being the date of
the later of the notifications of completion of the procedures as required by the respective laws for entry into force of the
said Agreement, in accordance with paragraph 1 of Article 30 of the said Agreement;
And whereas, clause (a) of paragraph 3 of Article 30 of the said Agreement provides that the provisions of the
said Agreement shall have effect in India in respect of taxes withheld at source, to income paid or credited on or after the
first day of April of the calendar year next following the year in which the said Agreement enters into force, and in
respect of other taxes on income chargeable for any fiscal year beginning on or after the first day of April of the calendar
year next following the year in which the said Agreement enters into force.
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 Agreement between the Government of the
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THE GAZETTE OF INDIA : EXTRAORDINARY
[PART II—SEC. 3(ii)]
Republic of India and the Government of the Republic of Macedonia for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income, as set out in the Annexure hereto, shall be given effect to in
the Union of India from the first day of April, 2015, being the first day of the fiscal year next following the year in which
the said Agreement entered into force.
[Notification No. 94/2015/ F. No. 503/08/2004-FTD-I]
AKHILESH RANJAN, Jt. Secy.
AGREEMENT
BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF INDIA
AND
THE GOVERNMENT OF THE REPUBLIC OF MACEDONIA
FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME
The Government of the Republic of India and the Government of the Republic of Macedonia, desiring to conclude an
Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and
with a view to promoting economic cooperation between the two countries, have agreed as follows:
Article 1
PERSONS COVERED
This Agreement shall apply to persons who are residents of one or both of the Contracting States.
Article 2
TAXES COVERED
1. This Agreement shall apply to taxes on income imposed on behalf of a Contracting State 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 in particular:
(b) In India:
the income tax (including any surcharge thereon)
(hereinafter referred to as "Indian tax");
(b)
in Macedonia:
i.
the profit tax;
ii.
the personal income tax;
(hereinafter referred to as “Macedonian tax”).
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. The competent authorities of the Contracting
States shall notify each other of any significant changes that have been made in their respective taxation laws.
Article 3
GENERAL DEFINITIONS
1.
For the purposes of this Agreement, unless the context otherwise requires:
(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 jurisdiction, according to the
Indian law and in accordance with international law, including the U.N. Convention on the Law of the Sea;
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23
(c) the term “Macedonia” means the territory of the Republic of Macedonia, over which it has jurisdiction or
sovereign rights for the purpose of exploring, exploiting, conserving and managing natural resources, pursuant
to internal jurisdiction and international law;
(d) the terms "Contracting State" and "the other Contracting State" mean the Republic of India or the Republic of
Macedonia as the context requires;
(e) the term "person" includes an individual, a company, a body of persons and any other entity which is treated as
a taxable unit under the taxation laws in force in the respective Contracting States;
(f) the term "company" means any body corporate or any entity that is treated as a body corporate for tax purposes;
(g) the term “ enterprise” applies to the carrying on of any business;
(h) the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively
an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the
other Contracting State;
(i) the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a
Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting
State;
(j) the term "competent authority" means:
iii.
in the case of India: the Finance Minister, Government of India, or his authorized representative;
iv.
in the case of Macedonia: the Ministry of Finance or its authorized representative;
(k) the term "national" means:
i.
any individual possessing the nationality of a Contracting State;
ii.
any legal person, partnership or association deriving its status as such from the laws in force in a
Contracting State;
(l) the term “tax” means Indian or Macedonian tax, as the context requires, but shall not include any amount which
is payable in respect of any default or omission in relation to the taxes to which this Agreement applies or
which represents a penalty or fine imposed relating to those taxes;
(m) The term “fiscal year” means:
i.
in the case of India: the financial year beginning on the 1st day of April.
ii.
in the case of Macedonia: the calendar year beginning on the 1st day of January; .
2. As regards the application of the Agreement at any time by a Contracting State 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 State for the
purposes of the taxes to which the Agreement applies and any meaning under the applicable tax laws of that State
prevailing over a meaning given to the term under other laws of that State.
Article 4
RESIDENT
1.
For the purposes of this Agreement, the term "resident of a Contracting State" means any person who, under the
laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other
criterion of a similar nature and also includes that State and any political subdivision or local authority thereof. This
term, however, does not include any person who is liable to tax in that State in respect only of income from sources in
that 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 only of the State in which he has a permanent home available to him; if he
has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with
which his personal and economic relations are closer (centre of vital interests);
(b) if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home
available to him in either State, he shall be deemed to be a resident only of the State in which he has an habitual
abode;
(c) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident only of the
State of which he is a national;
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THE GAZETTE OF INDIA : EXTRAORDINARY
[PART II—SEC. 3(ii)]
(d) if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall
endeavor to settle the question by mutual agreement.
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 only of the State in which its place of effective management
is situated. If the State in which its place of effective management is situated cannot be determined, then the competent
authorities of the Contracting States shall endeavor to settle the question by mutual agreement. In the absence of such
agreement, such person shall not be considered to be a resident of either Contracting State for the purposes of enjoying
benefits under this Agreement.
Article 5
PERMANENT ESTABLISHMENT
1. For the purposes of this Agreement, the term "permanent establishment" means a fixed place of business through
which the business of an enterprise is wholly or partly carried on.
2. The term "permanent establishment" includes especially:
(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop;
(f) a sales outlet;
(g) a warehouse in relation to a person providing storage facilities for others;
(h) a farm, plantation or other place where agricultural, forestry, plantation or related activities are carried on; and
(i) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources.
3. (a) A building site or construction, installation or assembly project or supervisory activities in connection therewith
constitutes a permanent establishment only if such site, project or activities last more than nine months.
(b) The furnishing of services, including consultancy services, by an enterprise through employees or other
personnel engaged by the enterprise for such purpose, but only where activities of that nature continue (for the same or
connected project) within the country for a period or periods aggregating more than 90 days within any 12-month period.
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 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 carrying on, for the enterprise, any other
activity of a preparatory or auxiliary character;
(f) the maintenance of a fixed place of business solely for any combination of activities mentioned in
subparagraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from this
combination is of a preparatory or auxiliary character.
5. Notwithstanding the provisions of paragraphs 1 and 2, where a person - other than an agent of an independent status
to whom paragraph 7 applies - is acting in a Contracting State on behalf of an enterprise of the other Contracting State,
that enterprise shall be deemed to have a permanent establishment in the first-mentioned Contracting State in respect of
any activities which that person undertakes for the enterprise, if such a person:
(a) has and habitually exercises in that State an authority to conclude contracts in the name of the enterprise,
unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a
