TaxTMI 
TaxTMI 
Modifying and Supplementing the Agreement between India and Japan for the Avoidance of Double Taxation
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.... ANNEXURE Protocol Modifying and Supplementing the Agreement between India and Japan for the Avoidance of Double Taxation in respect of Taxes on Income. The Government of India and the Government of Japan, Desiring to modify and supplement the Agreement between India and Japan for the avoidance of double taxation in respect of taxes on income, signed at New Delhi on January 5, 1960, Have agreed as follows: &....
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.... following immediately after paragraph (4): " (4A) No profit shall be attributed to a permanent establishment of an enterprise of one of the Contracting States situated in the other Contracting State through or from operations which are confined merely to the purchase of goods for the purpose of export from such other Contracting State. " Article IV 1. In the application of Article V of the Agreement, the rate of reduction shall be fifty-five per cent. instead of fifty per cent. 2. Paragraph (3) of Article V shall be amended by deleting the expression " sections 44A and 44B of the Indian Income-tax Act, 1922 (....
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....in modification of or in addition to the existing measures, provided that an agreement is made between the two Governments in respect of the scope of the benefit accorded to the taxpayer by the said measures. " Article VII Protocol which constitutes an integral part of the Agreement between Japan and India for the Avoidance of Double Taxation in respect of taxes on income, signed at New Delhi on January 5, 1960, shall be abrogated. &nbs....
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....aph (i), (ii) of paragraph (1) of Article II of the Agreement: for the purpose of the said sub-paragraph, where a resident of one of the Contracting States fulfils an order for the sale of plant or machinery to a resident of the other Contracting State and it is incidental to the sale of the plant or machinery that a person or persons employed by the resident of the first-mentioned Contracting State should proceed to that other Contracting State for assisting in the installation of the plant or machinery therein, such activity shall not be deemed to constitute a permanent establishment unless it is carried on for a period exceeding ninety days or the expenses incurred on such activity are more than 10 per cent. of the total sale price for the order. 3. With reference to sub-paragraph (i), (iiia) of paragraph (1) of Article II of the Agreement: for the purposes of the said paragraph, the provisions thereof shall not apply where the enterprise maintains any other fixed place of business in that other Contracting State for any purpose or purposes other than the purposes specified in the said paragraph. 4. With reference to paragraph (2) of Article XI of the Agreement: f....
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....se maintains any other fixed place of business in that other Contracting State for any purpose or purposes other than the purposes specified in the said paragraph. 4. With reference to paragraph (2) of Article XI of the Agreement: for the purposes of the said paragraph, where the resident of India is a company by which the surtax is payable, the credit to be allowed against Indian tax shall be allowed in the first instance against the income-tax payable by the company in India and, as to the balance, if any, against the surtax payable by it in India. I have further the honour to request Your Excellency to confirm the foregoing understanding on behalf of the Government of Japan. I have further the honour to confirm that the foregoing understanding is also the understanding of the Government of Japan. Accept, Your Excellency, the assurances of my highest consideration. (Sd.) SHINSAKU HOGEN, Ambassador Extraordinary and Plenipotentiary of Japan to India. His Excellency Mr. P. C. Sethi, Minister of State in the Ministry of Finance, Government of India, New Delhi. New Delhi, April 8, 1969. Excellency, I have the honour to refer to su....
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....ngs or ships or hotels; (ix) Section 85 and section 80K (which replaces section 85 with effect from April 1, 1968)-relating to exemption from tax of, or deduction in respect of, dividends attributable to profits and gains from eligible industrial undertakings or ships or hotels; (x) Section 85A and section 80M (which replaces section 85A with effect from April 1, 1968)-relating to deduction in respect of certain dividends received by a company from an Indian company or any other company declaring and paying dividends within India. I have further the honour to propose that this Note and your Excellency's reply confirming, on behalf of the Government of Japan, the foregoing shall constitute an agreement between the two Governments which shall enter into force on the date of the entry into force of the aforesaid Protocol and be applicable in respect of any assessment year commencing on or after the first day of April, 1967. Accept, Your Excellency, the assurances of my highest consideration. Sd. P. C. SETHI. His Excellency Mr. Shinsaku Hogen, Ambassador Extraordinary and Plenipotentiary of Japan to India. New Delhi, April 8, 1969. Excellency, I have....