19A. Agreement for avoidance of double taxation and
prevention of fiscal evasion with
Whereas the
annexed Convention between the Government of the Republic of India and the
Government of Ireland for the Avoidance of Double Taxation and for the
Prevention of Fiscal Evasion with respect to taxes on income and capital gains
has entered into force on 26th December, 2001, thirty days after the receipt of
the later of the notifications by both the Contracting States to each other of
the completion of the procedure required by their respective laws, as required
by Article 28 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
Notification: No. 45/2002 [F. No. 503/6/99-FTD], dated 20-2-2002.
Annexure
Convention between the Government of the
Republic of India and the Government of Ireland For the Avoidance of Double
Taxation and for the Prevention of Fiscal Evasion with respect to taxes on
Income and Capital Gains
The Government
of the
ARTICLE 1 : Personal Scope - This Convention
shall apply to persons who are residents of one or both of the Contracting
States.
ARTICLE 2 : Taxes Covered - 1. This
Convention shall apply to taxes on income and capital gains imposed on behalf
of a
2. There shall be regarded as taxes on income
and capital gains all taxes imposed on total income, or on elements of income
including taxes on gains from the alienation of movable or immovable property.
3. The existing taxes to which the Convention
shall apply are in particular :—
(a) In
the income-tax including
any surcharge thereon;
(hereinafter referred to as
“Indian tax”);
(b) In
(i) the income-tax;
(ii) the corporation tax; and
(iii) the capital gains tax
(hereinafter referred to as
“Irish tax”).
4. The Convention shall apply also to any
identical or substantially similar taxes which are imposed after the date of
signature of the Convention in addition to, or in place of, the existing taxes
referred to in paragraph 3. The competent authorities of the Contracting States
shall notify each other of significant changes which have been made in their
respective taxation laws.
ARTICLE 3 : General Definitions - 1. For
the purposes of this Convention, unless the context otherwise requires :—
(a) 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;
(b) the term “Ireland” includes any area outside the territorial waters
of Ireland which, in accordance with international law, has been or may
hereafter be designated under the laws of Ireland concerning the Continental
Shelf, as an area within which the rights of Ireland with respect to the sea
and subsoil and their natural resources may be exercised;
(c) the term “person” includes an individual, a company, a trust, a
partnership which is treated as a taxable unit under the Income-tax Act, 1961
(43 of 1961) of India, 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;
(d) the term “company” means any body corporate or any entity which is
treated as a body corporate for tax purposes;
(e) 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;
(f) the term “international traffic” means any transport by a ship or
aircraft operated by an enterprise of a
(g) the term “competent authority” means :
(i) in the case of
(ii) in the case of
(h) the term “national” means :
(i) in relation to
(ii) in relation to India (A) any individual
possessing the nationality of
(i) the term “fiscal year” means :
(i) in the case of
(ii) in the case of Ireland, a year beginning with
the sixth day of April in one year and ending with the fifth day of April in
the following year;
(j) The term “tax” means Indian tax or Irish 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 Convention applies or which
represents a penalty or fine imposed relating to those taxes;
(k) the terms “a
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 4 : Resident - 1. 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 or any other criterion of a similar
nature.
2. Where by reason of the provisions of
paragraph 1 an individual is a resident of both
(a) he shall be deemed to be a resident 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 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 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 of the State of which he is a national;
(d) if he is a national of both States or of neither of them the
competent authorities of the Contracting States shall 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 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 settle the question by mutual
agreement.
ARTICLE 5 : Permanent Establishment - 1.
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 or exploration of natural resources;
(g) an installation or structure used for the exploration or
exploitation of natural resources;
(h) a sales outlet;
(i) a warehouse in relation to a person providing
storage facilities for others; and
(j) a farm, plantation or other place where agricultural, forestry,
plantation or related activities are carried on.
3. A building site or construction or assembly
project or supervisory activities in connection therewith constitute a
permanent establishment only if such site, project or activity last more than
six months.
4. An enterprise shall be deemed to have a
permanent establishment in a Contracting 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 for or to be used
in, the prospecting for, or extraction or exploitation of mineral oils in that
State.
5. Notwithstanding the previous 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
delivery 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, display or delivery;
(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 sub-paragraphs (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.
6. Notwithstanding the provisions of paragraphs
1 and 2, where a person - other than an agent of an independent status to whom
paragraph 8 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 5 which, if exercised through a
fixed place of business, would not make this fixed place of business a
permanent establishment under the provisions of that paragraph; or
(b) 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; or
(c) 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 control as that
enterprise.
7. Notwithstanding the preceding provisions of
this Article, an insurance enterprise of a Contracting State shall, except in
regard to re-insurance, be deemed to have a permanent establishment in the
other Contracting State if it collects premiums in the territory of that other
State or insures risks situated therein through a person other than an agent of
an independent status to whom paragraph 8 applies.
8. An enterprise shall not be deemed to have a
permanent establishment in a
9. 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 6 : Income from immovable property - 1.
Income derived by a resident of a
2. The term “immovable property” shall have the
meaning which it has under the laws of the
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 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 7 : Business profits - 1. The
profits of an enterprise of a
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 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, whether in the
State in which the permanent establishment is situated or elsewhere. Executive and
general administrative expenses shall be allowed as deductions in accordance
with the taxation laws of that State. Nothing in this paragraph shall, however,
authorise a deduction for expenses which would not be
deductible if the permanent establishment were a separate enterprise.
4. 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.
5. 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.
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 this
Article.
ARTICLE 8 : Shipping and air transport - 1.
Profits derived by an enterprise of a Contracting State from the operation or
rental of ships or aircraft in international traffic and the rental of
containers and related equipment which is incidental to the operation of ships
or aircraft in international traffic shall be taxable only in that Contracting
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.
3. For the purposes of this Article, interest on
funds connected directly with the operation of ships or aircraft in
international traffic shall be regarded as profits derived from the operation
of such ships or aircraft; and the provisions of Article 11 shall not apply in
relation to such interest, provided that such funds are incidental to that
operation.
4. Notwithstanding the preceding provisions of
this Article, profits derived by an enterprise of a Contracting State from the
operation of ships between the ports of the other Contracting State and the
ports of third countries may be taxed in that other Contracting State, but the
tax imposed in that other State shall be reduced by an amount equal to
two-thirds thereof.
ARTICLE 9 : Associated Enterprises - 1.
Where—
(a) an enterprise of a
(b) the same persons participate directly or indirectly in the
management, control or capital of an enterprise of a
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.
2. Where a Contracting State includes in the
profits of an enterprise of that State and taxes accordingly profits on which
an enterprise of the other Contracting State has been charged to tax in that
other State and the profits so included are profits which would have accrued to
the enterprise of the first-mentioned State if the conditions made between the
two enterprises had been those which would have been made between independent
enterprises, then that other State shall make an appropriate adjustment to the
amount of the tax charged therein on those profits. In determining such
adjustment, due regard shall be had to the other provisions of this Convention
and the competent authorities of the Contracting States shall if necessary
consult each other.
ARTICLE 10 : Dividends - 1. Dividends paid
by a company which is a resident of a
2. However, such dividends may also be taxed in
the
3. The term “dividends” as used in this Article
includes income from shares or other rights, not being debt-claims,
participating in profit, 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 dividend 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 insofar as such dividends are paid to a resident of that other State or
insofar 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 11 : Interest - 1. Interest arising
in a
2. However, such interest may also be taxed in
the
3. Notwithstanding the provisions of paragraph
2, interest arising in a
(a) the Government, a political sub-division, a statutory body or a
local authority of the other
(b) (i) in the case of India, the Reserve Bank of India, the Industrial
Finance Corporation of India, the Industrial Development Bank of India, the
Export-Import Bank of India, the National Housing Bank, the Small Industries
Development Bank of India and the Industrial Credit and Investment Corporation
of India (ICICI); and
(ii) in the case of
(c) any other similar institution as may be agreed from time to time
between the Competent Authorities of the Contracting States.
4. 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, but does not include any income which is treated as a dividend
under Article 10. Penalty charges for late payment shall not be regarded as
interest for the purpose of this Article.
5. 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.
6. Interest shall be deemed to arise in a
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 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 relationships, 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
ARTICLE 12 : Royalties and fees for technical services
- 1. Royalties or fees for technical services arising in a
2. However, such royalties or fees for technical
services 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 or 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. (a) 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 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, other than an aircraft, or for information concerning
industrial, commercial or scientific experience;
(b) The
term “fees for technical services” means payment of any kind in consideration
for the rendering of any managerial, technical or consultancy services
including the provision of services by technical or other personnel but does
not include payments for services mentioned in Articles 14 and 15 of this
Convention.
4. 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 or property 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.
5. Royalties or fees for technical services
shall be deemed to arise in a
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 royalties or fees for technical services,
having regard to the use, right or information for which they are 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
ARTICLE 13 : Capital gains - 1. Gains
derived by a resident of a
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 also be taxed in that other State.
3. Gains derived by an enterprise of a
Contracting State from the alienation of ships or aircraft operated in
international traffic or movable property pertaining to the operation of such
ships or aircraft shall be taxable only in that State.
4. 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
5. Gains from the alienation of shares other
than those mentioned in paragraph 4 in a company which is a resident of a
6. Gains from the alienation of any property
other than that referred to in paragraphs 1, 2, 3, 4 and 5 shall be taxable
only in the
ARTICLE 14 : Independent personal services - 1.
Income derived by a resident of a Contracting State in respect of professional
services or other activities of an independent 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 State; or
(b) if his stay in the other State is for a period or periods
aggregating 183 days or more in any 12-month period commencing or ending in the
fiscal year concerned; in that case, only so much of the income as is derived
from his activities performed in that other State may be taxed in that other
State.
2. The term “professional services” includes
especially independent scientific, literary, artistic, educational or teaching
activities as well as the independent activities of physicians, lawyers,
engineers, architects, surgeons, dentists and accountants.
ARTICLE 15 : Dependent personal services - 1.
Subject to the provisions of Articles 16, 18, 19 and 21, salaries, wages and
other similar remuneration derived by a resident of a
2. Notwithstanding the provisions of paragraph
1, remuneration derived by a resident of a
(a) the recipient is present in the other State for a period or periods
not exceeding in the aggregate 183 days in any 12-month period commencing or
ending in the fiscal year concerned, and
(b) the remuneration is paid by, or on behalf of, an employer who is
not a resident of the other State, and
(c) the remuneration is not borne by a permanent establishment or a
fixed base which the employer has in the other State.
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 by an enterprise of a
ARTICLE 16 : Directors’ fees - Directors’ fees and
other similar payments derived by a resident of a
ARTICLE 17 : Artistes and sportspersons - 1.
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
his 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 some other
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. The provisions of paragraphs 1 and 2, shall
not apply to income from activities performed in a
ARTICLE 18 : Pensions and annuities - 1.
Subject to the provisions of paragraph 2 of Article 19, pensions and other
similar remuneration paid to a resident of a Contracting State in consideration
of past employment and any annuity paid to such a resident in consideration of
past employment shall be taxable only in that State.
2. The term “annuity” means a stated sum payable
periodically at stated times 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 or money’s worth.
ARTICLE 19 : Government service - 1. (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; or
(ii) did not become a resident of that State solely
for the purpose of rendering the services.
2. (a) Any pension paid by, or out of funds
created 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 pension shall be taxable only in the other
3. The provisions of Articles 15, 16 and 18
shall apply to remuneration and pensions in respect of services rendered in
connection with a business carried on by a
ARTICLE 20 : Students and apprentices - 1.
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; and
(b) remuneration from employment in that other State to the extent that
it does not exceed the amount which is exempt from tax under the laws of that
other
2. The benefit 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 six consecutive
years from the date of his first arrival in that other
ARTICLE 21 : Professors, teachers and research
scholars - 1. A professor, teacher or research scholar who is or was
a resident of one of the Contracting States immediately before visiting the
other Contracting State for the purpose of teaching or engaging in research, or
both, at a university, college or other similar 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 first arrival in that other State for such purpose.
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
ARTICLE 22 : Other income - 1. Items of
income of a resident of a
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
or 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 14 as the case may be, shall apply.
3. Notwithstanding the provisions of paragraph
1, if a resident of a Contracting State derives income from sources within the
other Contracting State in the form of winnings from lotteries, crossword
puzzles, races including horse races, card games and other games of any sort or
gambling or betting of any form or nature whatsoever such income may be taxed
in the other Contracting State.
ARTICLE 23 : Elimination of double taxation - 1.
The laws in force in either of the Contracting States will continue to govern
the taxation of income in the respective Contracting States except where
provisions to the contrary are made in this Convention.
2. Subject to the provisions of the laws of
India regarding the allowance as a credit against Indian tax of tax paid in a
territory outside India (which shall not affect the general principle hereof),
the amount of Irish tax paid, under the laws of Ireland and in accordance with
the provisions of this Convention, whether directly or by deduction, by a
resident of India, in respect of income from sources within Ireland which has
been subjected to tax both in India and Ireland shall be allowed as a credit
against the Indian tax payable in respect of such income but in an amount not
exceeding that proportion of Indian tax which such income bears to the entire
income chargeable to Indian tax.
3. Subject to the provisions of the laws of
(a) Indian tax payable under the laws of India and in accordance with
this Convention, whether directly or by deduction, on profits, income and gains
from sources within India (excluding in the case of a dividend tax payable in
respect of the profits out of which the dividend is paid) shall be allowed as a
credit against any Irish tax computed by reference to the same profits, income
and gains by reference to which Indian tax is computed.
(b) In the case of a dividend paid by a company which is a resident of
India to a company which is a resident of Ireland and which controls directly
or indirectly 25 per cent or more of the voting power in the company paying the
dividend, the credit shall take into account [in addition to any Indian tax
creditable under the provisions of sub-paragraph (a)] Indian tax payable
by the company in respect of the profits out of which such dividend is paid.
4. (a) For the purposes of sub-paragraph
(b) of paragraph 3, the term “Indian tax payable” shall be deemed to include
75 per cent of the Indian tax which would have been paid but for any exemption
or reduction of tax granted under incentive provisions contained in Indian law
designed to promote economic development to the extent that such exemption or
reduction is granted for profits from industrial or manufacturing activities,
or from the development, maintenance and operation of infrastructure
facilities, or from agriculture, fishing or tourism (including restaurants and
hotels), provided that such incentive provisions remain in substance unchanged
since the date of signature of this Convention and that the activities have
been carried out within India.
(b) The
provisions of sub-paragraph (a) shall cease to apply after twelve years
from the date of entry into force of this Convention.
(c)
Should
5. For the purposes of paragraphs 2 and 3,
profits, income and gains owned by a resident of a
6. 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 on other income.
ARTICLE 24 : Non-discrimination - 1.
Nationals of a
2. The taxation on a permanent establishment
which an enterprise of a
3. 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 State to any requirement connected
therewith which is other or more burdensome than the taxation and connected
requirements to which other similar enterprises of the first-mentioned State
are or may be subjected.
4. Except where the provisions of paragraph 1 of
Article 9, paragraph 7 of Article 11, or paragraph 6 of Article 12, apply,
interest, royalties and other disbursements paid by an enterprise of a
Contracting State to a resident of the other Contracting State shall, for the
purpose of determining the taxable profits of such enterprise, be deductible
under the same conditions as if they had been paid to a resident of the
first-mentioned State.
ARTICLE 25 : Mutual agreement procedure - 1.
Where a person considers that the actions of one or both of the Contracting
States result or will result for him in taxation not in accordance with the
provisions of this Convention, he may, irrespective of the remedies provided by
the domestic laws of those States, present his case to the competent authority
of the Contracting State of which he is a resident or, if his case comes under
paragraph 1 of Article 24, to that of the Contracting State of which he is a
national. The case must be presented within three years from the first
notification 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
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. They 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 a Commission consisting of representatives of the
competent authorities of the Contracting States.
ARTICLE 26 : Exchange of information - 1.
The competent authorities of the Contracting States shall exchange such
information including documents, as is necessary for carrying out the
provisions of this Convention or of the domestic laws of the Contracting State
concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention in particular
for the prevention of fraud or evasion of such taxes. The exchange of
information is not restricted by Article 1.
Any
information so exchanged by a Contracting State shall be treated as secret in
the same manner as information obtained under the domestic laws of the State
and shall be disclosed only to persons or authorities (including courts and
administrative bodies) concerned with the assessment or collection of, the
enforcement or prosecution in respect of, or the determination of appeals in
relation to the taxes covered by the Convention. Such persons or authorities
shall use the information only for such purposes. They may disclose the
information in public court proceedings or in judicial decisions.
2. In no case shall the provisions of paragraph
1 be construed so as to impose on a
(a) to carry out administrative measures at variance with the laws and
administrative practice of that or of the other
(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
(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.
ARTICLE 27 : Diplomatic agents and consular officials
- Nothing in this convention shall affect the fiscal privileges of diplomatic
agents or consular officials under the general rules of international law or
under the provisions of special agreements.
ARTICLE 28 : Entry into force - 1. The Contracting
States shall notify each other in writing, through diplomatic channels, of the
completion of the procedure required by the respective laws for the entry into
force of this Convention.
2. This Convention shall enter into force thirty
days after the receipt of the later of the notifications referred to in
paragraph 1.
3. The provisions of this Convention shall have
effect :
(a) in India, in respect of income arising in any fiscal year beginning
on or after the first day of April next following the calendar year in which
the Convention enters into force; and
(b) in
(i) in respect of income-tax and capital gains
tax, for any year of assessment beginning on or after the sixth day of April in
the year next following the date on which this Convention enters into force;
(ii) in respect of corporation tax, for any
financial year beginning on or after the first day of January in the year next
following the year in which this Convention enters into force.
ARTICLE 29 : Termination - This Convention shall
remain in force indefinitely unless terminated by a
(a) in
(b) in
(i) in respect of income-tax and capital gains
tax, for any year of assessment beginning on or after the sixth day of April in
the year next following the calendar year in which the notice is given ;
(ii) in respect of corporation tax, for any
financial year beginning on or after the first day of January next following
the calendar year in which the notice is given.
In witness
whereof the undersigned, being duly authorised
thereto, have signed this Convention.
Done in
duplicate at New Delhi on this 6th day of November in 2000, in the Hindi and
English languages, both the texts being equally authentic. In case of
divergence between the two texts, the English text shall prevail.
Protocol
At the signing
of the Convention between the Government of the
With
reference to Articles 3 and 23
1. Where a person resident in Ireland is a
member of a partnership which is resident in India and by virtue of this Convention
any profits, income or gains of the partnership are relieved from tax in
Ireland, the Convention shall not affect any liability to tax in Ireland of
such person in respect of such person’s share of any profits, income or gains
of the partnership; any such share of profits, income or gains shall be treated
for the purposes of Article 23 as profits, income or gains from sources in
India and the appropriate part of the Indian tax borne by the partnership shall
be allowed as a credit against any Irish tax computed by reference to the said
share of the profits, income or gains.
With
reference to Article 7
2. If, in accordance with the laws of a
Contracting State, profits are attributed to a permanent establishment of an
enterprise carrying on insurance business, 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; the method of apportionment adopted shall,
however, be such that the result shall be in accordance with the principles
contained in Article 7.
With
reference to Article 24
3. The provisions of this Article shall not be
construed as preventing India from charging the profits of a permanent
establishment of an Irish company in India at a rate of tax which is higher
than that imposed on the profits of a similar Indian company, nor as being in
conflict with the provisions of paragraph 3 of Article 7 of this Convention.
With
reference to collection assistance
4. It is understood that at the date of
signature of this Convention, the laws of
In witness
whereof the undersigned, being duly authorised
thereto, have signed this Convention.
Done in
duplicate at New Delhi on this 6th day of November in 2000, in the Hindi and
English languages, both the texts being equally authentic. In case of
divergence between the two texts, the English text shall prevail.
Addendum to notification 45/2002 [F. No.
503/6/99-ftd], dated 20-2-2002.
In the Notification No. 45/2002 of the
Government of India, in the Ministry of Finance (Department of Revenue), Number
G.S.R. 105(E), dated the 20th February, 2002 published in the
Gazette of India, (Extraordinary), in Part-II, section 3, sub-section (i), dated the 20th February, 2002, the
Exchange of Letters between the Indian and the Irish authorities as annexed
shall form part of the aforesaid notification.
Annexure
The Department
of Foreign Affairs presents its compliments to the Embassy of India and has the
honour to refer to the Convention between the
Government of Ireland and the Government of the Republic of India for the
Avoidance of Double Taxation and for the Prevention of Fiscal Evasion with
respect to Taxes on Income and on Capital Gains which was signed in New Delhi
on 6th November, 2000 and ratified by the Government of the Republic of India
on November 9, 2000 and which has yet to be ratified by the Irish Government, and
to make, on behalf of the Government of Ireland, the following proposal for the
purpose of its application.
The Government
of Ireland proposes that the references in Article 3(1)(ii) to “a year
beginning with the sixth day of April in one year and ending with the fifth day
of April in the following year” should read “the calendar year”.
The Government
of Ireland also proposes that the references in article 28(3)(b)(i) to “the sixth of April in the year next
following” should be read as “the first day of January in the year next
following”. By reason of the amendment, the Convention between the Government
of Ireland and the Government of the
Finally, the
Government of Ireland also proposes that the references in Article 29(b)(i) to “the sixth of April in the year next
following” should be read as “the first day of January in the year next
following”.
If the
foregoing proposals are acceptable to the Government of the Republic of India,
the Department of Foreign Affairs has the honour to
suggest that the present Note and the reply of the Government of the Republic
of India to that effect shall be regarded as constituting an agreement between
the two Governments in this matter which shall enter into force at the same
time as the entry into force of the Convention.
The Department
of Foreign Affairs avails itself of this opportunity to renew to the Embassy of
India the assurances of its highest consideration.
The Embassy of
India, Dublin, presents its compliments to the Department of Foreign Affairs of
the Government of Ireland and with reference to their Note Verbale
No. 348/764, dated 3rd September, 2001, regarding the Convention for Avoidance
of Double Taxation and the Prevention of Fiscal Evasion, signed between India
and Ireland, has the honour to convey that the
concerned authorities in India have informed that the Government of India has
accepted the amendments to the convention suggested by the Government of
Ireland vide the Note Verbale under reference
above.
This
information may please be conveyed to the Department of Revenue, Government of
Ireland, so that these amendments can come into effect from the date as
stipulated in the Note Verbale dated 3rd September,
2001, from the esteemed Department.
The Embassy of
India avails itself of this opportunity to renew to the Department of Foreign
Affairs, Government of Ireland the assurances of its highest consideration.
Notification : No. GSR 212(E), dated 19-3-2002.