TaxTMI 
TaxTMI 
Agreement between the Government of the Republic of India and the Government of the German Democratic Republic for the avoidance of double taxation with respect to taxes on income and on capital
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....f India. ANNEXURE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE GERMAN DEMOCRATIC REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL. The Government of the Republic of India and the Government of the German Democratic Republic ; Desiring to promote economic co-operation between the two States through an Agreement for the avoidance of double taxation with respect to taxes on income and on capital; Have agreed as follows : ARTICLE 1 PERSONAL SCOPE This agreement shall apply to persons who are residents of one or both of the Contracting States. ARTICLE 2 TAXES COVERED 1.The taxes to which this Agreement shall apply are : (a) in the Republic of India : (i) the income-tax including any surcharge thereon imposed under the Income-tax Act, 1961 (43 of 1961) ; and (ii) the wealth-tax imposed under the Wealth-tax Act, 1957 (27 of 1957) (hereinafter referred to as "Indian tax"). (b)in the German Democratic Republic : (i) Einkommensteuer (income-tax) ; (ii) Koerperschaftsteuer (corporate income-tax) ; (iii) Gewinnabfuhru....
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....(ii) any legal person, partnership or organisation deriving its status from the laws in force in the Contracting State ; (h) the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State. 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 for the purposes of 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 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 status shall be determined as follows : (a) he shall be deemed to be a resident of the State in which he has a permanent home available to him ; if he ....
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....pose of storage or display of goods or merchandise belonging to the enterprise ; (c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display ; (d) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another .enterprise ; (e) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or of collecting information, for the enterprise ; (f) the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research, or for similar activities which have a preparatory or auxiliary character, for the enterprise. However, the provisions of sub-paragraphs (b) to (f) shall not be applicable where the enterprise maintains any other fixed place of business in the other Contracting State for any purposes other than the purposes specified in the said sub-paragraphs. 4.Notwithstanding the provisions of paragraphs 1 and 2 where a person - other than an agent of an independent status to whom paragraph 5 applies -is act....
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.... accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of the law of the Contracting State respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources. Ships, boats and aircraft shall not be regarded as immovable property. 3. The provisions of paragraph 1 shall also apply to income derived from the direct use, letting, or use in any other form of immovable property. 4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used 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, the profits of the enterprise may be taxed in the other State but only so much of the....
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.... office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents, know-how or other rights, or by way of commission or other charges for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the head office of the enterprise or any of its other offices. 4. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. 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. ARTICLE 8 AIR TRANSPORT 1. Profits derived by an enterprise of a Contracting State from the operation of aircraft in international traffic shall be taxable only in that State. ....
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.... income from the operation of ships includes income derived from the use, maintenance or rental of containers (including trailers and related equipment for the transport of containers) in connection with the trans- port of goods or merchandise in international traffic. ARTICLE 10 ASSOCIATED ENTERPRISES 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 ....
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....ch other 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 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 15 per cent, of the gross amount of the interest. 3. Notwithstanding the provisions of paragraph 2,- (a) interest arising in a Contracting State shall be exempt from tax in that State provided it is derived and beneficially owned by : (i) the Government, a political sub-division or a local authority of the other Contracting State ; or (ii) the Central Bank of the other Contracting State ; (b) interest arising in a Contracting State shall be exempt from tax in that Contracting State to the extent approved by the Government of that State if it is derived and beneficially owned by any person other than a per- son referred to in sub-paragraph (a) who is a resident of the other Contracting State provided that the transaction giving rise to the debt-c....
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....rovisions of this Agreement. ARTICLE 13 ROYALTIES AND FEES FOR TECHNICAL SERVICES 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 if the recipient is the beneficial owner of the royalties, or fees for technical services, the tax so charged shall not exceed 22.5 (twenty-two and a half) per cent, of the gross amount of the royalties or fees for technical services. 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 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 "fee....
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....a Contracting State from the alienation of immovable property, referred to in article 6, and situated in the other Contracting State may be taxed in that other State. 2. Gains from the alienation of 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 or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or together with the whole enterprise) or of such fixed base, may be taxed in that other State. 3. Gains from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft shall be taxable only in the Contracting State of which the alienator is a resident. 4. Gains from the alienation of shares of the capital stock of a company the property of which consists directly or indirectly principally of immovable property situated in a Contracting State may be taxed in that State.....
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....t "fiscal year", as the case may be ; and (b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State ; and (c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. 3. Notwithstanding the preceding provisions of this article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State may be taxed in that State. 4. Experts of either Contracting State delegated to the other Contracting State under Agreements for Scientific Exchanges and Co-operation between India and the German Democratic Republic in force from time to time, shall be exempted by the other State from payment of income-tax on the salaries and allowances paid to them by their respective States. ARTICLE 17 DIRECTORS' FEES AND REMUNERATION OF TOP LEVEL MANAGERIAL OFFICIALS 1. Directors' fees and similar payments derived by a resident of a Contracting State in his capacity as a member of the Board of Directors of a company which is a resident of the other Contracting State may b....
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....y a resident of a Contracting State from sources within the other Contracting State may be taxed only in the first-mentioned Contracting State. 2.The term "pension" means a periodic payment made in consideration of past services or by way of compensation for injuries received in the course of performance of services. 3.The term "annuity" means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time, under an obligation to make the payments in return for adequate and full consideration in money or money's worth. ARTICLE 21 PAYMENTS RECEIVED BY STUDENTS AND APPRENTICES 1. A student or business apprentice who is or was a resident of one of the Contracting States immediately before visiting the other Contracting State and who is present in that other State solely for the purpose of his education or training, shall be exempt from tax in that other State on : (a) payments made to him by persons residing outside that other State for the purposes of his maintenance, education or training ; and (b) remuneration from employment in that other State in an amount not exceeding Rs. 15,000 or its equi....
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....ishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of article 7 or article 15, as the case may be, shall apply. 3. Notwithstanding the provisions of paragraphs 1 and 2, items of income of resident of a Contracting State not dealt with in the foregoing articles of this Agreement and arising in the other Contracting State may be taxed in that other State. ARTICLE 24 CAPITAL 1. Capital represented by immovable property referred to in article 6, 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 or by movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal service....
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.... partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned State are or may be subjected in the same circumstances and under the same conditions. 5.In this article, the term "taxation" means taxes which are the subject of this Agreement. 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 for him in taxation not in accordance with this Agreement, he may, notwithstanding the remedies provided by the national laws of those States, present his case to the competent authority of the Contracting State of which he is a resident. The case must be presented within three years of receipt of notice of the action which gives rise to taxation not in accordance with the Agreement. 2. The competent authority shall endeavour, if the objection appears to it to be j....
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....change of information shall be made, including, where appropriate, exchange of information regarding tax avoidance. 2.The exchange of information or documents shall be either on a routine basis or on a request with reference to particular cases or both. The competent authorities of the Contracting States shall agree from time to time on the list of information or documents 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 or documents 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 or documents 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 Contracting States undertake to lend assistance a....