TaxTMI 
TaxTMI 
Agreement between the Government of the Republic of India and the Government of the Republic of Bangladesh for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes
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.... INDIA AND THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF BANGLADESH FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF BANGLADESH Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, Have agreed as follows: CHAPTER I SCOPE OF THE CONVENTION Article 1 Personal scope This Convention shall apply to persons who are residents of one or both of the Contracting States. ARTICLE 2 Taxes covered 1. The existing taxes to which this convention shall apply are (a) in the case of Bangladesh : the income-tax (hereinafter referred to as Bangladesh tax); (b) in the case of India : (i) the income-tax including any surcharge thereon, (ii) the surtax, (hereinafter referred to as Indian tax). (2) This Convention shall also apply to any identical or substantially similar taxes which are imposed by either Contracting-State after the date o....
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.... the other Contracting-State. (2) As regards the application of this Convention by a Contracting State any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State relating to the taxes which are the subject of this Convention. ARTICLE 4 Resident 1. For the purposes of this Convention, the term resident of a Contracting-State means any person who, under the law of that State, is liable to taxation therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. 2. Where by reason of the provisions of paragraph (1) an individual is a resident of both Contracting States, then his case shall be determined in accordance with the following rules : (a) he shall be deemed to be a resident of the Contracting-State in which he has a permanent home available to him. If he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are the closest (centre of vital interests); (b) if the Contracting ....
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....h or for similar activities which have a preparatory or auxiliary character for the enterprise. 4. Notwithstanding the provisions of paragraphs (1) & (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 the other Contracting-State, that enterprise shall be deemed to have a permanent establishment in the first-mentioned State, if (a) he has, and habitually exercises, in the first-mentioned State a general authority to conclude contracts for or on behalf of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise, or (b) he habitually maintains in the first-mentioned State a stock of goods or merchandise belonging to the enterprise from which that person regularly delivers goods or merchandise for or on behalf of the enterprise, or (c) he habitually secures orders in the first-mentioned State, wholly or almost wholly, for the enterprise itself, or for the enterprise or other enterprises which are controlled by it or have controlling interest in it. 5. An enterprise of a Contrac....
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....ed for the performance of independent personal services. ARTICLE 7. Business profits 1. 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, then so much of the profits of the enterprise as is attributable to that permanent establishment shall be taxable only in that other Contracting State. 2. 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 ascertainment thereof presents exceptional difficulties....
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....ifty per cent of such tax. 2. The provisions of paragraph (1) shall also apply to profits derived from the participation in a pool, a joint business or an international operating agency. ARTICLE 10 Associated Enterprises 1. Where (a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting-State, or (b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. ARTICLE 11 Dividends 1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting-State....
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....tly or profits or income arising in such other Contracting State. Article 12 Interest (1) Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other Contracting 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 if the recipient is the beneficial owner of the interest the tax so charged shall not exceed 10 per cent of the gross amount of the interest. (3) Notwithstanding the provisions of paragraph (2): (a) interest arising in India and paid to the Government of Bangladesh or to the Bangladesh Bank shall be exempt from Indian tax; (b) interest arising in Bangladesh and paid to the Government of India or to the Reserve Bank of India shall be exempt from Bangladesh tax. The competent authorities of the Contracting States may determine by mutual agreement any other institution to which this paragraph shall apply. (4) 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 participat....
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....the Contracting State in which they arise, and according to the laws of that Contracting-State, but if the recipient is the beneficial owner of the royalties, the tax so charged shall not exceed 10 per cent of the gross amount of the royalties. (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 work, including cinematograph films, or films or tapes used or 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 but does not include any payments in respect of the operation of mineral deposits, sources and other natural resources. (4) The provisions of paragraphs (1) and (2) shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, or performs in that oth....
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.... (1) Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that Contracting State. However, such income may be taxed in the other Contracting State if: (a) he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; in that case, only so much of the income as is attributable to that fixed base may be taxed in that other Contracting State; or (b) he is present in the other Contracting State for a period or periods exceeding in the aggregate 120 days in the previous year or income year concerned of that Contracting State. (2) The term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities, as well as the independent activities of physicians, surgeons, lawyers, engineers, architects, dentists and accountants. Article 16 Dependent personal services (1) Subject to the provisions of Articles 17, 19 and 20 salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment ....
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....g State in which the activities of the entertainer or athlete are exercised. (3) The provisions of paragraphs (1) and (2) shall not apply to remuneration or profits, salaries, wages and similar income derived from activities performed in a Contracting State by entertainers or athletes if their visit to that State is substantially supported from the public funds of the other Contracting State, including those of any political sub-division, a local authority or statutory body thereof, nor to income derived by a non-profit making organization in respect of such activities provided no part of its income is payable to, or is otherwise available for the personal benefit of its proprietors, members or shareholders. Article 19 Non-governmental pensions (1) Any pension other than pension to which paragraph (1) of Article 20 applies and any annuity derived from sources within a Contracting State by an individual, who is a resident of the other Contracting State, shall be taxable only in the first-mentioned Contracting State. (2) The term "pension" as used in Article 20 and this Article means periodic payments made in consideration for services rendered or by way of compensatio....
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....e may be, representing remuneration for an employment in that other Contracting State if the employment is related with his studies or his training or if it is necessary for his maintenance. (2) An individual who is a resident of a Contracting State and who is temporarily present in the other Contracting State for a period not exceeding one year, as an employee of, or under a contract with, an enterprise of the first mentioned Contracting State or an organisation referred to in sub-paragraph (c) of paragraph (1), solely to acquire technical, professional or business experience from a person other than such enterprise or organisation, shall be exempt from tax in that other Contracting State in respect of remuneration for such period for his services directly related to the acquisition of such experience, to the extent such remuneration does not exceed the sum of Rs. 12,000 per annum or its equivalent sum in Bangladesh currency, during the "previous year" or the "income year", as the case may be. (3) An individual who is a resident of a Contracting State and who is temporarily present in the other Contracting State under arrangements with the Government of that other Contractin....
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....be agreed from time to time between the two Contracting States. Article 24 Income not expressly mentioned The laws in force in each Contracting State shall continue to govern the taxation of incomes in the respective Contracting State, except where express provision to the contrary has been made in this Convention. Article 25 Methods for elimination of double taxation (1) In the case of a resident of India, double taxation shall be avoided as follows: Subject to the provisions of Indian tax laws regarding the allowance as a credit against Indian tax of tax payable in any country other than India (which shall not affect the general principle hereof) the Bangladesh tax payable (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) under the laws of Bangladesh and in accordance with this Convention, whether directly or by deduction in respect of income from sources within Bangladesh which has been subjected to tax both in Bangladesh and India shall be allowed as a credit against Indian tax payable in respect of that income. The credit shall not, however, exceed that proportion of Indian tax which the income f....
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....erest an amount equal to 10 per cent of the gross amount of such interest; and (c) in the case of royalties an amount equal to 10 per cent of the gross amount of such royalties. (3) In the case of a resident of Bangladesh, double taxation shall be avoided as follows : Subject to the provisions of the law of Bangladesh regarding the allowance as a credit against Bangladesh tax of tax payable in any country other than Bangladesh (which shall not affect the general principle hereof), the Indian tax payable (excluding in the case of dividends, tax payable in respect of profits out of which the dividend is paid) under the law of India and in accordance with this Convention, whether directly or by deduction, by a resident of Bangladesh in respect of income from sources within India which has been subjected to tax both in India and Bangladesh shall be allowed as a credit against Bangladesh tax payable in respect of such income, but in an amount not exceeding that proportion of Bangladesh tax which such income bears to the entire income chargeable to Bangladesh tax. (4) For the purpose of paragraph (3) of this Article the term "Indian tax payable" shall be deemed to ....
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....g State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements in which other similar enterprises of that first-mentioned Contracting State are or may be subjected in the same circumstances and under the same conditions. (4) Nothing contained in paragraphs (1), (2) and (3) of this Article shall be construed as- (a) obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions which it grants to its own residents; (b) affecting any provisions of the tax laws of the respective Contracting States regarding the imposition of tax on non-resident persons as such; (c) affecting any provisions of the tax laws of the respective Contracting States regarding any tax concessions granted to persons fulfilling specified conditions. (5) In this Article the term "taxation" means taxes which are the subject of this Convention. Article 27 Mutual agreement procedure (1) Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result fo....
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.... from time to time on the list of information which shall be furnished on a routine basis. (3) In no case shall the provisions of paragraph (1) be construed so as to impose on a Contracting State the obligation: (a) to carry out administrative measures at variance with the laws or administrative practice of that or of the other Contracting State; (b) to supply information which are not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; (c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process or information the disclosure of which would be contrary to public policy. Article 29 Assistance in collection (1) The two Contracting States undertake to lend assistance and support to each other, in the collection of the taxes to which this Convention relates, in the cases where the taxes are definitely due according to the laws of the Contracting State making the request. (2) In the case of a request for enforcement of collection, tax claims of either of the Contracting States which have been finally determined wil....