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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....HE 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) Gewinnabfuhrungen der Staatlichen Betriebe (revenue transfer by public enterprises) ; (iv) Lohnsteuer (tax on wages) ; (v) Steu....
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....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 has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal a....
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....(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 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 that State an autho....
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....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 them as are attributable to (a) that permanent establishment; (6) sales in that other State of goods or merchandise of the same or similar kind as those sold through that permanent establishment; or (c) other business activities carried on in that other State of the same or simila....
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....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. 2. The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency. 3. For the purposes of this article, interest on the funds connected with the operation of aircraft in international traffic shall be regarded as....
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....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 may be taxed in that other State. 2. However, such dividends may also be taxed in the Contracting State of which the 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 as charg....
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....st, 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-claim has been approved in this regard by the Government of the first-mentioned Contracting State. 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 participate in the debtor's profits, and in particular, income from Government securities and income from bonds or ....
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....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 "fees for technical services" as used in this article means payments of any amount 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 o....
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....o 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. 5. Gains from the alienation of shares other than those mentioned in paragraph 4 in a company which is a resident of a Contracting State may be taxed in that State. 6. Gains from the alienation of any property other than that mentioned in paragraphs 1, 2, 3, 4 and 5 shall be taxable only in the Contracting State of which the alienator is a resident. ARTICLE 15 INDEPENDENT PERSONAL SERVICES 1. I....
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.... 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 be taxed in that other State. 2. Salaries, wages and other similar remuneration derived by a resident of a Contracting State in his capacity as an official in a top-level managerial position of a company which is a resident of the other Contracting State may be taxed in that other State. ARTICLE 18 INCOME EARNED BY ENTERTAINERS Notwithstanding the provisions of articles 15 and 16, income derived by a resident of a Contrac....
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....iod 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 equivalent in "Mark of the GDR" during any "previous year" or the "year of income", as the case may be, provided that such employment is directly related to his studies or is undertaken for the purpose of his maintenance. 2. The benefits of this article shall extend only for such period of time as may be reasonable or customarily required to complete the education or training undertaken, but in no event shall any individual have the benefits of ....
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.... 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 services, may be taxed in that other State. 3. Capital represented by ships or aircraft, operated in international traffic and by movable property pertaining to the operation of such ships or aircraft shall be taxed only in the Contracting State of which the enterprise owning such property is a resident. 4. All other elements of capital of a resident of a Contracting State may be taxed in both Contracting States. ARTICLE 25 ELI....
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.... 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 justified and if it is not itself able to arrive at an appropriate solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to avoidance of taxation not in accordance with the Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the national laws of the Contracting States. 3. The competent authorities of the Contracting States shall endeavour to reso....
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....agraph 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 and support to each other, in the collection of the taxes to which this Agreement relates, in the cases where the taxes are definitely due according to the laws of the 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 will be accepted for enforcement by the other Contracting State to which the request is made and collected in that State in accordance with the laws applicable ....