TaxTMI 
TaxTMI 
Agreement between the Republic of India and the Federal Republic of Germany for the Avoidance of Double Taxation with respect to taxes on income and capital
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....rnment of the Federal Republic of Germany and the Government of India for the Avoidance of Double Taxation of income signed on 18th ^2[March 1959], the Republic of India and the Federal Republic of Ger-^3[many;] Desiring to amend the Agreement for the Avoidance of Double Taxation of Income signed in New Delhi on 18th ^4[March 1959], between both States (hereinafter referred to as "^5[the Agreement]"); Have agreed as follows: ARTICLE I The title of the agreement shall be deleted and replaced by the following text: "AGREEMENT BETWEEN THE REPUBLIC OF INDIA AND THE FEDERAL REPUBLIC OF GERMANY FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND CAPITAL" ARTICLE II Sub-paragraphs (a) and (b) of paragraph (1) of Article I of the Agreement shall be deleted and replaced by the following text: "(a) in the Federal Republic of^ ^6[Germany:] (i) the income-tax (Eimkommensteuer) (ii) the corporation tax (Koerperschaftsteuer) (iii) the capital tax ^7[(Vermoegensteuer), and] (iv) the trade tax (Gewerbesteuer) (hereinafter referred to as "German tax"); (b) in India: ....
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....a Contracting State" and "the other Contracting State" means the Federal Republic ^10[or India], as the context requires. " (2) Sub-paragraph (g) of paragraph (1) of Article II of the Agreement shall be deleted ^11[and the sub-para-]graphs (h), (i), (j), (k) and (1) shall be renumbered as (g), (h), (i), (j) and (k), respectively. (3) Sub-paragraph (h) of paragraph (1) of Article II of the Agreement, as renumbered by paragraph (2), shall be deleted and replaced by the following text: "(h) (aa) ^12[The] term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on. (bb) ^13[The] term "permanent establishment" includes especially: (i) a place of management; (ii) a branch; (iii) an office; (iv) a factory; (v) a workshop; (vi) a sales outlet; (vii) a warehouse; and (viii) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources. (cc) A building site or construction or installation project constitutes a permanent establishment only if it lasts for more than six months. ....
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....l commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. (gg) 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; " (4) After sub-paragraph (k) of paragraph (1) of Article II of the Agreement, as renumbered by paragraph (2), the following new sub-paragraph (1) shall be added: "(1) the term "fiscal year" means: (i) in relation to Indian tax, the previous year as defined in the Income-tax Act, 1961; (ii) in relation to German tax, the calendar year." (5) The terms "territory", "territories", "Federal Republic tax" and "resident of one of the territories", wherever appearing in the Agreement, shall be replaced by the terms "Contracting State", "Contracting States", "German tax" and "resident of a Contracting State", ^14[respectively]" ARTICLE V Article III of ....
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....ss there is good and sufficient reason to the contrary. (7) Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article." ARTICLE VI Article VI of the Agreement shall be deleted and replaced by the following text: "(1) Profits derived from the operation of ships in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. (2) Notwithstanding the provisions of paragraph (1), such profits may be taxed in the other Contracting State from which they are derived provided that the tax so charged shall not exceed: (a) during the first five fiscal years after the entry into force of the Protocol signed on June 28, 1984, 50 per cent; and (b) during the subsequent five fiscal years, 25 per cent, of the tax otherwise imposed by the internal law of that State. Subsequently, only the provisions of paragraph (1) shall be applicable. (3) The provisions of paragraphs (1) and (2) shall also apply to profits from the p....
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.... establishment. In such case, the provisions of Article III 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 ^15[insofar] as such dividends are paid to a resident of that other State or in so far as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment 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 VIII Article VIII of the Agreement shall be deleted and replaced by the following text: "(1) Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. (2) However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State. But the tax so charged on interest payable in respect of a....
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...."(1) 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 that other State. (2) However, such royalties and 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 in so far as the fees for technical services are concerned, the tax so charged shall not exceed 20 per cent of the gross amount of such fees. (3) 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 ^19[work including] cinematograph ^20[films or 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. (4) The term "fees for technical services" as used in this Article means payments of any kind to any person, other than payments to an employee of the person....
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....of the enterprise is situated." ARTICLE XI After Article XV of the Agreement, a new Article XVA shall be inserted with the following text: "(1) Capital represented by immovable property referred to in Article IX, owned by a resident of a Contracting State and situated in the other Contracting State, may be taxed in that other State. (2) Capital represented by 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 may be taxed in that other State. (3) Capital represented by ships and aircraft operated in international traffic and by movable property pertaining to the operation of such ships or aircraft shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. (4) Capital represented by shares in a company shall be taxable in the Contracting State in which such company is resident. (5) All other elements of capital of a resident of a Contracting State shall be taxable only in that State." ARTICLE XII Paragraphs (2) and (3) of Article XVI of the Agreement shall ....
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....s it may be amended from time to time without changing the general principle hereof), there shall be allowed as a credit against German income and corporation tax payable in respect of the following items of income arising in India, the Indian tax paid under the laws of India and in accordance with this Agreement on: (aa) profits derived from the operation of ships in international traffic; (bb) dividends not dealt with in sub-paragraph (a); (cc) interest; (dd) royalties and fees for technical services. (c) For the purpose of ^22[lit.] (bb) to (dd) of sub-paragraph (b), the term "Indian tax" shall be deemed to include any amount which would have been payable as Indian tax under the laws of India and in accordance with this Agreement for any year but for an exemption from, or reduction of, tax granted for that year ^23[under] ^24[(aa) sections] 10(4), 10(4A), 10(15)(iv) and 80K of the Income-tax Act, 1961; ^25[(bb)] any other provision of similar character to be agreed between the competent authorities of both Contracting States. If this amount is less than 50 per cent of the German tax chargeable on such i....
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.... 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 Contracting State, with a view to the avoidance of taxation which is not in accordance with the Agreement. Any Agreement reached shall be implemented notwithstanding any time-limits in the domestic law of the Contracting States. (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 Agreement. They may also consult together for the elimination of double taxation in cases not provided for in the Agreement. (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." ARTICLE XIV This Protocol shall also apply to Land Berlin, provided that the Government of the Federal Republic of Germany does not make a contrary declaration to the Government of India within three months of the date of entry into force of this Protocol. ARTICLE XV Sub-paragraph....
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.... be taxed in that State and according to the law of that State. (a) if they are derived from rights or debt claims carrying a right to participate in profits (including income derived by a sleeping partner from his participation as such, and in the case of the Federal Republic from a "partiarisches Darlehen" and from "Gewinnobligationen"), and (b) under the condition that they are deductible in the determination of profits of the debtor of such income. 2. Where a company being a resident of the Federal Republic distributes income derived from sources within India, sub-paragraph (a) of paragraph (3) of Article XVI of the Agreement shall not preclude the compensatory imposition of corporation tax on such distributions in accordance with the provisions of German tax law, designed to ensure the crediting of the underlying tax against the ^32[income tax] payable by the shareholder. 3. Notwithstanding the provisions of paragraph (3) of Article III of the Agreement, no deduction shall be allowed in respect of amounts paid or charged (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head office of the enterpr....
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....ached agreement on the following: 1. Notwithstanding the provisions of Articles VII and VIII of the Agreement, dividends and interest arising in a Contracting State may be taxed in that State and according to the law of that State. (a) If they are derived from rights or debt claims carrying a right to participate in profits (including income derived by a sleeping partner from his participation as such, and in the case of the Federal Republic from a "partiarisches darlehen" and from "Gewinnobligationen"), and (b) under the condition that they are deductible in the determination of profits of the debtor of such income. 2. Where a company being a resident of the Federal Republic distributes income derived from sources within India, sub-paragraph (a) of ^36[paragraph] (3) of Article XVI of the Agreement shall not preclude the compensatory imposition of corporation tax on such distributions in accordance with the provisions of German tax law, designed to ensure the crediting of the underlying tax against the ^37[income tax] payable by the shareholder, 3. Notwithstanding the provisions of paragraph (3) of Article III of the Agreement, no deduc....
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....ted 30-06-1987 before it was read as, "March, 1959 " 3. Corrected vide Corrigenda No. G.S.R. 609(E) dated 30-06-1987 before it was read as, "many:" 4. Corrected vide Corrigenda No. G.S.R. 609(E) dated 30-06-1987 before it was read as, "March, 1959" 5. Corrected vide Corrigenda No. G.S.R. 609(E) dated 30-06-1987 before it was read as, "The Agreement" 6. Corrected vide Corrigenda No. G.S.R. 609(E) dated 30-06-1987 before it was read as, "Germany" 7. Corrected vide Corrigenda No. G.S.R. 609(E) dated 30-06-1987 before it was read as, "Vermoegensteur) and" 8. Corrected vide Corrigenda No. G.S.R. 609(E) dated 30-06-1987 before it was read as, "tax ")." 9. Corrected vide Corrigenda No. G.S.R. 609(E) dated 30-06-1987 before it was read as, "for" 10. Corrected vide Corrigenda No. G.S.R. 609(E) dated 30-06-1987 before it was read as, "of India" 11. Corrected vide Corrigenda No. G.S.R. 609(E) dated 30-06-1987 before it was read as, "and sub-para-" ....