You are on page 1of 13

1/6/2017

IncomeTaxDepartment

UAR(EGYPT)
AgreementforavoidanceofdoubletaxationwithUnitedArabRepublic(Egypt)
WhereastheannexedConventionbetweentheGovernmentofIndiaandtheGovernmentoftheUnitedArabRepublicforthe
avoidanceofdoubletaxationwithrespecttotaxesonincomehasbeenratifiedandtheinstrumentsofratificationexchanged,as
requiredbyarticleXXIXofthesaidConvention
Now,therefore,inexerciseofthepowersconferredbysection90oftheIncometaxAct,1961(43of1961),andsection24Aof
theCompanies(Profits)SurtaxAct,1964(7of1964),theCentralGovernmentherebydirectsthatalltheprovisionsofthesaid
ConventionshallbegiveneffecttointheUnionofIndia.
Notification:No.GSR2363,dated3091969.
TEXTOFANNEXEDCONVENTION,DATED2021969
The Government of India and the Government of the United Arab Republic, desiring to conclude a Convention for the
avoidanceofdoubletaxationwithrespecttotaxesonincomehaveagreedasfollows:

CHAPTERI
SCOPEOFTHECONVENTION
ARTICLE1
PERSONALSCOPE
ThisConventionshallapplytopersonswhoareresidentsofoneorbothoftheContractingStates.

ARTICLE2
TAXESCOVERED
1.ThisConventionshallapplytotaxesonincomeimposedonbehalfofeachContractingStateorofitspoliticalsubdivisions
orlocalauthorities,wheretheyhavetheauthority,irrespectiveofthemannerinwhichtheyarelevied.
2.Thereshallberegardedastaxesonincomealltaxesimposedontotalincomeoronallelementsofincomeincludingtaxeson
gainsfromthesale,exchangeortransferofmovableorimmovablepropertyandtaxesonthetotalamountsofwagesorsalaries
paidbyenterprises.
3.TheexistingtaxestowhichtheConventionshallapplyare,inparticular
(a)

InthecaseofIndia,

(1)

the incometax, including supertax and the surcharge, imposed under the Incometax Act, 1961 (43 of
1961),and

(2)

thesurtaximposedundertheCompanies(Profits)SurtaxAct,1964(7of1964)

(hereinafterreferredtoas"Indiantax")

(b)

inthecaseoftheUnitedArabRepublic,

(1)

taxonincomederivedfromimmovableproperty(includingthelandtax,thebuildingstaxandtheghaffir
tax),

(2)

taxonincomefrommovablecapital,

(3)

taxoncommercialandindustrialprofits,

(4)

taxonwages,salaries,indemnitiesandpensions[asmentionedinBookIIIofLaw(14of1939)],

(5)

taxonprofitsfromliberalprofessionsandallothernoncommercialprofessions,

(6)

generalincometax,

http://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=http://www.incometaxindia.gov.in/dtaa/comprehensive%20agreements/10869000000

1/13

1/6/2017

IncomeTaxDepartment

(7)

defencetax(imposedonincome),

(8)

nationalsecuritytax(imposedonincome),and

(9)

supplementarytaxesimposedaspercentageoftaxesmentionedabove,

(hereinafterreferredtoas"UnitedArabRepublictax").

4.TheConventionshallalsoapplytoanyidenticalorsubstantiallysimilartaxeswhicharesubsequentlyimposedinadditionto,
orintheplaceof,theexistingtaxes.
5.Attheendofeachyear,thecompetentauthoritiesoftheContractingStatesshallnotifytoeachotheranysignificantchanges
whichhavebeenmadeintheirrespectivetaxationlaws.

CHAPTERII
DEFINITIONS
ARTICLE3
GENERALDEFINITIONS
1.InthisConvention,unlessthecontextotherwiserequires,
(a)

theterm"India"shallhavethemeaningassignedtoitinarticle1oftheConstitutionofIndia

(b)

theterm"UnitedArabRepublic"meansEgypt

(c)

theterms"aContractingState"and"theotherContractingState"meanIndiaortheUnitedArabRepublic
asthecontextrequires

(d)

theterm"tax"meansIndiantaxorUnitedArabRepublictax,asthecontextrequires

(e)

theterm"person"includesindividuals,companiesandallotherentitieswhicharetreatedastaxableunits
underthetaxlawsinforceineitherContractingState

(f)

theterm"company"fortaxpurposesmeansanyentitywhichistreatedasacompanyundertheIndiantax
laworanyentitywhichistreatedasabodycorporateundertheUnitedArabRepublictaxlaw

(g)

the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean,
respectively,anenterprisecarriedonbyaresidentofaContractingStateandanenterprisecarriedonbya
residentoftheotherContractingState

(h)

the term "competent authority" means in the case of India the Central Government in the Ministry of
Finance(DepartmentofRevenueandInsurance)andinthecaseoftheUnitedArabRepublic,theMinister
ofTreasuryorhisauthorisedrepresentative.

2.IntheapplicationoftheprovisionsofthisConventionbyoneoftheContractingStatesanytermnototherwisedefinedshall,
unlessthecontextotherwiserequires,havethemeaningwhichithasunderthelawsinforceinthatStaterelatingtothetaxes
whicharethesubjectofthisConvention.

ARTICLE4
FISCALDOMICILE
1.ForthepurposesofthisConvention,theterm"residentofaContractingState"meansanypersonwho,underthelawofthat
State,isresidentofthatStateforthepurposesoftaxationthereinbyreasonofhisdomicile,residence,placeofmanagementor
anyothercriterionappliedunderthetaxlawsofthatState.
2.Wherebyreasonoftheprovisionsofparagraph(1)anindividualisaresidentofbothContractingStates,thenhiscaseshall
bedeterminedinaccordancewiththefollowingrules:
(a)

HeshallbedeemedtobearesidentoftheContractingStateinwhichhehasapermanenthomeavailable
tohim.IfhehasapermanenthomeavailabletohiminbothContractingStates,heshallbedeemedtobea
resident of the Contracting State with which his personal and economic relations are closest (centre of

http://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=http://www.incometaxindia.gov.in/dtaa/comprehensive%20agreements/10869000000

2/13

1/6/2017

IncomeTaxDepartment

vitalinterests).
(b)

IftheContractingStateinwhichhehashiscentreofvitalinterestscannotbedetermined,orifhehasnot
apermanenthomeavailabletohimineitherContractingState,heshallbedeemedtobearesidentofthe
ContractingStateinwhichhehasanhabitualabode.

(c)

IfhehasanhabitualabodeinbothContractingStatesorinneitherofthem,heshallbedeemedtobea
residentoftheContractingStateofwhichheisanational.

(d)

If he is a national of both Contracting States or of neither of them, the competent authorities of the
ContractingStatesshallsettlethequestionbymutualagreement.

3.Wherebyreasonoftheprovisionsofparagraph(1)apersonotherthananindividualisaresidentofbothContractingStates,
thenitshallbedeemedtobearesidentoftheContractingStateinwhichitsplaceofeffectivemanagementissituated.

ARTICLE5
PERMANENTESTABLISHMENT
1. For the purposes of this Convention, the term "permanent establishment" means a fixed place of business in which the
businessoftheenterpriseiswhollyorpartlycarriedon.
2.Theterm"permanentestablishment"shallinclude
(a)

aplaceofmanagement

(b)

abranch

(c)

anoffice

(d)

afactory

(e)

aworkshoporawarehouse

(f)

amine,aquarry,anoilfieldorotherplaceofextractionofnaturalresources

(g)

apermanentsalesexhibition

(h)

abuildingsiteorconstructionorassemblyprojectwhichexistsformorethanninetydays.

3.Theterm"permanentestablishment"shallnotbedeemedtoinclude
(a)

theuseoffacilitiessolelyforthepurposeofstorageordisplayofgoodsormerchandisebelongingtothe
enterprise

(b)

themaintenanceofastockofgoodsormerchandisebelongingtotheenterprisesolelyforthepurposeof
storageordisplay

(c)

themaintenanceofafixedplaceofbusinesssolelyforthepurposeofpurchasinggoodsormerchandiseor
forcollectinginformation,fortheenterpriseand

(d)

the maintenance of a fixed place of business solely for the purpose of advertising, or for scientific
research,fortheenterprise.

4.A person acting in one of the Contracting States for or on behalf of an enterprise of the other Contracting State shall be
deemedtobeapermanentestablishmentofthatenterpriseinthefirstmentionedStateif
(i)

hehasandhabituallyexercisesinthatStategeneralauthoritytonegotiateandenterintocontractsfororon
behalf of the enterprise, unless the activities of the person are limited to the purchase of goods or
merchandisefortheenterprise,or

(ii)

he habitually maintains in the firstmentioned Contracting State a stock of goods or merchandise


belongingtotheenterprisefromwhichthepersonregularlydeliversgoodsormerchandisefororonbehalf
oftheenterprise,or

(iii)

hehabituallysecuresordersinthefirstmentionedContractingStateexclusivelyoralmostexclusively,for

http://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=http://www.incometaxindia.gov.in/dtaa/comprehensive%20agreements/10869000000

3/13

1/6/2017

IncomeTaxDepartment

the enterprise itself or for the enterprise and other enterprises which are controlled by it or have a
controllinginterestinit.
5.AnenterpriseofaContracting StateshallnotbedeemedtohaveapermanentestablishmentintheotherContractingState
merelybecauseitcarriesonbusinessinthatotherStatethroughabrokerofagenuinelyindependentstatus.
6.Thefactthatacompany, whichisaresidentofoneoftheContractingStates,hasasubsidiarycompanywhicheitherisa
resident of the other Contracting State or carries on a trade or business in that other Contracting State (whether through a
permanentestablishmentorotherwise)shallnot,ofitself,constitutethatsubsidiarycompanyapermanentestablishmentofits
parentcompany.

CHAPTERIII
TAXATIONOFINCOME
ARTICLE6
INCOMEFROMIMMOVABLEPROPERTY
1.IncomefromimmovablepropertyshallbetaxableonlyintheContractingStateinwhichsuchpropertyissituated.
2.Theterm"immovableproperty"shallbedefinedinaccordancewiththelawandusageoftheContractingStateinwhichthe
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,mineraldeposits,sourcesandothernaturalresources.Shipsandaircraftshallnotberegardedasimmovableproperty.
3. The provisions of paragraph (1) shall apply to income derived from the direct use, letting, or use in any other form of
immovableproperty.
4.Theprovisionsofparagraphs(1)and(3 )shallalsoapplytotheincomefromimmovablepropertyofan enterprise and to
incomefromimmovablepropertyusedfortheperformanceofprofessionalservices.

ARTICLE7
BUSINESSPROFITS
1.TheprofitsofanenterpriseofaContractingStateshallbetaxableonlyinthatStateunlesstheenterprisecarriesonbusiness
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
permanentestablishment.
2. Where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent
establishmentsituatedtherein,thereshall,ineachContractingState,beattributedtothatpermanent establishment the profits
whichitmightbeexpectedtomakeifitwereadistinctandseparateenterpriseengagedinthesameorsimilaractivitiesunder
thesameorsimilarconditionsanddealingwhollyindependentlywiththeenterpriseofwhichitisapermanentestablishment.
3.Inthedeterminationoftheprofitsofapermanentestablishment,thereshallbeallowedasdeductionsexpenses which are
incurredforthepurposeofthepermanentestablishmentincludingexecutiveandgeneraladministrativeexpensessoincurred,
whetherintheStateinwhichthepermanentestablishmentissituatedorelsewhere.
4.InsofarasithasbeencustomaryinaContractingStatetodeterminetheprofitstobeattributedtoapermanentestablishment
onthebasisofanapportionmentofthetotalprofitsoftheenterprisetoitsvariousparts,nothinginparagraph(2)shallpreclude
thatContractingStatefromdeterminingtheprofitstobetaxedbysuchanapportionmentasmaybecustomarythemethodof
apportionmentadoptedshall,however,besuchthattheresultshallbeinaccordancewiththeprincipleslaiddowninthisarticle.
5.Noprofitsshallbeattributedtoapermanentestablishmentbyreasonofthemerepurchasebythatpermanentestablishment
ofgoodsormerchandiseforthepurposeofexporttotheenterpriseofwhichitisthepermanentestablishment.
6. Where profits include items of income which are dealt with separately in other articles of this Convention, then the
provisionsofthosearticlesshallnotbeaffectedbytheprovisionsofthepresentarticle.
1ARTICLE8
http://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=http://www.incometaxindia.gov.in/dtaa/comprehensive%20agreements/10869000000

4/13

1/6/2017

IncomeTaxDepartment

AIRTRANSPORT
1.IncomederivedfromtheoperationofaircraftbyanenterpriseofoneoftheContractingStatesshallnotbetaxedintheother
ContractingStateunlesstheaircraftisoperatedwhollyormainlybetweenplaceswithinthatotherContractingState.
2.Paragraph(1)shalllikewiseapplyinrespectofparticipationsinpoolsofanykindbyenterprisesengagedinairtransport.
1. The Note dated 2021969 exchanged between India and UAR set out the following understanding of the
provisionofthisarticlereadwitharticleXXIX:
'The provisions of article VIII (Air Transport) of the said Convention being operative under the terms of article XXIX
(Entryintoforce)oftheConventioninthecaseofIndia,asrespectsincomederivedfromoperationofaircraftduringany
"previousyear"beginningonorafterthefirstdayofJanuary,1961,andinthecaseoftheUnitedArabRepublic,asrespects
suchincomederivedduringanyaccountingperiodendingonorafterthefirstdayofJanuary,1961
WhereanytaxescoveredbythisConventionhavebeenpaidorarepayableinoneoftheContractingStatesbyadesignated
airlineoftheotherContractingStatesasrespectssuchincomederivedbyitduringany"previousyear"oraccountingperiod
aforesaid,thefirstmentionedContractingStateshallrefundsuchtaxestoor,asthecasemaybe,refrainfromchargingsuch
taxesfromthedesignatedairline.
Thedesignatedairlineaforesaidshall,inthecaseofIndia,betheAirIndia,andinthecaseoftheUnitedArabRepublic,be
theUnitedArabAirlines.'

ARTICLE9
SHIPPING
Income derived from the operation of ships by an enterprise of one of the Contracting States shall not be taxed in the other
ContractingStateunlesstheshipsareoperatedwhollyormainlybetweenplaceswithinthatotherContractingState.

ARTICLE10
ASSOCIATEDENTERPRISES
1.Where
(a)

anenterpriseofaContractingStateparticipatesdirectlyorindirectlyinthemanagement,controlorcapital
ofanenterpriseoftheotherContractingState,or

(b)

thesamepersonsparticipatedirectlyorindirectlyinthemanagement,controlorcapitalofanenterpriseof
aContractingStateandanenterpriseoftheotherContractingState,

andineithercaseconditionsaremadeorimposedbetweenthetwoenterprisesintheircommercialorfinancialrelationswhich
differfromthosewhichwouldbemadebetweenindependententerprisesthenanyprofitswhichwould,butforthoseconditions,
haveaccruedtooneoftheenterprises,but,byreasonofthoseconditions,havenotsoaccrued,maybeincludedintheprofitsof
thatenterpriseandtaxedaccordingly.
2.Iftheinformationavailabletothetaxationauthorityconcernedisinadequatetodetermine,forthepurposesofparagraph(1)
of this article, the profits which might be expected to accrue to an enterprise, nothing in that paragraph shall affect the
application of the law of either Contracting State in relation to the liability of that enterprise to pay tax on an amount
determinedbytheexerciseofadiscretionorthemakingofanestimatebytaxationauthorityofthatState:
Provided that such discretion shall be exercised or such estimate shall be made, so far as the information available to the
taxationauthoritypermits,inaccordancewiththeprinciplestatedinthatparagraph:
Provided further that the amount so determined or the estimate so made may be amended or revised when adequate
informationisfurnishedtothetaxationauthorityconcerned.

ARTICLE11
DIVIDENDS
http://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=http://www.incometaxindia.gov.in/dtaa/comprehensive%20agreements/10869000000

5/13

1/6/2017

IncomeTaxDepartment

1.DividendspaidbyacompanywhichisaresidentofIndiatoaresidentoftheUnitedArabRepublicmaybetaxedinIndia.
2.Dividendspaidbyacompanywhich is a resident of the UnitedArab Republic to a resident of India may be taxed in the
UnitedArabRepublic.Butsuchdividendsshallonlybesubjecttothetaxonincomederivedfrommovablecapital,thedefence
tax, the national security tax and the supplementary taxes (which taxes shall be deducted at the source). If paid to a natural
person,thegeneralincometaxleviedonthenettotalincomemayalsobeimposed.Dividendspaidshallbedeductedfromthe
amount of the distributing company's taxable income or profits subject to the tax chargeable in respect of its industrial and
commercialprofitsifsuchdividendsaredistributedoutofthetaxableprofitsofthesametaxableyearbutnotdistributedoutof
accumulatedreservesorotherassets.
3.DividendspaidbyacompanywhichisaresidentofIndiawhoseactivitiesliesolelyormainlyintheUnitedArabRepublic
shall,intheUnitedArabRepublicbetreatedasmentionedinparagraph(2)ofthisarticlewhensuchdividendsaredistributed
intheUnitedArabRepublic.
4.DividendspaidbyacompanywhichisaresidentoftheUnitedArabRepublicwhoseactivitieslie solelyormainlyinIndia
shall,inIndia,betreatedasmentionedinparagraph(1)ofthisarticlewhensuchdividendsaredistributedinIndia.
5. Dividends, deemed under article 11 of United Arab Republic Law 14 of 1939 to be paid out of the yearly profits of a
permanentestablishmentmaintainedintheUnitedArabRepublicbyanIndian companywhoseactivitiesextendtocountries
otherthantheUnitedArabRepublicshall,intheUnitedArabRepublic,betreatedasmentionedinparagraph(2)ofthisarticle.
ThepermanentestablishmentshallbeconsideredtohavedistributedasdividendsintheUnitedArab Republicwithin60days
fromtheclosingofitsfinancialyear,anamountequivalentto90percentofitstotalnetprofitsliabletotaxonindustrialand
commercialprofitswithoutapplyingtheprovisionsofarticle36ofLaw14of1939,providedthattheremaining10percentof
thenetprofitsshallbesetasidetoformaspecialreservewhichshallbeenteredinthelocalbalancesheetsubmittedannuallyto
theUnitedArabRepublictaxauthorities.Suchamountshallonlybesubjecttothetaxoncommercialandindustrialprofits.
All amounts deducted from the aforesaid 10 per cent set aside to form the special reserve for purposes other than the
redemptionoflossesincurredinthetradeorbusinesscarriedonbythatpermanentestablishmentsituatedintheUnitedArab
RepublicshallbedeemedtohavebeendistributedintheUnitedArabRepublicandshallbetaxedaccordingly.
6. The provisions of paragraphs (1) and (4 ) of this article, in the case of the United Arab Republic, shall not affect the
applicationofarticle4ofLaw14of1939,buttheprovisionsofthoseparagraphswillbeappliedforthepurposeofelimination
ofdoubletaxationinaccordancewithprovisionsofparagraph(2)ofarticleXXIVofthisConvention.

ARTICLE12
INTEREST
1.InterestpaidbyaresidentofIndiatoaresidentoftheUnitedArabRepublicmaybetaxedinIndia.
2.InterestpaidbyaresidentoftheUnitedArabRepublictoaresidentofIndiamaybetaxedintheUnitedArabRepublic.But
suchInterestshallonlybesubjecttothetaxonincomederivedfrommovablecapital,thedefencetax,thenationalsecuritytax
andthesupplementarytaxes(whichtaxesshallbedeductedatthesource).Ifpaidtoanaturalperson,thegeneralincometax
leviedonthenettotalincomemayalsobeimposed.
3.Theterm"interest" asusedinthisarticleincludesincomefromGovernmentsecurities,bondsordebentures (exclusive of
interestondebtssecuredbymortgagesonrealestate,inwhichcasearticleVIshallapply)andwhetherornotcarryingarightto
participateinprofits,anddebtclaimsofeverykindaswellasallotherincomeassimilatedtoincomefrommoneylentbythe
taxationlawoftheStateinwhichtheincomearises.
4.Interestshallbedeemedto arise in a Contracting state when the payer is that State itself, a political subdivision, a local
authorityoraresidentofthatState.Where,however,thepersonpayingtheinterest,whetherheisaresidentofaContracting
State or not, has in a Contracting State a permanent establishment in connection with which the indebtedness on which the
interestispaidwasincurred,andsuchinterestisbornebysuchpermanentestablishment,thensuchinterestshallbedeemedto
ariseintheContractingStateinwhichthepermanentestablishmentissituated.
5.The provisions of paragraph (1) of this article in the case of the UnitedArab Republic shall not affect the application of
article 4 of Law 14 of 1939, but the provisions of that paragraph will be applied for the purpose of elimination of double
taxationinaccordancewithprovisionsofparagraph(2)ofarticleXXIVofthisConvention.

ARTICLE13
http://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=http://www.incometaxindia.gov.in/dtaa/comprehensive%20agreements/10869000000

6/13

1/6/2017

IncomeTaxDepartment

ROYALTIES
1.RoyaltiesarisinginaContractingStateandpaidtoaresidentoftheotherContractingStateshallbetaxableonlyinthefirst
mentionedState.
2.Theterm"royalties"asusedinthisarticlemeanspaymentsofanykindreceivedasaconsiderationfortheuseof,ortheright
to use, any copyright of literary, artistic or scientific work, 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 equipments or for information concerning
industrial,commercialorscientificexperiencebutdoesnotincludeanyroyaltyorotherlikeamountinrespectoftheoperation
ofmines,quarriesoranyotherplaceofextractionofnaturalresources.
3. Rents and royalties arising in a Contracting State in respect of cinematographic films and paid to a resident of the other
ContractingStateshallbetaxableonlyinthefirstmentionedStateaccordingtothetaxlawsofthatstate.
4.Theprovisionsofthisarticleshallnotapplywherefounders'sharesareissuedintheUnitedArabRepublicasaconsideration
fortherightsmentionedinparagraph(2)ofthisarticleandtaxedinaccordancewiththeprovisionsofarticle1ofLaw14of
1939.InsucheventarticleXIofthisConventionshallbeapplicable.
5.RoyaltyshallbedeemedtoariseinaContractingStatewhenthepayeristhatStateitself,apoliticalsubdivision,alocal
authorityoraresidentofthatState.

ARTICLE14
CAPITALGAINS
1. Subject to the provisions of paragraph (3) gains from the sale, exchange or transfer of a capital asset being immovable
property,asdefinedinparagraph(2)ofarticleVI,ormovablepropertyshallbetaxableonlyintheContractingStateinwhich
suchpropertyissituated.
2.ForthepurposeofthisarticlethesitusofthesharesofacompanyshallbedeemedtobeintheContractingStatewherethe
companyisincorporated.
3.Capitalgainsderivedfromthesale,exchangeortransferofacapitalassetbeingashiporaircraftshallbetaxableonlyinthe
ContractingStateinwhichsuchshiporaircraftisregistered.

ARTICLE15
INDEPENDENTPERSONALSERVICES
1.IncomederivedbyaresidentoftheUnitedArabRepublicinrespectofprofessionalservices renderedorotherindependent
activitiesofasimilarcharacterperformedinIndiamaybetaxedinIndiaonlyifheispresentinIndiaforaperiodorperiods
exceedingintheaggregate183daysduringtherelevant"previousyear",andonlytotheextenttheincomeisattributableto
suchservicesoractivitiesinIndia.
2.IncomederivedbyaresidentofIndiainrespectofprofessionalservicesrenderedorotherindependentactivitiesofasimilar
characterperformedintheUnitedArabRepublicmaybetaxedintheUnitedArabRepubliconlyifheispresentintheUnited
ArabRepublicforaperiodorperiodsexceedingintheaggregate183daysduringtherelevant"fiscalyear",andonlytothe
extenttheincomeisattributabletosuchservicesoractivitiesintheUnitedArabRepublic.
3.Theterm"professionalservices"includesindependentscientific,literary,artistic,educationalorteachingactivitiesaswellas
theindependentactivitiesofphysicians,lawyers,engineers,architects,dentistsandaccountants.

ARTICLE16
DEPENDENTPERSONALSERVICES
1.SubjecttotheprovisionsofarticlesXVII,XIXandXX,salaries,wagesandothersimilarremunerationderivedbyaresident
ofaContractingStateinrespectofanemploymentshallbetaxableonlyinthatStateunlesstheemploymentisexercisedinthe
otherContractingState.Iftheemploymentissoexercised,suchremunerationisderivedtherefrommaybetaxedinthatother
State.
2.Notwithstandingtheprovisionsofparagraph(1)remunerationderivedbyaresidentoftheUnitedArabRepublicinrespectof
anemploymentexercisedinIndiashallnotbetaxedinIndia,if
http://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=http://www.incometaxindia.gov.in/dtaa/comprehensive%20agreements/10869000000

7/13

1/6/2017

IncomeTaxDepartment

(a)

heispresentinIndiaforaperiodorperiodsnotexceedingintheaggregate183daysduringtherelevant
"previousyear",and

(b)

theremunerationispaidby,oronbehalfof,anemployerwhoisnotaresidentofIndia,and

(c)

theremunerationissubjecttoUnitedArabRepublictax,and

(d)

theremunerationisnotdeductedincomputingprofitsofanenterprisechargeabletoIndiantax.

3.Notwithstandingtheprovisionsofparagraph(1)remunerationderived by a resident of India in respect of an employment


exercisedintheUnitedArabRepublicshallnotbetaxedintheUnitedArabRepublic,if
(a)

heispresentintheUnitedArabRepublicforaperiodorperiodsnotexceedingintheaggregate183days
duringtherelevant"fiscalyear",and

(b)

theremunerationispaidby,oronbehalfofanemployerwhoisnotresidentoftheUnitedArabRepublic,
and

(c)

theremunerationissubjecttoIndiantax,and

(d)

theremunerationisnotdeductedincomputingprofitsofanenterprisechargeabletoUnitedArabRepublic
tax.

4.Notwithstandingtheprecedingprovisionsofthisarticle,remunerationinrespectofanemploymentexercisedaboardaship
or aircraft in international traffic, may be taxed in the Contracting State in which the place of effective management of the
enterpriseissituated.

ARTICLE17
DIRECTORS'FEES
Directors'feesandsimilarpaymentsderivedbyaresidentofaContractingStateinhiscapacityasamemberoftheBoardof
DirectorsofacompanywhichisaresidentoftheotherContractingStatemaybetaxedinthatotherState.

ARTICLE18
ARTISTESANDATHLETES
1.NotwithstandinganythingcontainedinArticlesXVandXVI,incomederivedbypublicentertainers suchastheatre,motion
picture,radioortelevisionartistesandmusicians,andbyathletes,fromtheirpersonalactivitiesassuchmaybetaxedinthe
ContractingStateinwhichtheseactivitiesareexercised.
2.Theprovisionsofparagraph(1)shallapplyonlyifthepersonalactivitiesareexercisedintheContractingStateforaperiod
orperiodsintheaggregateexceeding15daysduringtherelevant"previousyear"orasthecasemaybe,"fiscalyear",andonly
inrespectoftheincomeattributabletothepersonalactivitiesexercisedinthatState.

ARTICLE19
PENSIONS
Subject to the provisions of paragraph (1) of article XX, pensions and other similar remuneration paid to a resident of a
ContractingStateinconsiderationofpastemploymentshallbetaxableonlyinthatState.

ARTICLE20
GOVERNMENTALFUNCTIONS
1.Remuneration,includingpensions,paidby,oroutoffunds,createdby,aContractingStateorapoliticalsubdivision,ora
localauthoritythereof,toanyindividualinrespectofservicesrenderedtothatStateorsubdivisionorlocalauthoritythereofin
thedischargeoffunctionsofagovernmentalnaturemaybetaxedinthatState.
2.Theprovisionsofparagraph(1)ofthisarticleshallalsoapplytoremunerationincludingpensions,paidbytheCentralBank,
http://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=http://www.incometaxindia.gov.in/dtaa/comprehensive%20agreements/10869000000

8/13

1/6/2017

IncomeTaxDepartment

the Post Railways, Telephone and Telegraph, Radio and Television Organisations of the United Arab Republic and by the
ReserveBankofIndia,PostalAdministration,thePublicRailwayAuthoritiesandtheAllIndiaRadioOrganisationofIndia.
3.The provisions of articles XVI, XVII and XIX shall apply to remuneration or pensions in respect of servicesrenderedin
connection with any trade or business other than those mentioned in paragraph ( 2) carried on by any of the legal entities
mentionedinthisarticle.

ARTICLE21
STUDENTS
AnindividualofoneoftheContractingStates,whoistemporarilypresentintheotherContractingStatesolely:
(a)

asastudentatauniversity,collegeorschoolintheotherContractingState,

(b)

asabusinessortechnicalapprentice,or

(c)

as the recipient of a grant, allowance or award for the primary purpose of study or research from a
religious,charitable,scientificoreducationalorganisation,

shall not be taxed in the other Contracting State in respect of remittances from abroad for the purposes of his maintenance,
educationortrainingorinrespectofascholarshipgrant.Thesameshallapply toanyamountrepresentingremunerationfor
servicesrenderedinthatotherState,providedthatsuchservicesareinconnectionwithhisstudiesorpracticaltrainingorare
necessaryforthepurposeofhismaintenance.

ARTICLE22
PROFESSORS,TEACHERSANDRESEARCHERS
A professor or a teacher from one of the Contracting States who receives remuneration for teaching or scientific research,
duringaperiodoftemporaryresidencenotexceedingtwoyearsatauniversity,college,technicalschoolorotherinstitutionfor
highereducationintheotherContractingState,shallnotbetaxedinthatotherContractingStateinrespectofthatremuneration.

ARTICLE23
INCOMENOTEXPRESSLYMENTIONED
ThelawsinforceineitheroftheContractingStateswillcontinuetogovernassessmentandtaxationofincomeintherespective
ContractingStatesexceptwhereexpressprovisiontothecontraryismadeinthisConvention.

CHAPTERIV
METHODFORELIMINATIONOFDOUBLETAXATION
ARTICLE24
EXEMPTIONANDCREDITMETHODS
1.WhereapersonbeingaresidentofaContractingStatederivesincomefromtheotherContractingStateandthatincome,in
accordancewiththeprovisionsofthisConvention,shallbetaxableonlyinthatotherContractingState,ormaybetaxedinthat
otherContractingState,thefirstmentionedStateshall,subjecttotheprovisionsofparagraph(2)exemptsuchincomefromtax
butmay,incalculatingtaxontheremainingincomeofthatperson,applytherateoftaxwhichwouldhavebeenapplicableif
theexemptedincomehadnotbeensoexempted.
2.WhereapersonbeingaresidentofaContractingStatederivesincomefromtheotherContractingStateandthatincome,in
accordancewiththeprovisionsofarticlesXIandXIImaybetaxedinthatotherContractingState,thefirstmentionedState
shallallowasadeductionfromthetax,ontheincomeofthatpersonandamountequaltothetaxpaidinthatotherContracting
State. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is
appropriatetotheincomederivedfromthatotherContractingState.

http://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=http://www.incometaxindia.gov.in/dtaa/comprehensive%20agreements/10869000000

9/13

1/6/2017

IncomeTaxDepartment

CHAPTERV
SPECIALPROVISIONS
ARTICLE25
NONDISCRIMINATION
1.ThenationalsofaContractingStateshallnotbesubjectedintheotherContractingStatetoanytaxationoranyrequirement
connectedtherewithwhichisotherormoreburdensomethanthetaxationandconnectedrequirementstowhichnationalsofthat
otherStateinthesamecircumstancesandunderthesameconditionsareormaybesubjected.
2.Theterm"nationals"means:
(a)

allindividualspossessingthenationalityofaContractingState

(b)

all legal persons, partnerships and associations deriving their status as such from the law in force in a
ContractingState.

3.ThetaxationonapermanentestablishmentwhichanenterpriseofaContractingStatehasintheotherContractingStateshall
notbelessfavourablyleviedinthatotherStatethanthetaxationleviedonenterprisesofthatotherStatecarryingonthesame
activities.
ThisprovisionshallnotbeconstruedasobligingaContractingStatetogranttoresidentsoftheotherContracting State any
personal allowance, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it
grantstoitsownresidents.
4.EnterprisesofaContractingState,thecapitalofwhichiswhollyorpartlyownedorcontrolled,directlyorindirectly,byone
ormoreresidentsoftheotherContractingState,shallnotbesubjectedinthefirstmentionedContractingStatetoanytaxation
oranyrequirementconnectedtherewithwhichisotherormoreburdensomethanthetaxationandconnectedrequirementsto
whichothersimilarenterprisesofthatfirstmentionedStateareormaybesubjectedinthesamecircumstancesandunderthe
sameconditions.
5. The provisions of this article shall not be construed as affecting the application in the United Arab Republic of the
exemptionsconferredintheUnitedArabRepublicbyarticles5and6ofLaw14of1939.
6.Inthisarticletheterm"taxation"meanstaxesofeverykindasspecifiedinthisConvention.

ARTICLE26
MUTUALAGREEMENTPROCEDURE
1.WherearesidentofaContractingStateconsidersthattheactionsofoneorbothoftheContractingStatesresultorwillresult
forhimintaxationnotinaccordancewiththisConvention,hemay,notwithstandingtheremediesprovidedbythenationallaws
ofthoseStates,presenthiscasetothecompetentauthorityoftheContractingStateofwhichheisaresident.
2.Thecompetentauthorityshallendeavour,iftheobjectionappearstoittobejustifiedandifitisnotitselfabletoarriveatan
appropriatesolution,toresolvethecasebymutualagreementwiththecompetentauthorityoftheotherContractingState,with
aviewtotheavoidanceoftaxationnotinaccordancewiththeConvention.
3.ThecompetentauthoritiesoftheContractingStatesshallendeavourtoresolvebymutualagreementanydifficultiesordoubts
arisingastotheinterpretationofapplicationoftheConvention.Theymayalsoconsulttogetherfortheeliminationofdouble
taxationincasesnotprovidedforintheConvention.
4.ThecompetentauthoritiesoftheContractingStatesmaycommunicatewitheachotherdirectlyforthepurposeofreachingan
agreement in the sense of the preceding paragraphs. When it seems advisable in order to reach agreement to have an oral
exchangeofopinions,suchexchangemaytakeplacethroughrepresentativesofthecompetentauthoritiesoftheContracting
States.

ARTICLE27
EXCHANGEOFINFORMATION
1.ThecompetentauthoritiesoftheContractingStatesshallexchangesuchinformationasisnecessaryforthecarryingoutof
thisConventionandofthedomesticlawsoftheContractingStatesconcerningtaxescoveredbythisConventioninsofarasthe
taxationthereunderisinaccordancewiththisConvention.Anyinformationsoexchangedshallbetreatedassecretandshallnot
http://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=http://www.incometaxindia.gov.in/dtaa/comprehensive%20agreements/1086900000

10/13

1/6/2017

IncomeTaxDepartment

disclosed to any persons or authorities other than those concerned with the assessment, including judicial determination, or
collectionofthetaxeswhicharethesubjectofthisConvention.
2.Innocaseshalltheprovisionsofparagraph(1)beconstruedsoastoimposeononeoftheContractingStatestheobligation

(a)

tocarryoutadministrativemeasuresatvariancewiththelawsortheadministrativepracticeofthatorof
theotherContractingState

(b)

tosupplyparticularswhicharenotobtainableunderthelawsorinthenormalcourseoftheadministration
ofthatoroftheotherContractingState

(c)

to supply information which would disclose any trade, business, industrial, commercial or professional
secretortradeprocess,orinformation,thedisclosureofwhichwouldbecontrarytopublicpolicy(ordre
public).

ARTICLE28
DIPLOMATICANDCONSULARPRIVILEGES
Nothing in this Convention shall affect the fiscal privileges of diplomatic or consular officials under the general rules of
internationallaworundertheprovisionsofspecialagreements.

CHAPTERVI
FINALPROVISIONS
ARTICLE29
ENTRYINTOFORCE
1.ThisConventionshallberatifiedandtheinstrumentsofratificationshallbeexchangedatNewDelhiassoonaspossible.
2.ThisConventionshallenterintoforceonthedateoftheexchangeoftheinstrumentsofratificationanditsprovisionsshall
haveeffect
(a)

inIndia,

(i) inthecaseofincomederivedfromoperationofaircraft(referredtoinarticleVIII),asrespectssuchincomederived
duringany"previousyear"beginningonorafterthefirstdayofJanuary,1961
(ii) inthecaseofanyotherincome,asrespectsincomederivedduringany"previousyear"beginningonorafterthefirst
dayofJanuaryofthecalendaryearinwhichtheexchangeoftheinstrumentsofratificationtakesplace.
(b)

intheUnitedArabRepublic,

(i) inthecaseofincomefromoperationofaircraft(referredtoinarticleVIII),asrespectssuchincomederivedduring
anyaccountingperiodendingonorafterthefirstdayofJanuary,1961
(ii) inthecaseofanyotherincome,
(1) asrespectstaxonincomefrommovablecapitalandtaxonwages,salaries,indemnitiesandpensions,whichtaxesare
dueonorafterthedateonwhichtheexchangeoftheinstrumentsofratificationtakesplace
(2) asrespectstaxoncommercialandindustrialprofitsforanyaccountingperiodendingonorafterthedateonwhichthe
exchangeoftheinstrumentsofratificationtakesplace
(3) asrespectstaxonincomederivedfromimmovableproperty(includingthelandtax,thebuildingstaxandtheghaffir
tax),taxonprofitsfromliberalprofessionsandallothernoncommercialprofessionsandthegeneralincometaxfor
thecalendaryearinwhichtheexchangeoftheinstrumentsofratificationtakesplace.
Therulesinsubparagraph(b)ofthisparagraph shallbe correspondingly applicable respectively to the defencetax,national
securitytaxandtothesupplementarytaxes.

http://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=http://www.incometaxindia.gov.in/dtaa/comprehensive%20agreements/1086900000

11/13

1/6/2017

IncomeTaxDepartment

ARTICLE30
TERMINATION
Either of the Contracting States 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 the diplomatic channels, written notice of
termination,providedthatsuchnoticeshallbegivenonlyonorbeforethethirtiethdayofJuneinanycalendaryear,andinsuch
event,thisConventionshallceasetobeeffective
(a)

(b)

inIndia,
asrespectsincomederivedduringany"previousyear"beginningon
orafterthefirstdayofJanuaryofthecalendaryearnextfollowing
thatinwhichthenoticeisgiven
intheUnitedArabRepublic,

(1) asrespectstaxonincomefrommovablecapitalandtaxonwages,salaries,indemnitiesandpensions,whichtaxesare
dueonorafterthefirstdayofJulyinthecalendaryearnextfollowingthatinwhichthenoticeisgiven
(2) asrespectstaxoncommercialandindustrialprofitsforanyaccountingperiodendingonorafterthefirstdayofJuly
inthecalendaryearnextfollowingthatinwhichthenoticeisgiven
(3) asrespectstaxonincomederivedfromimmovableproperty(includingthelandtax,thebuildingstaxandtheghaffir
tax),taxonprofitsfromliberalprofessionsandallothernoncommercialprofessionsandthegeneralincometaxfor
thecalendaryearnextfollowingthatinwhichthenoticeisgiven.
Therulesinsubparagraph(b)ofthisparagraph shallbe correspondingly applicable respectively to the defencetax,national
securitytaxandtothesupplementarytaxes.
INWITNESSwhereof,theundersigned,beingdulyauthorisedthereto,havesignedthisConvention.
DONEinduplicateatCairothis20thdayofFebruary,1969,intheEnglishlanguage.
DearSir,
The Convention between the Government of India and the Government of the UnitedArab Republic for the avoidance of
doubletaxationwithrespecttotaxesonincomebeingsignedtoday,Ihavethehonour,onbehalfoftheGovernmentofIndia,to
informyouthatthetwoContractingStateshaveagreedasfollows:
The provisions ofArticle 8 (Air transport) of the said Convention being operative under the terms of Article 29 (Entry into
force)oftheConvention,inthecaseofIndia,asrespectsincomederivedfromoperationofaircraftduringany"previousyear"
beginning on or after the first day of January, 1961, and in the case of the UnitedArab Republic, as respects such income
derivedduringanyaccountingperiodendingonorafterthefirstdayofJanuary,1961:
WhereanytaxescoveredbythisConventionhavebeenpaidorarepayableinoneoftheContractingStates by a designated
airline of the other Contracting State as respects such income derived by it during any "previous year" or accounting period
aforesaid,thefirstmentionedContractingStateshallrefundsuchtaxestoor,asthecasemaybe,refrainfromchargingsuch
taxesfromthedesignatedairline.
Thedesignatedairlineaforesaidshall,inthecaseofIndia,betheAirIndia,andinthecaseoftheUnitedArabRepublic,bethe
UnitedArabAirlines.
2.IshouldbegratefulifyouconfirmyouragreementtotheaboveunderstandingoftheprovisionsofArticle8readwithArticle
29ofthesaidConvention,andthatinsuchcase,thisnoteandyourreplytheretoshallbedeemedtobepartoftheConvention.
3.Pleaseaccept,YourExcellency,theassurancesofmyhighestconsideration.
Sd./ApaB.Pant
HisExcellencyMr.AhmedElSayedShaban,
UnderSecretaryfortheTaxationDepartment,
MinistryofTreasury,
GovernmentoftheUnitedArabRepublic,Cairo.
Cairo,the20thFebruary,1969.
DearSir,
http://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=http://www.incometaxindia.gov.in/dtaa/comprehensive%20agreements/1086900000

12/13

1/6/2017

IncomeTaxDepartment

WithreferencetotheConventionsignedtodaybetweentheGovernmentoftheUnitedArabRepublic andtheGovernmentof
Indiafortheavoidanceofdoubletaxationwithrespecttotaxesonincome,you,onbehalfoftheGovernmentofIndia,informed
meofthefollowing:
The Convention between the Government of India and the Government of the UnitedArab Republic for the avoidance of
doubletaxationwithrespecttotaxesonincomebeingsignedtoday,Ihavethehonour,onbehalfoftheGovernmentofIndia,to
informyouthatthetwoContractingStateshaveagreedasfollows:
The provisions ofArticle 8 (Air transport) of the said Convention being operative under the terms of Article 29 (Entry into
force)oftheConvention,inthecaseofIndia,asrespectsincomederivedfromoperationofaircraftduringany"previousyear"
beginning on or after the first day of January, 1961, and in the case of the UnitedArab Republic, as respects such income
derivedduringanyaccountingperiodendingonorafterthefirstdayofJanuary,1961:
WhereanytaxescoveredbythisConventionhavebeenpaidorarepayableinoneoftheContractingStates by a designated
airline of the other Contracting State as respects such income derived by it during any "previous year" or accounting period
aforesaid,thefirstmentionedContractingStateshallrefundsuchtaxestoor,asthecasemaybe,refrainfromchargingsuch
taxesfromthedesignatedairline.
Thedesignatedairlineaforesaidshall,inthecaseofIndia,betheAirIndia,andinthecaseoftheUnitedArabRepublic,bethe
UnitedArabAirlines.
IshouldbegratefulifyouconfirmyouragreementtotheaboveunderstandingoftheprovisionsofArticle8readwithArticle
29ofthesaidConvention,andthatinsuchcase,thisnoteandyourreplytheretoshallbedeemedtobepartoftheConvention.
2.IhavethehonourtoconfirmthattheabovementionedproposalmeetswiththeapprovaloftheGovernmentoftheUnited
ArabRepublic.
Yournoteoftoday'sdateandmyreplytheretoshall,therefore,bepartoftheConvention.
3.Pleaseaccept,yourExcellency,theassurancesofmyhighestconsideration.
Sd/
AhmedElSayedShaban
HisExcellencyMr.ApaB.Pant,
AmbassadorofIndia,
Cairo.

Copyright. Taxmann Publications Pvt. Ltd.

http://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=http://www.incometaxindia.gov.in/dtaa/comprehensive%20agreements/1086900000

13/13

You might also like