TaxTMI 
TaxTMI 
Amendment in the Convention between the Republic of India and the Kingdom of the Netherlands - G.S.R. 382(E), dated the 27th March, 1989
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....ther of the completion of the procedures required under their laws for bringing into force the said convention; And whereas the Central Government in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), section 24A of the Companies (Profits) Surtax Act, 1964 (7of 1969) and section 44A of the Wealth-tax Act, 1957 (27 of 1957), had directed that all the provisions of the said Convention annexed to the notification of the Government of India in the Ministry of Finance (Department of Revenue) (Foreign Tax Division) number G.S.R. 382(E), dated the 27th March, 1989, shall be given effect to in the Union of India; And whereas Article IV of the Protocol dated the 30th July, 1988 to the aforesaid Convention ....
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.... 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 the following modifications shall be made in the Convention notified by the said notification which are necessary for implementing the aforesaid Convention between India and Netherlands, namely; I. With effect from 1st April, 1997, for the existing paragraph 2 of Article 10 relating to Dividends the following paragraph shall be read: "2. 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 so charge....
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.... for which this Convention has effect, (A) 15 per cent of the gross amount of the royalties or fees for technical services as defined in this Article, where the payer of the royalties or fees is the Government of that Contracting State, a political sub-division or a public sector company; and (B) 20 per cent of the gross amount of the royalties or fees for technical services in all other cases; and (ii) during the subsequent years 15 per cent of the gross amount of royalties or technical services; and (b) in the case of royalties referred to in sub-paragraph (b) of paragraph 4 and fees for technical services as defined in this Article that are ancillary and subsidiary to the enjoyment of the property for ....
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.... payment described in paragraph 4 of this Article is received; or b) make available technical knowledge, experience, skill, know how or processes, or consist of the development and transfer of a technical plan or technical design. 6. Notwithstanding paragraph 5, "fees for technical services" does not include amounts paid: a) for services that are ancillary and subsidiary as well as inextricably and essentially linked, to the sale of property other than a sale described in paragraph 4(a); b) for services that are ancillary and subsidiary to the rental of ships, aircraft, containers or other equipment used in connection with the operation of ships or aircraft in international traffic; c) for teachi....
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....rmanent 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. 9. 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 royalties or fees for technical services, having regard to the royalties or fees for technical services 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 payment shall remain taxable a....