TaxTMI 
TaxTMI 
Agreement between the Government of the Republic of India and the Government of the Union of Soviet Socialist Republics for the avoidance of double taxation of income
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....OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE UNION OF SOVIET SOCIALIST REPUBLICS FOR THE AVOIDANCE OF DOUBLE TAXATION OF INCOME. The Government of the Republic of India and the Government of the Union of Soviet Socialist Republics, led by the desire to strengthen and develop friendly relations in economic, industrial, technical and cultural spheres, have resolved to conclude an Agreement for the avoidance of double taxation of income and have agreed as follows: ARTICLE 1 SCOPE OF THE AGREEMENT 1. This Agreement shall apply to persons who for the purposes of taxation are deemed to be residents of one or both of the Contracting States. 2. (a) This Agreement shall apply to the territory of each Contracting State, including its territorial sea, to its economic zone and its continental shelf, adjacent to the limits of its territorial sea, in respect of which it ^1[exercises], in conformity with international law, sovereign rights for the purpose of exploration and exploitation of natural resources of such areas; (b) For the purposes of this Agreement, any reference to either Contracting State shall be deemed as reference to the territor....
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....laws in force in India; (ii) in the case of the USSR, any individual possessing the citizenship of the USSR and any legal person deriving its status from the laws in force in the USSR; (e) the term " international traffic " means any transport by a ship or aircraft operated by a resident of a Contracting State except when the ship or aircraft is operated solely between places in the other Contracting State; (f) the term " fiscal year " means: (i) in the case of India, the " previous year ", as defined in the Income-tax Act, 1961; (ii) in the case of the USSR, the period commencing on the 1st January and ending on the 31st of December. 2. 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 under the law of that State concerning the taxes to which the Agreement applies. ARTICLE 4 RESIDENT 1. 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 an....
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....ogether with other such sites, projects or activities, if any) continue for a period of more than 6 months or where such project or supervisory activity, being incidental to the sale of machinery or equipment, continues for a period not exceeding six months and the charges payable for the project or supervisory activity exceed 10 per cent. of the sale price of the machinery and equipment. However, the competent authorities of the Contracting States may in particular cases and by mutual agreement consider such activities as not constituting a permanent establishment also in cases when the duration of works on a building site or a construction or assembly project exceeds six months: Provided that for the purpose of this paragraph a resident of a Contracting State shall be deemed to have a permanent establishment in the other 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 or to be used in, the prospecting for, or extraction or production of mineral oils in that other State. 3. Notwithstanding the preceding provisions of this article, the term ....
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....ock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the resident; (c) he habitually secures orders in the first-mentioned State, wholly or almost wholly for the resident itself or for the resident and other residents controlling, controlled by, or subject to the same common control, as that resident; or (d) in so acting, he manufactures or processes in that State for the resident goods or merchandise belonging to the resident. 5. A resident 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 a 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. 6. The fact that a person (other than an individual) who is a resident of a Contracting State controls or is controlled by a person (other than an individual), who is a resident of the other Contracting State or who carries on business in that other State (either through a permanent establishment or otherwise) shall not constitute one of those persons a....
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....ctions 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. 4. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of ^4[goods] of merchandise for the resident. 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 Agreement, then the provisions of those articles shall not be affected by the provisions of this article. 7. Where: (a) a resident of a Contracting State participates directly or indirectly in the management, control or capital of a resident of the other Contracting State, or (b) the same persons participate directly or ....
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...., a joint business or an international operating agency engaged in the operation of ships. 4. For the purposes of this article: (a) interest on funds connected with the operation of ships in international traffic shall be regarded as income from the operation of such ships and the provisions of article 11 shall not apply in relation to such interest; and (b) income from the operation of ships includes income derived from the use, maintenance or rental of containers (including trailors and related equipment for the transport of containers) in connection with the transport of goods or merchandise in international traffic. ARTICLE 10 DIVIDENDS 1. Dividends paid by a legal person (in the case of India, a company) which is resident of a Contracting State to a resident of the other Contracting State may be taxed in ^6[that] other State. 2. However, such dividends may also be taxed in the Contracting State of which the legal person (in the case of India, a 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 charged shall not exceed 15% of the gross am....
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.... other Contracting State provided that the transaction giving rise to the debt-claim has been approved in this regard by the Government of the first-mentioned State. 4. The term " interest " when used in this article means income from debt-claims of every kind, bank deposits, government loans as well as any other income which is treated as interest in ^9[accordance] with the laws of the State where such income arises. 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, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment. In such case the provisions of article 7 shall apply. 6. Interest shall be deemed to arise in a Contracting State when the payer is that Contracting State itself, a sub-division, a local authority or a resident of that State. Where, however, the person paying the interest, whet....
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....r technical services " as used in this article means payments of any kind 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 of services of technical or other personnel. 5. 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, 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. In such case the provisions of article 7 shall apply. 6. Royalties and fees for technical services shall be deemed to arise in a Contracting State when the payer is that State itself, a 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 ^10[not....
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....tate unless he is present in the other Contracting State for a period or periods amounting to or exceeding in the aggregate 90 days in the relevant fiscal year: in that case, such income may also be taxed in that other State, but only so much of it as is derived from his activities performed in that other State. 2. The term " professional services " includes especially independent personal services of an individual in his capacity as a physician, teacher, architect, engineer and accountant. ARTICLE 15 INCOME FROM EMPLOYMENT 1. Subject to the provisions of articles 16, 17, 18, 19 and 20, 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 so 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. 2. 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 first-mentioned State if: (a) the recip....
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....tainer or athlete himself but to another person, that income shall be taxable only in the other Contracting State, if more than 50 per cent. of the expenses of such person are supported from the public funds of that other State, including any of its sub-divisions or local authorities. ARTICLE 18 REMUNERATION AND PENSIONS IN RESPECT OF GOVERNMENT SERVICES 1. (a) Remuneration, other than a pension, paid by a Contracting State, or a sub-division or a local authority ^12[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 other 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 purposes of rendering the services. 2. (a) Any pension paid by, or out of funds created by a Contracting State, or a 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....
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....ermanent establishment. In such cases, the provisions of article 7 shall apply. ARTICLE 22 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 ^13[this] Agreement. 2. In the case of India, double taxation shall be avoided as follows: (a) where a resident of India derives income which, in accordance with the provisions of this Agreement, may be taxed in the USSR, India, shall allow as a deduction from the tax on the income of that resident an amount equal to the income-tax paid in the USSR, whether directly or by deduction. Such deduction shall not, however, exceed that part of income-tax (as paid before the deduction is given), which may be attributable to the income which may be taxed in the USSR; (b) where a resident of India derives income which, in accordance with the provisions of this Agreement, shall be taxable only in the USSR. India may include this income in the tax base but shall allow as a deduction from the income-tax that part of the income-tax which is attributable to ....
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.... States. ARTICLE 25 EXCHANGE OF INFORMATION 1. The competent authorities of the Contracting States shall exchange, to the extent permitted by their domestic laws, such information (including documents) as is necessary for carrying out the provisions of this Agreement or of the domestic laws of the Contracting States concerning taxes covered by the Agreement, in so far as the taxation thereunder is not contrary to the Agreement, in particular for the prevention of fraud or evasion of such taxes. Any information received by a Contracting State shall be treated as confidential in the same manner as information obtained under the domestic laws of that State. However, if the information is originally regarded as confidential in the transmitting State, it shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes which are the subject of the Agreement. Such persons or authorities shall use the information only for such purposes but may disclose the information in public court proceedings or in jud....
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....e in any calendar year beginning after the expiration of a period of five years from the date of its entry into force, give the other Contracting State, through diplomatic channels, written notice of termination, and, in such event, this Agreement shall cease to 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 notice of termination is given; (b) in the USSR, in respect of income arising in any fiscal year beginning on or after the first day of January next following the calendar year in which the notice of termination is given. In witness whereof the undersigned, being duly authorised thereto, have signed the present Agreement. Done in duplicate at New Delhi this 20th day of November one thousand nine hundred and eighty-eight in the Hindi, Russian and English languages, all the texts being equally authentic. In case of divergence between any of the texts, the English text shall be the operative one. For the Government of the Republic of India. Sd/- (S. B. CHAVAN) For the Government of the Union of Soviet Socialist Republics Sd/-....