INDIA GERMANY DTAA PDF

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As per the Article 11 of the double taxation avoidance agreement (DTAA) between India and Germany, the interest income earned in India by a. Get comprehensive agreements & Tax information exchange agreement between different countries & India to know how Non-resident can claim tax benefits. Double Taxation Avoidance Agreement – DTAA, fiscal evasion, prevention. Taxation Avoidance Agreement (DTAA) with Government of the Republic of India.

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Double Taxation Avoidance Agreement. Agreement between the Government of Republic of the India and the Government of the German Democratic Republic for the avoidance of double taxation with respect to taxes on income and on capital.

Whereas the annexed agreement between the Government of the Republic of India and the Government of the German Democratic Republic for the avoidance of double taxation with respect to taxes on income and on capital has come into force on the 24th November,on the notification by both the Contracting States geermany each other of the approval of the agreement under their laws in accordance with article 31 of the said agreement.

Now, therefore, in exercise of the powers conferred by section 44A of the Wealth-tax Act, 27 ofibdia section 90 of the Income-tax Act, 43 ofthe Central Government hereby directs that all the provisions of the said agreement shall be given effect to in the Union of India.

Desiring to promote economic co-operation between the two States through an Agreement for the avoidance of double taxation with respect to taxes on income and on capital. Have agreed as follows: This agreement shall apply to persons who gsrmany residents of one or both of the Contracting States. The taxes to which this Agreement shall apply are: In the Republic of India: In the German Democratic Republic: Koerperschaftsteuer corporate income-tax.

Gewinnabfuhrungen der Staatlichen Betriebe revenue transfer by public enterprises. Lohnsteue; tax on wages. Steuer auf Lizenzgebuhren tax on royalties. Gewerbesteuer trade-tax ; and. The Agreement shall also apply to any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of the present Agreement in addition to, or in place of, the taxes referred to in paragraph 1. The competent authorities of the Contracting States shall indka each other of any substantial changes which are made in their respective taxation laws.

In this Agreement, unless the context otherwise requires: As regards the application of the Agreement by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has for the purposes of the law of that State concerning the taxes to which the Agreement applies. 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.

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 tdaa 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.

For the purposes of this Agreement, the term “permanent establishment” means a fixed place of business through which the business of the enterprise is wholly or partly carried on. The term “permanent establishment” includes especially: Notwithstanding the preceding provisions of this article, the term “permanent establishment” shall be deemed not to include: However, the provisions of sub-paragraphs b to f shall not be applicable where the enterprise maintains any other fixed place of business in the other Contracting State for any purposes other than the purposes specified in the said sub-paragraphs.

Notwithstanding the provisions of paragraphs 1 and 2 where a person –other than an agent of an independent status to whom paragraph 5 applies–is acting in a Contracting State on behalf of an enterprise of lndia other Contracting State, that enterprise shall inxia deemed to have a permanent establishment in the first-mentioned State, if.

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 getmany broker, general commission agent or any other agent of an independent status provided that such persons are acting in the ordinary course of their business.

However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise itself or on behalf of that enterprise and other enterprises controlling, controlled by, or subject to the same common control, as that enterprise, he will not be considered an agent of an independent status within the meaning of this paragraph.

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 Contracting State whether ihdia a permanent establishment or otherwiseshall not of itself constitute either company a permanent establishment of the other. Income derived by a resident of a Contracting State from immovable property including income from agriculture or forestry situated in the other Contracting State may be taxed in that other State.

The term “immovable property” shall have the meaning which it has under the law of the Contracting State in which the property in question is situated.

The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of the law of the Contracting State 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.

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Ships, boats and aircraft shall not be regarded as immovable property. The provisions of paragraph 1 shall also apply to income derived from the direct use, letting, or use in any other form of immovable property.

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. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting 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 are attributable to a that permanent establishment; b sales in that other State of goods or merchandise of the same or similar kind as those sold through that permanent establishment; or c other business activities carried on in that other State of the same or similar kind as those effected through that permanent establishment.

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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.

In any case where the correct amount of profits attributable to a permanent establishment is incapable of determination or the determination thereof presents exceptional difficulties, the profits attributable to the permanent establishment may be estimated on a reasonable basis. 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 business of the permanent establishment including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere, in accordance with the provisions of and subject to the limitations of the taxation laws of that State.

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However, no such deduction shall be allowed in respect of amounts, if any, paid otherwise than towards reimbursement of actual expenses by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents, know-how or other rights, or by way of commission or other charges for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the permanent establishment.

Likewise, no account shall be taken, in the determination of the profits of a permanent establishment, for amount charged otherwise than towards reimbursement of actual expensesby the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents, know-how or other rights, or by way of commission or other charges for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the head office of the enterprise or any of its other offices.

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.

double taxation avoidance agreement between india and germany

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. Where profits include items of income which are dealt with separately in other articles of this Agreement, then idia provisions of those articles shall. Profits derived by an enterprise of a Contracting State from the operation of aircraft in international traffic shall be taxable only in that State.

The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency. For the purposes of this article, interest on the funds connected with the operation of aircraft in international traffic shall be regarded as profits derived from the operation of such aircraft, and the provisions of article 12 shall not apply in relation to such interest.

The term undia of aircraft” shall mean business of transportation by air of passengers, mail, livestock or goods carried on by the owners or lessees or charterers of aircraft, including the sale of tickets for such transportation on behalf of other enterprises, the incidental lease of aircraft and any other activity directly connected with such transportation.

Income derived by an enterprise of a Contracting State from the operation of ships in international traffic may be taxed in the other Contracting State. Income derived by an enterprise of a Contracting State from the operation of ships in international traffic for the transport of cargo other than that belonging to either Contracting State may be taxed also in that data Contracting State; but such tax shall be restricted to 50 per cent.

The provisions of this article shall also apply to profits from the participation in a pool, a joint business or an international operating agency engaged in the operation of ships. For the germqny of this article: Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the recipient is the beneficial owner of the dividends, the tax as gwrmany shall not exceed: This paragraph shall not affect the taxation of the company in respect of the profits out of which german dividends are paid.

The term “dividends” as used in this article means income from shares or other rights, not being debt-claims, participating in profits, 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.

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 dividends 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 a case, the provisions of article 7 or article 15, as the case may be, shall apply. 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 in so far as such dividends are paid to a resident of that other State or so far 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 inia 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.

Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the interest, the tax so charged shall not exceed 15 per cent.

Notwithstanding the provisions of paragraph 2, 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 iindia income from bonds or debentures, including premiums and prizes attaching to such iindia, bonds or debentures.

Penalty charges for late payment shall not be regarded as interest for the purpose of this article. 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 a permanent establishment or fixed base.

In such case, the provisions of article 7 or article 15, as the case may be, shall apply. Interest shall be deemed to arise in a Contracting State when the payer is that Contracting 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 a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the Contracting State dta which the permanent establishment or fixed base is situated.

Where, by reason of jndia 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 relationship, the provisions of this article shall apply to the last-mentioned amount In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.

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Royalties and fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in gdrmany other State. However, such royalties getmany fees for technical services may also be taxed in the Contracting State in which they arise and ibdia 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 The indua “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 tapes used 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, or for information concerning industrial, commercial or scientific experience.

The term “fees for technical services” as used in this article means payments of any amount to any person other than payments to an employee of a person making payments, in consideration for the services of a managerial, technical or consultancy nature, including the provision indka services of technical or other personnel.

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, property or contract in respect of which the royalties or fees for technical services are paid is effectively connected with such permanent establishment or fixed base.

Royalties and fees for technical services 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 royalties or fees for technical services, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties or fees for technical services was incurred, and such royalties or fees for technical services are borne by such permanent establishment or fixed base, then such royalties or fees for technical services shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.

Where, by reason of special relationship between the payer and the beneficial owner or between both of them termany some other person, the amount of royalties or fees for technical services paid exceeds the amount which would have been paid 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 Contracting State, due regard being had to the other provisions of this Agreement.

Gains derived by a resident of a Contracting State from the alienation of immovable property, referred to in article 6, and situated in the other Contracting State may be taxed in that other State.

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 together with the whole enterprise or of such fixed base, may be taxed in that other State.

Gains 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 the Contracting State of which the alienator is a resident. 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.

Gains inda the alienation of shares indua than those mentioned in paragraph 4 in a company which is a resident of a Contracting State may be taxed in that State.

Gains from the alienation of any property other than rtaa mentioned in paragraphs 1, germahy, 3, 4 and 5 shall be taxable only in the Contracting State of which the alienator is a resident. Income derived by an individual who is a resident of a Contracting State from the performance of professional services or other independent activities of a similar 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: The term “professional services” includes independent scientific, literary, artistic, educational or teaching activities, as well as the independent activities of physicians, surgeons, lawyers, engineers, architects, dentists and accountants.

Subject to the provisions of articles 17, vermany, 19, 20, 21 and 22, 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. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the firstmentioned State if: 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 Contracting State may be taxed in that State.

Exports of either Contracting State delegated to the other Contracting State under Agreements for Scientific Exchanges and Co-operation between India and the German Democratic Republic in force from time to time shall be exempted by the other State from payment of income-tax on the salaries and allowances paid to them by their respective States.

Directors’ 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 gerany resident of the other Contracting State may be taxed in that other State.

Salaries, wages and other similar remuneration derived by a resident of a Contracting State in his capacity as an official in a top-level managerial position of a company which is a resident of the other Contracting State may be taxed in that other State.

Notwithstanding the provisions of articles 15 and 16, income derived by a resident of a Contracting State indis an entertainer such as a theatre, gemany picture, radio or television artiste or a musician from his personal activities as such exercised in the other Contracting State may be taxed in that other State: Provided that income derived by individuals or indiw of persons from activities exercised in the framework of cultural exchanges agreed between the Contracting States on a bilateral or multilateral basis may be taxed only in the State of which they are residents.

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.

However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the individual is germwny resident of that State who: