TaxTMI 
TaxTMI 
Agreement between the government of India and the government of the federal republic of Germany for the avoidance of double taxation of income
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....eement for the avoidance of double taxation of income ; Now, therefore, it is hereby agreed as follows :- ARTICLE I (1) The taxes which are the subject of the present Agreement are : (a) in India : the income-tax, the super tax, the surcharge, imposed under the Indian Income-tax Act, 1922 (11 of 1922) (hereinafter referred to as "Indian tax"); (b) in the Federal Republic of Germany : the Einkommensteuer (income tax), the Korperschaftstouer (corporation tax), the Notopfer Berlin (Berlin emergency aid tax) (hereinafter referred to as "Federal Republic tax"). (2) The present Agreement shall also apply to any other taxes of a substantially similar character imposed in India or the Federal Republic of Germany subsequent to the date of signature of the present Agreement. ARTICLE II (1) In the present Agreement, unless the context otherwise requires: (a) the term "Federal Republic" means the Federal Republic of Germany; "the territory of the Federal Republic of Germany" means the territory in which the Basic Law for the Federal Republic of Germany is in force; (b) ....
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....ry a construction, installation or assembly project or the like. (cc) The use of mere storage facilities or the maintenance of a place of business exclusively for the purchase of goods or merchandise and not for any processing of such goods or merchandise in the territory of purchase, shall not constitute a permanent establishment. (dd) A person acting in one of the territories for or on behalf of an enterprise of the other territory shall be deemed to be a permanent establishment in the first-mentioned territory, but only if 1. he has and habitually exercises in the first-mentioned territory a general authority to negotiate and enter into contracts for or on behalf of the enterprise, unless the activities of the person are limited exclusively to the purchase of goods or merchandise for the enterprise, or 2. he habitually maintains in the first-mentioned territory a stock of goods or merchandise belonging to the enterprise from which the person regularly delivers goods or merchandise for or on behalf of the enterprise, or 3. he habitually secures orders in the first-mentioned territory, exclusively or almost exclusively, for the enterpri....
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....mmercial profits which it might be expected to derive in that other territory if it were an independent enterprise engaged in the same or similar activities under the same or similar conditions and dealing at arm's length with the enterprise of which it is the 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 the profits attributable to the establishment may be estimated on a reasonable basis. (3) For the purposes of this Agreement the term "industrial or commercial profits" shall not include income in the form of rents, royalties, interests, dividends, management charges, remuneration for labour or personal services or income from the operation of ships or aircraft but shall include rents or royalties in respect of cinematographic films. ARTICLE IV Where a resident of one of the territories carries on business with a resident of the other territory and it appears to the taxation authorities of the first-mentioned territory that owing to the close connection between such persons the course of business is so arra....
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....ituated at the time of such sale, exchange or transfer. For this purpose, the situs of the shares of a company shall be deemed to be in the territory where the company is incorporated. ARTICLE XI (1) Remuneration, including pensions and annuities, paid out of public funds of India in respect of present or past services shall not be taxed in the Federal Republic unless the payment is made to a citizen of the Federal Republic. (2) Remuneration, including pensions and annuities, paid out of public funds of the Federal Republic or its Laender or political sub- divisions thereof in respect of present or past services shall not be taxed in India unless the payment is made to a citizen of India. (3) The provisions of paragraphs (1) and (2) of this Article shall not apply to payments in respect of services in connection with any trade or business carried on by either of the Contracting Parties or political sub-divisions thereof for purposes of profit. (4) The provisions of paragraphs (1) and (2) of this Article shall also apply to remuneration, including pensions and annuities, paid by the Federal Bank, the Federal Railways and the Postal Administration of the Federal Republ....
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....y present in the other territory solely (a) as a student at a recognized university, college or school in such other territory, (b) as a business apprentice (including in the Federal Republic a Volontar or a Praktikant), or (c) as the recipient of a grant, allowance or award for the primary purpose of study or research from a religious, charitable, scientific or educational organisation shall not be taxed in the other territory in respect of remittances from abroad for the purposes of his maintenance, education or training, in respect of a scholarship, and in respect of any amount representing remuneration for an employment in that other territory. (2) An individual from one of the territories who is temporarily present in the other territory for a period not exceeding one year, as an employee of, or under contract with, an enterprise of the former territory or an organisation referred to in paragraph (1) sub- paragraph (c) above, solely to acquire technical, professional or business experience from a person other than such enterprise or organisation, shall not be taxed in that other territory on remuneration for such period, unless the amount....
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.... cent, of the Federal Republic tax; (bb) on interest within the meaning of Article VIII the Indian tax levied thereon, but in any case at least an amount of 50 per cent, of the Federal Republic tax ; (cc) on profits through shipping operations, on royalties, and on remuneration within the meaning of Article XI, the Indian tax levied thereon. ARTICLE XVII The competent authorities shall exchange such information (being information which is at their disposal under their respective taxation laws in the normal course of administration) as is necessary for carrying out the provisions of the present Agreement. Any information so exchanged shall be treated as secret and shall not be disclosed to any persons other than those concerned with the assessment and collection of the taxes which are the subject of the present Agreement. No information as aforesaid shall be exchanged by the competent authority of one of the territories which would disclose any trade, business, industrial or professional secret or any trade process to the authority of the other territory. ARTICLE XVIII Where a resident of one of the territories shows proof that the action of the taxatio....
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....erman and Hindi languages, all the three texts being equally authentic, except in the case of doubt when the English text shall prevail. (DR. B. GOPALA REDDY). (DR. W. MELCHERS). Minister for Revenue and Civil Expenditure, Government of India. Ambassador of the Federal Republic of Germany in India. New Delhi, the 18th day of March, 1959. Dear Sir, The Agreement between the Government of India and the Government of the Federal Republic of Germany for the Avoidance of Double Taxation of Income being signed today, I have the honour, on behalf of the Government of India, to inform you that the two Contracting Parties have agreed that the provisions referred to below shall be applied as follows: 1. Article II(I)(i)(dd) The term "person" as used in the provision referred to includes an employee as well as a person who, though being of independent status, performs activities similar to those of an employee. 2. Article II(I)(i)(dd)(3) The term "almost exclusively" shall be understood to mean that the person's activities for or on behalf of enterprises other than those referred to therein are of such minor importance in relation to his activiti....