TaxTMI 
TaxTMI 
Convention Between The Government of The Republic of India And The Government of The Kingdom of Sweden For The Avoidance of Double Taxation And The Prevention of Fiscal Evasion With Respect To Taxes On Income And On Capital
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....nbsp;Surtax Act, 1964 (7 of 1964) and section 44A of the Wealth-tax Act, 1957 (27 of 1957), the Central Government hereby directs that all the provisions of the said Convention shall be given effect to in the Union of India. ANNEXURE CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE KINGDOM OF SWEDEN FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL The Government of the Republic of India and the Government of the Kingdom of Sweden; Desiring to conclude a convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital: Have agreed as follows: 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 the Convention shall apply are: (a) in India: (i) the income-tax and any surcharge thereon; (ii) the surtax; and (iii) the wealth-tax; (hereinafter referred to as " Indi....
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.... an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; (g) the term " national " means: (i) any individual possessing the nationality of a Contracting State; (ii) any legal person, partnership and association deriving its status as such from the laws in force in a Contracting State; (h) the term " competent authority " means: (i) in India, the Central Government in the Ministry of Finance (Department of Revenue) or their authorized representative. (ii) in Sweden, the Minister of Finance or his authorized representative; (i) the term " fiscal year " means (i) in the case of India, " previous year " as understood under the laws concerning taxes on income in force in India; and (ii) in the case of Sweden, the calendar year. 2. As regards the application of this Convention by a Contracting State any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the laws of that State concerning the taxes to which the Convention applies. ARTICLE 4 RESIDENT 1. F....
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.... a building site. a construction, assembly or installation project or the like or supervisory activities in connection therewith, where such site, project or activity continues 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 6 months but the charges payable for the project or supervisory activity exceed 10 per cent. of the sale price of the machinery and equipment. 4. Notwithstanding the preceding provisions of this Article, the term " permanent establishment " shall be deemed not to include: (a) the use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise; (b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display; (c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; (d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for....
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....CLE 6 INCOME FROM IMMOVABLE PROPERTY 1. Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State. 2.The term " immovable property " shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include buildings, property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the rights 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 apply to income derived from the direct use, letting or use in any other form of immovable property. 4. The provisions of paragraph 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the perfo....
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.... of a permanent establishment for amounts charged (otherwise than towards reimbursement of actual expenses), by the permanent establishment to the head 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 or other rights, or by way of commission for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on monies lent to the head office of the enterprise or any of its other offices. Nothing contained in this paragraph shall be construed as obliging a Contracting State to allow in the case of an enterprise of the other Contracting State any deduction in respect of expenses which under the laws of the first-mentioned State would not be allowed to be deducted in the case of an enterprise of that State. 4. No profits shall be attributable to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. 5. In so far as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of....
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....ons of paragraph 1 such profits may also be taxed in the other Contracting State and according to the laws of that other State if the operation of ships in international traffic is carried on in that other State, but for the purposes of the calculation of the tax: (a) such profits shall be deemed to be an amount not exceeding seven and a half per cent. of the full amount received by the enterprise on account of the carriage of passengers or freight embarked in that other State; (b) the tax chargeable in that other State shall be reduced by fifty per cent. 3. For the purposes of paragraph 2, income derived by an enterprise of a Contracting State from the operation of ships in international traffic carried on in the other Contracting State shall mean income from the carriage of passengers, mail, livestock or goods shipped from that other State. 4. The provisions of paragraphs 1 and 2 shall also apply to profits from the participation in a pool, a joint business or an international operating agency. ARTICLE 10 ASSOCIATED ENTERPRISES Where: (a) an enterprise of a Contracting State participates directly or indirectly in the management, control o....
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....hich the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of article 7 or article 15, as the case may be, shall apply. 5. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except in so far as such dividends are paid to a resident of that other State or in so far as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State; nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State. 6. As used in paragraph 2 of this article, the term " new contribution " means any share capital, other than bonus shares, issued after the date of entry into force of this Convention by a company which is a resident of a Contracting State, and beneficially owned by a resident of the other Contracting State. ART....
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....the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base, or with business activities referred to under (c) of paragraph 1 or article 7. In such cases the provisions of article 7 or article 15, as the case may be, shall apply. 6. Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political sub-division, a local authority or a resident of the State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 7. where, by reason of a special relationship between the payer and the beneficial owner or betwe....
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....ugh a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property or contract in respect of which the royalties or fees for technical services are paid is effectively connected with such permanent establishment or fixed base or with business activities referred to under (c) of paragraph 1 of article 7. In such case, the provisions of article 7 or article 15, as the case may be, 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 political 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 not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties or fees for technical services was incurred, and such royalties or fees for technical services are borne by such permanent establishment or fixed base, then such royalties or fees for technical services shall be deemed to arise i....
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....Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State except in the following circumstances, when such income may also be taxed in the other Contracting State: (a) if 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) if his stay in the other Contracting State is for a period or periods exceeding in the aggregate 90 days in the fiscal year of that other State; in that case, only so much of the income as is derived from his activities performed in that other State may be taxed in that other 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, 18, 19, 20, 21 and 22, salaries, wag....
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....ties as such exercised in the other Contracting State may be taxed in that other State. 2. Where income in respect of personal activities exercised by an entertainer or an athlete in his capacity as such accrues not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of articles 7, 15 and 16, be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised. 3. Notwithstanding the provisions of paragraphs 1 and 2, income derived from such activities as defined in paragraph 1 shall be exempt from tax in the Contracting State in which these activities are performed if the visit of the entertainer or the athlete is within the framework of cultural exchange between the Contracting States, or is directly or indirectly supported, wholly or substantially, from the public funds of the other Contracting State, including a political sub-division or local authority of that other State. ARTICLE 19 PENSIONS, SOCIAL SECURITY PAYMENTS AND ANNUITIES 1. Subject to the provisions of paragraph 2 of article 20, pensions and other similar remuneration in consideration of past employment, annuitie....
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....nmental, religious, charitable, scientific, literary or educational organisation, or as a participant in other programmes sponsored by such an organisation, shall be exempt from tax in that other State in respect of: (i) remittances from abroad for the purposes of his maintenance, education, research or training; (ii) remuneration for personal services performed in that other State, provided the remuneration does not exceed fifteen thousand Swedish Kronor or the equivalent in Indian currency for any fiscal year of that other State; and (iii) the amount of such grant, allowance or award. The benefits under sub-paragraph (ii) above shall extend only for such period of time as may be reasonably or customarily required to complete the education, research or training undertaken but shall in no event exceed a period of five consecutive years. ARTICLE 22 TEACHING AND RESEARCH 1. An individual who is a resident of a Contracting State or was a resident of that State immediately before visiting the other Contracting State and who, at the invitation of the Government of that other State or of a university or other educational institution situated i....
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....ay 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 taxable 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 ELIMINATION OF DOUBLE TAXATION 1. The laws in force in either of the Contracting States shall continue to govern the taxation of income and capital in the respective Contracting State except where express provision to the contrary is made in this Convention. 2. (a) Where a resident of India derives income or owns capital which, in accordance with the provisions of this Convention, may be taxed in Sweden, India shall allow as a deduction from the tax on the income of that resident an amount equal to the income-tax paid in Sweden, whether directly or by deduction; and as a deduction from the tax on the capital of that resident an amount equal to the capital tax paid in Sweden. Such deduction in either case shall not, however, exceed that pa....
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....For the purposes of deduction referred to in sub-paragraph (a), Indian tax on interest and royalties and fees for technical services shall in no case be considered as having been paid at a rate of less than- (i) 15 per cent. in the case of interest; and (ii) 20 per cent. in the case of royalties and fees for technical services. (d) Where a resident of Sweden owns capital which, in accordance with the provisions of this Convention, may be taxed in India, Sweden shall allow as a deduction from the tax on the capital of that resident an amount equal to the capital tax paid in India. Such deduction shall not, however, exceed that part of the Swedish capital tax, as computed before the deduction is given, which is appropriate to the capital which may be taxed in India. (e) Notwithstanding the provisions of sub-paragraph (a) of this paragraph, where a resident of Sweden derives income which, in accordance with the provisions of article 7, paragraph (2) of article 14 or paragraph (1)(a) of article 15 may be taxed in India, Sweden shall exempt such income from tax provided that the principal part of the income arises from inde....
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....s and under the same conditions are or may be subjected. This provision shall, notwithstanding the provisions of article 1, also apply to persons who are not residents of one or both of the Contracting States. 2. The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprise of that other State carrying on the same activities in the same circumstances and under the same conditions. This provision shall not be construed as preventing a Contracting State from charging the profits of a permanent establishment which an enterprise of the other Contracting State has in the first-mentioned State at a rate of tax which is higher than that imposed on the profits of a similar enterprise of the first-mentioned Contracting State. 3. Nothing contained in this article shall be construed as obliging a Contracting State to grant to individuals not resident in that State any personal allowances, reliefs and reductions for taxation purposes which are by law available only to individuals who are so resident. 4. Enterprises of a Contracting St....
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.... limits in the domestic laws of the Contracting States. 3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention. 4. The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. The competent authorities shall through consultations develop appropriate bilateral procedures, conditions, methods and techniques for the implementation of the mutual agreement procedure provided for in this article. ARTICLE 28 EXCHANGE OF INFORMATION 1. The competent authorities of the Contracting States shall exchange information as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention, in so far as the taxation thereunder is not contrary to the Convention, in particular for the prevention of fraud or evasion of such taxes. The....
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....nters into force and in respect of capital which is held at the expiry of the calendar year next following that in which the Convention enters into force or subsequent years; (b) In India: in respect of income arising in any fiscal year beginning on or after 1st April next following the calendar year in which the Convention enters into force and in respect of capital which is held at the expiry of any fiscal year beginning on or after 1st April next following the calendar year in which the Convention enters into force. 2. The agreement between the Royal Government of Sweden and the Government of India for the avoidance of double taxation of income, signed at Stockholm on 30th July, 1958, shall cease to have effect at the time when the provisions of this Convention shall be effective in accordance with the provisions of paragraph 1. ARTICLE 31 TERMINATION This Convention shall remain in force indefinitely, but either of the Contracting States may, on or before 30th June in any calendar year beginning after the expiration of a period of five years from the date of its entry into force, give to the other Contracting State, through diplomatic cha....