UK Agreement for avoidance of double taxation ... - Taxsutra

1 UK Agreement for avoidance of double taxation and prevention of fiscal evasion with united kingdom of Great Britain and Northern Ireland Whereas the annexed convention between the Government of the Republic of India and the Government of the united kingdom of Great Britain and Northern Ireland for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains has entered into force on 26th October, 1993 on the notification by both the Contracting States to each other of the completion of the procedures required by their respective laws, as required by Article 30 of the said convention ; Now, therefore, in exercise of the powers conferred by section 90 of the income -tax Act, 1961 (43 of 1961), the Central Government hereby directs that all the provisions of the said convention shall be given effect to in the Union of India.

2 Notification : No. GSR 91(E), dated 11-2-1994. ANNEXURE convention BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE united kingdom OF GREAT BRITAIN AND NORTHERN IRELAND FOR THE avoidance OF double taxation AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON income AND CAPITAL GAINS The Government of the Republic of India and the Government of the united kingdom of Great Britain and Northern Ireland; Desiring to conclude a new convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains; Have agreed as follows : ARTICLE 1 - Scope of the convention - 1.

3 This convention shall apply to persons who are residents of one or both of the Contracting States. 2. This convention extends to the territory of each Contracting State, including its territorial sea, and to those areas of the exclusive economic zone or the continental shelf adjacent to the outer limit of the territorial sea of each State over which it has, in accordance with international law, sovereign rights for the purpose of exploration and exploitation of the natural resources of such areas.

4 And references in this convention to the Contracting State or to either of them shall be construed accordingly. ARTICLE 2 - Taxes covered - 1. The taxes which are the subject of this convention are : (a) in the united kingdom : (i) the income -tax; (ii) the corporation tax; (iii) the capital gains tax; and (iv) the petroleum revenue tax; (hereinafter referred to as united kingdom tax ); (b) in India; the income -tax including any surcharge thereon; (hereinafter referred to as Indian tax ).

5 2. This convention shall also apply to any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of this convention in addition to, or in place of, the taxes of that Contracting State referred to in paragraph 1 of this Article. The competent authorities of the Contracting States shall notify each other of any substantial changes which are made in their respective taxation laws. ARTICLE 3 - General definitions - 1.

6 In this convention , unless the context otherwise requires : (a) the term united kingdom means Great Britain and Northern Ireland; (b) the term India means the Republic of India; (c) the term tax means united kingdom tax or Indian tax, as the context requires but shall not include any amount which is payable in respect of any default or omission in relation to the taxes to which this convention applies or which represents a penalty imposed relating to those taxes; (d) the term fiscal year in relation to Indian tax means previous year as defined in the income -tax Act, 1961 (43 of 1961) and in relation to united kingdom tax means a year beginning with 6th April in one year and ending with 5th April in the following year; (e) the terms a Contracting State and the other Contracting State mean India or the united kingdom , as the context requires.

7 (f) the term person includes an individual, a company and any other entity which is treated as a taxable unit under the taxation laws in force in the respective Contracting States, but, subject to paragraph 2 of this Article, does not include a partnership; (g) the term company means any body corporate or any entity which is treated as a company or body corporate for tax purposes; (h) the terms enterprise of a Contracting State and enterprise of the other Contracting State mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State.

8 (i) the term competent authority means, in the case of the united kingdom , the Commissioners of Inland Revenue or their authorised representative, and in the case of India, the Central Government in the Ministry of Finance (Department of Revenue) or their authorised representative; (j) 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; (k) the term Government means the Government of a Contracting State or a political sub-division or local authority thereof.

9 In relation to the united kingdom , the term political sub-division shall include Northern Ireland. 2. A partnership which is treated as a taxable unit under the income -tax Act, 1961 (43 of 1961) of India shall be treated as a person for the purposes of this convention . 3. 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 .

10 ARTICLE 4 - Fiscal domicile - 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 of this Article an individual is a resident of both Contracting States, then his status 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.