The Government of the Republic of India and the Government
of the Federative Republic of Brazil
Desiring to conclude a Convention for the avoidance
of double taxation and the prevention of fiscal evasion with respect
to taxes on income.
This Convention shall apply to persons who are residents
of one or both of the Contracting States.
1. The taxes to which the Convention shall apply
are:
- in the case of Brazil:
- the federal income tax, excluding the supplementary income tax
and the tax on activities of minor importance; (hereafter referred
to as "Brazilian tax")
- in the case of India:
- the income tax including any surcharge thereon;
- the surtax; (hereafter referred to as "Indian tax")
2. The Convention shall also apply to any identical
or substantially similar taxes which are imposed after the date
of signature of the Convention in addition to, or in place of, the
above-mentioned taxes. The competent authorities of the Contracting
States shall notify each other of any substantial changes which
have been in their respective taxation laws.
Article 3
General Definitions
1. For the purposes of this Convention, unless
the context otherwise requires:
- the term "nationals" means:
I - all individuals possessing the nationality
of a Contracting State;
- all legal persons, partnerships and associations deriving
their status as such from the law in force in a Contracting
State;
- the terms "a Contracting State" and "the other
Contracting State" mean Brazil or India, as the context requires.
- 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;
- The term "Company" means any body corporate or any
entity which is treated as a body corporate for tax purposes;
- 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;
- The term "International traffic" means any transport
by a ship or aircraft operated by an enterprise which has its
place of effective management in a Contracting State, except when
the ship or aircraft is operated solely between places in the
other Contracting States;
- The term "tax" means Brazilian tax or Indian tax,
as the context requires;
- The term "competent authority" means:
- in Brazil: the Minister of Finance, the Secretary of Federal
Revenue or their authorized representative;
- in India: the Central Government in the Ministry of Finance
(Department of Revenue) or their authorized representative.
2. As regards the application of the Convention
by a Contracting State, any term not defined therein shall, unless
the context otherwise requires, have the meaning which it has under
the law of that State concerning the taxes to which the Convention
applies.
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 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
- 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 and economic relations are
closer (center of vital interests);
- if the State in which he has his center of vital interests cannot
be determined, of if he has not a permanent home available to
him in either State, he shall be deemed to be a resident of the
State in which he has an habitual abode;
- if he has an habitual abode in both States or in neither of
them, he shall be deemed to be a resident of the State of which
he is a national;
- if he is a national of both States or of neither of them, the
competent authorities of the Contracting States shall settle the
question by mutual agreement.
3. Where by reason of the provisions of paragraph
1 a person other than an individual is a resident of both Contracting
States, then it shall be deemed to be a resident of the State in
which its place of effective management is situated.
Article 5
Permanent Establishment
1. For the purposes of this Convention, the terms
"permanent establishment" means a fixed place of business
through which the business of an enterprise is wholly or partly
carried on.
2. The term "permanent establishment"
includes especially:
- a place of management;
- a branch;
- an office;
- a factory;
- a workshop;
- a mine, an oil or gas well, a quarry or other place of extraction
of natural resources;
- a building site or construction or assembly project which exists
for more than six months;
- an installation, a drilling rig or ship used for the exploration
or exploitation of natural resources, but only if so used for
a period of more than six months.
3. Notwithstanding the preceding provisions of
this Article, the term "permanent establishment" shall
be deemed not to include:
- the use of facilities solely for the purpose of storage or
display of goods or merchandise belonging to the enterprise;
- the maintenance of a stock of goods or merchandise belonging
to the enterprise solely for the purpose of storage or display;
- the maintenance of a stock of goods or merchandise belonging
to the enterprise solely for the purpose of processing by another
enterprise;
- the maintenance of a fixed place of business solely for the
purpose of purchasing goods or merchandise or of collecting
information, for the enterprise;
- the maintenance of a fixed place of business solely for the
purpose of carrying on, for the enterprise, any other activity
of a preparatory or auxiliary character.
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 on behalf of an enterprise
and has, and habitually exercises, in a Contracting State an authority
to conclude contracts in the name of the enterprise, that enterprise
shall be deemed to have a permanent establishment in that State
in respect of any activities which that person undertakes for the
enterprise, unless the activities of such person are limited to
those mentioned in paragraph 3 which, if exercised through a fixed
place of business, would not make this fixed place of business a
permanent establishment under the provisions of that paragraph.
5. An enterprise of a Contracting State shall not
be deemed to have a permanent establishment in the other Contracting
State merely because it carries on business in that other State
through a broker, general commission agent or any other agent of
an independent status, provided that such persons are acting in
the ordinary course of their business. However, when the activities
of such an agent are devoted wholly or almost wholly on behalf of
that enterprise itself or on behalf of that enterprise and other
enterprises controlling, controlled by, or subject to the same common
control, as that enterprise, he will not be considered an agent
of an independent status within the meaning of this paragraph.
6 The fact that a company which is a resident of
a Contracting State controls or is controlled by a company which
is a resident of the other Contracting State, or which carries on
business in that other State (whether through a permanent establishment
or otherwise), shall not of itself constitute either company a permanent
establishment of the other.
Article 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 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 right to work, mineral
deposits, sources and other natural resources; ships 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 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 is attributable to that
permanent establishment.
2. Subject to the provisions of paragraph 3, where
an enterprise of a Contracting State carries on business in the
other Contracting State through a permanent establishment situated
therein, there shall in each Contracting State be attributed to
that permanent establishment the profits which it might be expected
to make if it were a distinct and separate enterprise engaged in
the same or similar activities under the same or similar conditions
and dealing wholly independently with the enterprise of which it
is a permanent establishment.
3. In determining the profits of a permanent establishment,
there shall be allowed as deductions expenses which are incurred
for the purposes of the permanent establishment, including executive
and general administrative expenses so incurred, in accordance with
the provisions of and subject to the limitations of the taxation
laws of the Contracting State concerned.
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. Where profits include items of income which
are dealt with separately in other Articles of this Convention,
then the provisions of those Articles shall not be affected by the
provisions of this Article.
Article 8
Shipping and Air Transport
1. Profits from the operation of ships or aircraft
in international traffic shall be taxable only in the Contracting
State in which the place of effective management of the enterprise
is situated.
2. If the place of effective management of a shipping
enterprise is aboard a ship, then it shall be deemed to be situated
in the Contracting State in which the home harbour of the ship is
situated, or, if there is no such home harbour, in the Contracting
State of which the operator of the ship is a resident.
3. The provisions of paragraph 1 shall also apply
to profits from the participation in a pool, a joint business or
an international operating agency.
4. The term "Operation of ships or aircraft"
shall mean business of transportation of persons, mail, livestock
or goods carried on by the owners or lessees or characters of the
ships or aircraft, including the sale of tickets for such transportation
on behalf of other enterprises.
Article 9
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 person 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 10
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 a company which is the beneficial owner of the dividends
the tax so charged shall not exceed 15 per cent of the gross amount
of the dividends.
This paragraph shall not affect the taxation of
the company in respect of the profits out of which the dividends
are paid.
3. The term "dividends" as used in this
Article means income from shares, "jouissance" shares
or "jouissaance" rights, mining shares, founders’ shares
or other rights, not being debt-claims, participating in profits,
as well as income from other corporate rights which is subjected
to the same taxation treatment as income from shares by the laws
of the State of which the company making the distribution is a resident.
4. The provisions of paragraph 1 and 2 shall not
apply if the beneficial owner of the dividends being a resident
of a Contracting State, carries on business in the other Contracting
State of which the company paying the dividends is a resident through
a permanent establishment situated therein, and the holding by virtue
of which the dividends are paid is effectively connected with such
permanent establishment. In such case the provisions of Article
7 shall apply.
5. Where a resident of India has a permanent establishment
in Brazil, this permanent establishment may be subject to tax withheld
at source in accordance with Brazilian law. However, such a tax
cannot exceed 15 per cent of the gross amount of the profits of
that permanent establishment determined after the payment of the
corporate tax related to such profits.
6. 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 insofar as such dividends are paid to a resident
of that other State or insofar as the holding in respect of which
the dividends are paid is effectively connected with a permanent
establishment situated in that other State, nor subject 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.
Article 11
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 paragraphs 1 and 2:
- interest arising in a Contracting State and paid to the Government
of the other Contracting State, a political subdivision thereof
or any agency (including a financial institution) wholly owned
by that Government, or political subdivision shall be exempt from
tax in the first-mentioned State, unless subparagraph (b) applies;
- interest from securities, bonds or debentures issued by the
Government of a Contracting State, a political subdivision thereof
or any agency (including a financial institution) wholly owned
by that Government or political subdivision shall be taxable only
in that State.
4. The term "interest" as used in this
Article means income from government securities, bonds or debentures,
whether or not secured by mortgage and whether or not carrying a
right to participate in profits, and debt-claims of every kind as
well as other income assimilated to income from money lent by the
taxation law of the Contracting State in which the income arises.
5. The provisions of paragraphs 1 and 2 shall not
apply if the beneficial owner of the interest, being a resident
of a Contracting State carries on business in the other Contracting
State in which the interest arises, through a permanent establishment
situated therein and the debt –claim in respect of which the interest
is paid is effectively connected with such permanent establishment.
In such case the provisions of Article 7 shall apply.
6. The tax rate limitation provided for in paragraph
2 shall not apply to interest arising in a Contracting State and
paid to a permanent establishment of an enterprise of the other
Contracting State which is situated in a third State.
7. 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 that 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
in connection with which the indebtedness on which the interest
is paid was incurred, and such interest is borne by such permanent
establishment, then such interest shall be deemed to arise in the
State in which the permanent establishment is situated.
8. Where, by a reason of a special relationship
between the payer and the beneficial owner or between both of them
and some other person, the amount of the interest , having regard
to the debt-claim for which it is paid, exceeds the amount which
would have been agreed upon by the payer and the beneficial owner
in the absence of such relationship, the provisions of this Article
shall apply only to the last-mentioned amount. In such case, the
excess part of the payments shall remain taxable according to the
laws of each Contracting State, due regard being had to the other
provisions of this Convention.
Article 12
Royalties
1. Royalties 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 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 the tax so charged shall not exceed:
a) 25% of the gross amount of the royalties arising
from the use or the right to use trade marks;
b) 15% of the gross amount of the royalties in
all other cases.
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, films or tapes
for television or radio 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 provisions of paragraphs 1 and 2 shall not
apply if the beneficial owner of the royalties, being a resident
of a Contracting State, carries on business in the other Contracting
State in which the royalties arise, through a permanent establishment
situated therein, and the right or property in respect of which
the royalties are paid is effectively connected with such permanent
establishment. In such case the provisions of Article 7 shall apply.
5. Royalties shall be deemed to arise in a Contracting
State when the payer is that State itself, a political subdivision,
a local authority or a resident of that State. Where, however, the
person paying the royalties, whether he is a resident of a Contracting
State or not, has in a Contracting State a permanent establishment
in connection with which the obligation to pay the royalties was
incurred, and such royalties are borne by such permanent establishment,
then such royalties shall be deemed to arise in the State in which
the permanent establishment is situated.
6. Where, by reason of a special relationship between
the payer and the beneficial owner or between both of them and some
other person, the amount of the royalties, having regard to the
use, right or information for which they are paid, exceeds the amount
which would have been agreed upon by the payer and the beneficial
owner in the absence of such relationship, the provisions of this
Article shall apply only to the last-mentioned amount. In such case,
the excess part of the payments shall remain taxable according to
the laws of each Contracting State, due regard being had to the
other provisions of this Convention.
Article 13
Capital gains
1. Gains derived by a resident of a Contracting
State from the alienation of immovable property referred to in Article
6, which is 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, including such gains from the alienation of such a permanent
establishment (alone or with the whole enterprise), may be taxed
in the other State. However, 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 in which the place of effective
management is situated.
3. Gains from the alienation of any property other
than that referred to in paragraphs 1 and 2, may be taxed in both
Contracting States.
Article 14
Independent personal services
1. Income derived by a resident of a Contracting
State in respect of professional services or other activities of
an independent character shall be taxable only in that State, unless
the remuneration for such services or activities is paid by a resident
of the other Contracting State or is borne by a permanent establishment
situated therein. In such case, the income may be taxed in that
other State.
2. The term "professional services" includes
especially independent scientific, technical, literary, artistic,
educational or teaching activities as well as the independent activities
of physicians, lawyers, engineers, architects, dentists and accountants.
Article 15
Dependent personal services
1. Subject to the provisions of Articles 16, 18,
19 and 20, salaries, wages and other similar remuneration derived
by a resident of a Contracting State in respect of an employment
shall be taxable only in that State unless the employment is exercised
in the other Contracting State. If the employment is so exercised,
such remuneration as is derived therefrom may be taxed in that other
State.
2. Notwithstanding the provisions of paragraph
1, remuneration derived by a resident of a Contracting State in
respect of an employment exercised in the other Contracting State
shall be taxable only in the first-mentioned State if:
a) the recipient is present in the other State
for a period or periods not exceeding in the aggregate 183 days
in the fiscal year concerned, 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 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 may
be taxed in the Contracting State in which the place of effective
management of the enterprise is situated.
Article 16
Directors´ fees
Directors´ fees and other similar payments derived
by a resident of a Contracting State in his capacity as a member
of the board of directors or of any council of a company which is
a resident of the other Contracting State may be taxed in that other
State.
Article 17
Artistes and Athletes
1. Notwithstanding the provisions of Article 14
and 15, income derived by a resident of a Contracting State as an
entertainer, such as theatre, motion picture, radio or television
artiste, or a musician, or as an athlete, from his personal activities
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, 14 and 15, be taxed in the Contracting State in which the activities
of the entertainer or athlete are exercised.
3. The provisions of paragraphs 1 and 2 of this
Article shall not apply to income derived from activities performed
in a Contracting State by an entertainer or an athlete if the visit
to that Contracting State is substantially supported by public funds
of, or sponsored by the other Contracting State, including those
of any political subdivision or local authority.
Article 18
Pensions and social security payments
1. Subject to the provisions of paragraph 2 of
Article 19, pensions and other similar remuneration, alimony and
annuities paid to a resident of a Contracting State may be taxed
in that State.
2. However, such pensions and other similar remuneration,
alimony and annuities may also be taxed in the other Contracting
State if the payment is made by a resident of that other State or
a permanent establishment situated therein.
3. Notwithstanding the provisions of paragraphs
1 and 2, pensions paid and other payments made under a public scheme
which is part of the social security system of a Contracting State
or a political subdivision or a local authority thereof shall be
taxable only in that State.
4. As used in this Article:
a) the term "pensions and other similar remuneration"
means periodic payments made in consideration of past employment
or by way of compensation for injuries in connection with past employment;
b) the term "annuities" means stated
sums 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 19
Government payments
1. Remuneration not including pensions, paid by
a Contracting State, a political subdivision or a local authority
thereof to an individual in respect of services rendered to that
State, to a political subdivision or local authority shall be taxable
only in that State.
However, such remuneration shall be taxable only
in the Contracting State of which the recipient is a resident if
the services are rendered in that State and the recipient of the
remuneration is a resident of that State who
a) is a national of that State, or
b) did not become a resident of that State solely
for the purpose of performing the services.
2. Pensions paid by, or out of funds created by,
a Contracting State, a political subdivision or a local authority
thereof to an individual in respect of services rendered to that
State, to a political subdivision or a local authority thereof may
be taxed in that State.
3. The provisions of Articles 15, 16 and 18 shall
apply to remuneration and pensions paid in respect of services rendered
in connection with any business carried on by a Contracting State,
a political subdivision or a local authority thereof.
Article 20
Teachers and researchers
1. An individual who is or was immediately before
visiting a Contracting State a resident of the other Contracting
State and who, at the invitation of the Government of the first-mentioned
State or of a university, college, school, museum or other cultural
institution of that first-mentioned State or under an "official
programme of cultural exchange, is present in that State for a period
not exceeding two consecutive years solely for the purpose of teaching,
giving lectures or carrying out research at such institution shall
be exempt from tax in that State or his remuneration for such activity,
provided that the payment of such remuneration is derived by him
from outside that State.
2. This Article shall not apply to income from
research if such research is undertaken primarily for the private
benefit of a specific person or persons.
Article 21
Students and apprentices
1. Payments which a student or business apprentice
who is was immediately before visiting a Contracting State a resident
of the other Contracting State and who is present in the first-mentioned
State solely for the purpose of his education or training receives
for the purpose of his maintenance, education or training shall
not be taxed in that State, provided that such payments arise from
sources outside that State.
2. In respect of grants, scholarships and remuneration
from employment not covered by paragraph 1, a student or business
apprentice described in paragraph 1 shall, in addition, be entitled
during such education or training to the same exemptions, reliefs
or reductions in respect of taxes available to residents of the
State which he is visiting.
3. 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 this Article, for more
than five consecutive years from the date of his first arrival in
that State.
Article 22
Other Income
Items of income of a resident of a Contracting
State, arising in the other Contracting State and not dealt with
in the foregoing Articles of this Convention, may be taxed in that
other State.
Article 23
Methods for the elimination of double taxation
1. Subject to the provisions of paragraphs 3 and
4, where a resident of a Contracting State derives income which,
in accordance with the provisions of this Convention, may be taxed
in the other Contracting State, the first-mentioned State shall
allow as a deduction from the tax on the income of that resident
an amount equal to the tax paid in that other State.
Such deduction shall not, however, exceed that
part of the tax, as computed before the deduction is given, which
is attributable to the income which may be taxed in that other State.
2. For the deduction mentioned in paragraph 1,
the tax paid in that other State shall always be deemed to have
been paid at the rate of 25 per cent of the gross amount of interest
referred to in paragraph 2 of Article 11 and of royalties referred
to in paragraph 2b of Article 12, provided, however, that the tax
so deemed to have been paid shall not exceed the tax leviable on
that income in the first-mentioned State.
3. Where a company which is a resident of a Contracting
State derives dividends which, in accordance with the provisions
of paragraph 2 of Article 10, may be taxed in the other Contracting
State, the first-mentioned State shall exempt such dividends from
tax.
4. Where a resident of India derives profits which,
in accordance with the provisions of paragraph 5 of Article 10 may
be taxed in Brazil, India shall exempt such profits from tax.
Article 24
Non-discrimination
1. Nationals of a Contracting State shall not be
subjected in the other Contracting State to any taxation or any
requirement connected therewith, which is other or more burdensome
than the taxation and connected requirements to which nationals
of that other State in the same circumstances are or may be subjected.
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 enterprises of that other State carrying
on the same activities. This provision shall not be construed as
obliging a Contracting State to grant to residents of the other
Contracting State any personal allowances, reliefs and reductions
for taxation purposes on account of civil status of family responsibilities
which it grants to its own residents.
3. Enterprises of a Contracting State, the capital
of which is wholly or 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 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 the first-mentioned State, the capital of which is
wholly or partly owned or controlled, directly or indirectly, by
one or more residents of a third State, are or may be subjected.
4. In this Article, the term "taxation"
means taxes to which this Convention applies.
Article 25
Mutual agreement procedure
1. Where a resident of a Contracting State considers
that the actions of one or both of the Contracting State result
or will result for him in taxation not in accordance with this Convention,
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. This case must
be presented within five years of the date of receipt of notice
of the action which gives rise to taxation not in accordance with
the Convention.
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 Convention. 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 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.
When it seems advisable in order to reach agreement to have an oral
exchange of opinions, such exchange may take place through a commission
consisting of representatives of the competent authorities of the
Contracting States.
Article 26
Exchange of Information
1. The competent authorities of the Contracting
States shall exchange such information (including documents) as
is necessary for carrying out the provisions of the Convention or
of the domestic laws of the Contracting States concerning taxes
covered by the Convention, in so far as the taxation there-under
is not contrary to the Convention, in particular for the prevention
of fraud or evasion of such taxes. Any information received by a
Contracting State shall be treated as secret in the same manner
as information obtained under the domestic laws of that State. However,
if the information is originally regarded as secret in the transmitting
State, it shall be disclosed only to persons or authorities (including
courts and administrative bodies) involved in the assessment or
collection of, the enforcement or prosecution in respect of, or
the determination of appeals in relation to, the taxes which are
the subject of the Convention. Such persons or authorities shall
use the information only for such purposes but may disclose the
information in public court proceedings or in judicial decisions.
The competent authorities shall, through consultation, develop appropriate
conditions, methods and techniques concerning the matters in respect
of which such exchange of information shall be made, including,
where appropriate, exchange of information regarding tax avoidance.
2. 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 27
Diplomatic agents and consular officers
Nothing in this Convention shall affect the fiscal
privileges of diplomatic agents or consular officers under the general
rules of international law or under the provisions of special agreements.
Article 28
Entry into force
1. This Convention shall be ratified and the instruments
of ratification shall be exchanged at as soon as possible.
2. The Convention shall enter into force upon the
exchange of instruments of ratification and its provisions shall
have effect for the first time:
a) in Brazil:
- in respect of taxes withheld at source, to amounts paid or credited
on or after the first day of January of the calendar year immediately
following that in which the Convention enters into force;
- in respect of other taxes covered by the Convention, for the
taxable year beginning on or after the first day of January of
the calendar year immediately following that in which the Convention
enters into force.
b) in India;
in respect of income arising in any previous year
beginning on or after the first day of April immediately following
the calendar year in which the Convention enters into force.
Article 29
Termination
Either Contracting State may terminate this Convention after a
period of five years from the date on which the Convention enters
into force by giving to the other Contracting State, through diplomatic
channels, a written notice of termination, provided that any such
notice shall be given only on or before the thirtieth day of June
in any calendar year.
In such case the Convention shall cease to have effect:
(a) in Brazil:
I - in respect of taxes withheld at source, to amounts paid or
credited on or after the first day of January of the calendar year
immediately following that in which the notice of termination is
given;
II - in respect of other taxes, for taxable years
beginning on or after the first day of January of the calendar year
immediately following that in which the notice of termination is
given.
b) in India
in respect of income arising in any previous year beginning on
or after the first day of April immediately following the calendar
year in which the notice is given.
In witness whereof the undersigned being duly authorized thereto
have signed this Convention.
Done at this day of , in duplicate in Hindi, Portuguese and English
languages, all three texts being equally authentic. In case of any
divergence of interpretation, the English text shall prevail.
For the Government of for the Government of the
The Republic of India Federative Republic of Brazil
PROTOCOL
At the moment of the signature of the Convention
between the Republic of India and the Federative Republic of Brazil
for the avoidance of double taxation and the prevention of fiscal
evasion with respect to taxes on income the undersigned, being duly
authorized thereto, have agreed upon the following provisions which
constitute an integral part of the Convention.
1. With reference to Article 3, paragraph 1, item
(g)
It is understood that the term "tax"
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.
2. With reference to Article 12, paragraph 3
It is understood that the provisions of paragraph
3 of Article 12 shall apply to payments of any kind to any person,
other than payments to an employee of a person making such payments,
in consideration for the rendering of assistance or services of
a managerial, administrative, scientific, technical or consultancy
nature.
3. With reference to Article 20
It is understood that the terms "museum or
other cultural institution" shall refer only to such organizations
which have been approved in this regard by the competent authority
of the Contracting State concerned.
4. With reference to Article 24, paragraph 2
It is understood that the provisions of paragraph
5 of Article 10 are not in conflict with the provisions of paragraph
2 of Article 24.
5. It is understood that either Contracting State
may, at any time not earlier than ten years from the date on which
the Convention enters into force, seek to review any or all of its
provisions, by notice in writing through competent authority thereof
to the competent authority of the other Contracting State. The competent
authorities shall, within a period of six months thereafter, initiate
appropriate proceedings for such review.
In witness whereof the undersigned being duly authorized
thereto have signed this Protocol.
Done at this day of , in duplicate, in Hindi, Portuguese
and English languages, all three texts being equally authentic.
In case of any divergence of interpretation, the English text shall
prevail.
For the Government of the For the Government of
the
Republic of India Federative Republic of Brazi
