United Arab Emirates

INCOME-TAX ACT, 1961 : NOTIFICATION UNDER SECTION 90

AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF
INDIA AND THE GOVERNMENT OF THE UNITED ARAB EMIRATES
FOR AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION
OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND
ON CAPITAL
Notification G.S.R. No. 710(E), dated 18th November, 1993.

Whereas the annexed agreement between the Government of the United

Arab Emirates and the Government of the Republic of India for the
avoidance of double taxation and prevention of fiscal evasion with respect
to taxes on income and on capital has entered into force on the 22nd
September, 1993, after the notification by both the Contracting States to
each other of the completion of the proceedings required by laws for
bringing into force of the said agreement in accordance with paragraph 1
of Article 30 of the said Agreement :

Now, therefore, in exercise of the powers conferred by section 90 of the

Income-tax Act, 1961 (43 of 1961), section 24A of the Companies (Profits)
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 agreement shall be given effect to in the Union of India.

ANNEXURE

AN AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA

AND THE GOVERNMENT OF THE UNITED ARAB EMIRATES 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 United
Arab Emirates

Desiring to promote mutual economic relations by concluding an

Agreement 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 Agreement shall apply to persons who are residents of one or both of
the Contracting States.

Article 2

TAXES COVERED

1. There shall be regarded as taxes on income and on capital all taxes

imposed on total income, on total capital, or on elements of income or of
capital including taxes on gains from alienation of movable or immovable
property as well as on capital appreciation.

2. The existing taxes to which the Agreement shall apply are :

(a) In United Arab Emirates ;

(i) income-tax ;

(ii) corporation tax ;

(iii) wealth-tax ;

(hereinafter referred to as "U.A.E. tax") ;

(b) In India :

(i) the income-tax including any surcharge thereon ;

(ii) the surtax ; and

(iii) the wealth-tax ;

(hereinafter referred to as "Indian tax").

3. This Agreement shall also apply to any identical or substantially similar

taxes on income or capital which are imposed at Federal or State level by
either Contracting State in addition to, or in place of, the taxes referred to
in paragraph 2 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. In this Agreement, unless the context otherwise requires

(a) the term "India" means the Territory of India and includes the
territorial sea and air space above it, as well as any other maritime zone in
which India has sovereign rights, other rights and jurisdictions, according
to the Indian law and in accordance with international law ;

(b) the term "U.A.E." means the United Arab Emirates and when used in a
geographical sense, means all the territory of the United Arab Emirates
including its territorial sea in which the U.A.E. laws relating to taxation
apply and any area beyond its territorial sea within which the United Arab
Emirates has sovereign rights of exploration for an exploitation of
resources of the seabed and its sub-soil and superjacent water resources in
accordance with international law ;

(c) the terms "a Contracting State" and "the other Contracting State" mean
U.A.E. or India as the context requires ;

(d) the term "tax" means "Indian tax" or "U.A.E. 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 Agreement
applies or which represents a penalty imposed relating to those taxes ;

(e) 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 ;

(f) the term "company" means any body corporate or any entity which is
treated as a company or body corporate under the taxation laws in force in
the respective Contracting States ;

(g) 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 ;

(h) the term "national" means :

(i) in the case of U.A.E. all individuals possessing the nationality of U.A.E.
in accordance with U.A.E. laws and any legal person, partnership and other
body corporate deriving its status as such from the U.A.E. laws ;

(ii) in the case of India, any individual possessing the nationality of India
and any legal person, partnership, or association deriving its status as such
from the laws in force in India ;

(i) 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 State ;

(j) the term "competent authority" means :

(i) in the case of U.A.E., the Minister of Finance and Industry or his
authorised representative ; and

(ii) in the case of India, the Central Government in the Ministry of Finance
(Department of Revenue) or their authorised representative.

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 under the laws 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, place of
incorporation 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 and economic relations are closer (centre of vital
interests) ;

(b) if the State in which he has his centre of vital interests cannot be
determined, or 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 ;

(c) if he has an habitual. abode in both States or in either of them, he shall

be deemed to be a resident of the State of which he is a national ;

(d) 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 Agreement, the term "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) a place of management ;

(b) a branch ;

(c) an office ;

(d) a factory ;

(e) a workshop ;

(f) a mine, an oil or gas well, a quarry or any other place of extraction of
natural resources ;

(g) a farm or plantation ;

(h) a building site or construction or assembly project or supervisory

activities in connection therewith, but only where such site, project or
activity continues for a period of more than 9 months ;

(i) the furnishing of services including consultancy services by an

enterprise of a Contracting State through employees or other personnel in
the other Contracting State, provided that such activities continue for the
same project or connected project for a period or periods aggregating to
more than 9 months within any twelve-month period.

3. 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, display or delivery
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, display or delivery ;

(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 the
enterprise ;

(e) 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 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 on behalf 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 persons are
limited to the purchase of goods or merchandise for the enterprise.

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, he will not be considered an
agent of an independent status within the meaning of this paragraph.

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, 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 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
business of the permanent establishment, including executive and general
administrative expenses so incurred, whether in the State in which the
permanent establishment is situated or elsewhere.

4. 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 the total profits of the enterprise to its various parts,
nothing in paragraph 2 shall preclude that Contracting State from
determining the profits to be taxed by such an apportionment as may be
customary ; the methods of apportionment adopted shall, however, be
such that, the result shall be in accordance with the principles contained in
this Article.

5. No profits shall be attributed to a permanent establishment by reason of

the mere purchase by the permanent establishment of goods or
merchandise for the enterprise.

6. 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.

7. 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

SHIPPING

1. Profits derived by an enterprise of a Contracting State from the

operation by that enterprise of ships in international traffic shall be taxable
only in that State.

2. For the purposes of this Article, profits from the operation of ships in
international traffic shall mean profits derived by an enterprise described in
paragraph 1 from the transportation by sea of passengers, mail, livestock
or goods and shall include :

(a) the charter or rental of ships incidental to such transportation ;

(b) the rental of containers and related equipments used in connection with
the operation of ships in international traffic ;

(c) the gains derived from the alienation of ships, containers and related
equipments owned and operated by the enterprise in international traffic.

3. For the purposes of this Article, interest on funds connected with the
operation of ships in international traffic shall be regarded as profits
derived from the operation of such ships and the provisions of Article 11
shall not apply in relation to such interest.

4. The provisions of paragraphs 1, 2 and 3 shall apply to profits from the

participation in a pool, a joint business or an international operating
agency.

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 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 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 the beneficial owner of the
dividends, the tax so charged shall not exceed :

(a) 5 per cent. of the gross amount of the dividends if the beneficial owner
is a company which owns at least ten per cent. of the shares of the
company paying the dividend ;

(b) 15 per cent. of the gross amount of the dividends in all other cases.

3. The term "dividends" as used in this Article means income from 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 paragraphs 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 or performs in that other State independent personal services from
a fixed base situated therein, and the holding in respect of which the
dividends are paid is effectively connected with such permanent
establishment or fixed base. In such a case, the provisions of Article 7 or
Article 14, 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.

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 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 :

(a) 5 per cent. of the gross amount of the interest if such interest is paid
on a loan granted by a bank carrying on a bona fide banking business or by
a similar financial institution ; and

(b) 12.5 per cent. of the gross amount of the interest in all other cases.

3. Notwithstanding the provisions of paragraph 2 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.

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 debentures
including premiums and prizes attaching to such securities, bonds or
debentures. Penalty charges for late payment shall not be regarded as
interest for the purpose of this Article.

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 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. In
such case, the provisions of Article 7 or Article 14, as the case may be,
shall apply.

6. Interest shall be deemed to arise in a Contracting State when the payer

is that Contracting 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 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 Contracting 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 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 Agreement.

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 10 per cent. of the gross amount of such royalties.

3. The term "royalties" as used in this Article means payment 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 cinematography
films, or 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 but do not include royalties or other payments in
respect of the operation of mines or quarries or exploitation of petroleum
or other natural resources.

4. The provisions of paragraphs I 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 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 royalties are paid
is effectively connected with such permanent establishment or fixed base.
In such a case, the provisions of Article 7 or Article 14, as the case may
be, shall apply.

5. Royalties 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, 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 was incurred, and such royalties are borne by
such permanent establishment or fixed base, then such royalties shall be
deemed to arise in the Contracting State in which the permanent
establishment or fixed base 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
lastmentioned 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 Agreement.

Article 13

CAPITAL GAINS

1. Gains derived by a resident of a Contracting State from the alienation of

immovable property referred to in paragraph 2 of 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 any property other than that mentioned in
paragraphs 1 and 2 shall be taxable only in the Contracting State of which
the alienator is a resident.

Article 14
INDEPENDENT PERSONAL SERVICES

1. Income derived by a resident of a Contracting State in respect of

professional services or other independent activities of a similar 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
amounting to or exceeding in the aggregate 183 days in the relevant
"previous year" or "year of income", as the case may be ; 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 independent scientific, literary,

artistic, educational or teaching activities as well as the independent
activities of physicians, surgeons, lawyers, engineers, architects, dentists
and accountants.

Article 15

DEPENDENT PERSONAL SERVICES

1. Subject to the provisions of Articles 16, 17, 18, 19, 20 and 21, 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 relevant "previous year" or
"year of income", 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

(e) 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
shall be taxable only in that State.

Article 16

DIRECTORS' FEES
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.

Article 17

INCOME EARNED BY ENTERTAINERS AND ATHLETES

1. Notwithstanding the provisions of Articles 14 and 15, income derived by

a resident of a Contracting State as an entertainer such as a 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 an 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. Notwithstanding the provisions of paragraph 1, income derived by an

entertainer or an athlete who is a resident of a Contracting State from his
personal activities as such exercised in the other Contracting State, shall
be taxable only in the first-mentioned Contracting State, if the activities in
the other Contracting State are supported wholly or substantially from the
public funds of the first-mentioned Contracting State, including any of its
political sub-divisions or local authorities.

4. Notwithstanding the provisions of paragraph 2 and Articles 7, 14 and 15,

where income in respect of personal activities exercised by an entertainer
or an athlete in his capacity as such in a Contracting State accrues not to
the entertainer or athlete himself but to another person, that income shall
be taxable only in the other Contracting State, if that other person is
supported wholly or substantially from the public funds of that other State,
including any of its political sub-divisions or local authorities.

Article 18

REMUNERATION AND PENSIONS IN RESPECT OF GOVERNMENT SERVICE

1. (a) Remuneration, other than a pension, paid by a Contracting State or

a political sub-division or a local authority thereof to an individual in
respect of services rendered to that State or sub-division or authority shall
be taxable only in that State.

(b) However, such remuneration shall be taxable only in the other

Contracting State if the services are rendered in that other State and the
individual is a, resident of that State who :

(i) is a national of that State ; or

(ii) did not become a resident of that State solely for the purpose of
rendering the services.

2. (a) Any pension paid by, or out of funds created by a Contracting State
or a political sub-division or a local authority thereof to an individual in
respect of services rendered to that State or sub-division or authority shall
be taxable only in that State.

(b) However, such pension shall be taxable only in the other Contracting
State, if the individual is a resident of, and a national of that other State.

3. The provisions of Articles 15, 16 and 17 shall apply to remuneration and

pensions in respect of services rendered in connection with a business
carried on by a Contracting State or a political sub-division or a local
authority thereof.

Article 19

NON-GOVERNMENT PENSIONS AND ANNUITIES

1. Any pension, other than a pension referred to in Article 18, or any

annuity derived by 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 20

STUDENTS, TRAINEES AND APPRENTICES

1. An individual who is a resident of a Contracting State and who is

temporarily present in the other Contracting State solely as a student at a
recognised university, college, school or other educational institution in
that other Contracting State or as a business or technical apprentice
therein, for a period not exceeding six years from the date of his first
arrival in that other Contracting State in connection with that visit, shall be
exempt from tax in that other Contracting State on--

(a) all remittances from the first-mentioned Contracting State for the
purposes of his maintenance, education or training ; and

(b) any remuneration (not exceeding 20,000 Indian rupees or its

equivalent sum in U.A.E. currency per annum) for personal services
rendered in that other Contracting State with a view to supplementing the
resources available to him for such purposes.

2. An individual who is a resident of a Contracting State and who is

temporarily present in the other Contracting State for the purpose of
study, research or training solely as a recipient of a grant, allowance or
award from the Government of either of the Contracting States or from a
scientific, educational, religious or charitable organisation or under a
technical assistance programme entered into by the Government of either
of the Contracting States for a period not exceeding three years from the
date of his first arrival in that other Contracting State in connection with
that visit shall be exempt from tax in that other Contracting State on--

(a) the amount of such grant, allowance or award ;

(b) all remittances from the first-mentioned Contracting State for the
purposes of his maintenance, education or training ; and

(c) any remuneration (not exceeding 20,000 Indian rupees or its

equivalent sum in U.A.E. currency per annum) in respect of services in that
other Contracting State if the services are performed in connection with his
study, research, training or are incidental thereto.

3. An individual who is a resident of a Contracting State and who is

temporarily present in the other Contracting State solely as an employee
of, or under contract with, an enterprise of the first-mentioned Contracting
State solely for the purpose of acquiring technical, professional or business
experience from a person other than such enterprise, for a period not
exceeding twelve months from the date of his first arrival in that other
Contracting State in connection with that visit shall be exempt from tax in
that other Contracting State on--

(a) all remittances from the first-mentioned Contracting State for the
purposes of his maintenance, education or training ; and

(b) any remuneration, so far as it is not in excess of 20,000 Indian rupees

or its equivalent sum in U.A.E. currency per annum, for personal services
rendered in that other Contracting State, provided such services are in
connection with the acquisition of such experience.

4. An individual who is a resident of a Contracting State and who is

temporarily present in the other Contracting State under arrangements
with the Government of that other Contracting State solely for the purpose
of training or study shall be exempt from tax in that other Contracting
State in respect of remuneration received by him on account of such
training or study.

5. For the purposes of this Article and Article 21,

(a) (i) an individual shall be deemed to be a resident of India if he is

resident in India in the "previous year" in which he visits U.A.E. or in the
immediately preceding "previous year" ;

(ii) an individual shall be deemed to be a resident of U.A.E. if, immediately

before visiting India, he is a resident of U.A.E. ;

(b) the term "recognised" in relation to a university, college, school or

other educational institution in a Contracting State shall, in the case of
doubt, be determined by the competent authority of that State.

Article 21

PROFESSORS, TEACHERS AND RESEARCHERS

1. An individual who is a resident of a Contracting State immediately

before making a visit to the other Contracting State, and who, at the
invitation of any university, college, school or other similar educational
institution, which is recognised by the Government a political sub-division
or a local or statutory authority of that State, visits that other Contracting
State for a period not exceeding two years solely for the purpose of
teaching or research or both at such educational institution, shall be
exempt from tax in that other Contracting State on his remuneration for
such teaching or research

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 22

OTHER INCOME

1. Subject to the provisions of paragraph 2, items of income of a resident

of a Contracting State, wherever arising, which are not expressly dealt with
in the foregoing articles of this Agreement, shall be taxable only in that
Contracting State.

2. The provisions of paragraph 1 shall not apply to income, other than

income from immovable property as defined in paragraph 2 of Article 6, if
the recipient of such income, being a resident of a Contracting State,
carries on business in the other Contracting State through 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 in respect of which the income is paid is effectively connected
with such permanent establishment or fixed base. In such case, the
provisions of Article 7 or Article 14, as the case may be, shall apply.

Article 23

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 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 operated in international traffic and by

movable property pertaining to the operation of such ships, shall be
taxable only in the Contracting State in which the place of effective
management of the enterprise is situated.

Article 24

INCOME OF GOVERNMENT AND INSTITUTIONS

1. The Government of one of the Contracting States shall be exempt from

tax in the other Contracting State in respect of any income derived by such
Government from that other Contracting State.

2. For the purposes of paragraph 1 of this Article, the term "Government"--

(a) in the case of India, means the Government of India, and shall
include :

(i) the political sub-divisions, the local authorities, the local

administrations,and the local Governments ;

(ii) the Reserve Bank of India ;

(iii) any such institution or body as may be agreed from time to time
between the two Contracting States ;

(b) in the case of U.A.E., means the Government of the United Arab
Emirates, and shall include ;

(i) the political sub-divisions, the local authorities, the local administrations
and the local Governments ;

(ii) the Central Bank of the United Arab Emirates, Abu Dhabi Investment
Authority and Abu Dhabi Fund for Economic Development ;

(iii) any such institution or body as may be agreed from time to time
between the two 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
States except where express provisions to the contrary are made in this
Agreement.

2. Where a resident of India derives income or owns capital which, in

accordance with the provisions of this Agreement, may be taxed in U.A.E.,
India shall allow as a deduction from the tax on the income of that resident
an amount equal to the income-tax paid in U.A.E. 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 U.A.E. Such deduction in either
case shall not, however, exceed that part of the income-tax or capital tax
(as computed before the deduction is given) which is attributable, as the
case may be, to the income or the capital which may be taxed in U.A.E.
Further, when such resident is a company by which surtax is payable in
India, the deduction in respect of income-tax paid in U.A.E. shall be
allowed in the first instance from income-tax payable by the company in
India and as to the balance, if any, from the surtax payable by it in India.

3. Subject to the laws of the U.A.E. where a resident of the U.A.E. derives
income which in accordance with the provisions of this Agreement may be
taxed in India, the U.A.E. shall allow as a deduction from the tax on
income of that person an amount equal to the tax on income paid in India.
Such deduction shall not, however, exceed that part of income-tax as
computed before the deduction is given, which is attributable to the income
which may be taxed in the U.A.E.

4. For the purpose of paragraph 3, the term "tax paid in India" shall be
deemed to include the amount of Indian tax which would have been paid if
the Indian tax had not been exempted or reduced in accordance with the
special incentive measures under the provisions of the Income-tax Act,
1961, which are designed to promote economic development in India,
effective on the date of signature of this Agreement, or which may be
introduced in the future in modification of, or in addition to, the existing
provisions for promoting economic development in India, and such other
incentive measures which may be agreed upon from time to time by the
Contracting States.

5. Where, in accordance with any provision of the Agreement, income

derived or capital owned by a resident of a Contracting State is exempt
from tax in that State, such State may, nevertheless, in calculating the
amount of tax on the remaining income or capital of such resident, take
into account the exempted income or capital.

Article 26

NON-DISCRIMINATION

1. The 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 and under the same conditions 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 Contracting State than the taxation levied
on enterprises of that Contracting State carrying on the same activities in
the same circumstances or under the same conditions.

3. The provisions of this Article 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 or family responsibilities which it grants to its own
residents.

4. 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 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. This case must be presented within two years of the date 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

resolve by mutual agreement any difficulties or doubts arising as to the
interpretation or application of the Agreement. When it seems advisable in
order to reach agreement to have an oral exchange of opinion, such
exchange may take place through a commission consisting of
representatives of the competent authorities of the Contracting States.
They may also consult together for the elimination of double taxation in
cases not provided for in the Agreement.

4. The competent authorities of the Contracting States may communicate

with each other directly for the purpose of applying this Agreement.

Article 28

EXCHANGE OF INFORMATION

1. The competent authorities of the Contracting States shall exchange such

information as is necessary for carrying out the provisions of the
Agreement or for the prevention or detection of evasion of taxes which are
the subject of this Agreement. Any information so exchanged shall be
treated as secret but may be disclosed only to persons (including a court or
administrative body) concerned with the assessment, collection,
enforcement, investigation or prosecution in respect of the taxes which are
the subject of this Agreement, or to persons with respect to whom the
information relates.

2. The exchange of information may also be on request with reference to

particular cases.

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 of 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
(ordre public).

Article 29

DIPLOMATIC AND CONSULAR ACTIVITIES

Nothing in this Agreement shall affect the fiscal privileges of diplomatic or

consular officials under the general rules of international law or under the
provisions of special agreements.

Article 30

ENTRY INTO FORCE

1. Each of the Contracting States shall notify to the other the completion of
the proceedings required by its law for the bringing into force of this
Agreement. The Agreement shall enter into force on the date of the later of
these notifications and shall thereupon have effect-

(a) in the United Arab Emirates :

in respect of income derived on or after the 1st January next following the
calendar year in which the Agreement enters into force and in respect of
capital which is held at the expiry of the calendar year next following that
in which the Agreement enters into force or subsequent years ;

(b) in India :

in respect of income arising in any "previous year" beginning on or after

1st April next following the calendar year in which the Agreement enters
into force and in respect of capital which is held at the expiry of any
"previous year" beginning on or after 1st April next following the calendar
year in which the Agreement enters into force.

Article 31

TERMINATION

This Agreement 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
channels, written notice of termination. In such event, the Agreement shall
cease to have effect--

(a) in the United Arab Emirates :

in respect of income derived on or after 1st January next following the

calendar year in which the notice of termination is given and in respect of
capital which is held at the expiry of the calendar year next following that
in which the notice of termination is given or subsequent years ;

(b) in India :

in respect of income arising in any "previous year" beginning on or after

1st April next following the calendar year in which the notice of termination
is given and in respect of capital which is held at the expiry of any
"previous year" beginning on or after 1st April next following the calendar
year in which the notice of termination is given.

IN WITNESS WHEREOF, the undersigned, being duly authorised thereto,

have signed this Agreement.

Done in two originals at New Delhi on this Wednesday, 29th day of April,
One Thousand Nine Hundred and Ninety-Two corresponding to the 27th
day of Shawwal 1412H in the Hindi, Arabic and English languages, all texts
 being equally authentic. In case of divergence amongst the texts, the
English text shall be the operative one.

For the
Government For the Government of
of the the United Arab
Republic of Emirates 
India     (Sd.) Hamdan Bin Rashid
(Sd.) Dr. Al Maktoum, 
Manmohan Minister of Finance and
Singh,  Industry.
Minister of
Finance.
PROTOCOL

At the signing today of the Agreement between the Government of the

Republic of India and the Government of the United Arab Emirates for the
Avoidance of Double Taxation and the Prevention of Fiscal Evasion with
respect to taxes on income and on capital, the undersigned have agreed
upon the following provisions which shall form an integral part of this
Agreement

(i) Subject to the provisions of Article 5, nothing in this Agreement shall

affect the right of the Government of the United Arab Emirates, its political
sub-divisions, local authorities or local Governments to apply its own laws
related to the taxation of income derived from the petroleum and natural
resources ; such activities will be taxed according to the laws of the United
Arab Emirates ;

(ii) Notwithstanding the provisions of Article 6 and Article 23, the

residential property owned by a national of a Contracting State and
occupied for self-residence in the other Contracting State shall be exempt
in the other Contracting State from the taxes covered by this Agreement.

In Witness whereof, the undersigned, being duly authorised thereto, have

signed this Protocol.

Done in two originals at New Delhi on this Wednesday, 29th day of April,
One Thousand Nine Hundred and Ninety-Two corresponding to the 27th
day of Shawwal 1412H in the Hindi, Arabic and English languages, all texts
being equally authentic. In case of divergence amongst the texts, the
English text shall be the operative one.

For the
Government For the Government of
of the the United Arab
Republic of Emirates 
India     (Sd.) Hamdan Bin Rashid
(Sd.) Dr. Al Maktoum, 
Manmohan Minister of Finance and
Singh,  Industry.
Minister of
Finance.
                               (Sd.) V. B. Srinivasan, 
                               Joint Secretary to the Government of India. 
                              [No. 9409/F. No. 501/3/89-FTD]
Agreement between the Government of the Republic of India and the
Government of the United Arab Emirates for the avoidance of double
taxation of income derived from international air transport

Notification No. G. S. R. 969(E), dated 8th November, 1989.

Whereas the annexed Agreement between the Government of the Republic

of India and the Government of the United Arab Emirates for the avoidance
of double taxation of income derived from international air transport will
enter into force on December 1, 1989, 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 6 of the said
Agreement ;

Now, therefore, in exercise of the powers conferred by section 90 of the

Income-tax Act, 1961 (43 of 1961), and section 24A of the Companies
(Profits) Surtax Act, 1964 (7 of 1964), the Central Government hereby
directs that all the provisions of the said Agreement shall be given effect to
in the Union of India.

ANNEXURE

AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA

AND THE GOVERNMENT OF THE UNITED ARAB EMIRATES FOR THE
AVOIDANCE OF DOUBLE TAXATION OF INCOME DERIVED FROM
INTERNATIONAL AIR TRANSPORT

The Government of the Republic of India and the Government of the United
Arab Emirates,

Desiring to conclude an Agreement for the avoidance of double taxation of

income derived from international air transport,

Have agreed as follows :--

Article 1

TAXES COVERED

1. The taxes to which this Agreement shall apply are :--

(a) In the case of the United Arab Emirates, the income-tax as imposed by
the Federal Government of the United Arab Emirates (hereinafter referred
to as "United Arb Emirates Tax").

(b) In the case of India :--

(i) the income-tax including any surcharge thereon ; and

(ii) the surtax (hereinafter referred to as "Indian tax").

2. This agreement shall also apply to any identical or substantially similar

taxes on income which are imposed at Federal or State level by either
Contracting State in addition to, or in place of, the taxes 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 2

DEFINITIONS

1. For the purpose of this Agreement, unless the context otherwise

requires :--

(a) The term "a Contracting State" and "the other Contracting State"
means the United Arab Emirates or India as the context requires ;

(b) The term "tax" means United Arab Emirates tax or Indian tax as the
context requires ;

(c) The term "enterprise of India" means Air India and Indian Airlines and
any other enterprises designated by the Government of India ;

(d) The term "enterprise of The United Arab Emirates" means Gulf Air and
Emirates Air lines and any other enterprises designated by the Government
of the United Arab Emirates ;

(e) The term "international traffic" means any transport by, an aircraft
operated by an enterprise of a Contracting State, except when the aircraft
is operated solely between places in the other Contracting State ;

(f) The expression "operation of aircraft" means business of carriage by air

of passengers, livestock, goods or mail carried on by the owners or lessees
or charterers of aircraft including the sale of tickets for such transportation
on behalf of other enterprises, the incidental lease of aircraft and any other
activity directly connected with such transportation.

(g) The term "competent authority" means :

(i) in the case of India, the Central Government in the Ministry of Finance
(Department of Revenue), or its authorised representative ;

(ii) in the case of the United Arab Emirates, The Minister of Finance and
Industry or his authorised representative.

2. In the application of the provisions of this Agreement by one of the

Contracting States, any term not defined herein shall, unless the context
otherwise requires, have the meaning which it has under the laws in force
in that State relating to the taxes which are the subject of this Agreement.

Article 3

AVOIDANCE OF DOUBLE TAXATION 1. Income which an enterprise of the

United Arab Emirates derives from the operation of aircraft in international
traffic shall be exempted in India from Indian tax.

2. Income which an enterprise of India derives from the operation of

aircraft in international traffic shall be exempted in the United Arab
Emirates from United Arab Emirates tax.

3. The provisions of paragraphs 1 and 2 shall also apply to income from

the participation in a pool, a joint business or an international operating
agency.

4. For the purpose of paragraphs 1 and 2, interest on funds directly

connected with the operation of aircraft in international traffic shall be
regarded as income from the operation of such aircraft.

5. Gains derived by an enterprise of a Contracting State from the alienation

of aircraft owned and operated by the enterprise including gains from the
alienation of spares and equipment used by the enterprise in the operation
of such aircraft shall be taxable only in that State.

6. Salaries, wages and other remuneration in respect of an employment

exercised aboard an aircraft operated in international traffic shall be
taxable only in the Contracting State where the air transport enterprise is
managed and controlled, provided that the employee concerned is not a
resident in the other Contracting State in accordance with the tax laws of
that other State.

Article 4

RESIDUAL PROVISIONS

The laws in force in either of the Contracting States will continue to govern
the assessment and taxation of income in the Contracting States except
where express provision to the contrary is made in this Agreement.

Article 5

MUTUAL AGREEMENT PROCEDURE

1. 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 Agreement.

2. Consultation may be requested at any time by the competent authority

of a Contracting State for the purpose of application or interpretation of the
article. Such consultation shall begin within 90 days from the date of
receipt of any such request and decisions shall be by mutual consent.

Article 6

ENTRY INTO FORCE

1. Each State shall notify to the other the completion of the procedure
required by its law for the bringing into force of this Agreement. The
Agreement shall enter into force on the first day of the second month
following the month in which the latter of these notifications has been
given.

2. the provisions of this Agreement shall have effect in respect of income

derived on or after the 1st day of January, 1971.

3. No action would be taken to reopen assessments in respect of the period

prior to the 1st day of January, 1971.

4. In case a Contracting State collects taxes relating to the above-

mentioned period, on income derived from the operation of aircraft by an
enterprise of the other Contracting State, then such taxes shall be
 refunded together with interest if any, in accordance with the laws of the
first mentioned Contracting State.

Article 7

TERMINATION

This Agreement shall continue in effect indefinitely but either Contracting

State may, on or before the thirtieth day of June in any calendar year after
the year 1993, give notice of termination to the other Contracting State
and in such event this Agreement shall cease to be effective :--

(a) in the United Arab Emirates in respect of any tax year cornmencing on
or after the 1st day of January of the second calendar year following the
year in which the notice is given ;

(b) in India in respect of any assessment year commencing on or after the

1st day of April of the second calendar year following the year in which the
notice is given.

In witness whereof, the undersigned, duly authorised thereto have signed

this Agreement.

Done at New Delhi this third day of March one thousand nine hundred and
eighty-nine in two originals in the Hindi, Arabic and English languages, all
texts being equally authentic. In case of dispute as to interpretation and
application of this Agreement, the English text shall prevail.

For the
Government For the Government of
of the the United Arab
Republic of Emirates 
India     (Sd.) Mohamed Khalfan
(Sd.) P. K. Khirbash,   Government
Appachoo, of India, 
Joint Minister of Finance and
Secretary to Industry.
the 
Minister of
Finance.
                                         
[No. 8490/F. No. 501/1/88-FTD
 
http://www.incometaxindia.gov.in/DOUBLE%20TAXATION%20AGREEMENT/UnitedArabEmirates.asp