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TURKMENISTAN
AgreementforavoidanceofdoubletaxationandthepreventionoffiscalevasionwithTurkmenistan
WhereastheannexedConventionbetweentheGovernmentoftheRepublicofIndiaandtheGovernmentofTurkmenistanforthe
avoidanceofdoubletaxationandthepreventionoffiscalevasionwithrespecttotaxesonincomeandoncapitalhasentered
intoforceontheseventhdayofJuly,1997afterthenotificationbytheContractingStatestoeachotherofthecompletionof
procedures required by its law for bringing into force of the said Convention in accordance with Article 30 of the said
Convention
Now,therefore,inexerciseofthepowersconferredbysection90oftheIncometaxAct,1961(43of1961)andsection44Aof
the WealthtaxAct, 1957 (27 of 1957), the Central Government hereby directs that all the provisions of the said Convention
shallbegiveneffecttointheUnionofIndia.
Notification:No.GSR567(E),dated2591997.
ANNEXURE
CONVENTIONBETWEENTHEGOVERNMENTOFREPUBLICOFINDIAANDTHEGOVERNMENTOF
TURKMENISTANFORTHEAVOIDANCEOFDOUBLETAXATIONANDTHEPREVENTIONOFFISCAL
EVASIONWITHRESPECTTOTAXESONINCOMEANDONCAPITAL
The Government of the Republic of India and the Government of Turkmenistan desiring to conclude a Convention for the
avoidanceofdoubletaxationandthepreventionoffiscalevasionwithrespecttotaxes on income and on capital and with a
viewtopromotingeconomiccooperationbetweenthetwocountries.
Haveagreedasfollows:

ARTICLE1
PERSONALSCOPE
ThisConventionshallapplytopersonswhoareresidentsofoneorbothoftheContractingStates.

ARTICLE2
TAXESCOVERED
1.ThisConventionshallapplytotaxesonincomeandoncapitalimposedonbehalfofaContractingStateorofitspolitical
subdivisionsorlocalauthorities,irrespectiveofthemannerinwhichtheyarelevied.
2.Thereshallberegardedastaxesonincomeandoncapitalalltaxesimposedontotalincome,ontotalcapital,oronelements
of income or of capital, including taxes on gains from the alienation of movable or immovable property, taxes on the total
amountsofwagesorsalariespaidbyenterprises,aswellastaxesoncapitalappreciation.
3.ThetaxestowhichtheConventionshallapplyareinparticular:
(a)

InTurkmenistan:

(i)

theprofits(income)tax

(ii)

thepersonalincometaxfromtheindividuals

(iii)

thetaxonnaturalresources

(iv)

thetaxonthepropertyoftheenterprises

(v)

thepaymentforthelands

(hereinafterreferredtoas"Turkmentax")

(b)

InIndia:

(i)

theincometaxincludinganysurchargethereon

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(ii)

thewealthtax
(hereinafterreferredtoas"Indiantax").

4.TheConventionshallapplyalsotoanyidenticalorsubstantiallysimilartaxeswhichareimposedafterthedateofsignature
of the Convention in addition to, or in place of, the taxes referred to in paragraph 3. The competent authorities of the
ContractingStatesshallnotifyeachotherofsignificantchangeswhichhavebeenmadeintheirrespectivetaxationlaws.

ARTICLE3
GENERALDEFINITIONS
1.ForthepurposesofthisConvention,unlessthecontextotherwiserequires:
(a)

theterm"Turkmenistan"meansTurkmenistanand,whenusedinageographicalsense,includes
anyareabeyondtheterritorialwatersofTurkmenistanwhich in accordancewith international
law and the laws of Turkmenistan is an area within which Turkmenistan may exercise rights
withrespecttotheseabedandsubsoilandtheirnaturalresources

(b)

theterm"India"meanstheterritoryofIndiaandincludestheterritorialseaandairspaceabove
it,andothermaritimezones inwhich Indiahassovereignrights, other rights and jurisdiction,
according to the Indian law and in accordance with international law, including the UN
ConventiononthelawoftheSea

(c)

the term "person" includes an individual, a company, a body of persons and any other entity
whichistreatedasataxableunitunderthetaxationlawsinforceintherespectiveContracting
States

(d)

theterm"company"meansanybodycorporateoranyentitywhichistreatedasabodycorporate
fortaxpurposes

(e)

the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State"
meanrespectivelyanenterprisecarriedonbyaresidentofaContractingStateandanenterprise
carriedonbyaresidentoftheotherContractingState

(f)

the term "international traffic" means any transport by a ship or aircraft operated by an
enterprise of a Contracting State, except when the ship or aircraft is operated solely between
placesintheotherContractingState

(g)

theterm"competentauthority"means:

(i) inTurkmenistan,theHeadoftheMainStateTaxInspectorateorhisauthorisedrepresentative
(ii) inIndia,theCentralGovernmentintheMinistryofFinance(DepartmentofRevenue)ortheirauthorised
representative
(h)

the
term
"national"means:

(i) anyindividualpossessingthenationalityofaContractingState
(ii) anylegalperson,partnershiporassociationderivingitsstatusassuchfromthelawsinforce
inaContractingState
(i)

theterm"fiscalyear"means:

(i) inthecaseofTurkmenistan,thecalendaryearfrom1stofJanuaryto31stofDecemberoftheyearunder
review
(ii) inthecaseofIndia,the"previousyear"asdefinedundersection3oftheIncometaxAct,1961
(j)

the term "tax" means Indian tax or Turkmen tax as the context
requires,butshallnotincludeanyamountwhichispayableinrespect

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of any default or omission in relation to the taxes to which this


Conventionappliesorwhich represents a penalty imposed relating to
thosetaxes.
2.Asregardstheapplication oftheConventionbyaContractingState,anytermnotdefinedthereinshall,unlessthecontext
otherwiserequires,havethemeaningwhichithasunderthelawofthatStateconcerningthetaxestowhichtheConvention
applies.

ARTICLE4
RESIDENT
1.ForthepurposesofthisConvention,theterm"residentofaContractingState"meansanypersonwho,underthelawsofthat
State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar
nature.ButthistermdoesnotincludeanypersonwhoisliabletotaxinthatStateinrespectonlyofincomefromsourcesinthat
Stateorcapitalsituatedtherein.
2.Wherebyreasonoftheprovisionsofparagraph1,anindividualisaresidentofbothContractingStates,thenhisstatusshall
bedeterminedasfollows:
(a)

heshallbedeemedtobearesidentoftheStateinwhichhehasapermanenthomeavailabletohimifhe
hasapermanenthomeavailabletohiminbothStates,heshallbedeemedtobearesidentoftheState
withwhichhispersonalandeconomicrelationsarecloser(centreofvitalinterests)

(b)

iftheStateinwhichhehashiscentreofvitalinterestscannotbedetermined,orifhehasnotapermanent
homeavailabletohimineitherState,heshallbedeemedtobearesidentoftheStateinwhichhehasan
habitualabode

(c)

ifhehasanhabitualabodeinbothStatesorinneitherofthem,heshallbedeemedtobearesidentofthe
Stateofwhichheisanational

(d)

ifheisanationalofbothStatesorofneitherofthem,thecompetentauthoritiesoftheContractingStates
shallsettlethequestionbymutualagreement.

3.Wherebyreasonoftheprovisionsofparagraph1,apersonotherthananindividualisaresidentofbothContractingStates,
thenitshallbedeemedtobearesidentoftheStateinwhichitsplaceofeffectivemanagementissituated.

ARTICLE5
PERMANENTESTABLISHMENT
1.ForthepurposesofthisConvention,theterm"permanentestablishment"meansafixedplaceofbusinessthroughwhichthe
businessofanenterpriseiswhollyorpartlycarriedon.
2.Theterm"permanentestablishment"includesespecially:
(a)

aplaceofmanagement

(b)

abranch

(c)

anoffice

(d)

afactory

(e)

aworkshop

(f)

amine,anoilorgaswell,aquarryoranyotherplaceofextractionofnaturalresources

(g)

salesoutlet

(h)

warehouseinrelationtoapersonprovidingstoragefacilitiesforothers.

3.Theterm"permanentestablishment"likewiseencompassesabuildingsite,aconstruction,assemblyorinstallationprojector
supervisoryactivitiesinconnectiontherewith,butonlywhensuchsite,project,oractivitiescontinueforaperiodofmorethan
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sixmonths.
4.NotwithstandingtheprecedingprovisionsofthisArticle,theterm"permanentestablishment"shallbedeemednottoinclude:
(a)

theuseoffacilitiessolelyforthepurposeofstorageordisplayofgoodsormerchandisebelongingtothe
enterprise

(b)

themaintenanceofastockofgoodsormerchandisebelongingtotheenterprisesolelyforthepurposeof
storageordisplay

(c)

themaintenanceofastockofgoodsormerchandisebelongingtotheenterprisesolelyforthepurposeof
processingbyanotherenterprise

(d)

themaintenanceofafixedplaceofbusinesssolelyforthepurposeofpurchasinggoodsormerchandiseor
ofcollectinginformation,fortheenterprise

(e)

themaintenanceofafixedplaceofbusinesssolelyforthepurposeofcarryingon,fortheenterprise,any
otheractivityofapreparatoryorauxiliarycharacter

(f)

themaintenanceof a fixed place of business solely for any combination of activities mentionedinsub
paragraphs(a)to(e),providedthattheoverallactivityofthefixedplaceofbusinessresultingfromthis
combinationisofapreparatoryorauxiliarycharacter.

5.Notwithstandingtheprovisionsofparagraphs1and2,whereapersonotherthananagentofanindependentstatustowhom
paragraph7appliesisactinginaContractingStateonbehalfofanenterpriseoftheotherContractingState,thatenterprise
shallbedeemedtohaveapermanentestablishmentinthefirstmentionedContractingStateinrespectofanyactivitieswhich
thatpersonundertakesfortheenterprise,ifsuchaperson:
(a)

hasandhabituallyexercisesinthatStateanauthoritytoconcludecontractsinthenameoftheenterprise,
unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised
throughafixedplaceofbusiness,wouldnotmakethisfixedplaceofbusinessapermanentestablishment
undertheprovisionsofthatparagraphor

(b)

has no such authority, but habitually maintains in the firstmentioned State a stock of goods or
merchandisefromwhichheregularlydeliversgoodsormerchandiseonbehalfoftheenterprise.

6. Notwithstanding the preceding provisions of this Article, an insurance enterprise of a Contracting State shall, except in
regardtoreinsurance,bedeemedtohaveapermanentestablishmentintheotherContractingStateifitcollectspremiumsin
theterritoryofthatotherStateorinsuresriskssituatedthereinthroughapersonotherthananagentofanindependentstatusto
whomparagraph7applies.
7.An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on
businessinthatStatethroughabroker,generalcommissionagentoranyotheragentofanindependentstatus,providedthat
such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted
whollyoralmostwhollyonbehalfof that enterprise, he will not be considered an agent of an independent status within the
meaningofthisparagraph.
8.ThefactthatacompanywhichisaresidentofaContractingStatecontrolsoriscontrolledbyacompanywhichisaresident
oftheotherContractingState,orwhichcarriesonbusinessinthatotherState(whetherthroughapermanentestablishmentor
otherwise),shallnotofitselfconstituteeithercompanyapermanentestablishmentoftheother.

ARTICLE6
INCOMEFROMIMMOVABLEPROPERTY
1.IncomederivedbyaresidentofaContractingStatefromimmovableproperty(includingincomefromagricultureorforestry)
situatedintheotherContractingStatemayalsobetaxedinthatotherState.
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
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work,mineraldeposits,sourcesandothernaturalresourcesshipsandaircraftshallnotberegardedasimmovableproperty.
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.Theprovisionsofparagraphs1and3shallalsoapplytotheincomefromimmovablepropertyofanenterpriseandtoincome
fromimmovablepropertyusedfortheperformanceofindependentpersonalservices.

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. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other
ContractingStatethroughapermanentestablishmentsituatedtherein,thereshallineachContractingStatebeattributedtothat
permanentestablishmenttheprofitswhichitmightbeexpectedtomakeifitwereadistinctandseparateenterpriseengagedin
the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of
whichitisapermanentestablishment.
3.Indeterminingtheprofitsofapermanentestablishment,thereshallbeallowedasdeductionsexpenseswhichareincurredfor
thepurposesofthepermanentestablishment,includingexecutiveandgeneraladministrativeexpensessoincurred,whetherin
theStateinwhichthepermanentestablishmentissituatedorelsewhere,inaccordancewiththeprovisionsofandsubjecttothe
limitationsofthetaxlawsofthatState.
4.Noprofitsshallbeattributedtoapermanentestablishmentbyreasonofthemerepurchasebythatpermanentestablishment
ofgoodsormerchandisefortheenterprise.
5.Forthepurposesoftheprecedingparagraphs,theprofitstobeattributedtothepermanentestablishmentshallbedetermined
bythesamemethodyearbyyearunlessthereisgoodandsufficientreasontothecontrary.
6. Where profits include items of income which are dealt with separately in other Articles of this Convention, then the
provisionsofthoseArticlesshallnotbeaffectedbytheprovisionsofthisArticle.

ARTICLE8
SHIPPINGANDAIRTRANSPORT
1.ProfitsderivedbyanenterpriseofaContractingStatefromtheoperationofshipsoraircraftininternationaltrafficshallbe
taxableonlyinthatState.
2.ProfitsderivedbyatransportationenterprisewhichisaresidentofaContractingStatefromtheuse,maintenance,orrentalof
containers(includingtrailersandotherequipmentforthetransportofcontainers)usedforthetransportofgoodsormerchandise
in international traffic shall be taxable only in that Contracting State unless the containers are used solely within the other
ContractingState.
3.Theprovisionsofparagraph1shallalsoapplytoprofitsfromtheparticipationinapool,ajointbusinessoraninternational
operatingagency.

ARTICLE9
ASSOCIATEDENTERPRISES
1.Where,
(a)

anenterpriseofaContractingStateparticipatesdirectlyorindirectlyinthemanagement,controlorcapital
ofanenterpriseoftheotherContractingState,or

(b)

thesamepersonsparticipatedirectlyorindirectlyinthemanagement,controlorcapitalofanenterpriseof
aContractingStateandanenterpriseoftheotherContractingState,

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andineithercaseconditionsaremadeorimposedbetweenthetwoenterprisesintheircommercialorfinancialrelationswhich
differ from those which would be made between independent enterprises, then any profits which would, but for those
conditions,haveaccruedtooneoftheenterprises,but,byreasonofthoseconditions,havenotsoaccrued,maybeincludedin
theprofitsofthatenterpriseandtaxedaccordingly.
2.WhereaContractingStateincludesintheprofitsofanenterpriseofthatStateandtaxesaccordinglyprofitsonwhichan
enterpriseoftheotherContractingStatehasbeenchargedtotaxinthatotherStateandtheprofitssoincludedareprofitswhich
wouldhaveaccruedtotheenterpriseofthefirstmentionedStateiftheconditionsmadebetweenthetwoenterpriseshadbeen
thosewhichwouldhavebeenmadebetweenindependententerprises,thenthatotherStateshallmakeanappropriateadjustment
totheamountofthetaxchargedthereinonthoseprofits.Indeterminingsuchadjustment,dueregardshallbehadtotheother
provisionsofthisConventionandthecompetentauthoritiesoftheContractingStatesshallifnecessaryconsulteachother.

ARTICLE10
DIVIDENDS
1.DividendspaidbyacompanywhichisaresidentofaContractingStatetoaresidentoftheotherContractingStatemaybe
taxedinthatotherState.
2.However,suchdividendsmayalsobetaxedintheContractingStateofwhichthecompanypayingthedividendsisaresident
andaccordingtothelawsofthatState,butiftherecipientisthebeneficialownerofthedividendsthetaxsochargedshallnot
exceed10percentofthegrossamountofthedividends.ThecompetentauthoritiesoftheContractingStatesshallbymutual
agreement settle the mode of application of this limitation. This paragraph shall not affect the taxation of the company in
respectoftheprofitsoutofwhichthedividendsarepaid.
3.Theterm"dividends"asusedinthisArticlemeansincomefromsharesorotherrights,notbeingdebtclaims,participatingin
profits,aswellasincomefromothercorporaterightswhichissubjectedtothesametaxationtreatmentasincomefromshares
bythelawsoftheStateofwhichthecompanymakingthedistributionisaresident.
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a
ContractingState,carriesonbusinessintheotherContractingStateofwhichthecompanypayingthedividendsisaresident,
throughapermanentestablishmentsituatedtherein,orperformsinthatotherStateindependentpersonalservicesfromafixed
basesituatedtherein,andtheholdinginrespectofwhichthedividendsarepaidiseffectivelyconnectedwithsuchpermanent
establishmentorfixedbase.InsuchcasetheprovisionsofArticle7orArticle14,asthecasemaybe,shallapply.
5.WhereacompanywhichisaresidentofaContractingStatederivesprofitsorincomefromtheotherContractingState,that
other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a
residentofthatotherStateorinsofarastheholdinginrespectofwhichthedividendsarepaidiseffectivelyconnectedwitha
permanentestablishmentorafixedbasesituatedinthatotherState,norsubjectthecompany'sundistributedprofitstoataxon
thecompany'sundistributedprofits,evenifthedividendspaidortheundistributedprofitsconsistwhollyorpartlyofprofitsor
incomearisinginsuchotherState.

ARTICLE11
INTEREST
1.InterestarisinginaContractingStateandpaidtoaresidentoftheotherContractingStatemaybetaxedinthatotherState.
2.However,suchinterestmayalsobetaxedintheContractingStateinwhichitarisesandaccordingtothelawsofthatState,
butiftherecipientisthebeneficialowneroftheinterestthetaxsochargedshallnotexceed10percentofthegrossamountof
theinterest.ThecompetentauthoritiesoftheContractingStatesshallbymutualagreementsettlethemodeofapplicationofthis
limitation.
3.Notwithstandingtheprovisionsofparagraph2,interestarisinginaContractingStateshallbeexemptfromtaxinthatState
provideditisderivedandbeneficiallyownedby:
(i)

theGovernment,apoliticalsubdivisionoralocalauthorityoftheotherContractingStateor

(ii)

the Central Bank of the other Contracting State, or any other bank that may be mutually agreed upon
betweenthetwoContractingStates.

4.Theterm"interest"asusedinthisArticlemeansincomefromdebtclaimsofeverykind,whetherornotsecuredbymortgage
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andwhetherornotcarryingrighttoparticipateinthedebtor'sprofits,andinparticular,incomefromGovernmentsecuritiesand
income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. Penalty
chargesforlatepaymentshallnotberegardedasinterestforthepurposeofthisArticle.
5.Theprovisionsofparagraphs1and2shallnotapplyifthebeneficialowneroftheinterest,beingaresidentofaContracting
State,carriesonbusinessintheotherContractingStateinwhichtheinterestarises,throughapermanentestablishmentsituated
therein,orperformsinthatotherStateindependentpersonalservicesfromafixedbasesituatedtherein,andthedebtclaimin
respectofwhichtheinterestispaidiseffectivelyconnectedwithsuchpermanentestablishmentorfixedbase.Insuchcasethe
provisionsofArticle7orArticle14,asthecasemaybe,shallapply.
6.InterestshallbedeemedtoariseinaContractingState when the payer is that State itself, a politicalsubdivision,alocal
authorityoraresidentofthatState.Where,however,thepersonpayingtheinterest,whetherheisaresidentofaContracting
StateornothasinaContractingStateapermanentestablishmentorafixedbaseinconnectionwithwhichtheindebtednesson
whichtheinterest ispaidwasincurred, andsuchinterest isborneby such permanentestablishment or fixedbase, then such
interestshallbedeemedtoariseintheStateinwhichthepermanentestablishmentorfixedbaseissituated.
7.Where,byreasonofaspecialrelationshipbetweenthepayerandthebeneficialownerorbetweenbothofthemandsome
otherperson,theamountoftheinterest,havingregardtothedebtclaimforwhichitispaid,exceedstheamountwhichwould
havebeenagreeduponbythepayerandthebeneficialownerintheabsenceofsuchrelationship,theprovisionsofthisArticle
shallapplyonlytothelastmentionedamount.Insuchcase,theexcesspartofthepaymentsshallremaintaxableaccordingto
thelawsofeachContractingState,dueregardbeinghadtotheotherprovisionsofthisConvention.

ARTICLE12
ROYALTIESANDFEESFORTECHNICALSERVICES
1.RoyaltiesorfeesfortechnicalservicesarisinginaContractingStateandpaidtoaresidentoftheotherContractingStatemay
betaxedinthatotherState.
2.However, such royaltiesorfees for technical services may also be taxed in the Contracting State in which they arise and
accordingtothelawsofthatState,butiftherecipientisthebeneficialowneroftheroyaltiesorfeesfortechnicalservicesthe
taxsochargedshallnotexceed10percentofthegrossamountoftheroyaltiesorfeesfortechnicalservices.
3.(a)Theterm"royalties"asusedinthisArticlemeanspaymentsofanykindreceivedasaconsiderationfortheuseof,orthe
righttouse,anycopyrightofliterary,artisticorscientificworkincludingcinematographfilms,orrecordingsonanymeansof
reproductionforuseinconnectionwithradioortelevisionbroadcasting,computersoftware,anypatent,trademark,designor
model,plan,secretformulaorprocess,orfortheuseof,ortherighttouse,industrial,commercialorscientificequipment,or
forinformationconcerningindustrial,commercialorscientificexperience
(b)Theterm"feesfortechnicalservices"meanspaymentsofanykindinconsiderationfortherendering of any managerial,
technical or consultancy services including the provision of services by technical or other personnel but does not include
paymentsforservicesmentionedinArticles14and15ofthisConvention.
4.Theprovisionsofparagraphs1and2shallnotapplyifthebeneficialowneroftheroyaltiesorfeesfortechnicalservices,
being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties or fees for
technical services 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 or fees for
technicalservicesarepaidiseffectivelyconnectedwithsuchpermanentestablishmentorfixedbase.Insuchcasetheprovisions
ofArticle7orArticle14,asthecasemaybe,shallapply.
5.RoyaltiesorfeesfortechnicalservicesshallbedeemedtoariseinaContractingStatewhenthepayeristhatStateitself,a
politicalsubdivision,orlocalauthorityoraresidentofthatState.Where,however,thepersonpayingtheroyaltiesorfeesfor
technicalservices,whetherheisaresidentofaContractingStateornot,hasinanyStateapermanentestablishmentorafixed
baseinconnectionwithwhichtheliabilitytopaytheroyaltiesorfeesfortechnicalserviceswasincurred,andsuchroyaltiesor
feesfortechnicalservicesarebornebysuchpermanentestablishmentorfixedbase,thensuchroyaltiesorfeesfortechnical
servicesshallbedeemedtoariseintheStateinwhichthepermanentestablishmentorfixedbaseissituated.
6.Where,byreasonofaspecialrelationshipbetweenthepayerandthebeneficialownerorbetweenbothofthemandsome
otherperson,theamountoftheroyaltiesorfeesfortechnicalservices,havingregardtotheuse,rightorinformationforwhich
theyarepaid,exceedstheamountwhichwouldhavebeenagreeduponbythepayerandthebeneficialownerintheabsenceof
suchrelationship,theprovisionsofthisArticleshallapplyonlytothelastmentionedamount.Insuchcase,theexcesspart of
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thepaymentsshallremaintaxableaccordingtothelawsofeachContractingState,dueregardbeinghadtotheotherprovisions
ofthisConvention.

ARTICLE13
CAPITALGAINS
1.GainsderivedbyaresidentofaContractingState from the alienation of immovablepropertyreferred to inArticle 6 and
situatedintheotherContractingStatemaybetaxedinthatotherState.
2.Gainsfromthealienationofmovablepropertyformingpartofthebusinesspropertyofapermanentestablishmentwhichan
enterpriseofaContractingStatehasintheotherContractingStateorofmovablepropertypertainingtoafixedbaseavailableto
aresidentofaContractingStateintheotherContracting State for the purpose of performing independent personal services,
includingsuchgainsfromthealienationofsuchapermanentestablishment(aloneorwiththewholeenterprise)orofsuchfixed
base,maybetaxedinthatotherState.
3.GainsderivedbyanenterpriseofaContractingStatefromthealienationofshipsoraircraftoperatedininternationaltraffic,
ormovablepropertypertainingtotheoperationofsuchshipsoraircraftshallbetaxableonlyinthatState.
4.Gainsfromthealienationofsharesofthecapitalstockofacompanythepropertyofwhichconsistsdirectlyorindirectly
principallyofimmovablepropertysituatedinaContractingStatemaybetaxedinthatState.
5. Gains from the alienation of shares other than those mentioned in paragraph 4 in a company which is a resident of a
ContractingStatemaybetaxedinthatState.
6.Gainsfromthealienationofanypropertyotherthanthatreferredtoinparagraphs1,2,3,4and5shallbetaxableonlyinthe
ContractingStateofwhichthealienatorisaresident.

ARTICLE14
INDEPENDENTPERSONALSERVICES
1.IncomederivedbyaresidentofaContractingStateinrespectofprofessionalservicesorotheractivitiesofanindependent
charactershallbetaxableonlyinthatStateexceptinthefollowingcircumstances,whensuchincomemayalsobetaxedinthe
otherContractingState:
(a)

if he has a fixed base regularly available to him in the other Contracting State for the purpose of
performinghisactivitiesinthatcase,onlysomuchoftheincomeasisattributabletothatfixedbasemay
betaxedinthatotherStateor

(b)

ifhisstayintheotherContractingStateisforaperiodorperiodsaggregating183daysormoreinany12
monthperiodcommencingorendinginthefiscalyearconcernedinthatcaseonlysomuchoftheincome
asisderivedfromhisactivitiesperformedinthatotherStateintheyearmaybetaxedinthatotherState.

2.Theterm"professionalservices"includesespeciallyindependentscientific,literaryartistic,educationalorteachingactivities
aswellastheindependentactivitiesofphysicians,lawyers,engineers,architects,surgeons,dentistsandaccountants.

ARTICLE15
DEPENDENTPERSONALSERVICES
1.SubjecttotheprovisionsofArticles16,18and19,salaries,wagesandothersimilarremunerationderivedbyaresidentofa
Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the
otherContractingState.Iftheemploymentissoexercised,suchremunerationasisderivedtherefrommaybetaxedinthatother
State.
2.Notwithstandingtheprovisionsofparagraph1,remunerationderivedbyaresidentofaContractingState in respect of an
employmentexercisedintheotherContractingStateshallbetaxableonlyinthefirstmentionedStateif:
(a)

therecipientispresentintheotherStateforaperiodorperiodsnotexceedingintheaggregate183daysin
any12monthperiodcommencingorendinginthefiscalyearconcerned,and

(b)

theremunerationispaidby,oronbehalfof,anemployerwhoisnotaresidentoftheotherState,and

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(c)

theremunerationisnotbornebyapermanentestablishmentorafixedbasewhichtheemployerhasinthe
otherState.

3.NotwithstandingtheprecedingprovisionsofthisArticle,remunerationderivedinrespectofanemploymentexerciseaboard
ashiporaircraftoperatedininternationaltrafficbyanenterpriseofaContractingStatemaybetaxedinthatState

ARTICLE16
DIRECTORS'FEES
Directors'feesandothersimilarpaymentsderivedbyaresidentofaContractingStateinhiscapacityasamemberoftheboard
ofdirectorsofacompanywhichisaresidentoftheotherContractingStatemaybetaxedinthatotherState.

ARTICLE17
ARTISTESANDSPORTSMEN
1.NotwithstandingtheprovisionsofArticles14and15,incomederivedbyaresidentofaContracting Stateasanentertainer,
suchasatheatre,motionpicture,radioortelevisionartiste,oramusician,orasasportsman,fromhispersonalactivitiesassuch
exercisedintheotherContractingState,maybetaxedinthatotherState.
2.Whereincomeinrespectofpersonalactivitiesexercisedbyanentertainerorasportsmaninhiscapacityassuchaccruesnot
totheentertainerorsportsmanhimselfbuttoanotherperson,thatincomemay,notwithstandingtheprovisionsofArticles7,14
and15,betaxedintheContractingStateinwhichtheactivitiesoftheentertainerorsportsmanareexercised.
3.Theprovisionsofparagraphs1and2shallnotapplytoincomederivedfromactivitiesperformedinaContractingStateby
entertainersorsportsmenifthevisittothatStateissubstantiallysupportedbypublicfundsofoneorbothoftheContracting
Statesorofpoliticalsubdivisionsorlocalauthoritiesthereof.Insuchacase,theincomeistaxableonlyintheContractingState
ofwhichtheentertainerorsportsmanisaresident.

ARTICLE18
PENSIONS
Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a
ContractingStateinconsiderationofpastemploymentshallbetaxableonlyinthatState.

ARTICLE19
GOVERNMENTSERVICE
1.(a)Remuneration,otherthanapension,paidbyaContractingStateorapoliticalsubdivisionoralocalauthoritythereofto
anindividualinrespectofservicesrenderedtothatStateorsubdivisionorauthorityshallbetaxableonlyinthatState.
(b)However,suchremunerationshallbetaxableonlyintheotherContractingStateiftheservicesarerenderedinthatStateand
theindividualisaresidentofthatStatewho:
(i)

isanationalofthatStateor

(ii)

didnotbecomearesidentofthatStatesolelyforthepurposeofrenderingtheservices.

2.(a)Anypensionpaidby,oroutoffundscreatedby,aContractingStateorapoliticalsubdivisionoralocalauthoritythereof
toanindividualinrespectofservicesrenderedtothatStateorsubdivisionorauthorityshallbetaxableonlyinthatState.
(b)However,suchpensionshallbetaxableonlyintheotherContractingStateiftheindividualisaresidentof,andanational
of,thatState.
3. The provisions of Articles 15, 16 and 18 shall apply to remuneration and pensions in respect of services rendered in
connectionwithabusinesscarriedonbyaContractingStateorapoliticalsubdivisionoralocalauthoritythereof.

ARTICLE20
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STUDENTSANDAPPRENTICES
1. A student or business apprentice who is or was a resident of a Contracting state immediately before visiting the other
ContractingStateandwhoispresentinthatotherContractingStatesolelyforthepurposeofhiseducationortrainingshallbe
exemptfromtaxinthatotherStateon:
(a)

paymentsmadetohimbypersonsresidingoutsidethatotherStateforthepurposesofhismaintenance,
educationortrainingand

(b)

remunerationfromemploymentinthatotherState,inanamountnotexceedingUS$500oritsequivalent
amountduringanyfiscalyear,

as the case may be, provided that such employment is directly related to his studies or is undertaken for the purpose of his
maintenance.
2. The benefits of this Article shall extend only for such period of time as may be reasonable or customarily required to
completetheeducationortrainingundertaken,butinnoeventshallanyindividualhavethebenefitsofthisArticleformore
thanfiveconsecutiveyearsfromthedateofhisfirstarrivalinthatotherContractingState.

ARTICLE21
PROFESSORS,TEACHERSANDRESEARCHSCHOLARS
1.Aprofessororteacherwho isorwasaresidentoftheContractingStateimmediatelybeforevisitingtheotherContracting
Stateforthepurposeofteachingorengaginginresearch,orboth,atauniversity,college,schoolorotherapprovedinstitutionin
thatotherContractingstateshallbeexemptfromtaxinthatotherStateonanyremunerationforsuchteachingorresearchfora
periodnotexceedingtwoyearsfromthedateofhisarrivalinthatotherState.
2.ThisArticle shall not apply to income from research, if such research is undertaken primarily for the private benefit of a
specificpersonorpersons.
3.ForthepurposesofthisArticleandArticle20,anindividualshallbedeemedtobearesidentofaContractingStateifheisa
residentinthatStateinthefiscalyearinwhichhevisitstheotherContractingStateorintheimmediatelyprecedingfiscalyear.
4.Forthepurposesofparagraph1,"approvedinstitution"meansaninstitutionwhichhasbeenapprovedinthisregardbythe
competentauthorityoftheconcernedContractingState.

ARTICLE22
OTHERINCOME
1.Subjecttotheprovisionsofparagraph2,itemsofincomeofaresidentofaContractingState,whereverarising,whicharenot
expresslydealtwithintheforegoingArticlesofthisConvention,shallbetaxableonlyinthatState.
2.Theprovisionsofparagraph1shallnotapplytoincome,otherthanincomefromimmovablepropertyasdefinedinparagraph
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
connectedwithsuchpermanentestablishmentorfixedbase.Insuchcase,theprovisionsofArticle7 orArticle14,asthecase
maybe,shallapply.
3.Notwithstandingtheprovisionsofparagraphs1and2,itemsofincomeofaresidentofaContractingStatenotdealtwithin
theforegoingArticlesofthisConventionandarisingintheotherContractingStatemayalsobetaxedinthatotherState.

ARTICLE23
CAPITAL
1.CapitalrepresentedbyimmovablepropertyreferredtoinArticle6,ownedbyaresidentofaContractingStateandsituatedin
theotherContractingState,maybetaxedinthatotherState.
2. Capital represented by movable property, forming part of the business property of a permanent establishment which an
enterpriseofaContractingStatehasintheotherContractingStateorbymovablepropertypertainingtoafixedbaseavailable
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toaresidentofaContractingStateintheotherContractingStateforthepurposeofperformingindependentpersonalservices,
maybetaxedinthatotherState.
3.CapitalownedbyanenterpriseofaContractingStateandrepresentedbyshipsandaircraftoperatedininternationaltraffic,
andbymovablepropertypertainingtotheoperationsofsuchshipsandaircraft,shallbetaxableonlyinthatState.
4.AllotherelementsofcapitalofaresidentofaContractingStateshallbetaxableonlyinthatState.

ARTICLE24
ELIMINATIONOFDOUBLETAXATION
1. The laws in force in either of the Contracting States will continue to govern the taxation of income and capital in the
respectiveContractingStates,exceptwhereprovisionstothecontraryaremadeinthisConvention.
2.WherearesidentofIndiaderivesincomeorownscapitalwhich,inaccordancewiththeprovisionsofthisConvention,may
betaxedinTurkmenistan,Indiashallallowasadeductionfromthetaxontheincomeofthatresident,anamountequaltothe
incometax paid in Turkmenistan, whether directly or by deduction and as a deduction from the tax on the capital of that
resident,anamountequaltothecapitaltaxpaidinTurkmenistan.Suchdeductionineithercaseshallnot,however,exceedthat
partofincometaxortaxoncapital(aspaidbeforethedeductionisgiven),whichisattributabletotheincomeorthecapital
whichmaybetaxedinTurkmenistan.
3. In the case of Turkmenistan, the double taxation shall be avoided by a method which is identical to that mentioned in
paragraph2.
4.Forthepurposesofparagraphs2and3ofthisArticle,thetaxpayableintheContractingStateshallbedeemedtoincludethe
taxwhichwouldhavebeenpayablebutforthetaxincentivesaccordingtowhichsuchtaxisnotpayableunderthelawsofthe
ContractingStateandwhicharedesignedtopromoteeconomicdevelopment.
5.IncomewhichinaccordancewiththeprovisionsofthisConvention,isnottobesubjectedtotaxinaContractingState,may
betakenintoaccountforcalculatingtherateoftaxtobeimposedinthatContractingState.

ARTICLE25
NONDISCRIMINATION
1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement
connectedtherewith,whichisotherormoreburdensomethanthetaxationandconnectedrequirementstowhichnationalsof
thatotherStateinthesamecircumstances,inparticularwithrespecttoresidence,areormaybesubjected.Thisprovisionshall,
notwithstandingtheprovisionsofArticle1,alsoapplytopersonswhoarenotresidentsofoneorbothoftheContractingStates.
2.ThetaxationonapermanentestablishmentwhichanenterpriseofaContractingStatehasintheotherContractingStateshall
notbelessfavourablyleviedinthatotherStatethanthetaxationleviedonenterprisesofthatotherStatecarryingonthesame
activities.Thisprovisionshallnotbeconstrued asobliging a Contracting State to grant to residents of the other Contracting
Stateanypersonalallowances,reliefsandreductionsfortaxationpurposesonaccountofcivilstatusorfamilyresponsibilities
whichitgrantstoitsownresidents.ThisprovisionshallnotbeconstruedaspreventingaContractingStatefromchargingthe
profitsofapermanentestablishmentwhichanenterpriseoftheotherContractingStatehasinthefirstmentionedContracting
stateataratehigherthanthatimposedontheprofitsofsimilarenterpriseofthefirstmentionedState,norasbeinginconflict
withtheprovisionsofparagraph3ofArticle7ofthisConvention.
3. Except where the provisions of paragraph 1 ofArticle 9, paragraph 6 ofArticle 11, or paragraph 6 of Article 12, apply,
interest,royalties,feesfortechnicalservicesandotherdisbursementspaidbyanenterpriseofaContractingStatetoaresident
oftheotherContractingstateshall,forthepurposeofdeterminingthetaxableprofitsofsuchenterprise,bedeductibleunderthe
sameconditionsasiftheyhadbeenpaidtoaresidentofthefirstmentionedState.Similarly,anydebtsofanenterpriseofa
ContractingStatetoaresidentoftheotherContractingStateshall,forthepurposeofdeterminingthetaxablecapitalofsuch
enterprise,bedeductibleunderthesameconditionsasiftheyhadbeencontractedtoaresidentofthefirstmentionedState.
4.EnterprisesofaContractingState,thecapitalofwhichiswhollyorpartlyownedorcontrolled,directlyorindirectly,byone
or more residents of the other Contracting State, shall not be subjected in the firstmentioned State to any taxation or any
requirementconnectedtherewithwhichisotherormore burdensome than the taxation and connected requirements to which
othersimilarenterprisesofthefirstmentionedStateareormaybesubjected.
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5.TheprovisionsofthisArticleshall,notwithstandingtheprovisionsofArticle2,applytotaxesofeverykindanddescription.

ARTICLE26
MUTUALAGREEMENTPROCEDURE
1.WhereapersonconsidersthattheactionsofoneorbothoftheContractingStatesresultorwillresultforhimintaxationnot
in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic law of
thoseStates,presenthiscasetothecompetentauthorityoftheContractingStateofwhichheisaresidentor,ifhiscasecomes
underparagraph1ofArticle25,tothatoftheContractingStateofwhichheisanational.Thecasemustbepresentedwithin
threeyearsfromthefirstnotificationoftheactionresultingintaxationnotinaccordancewiththeprovisionsoftheConvention.
2.Thecompetentauthorityshallendeavour,iftheobjectionappearstoittobejustifiedandifitisnotitselfabletoarriveata
satisfactorysolution,toresolvethecasebymutualagreementwiththecompetentauthorityoftheotherContractingState,with
a view to the avoidance of taxation which is not in accordance with the Convention. Any agreement reached shall be
implementednotwithstandinganytimelimitsinthedomesticlawoftheContractingStates.
3.ThecompetentauthoritiesoftheContractingStatesshallendeavourtoresolvebymutualagreementanydifficultiesordoubts
arisingastotheinterpretationorapplicationoftheConvention.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
exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent
authoritiesoftheContractingStates.

ARTICLE27
EXCHANGEOFINFORMATION
1.ThecompetentauthoritiesoftheContractingStatesshallexchangesuchinformation(includingdocuments)asisnecessary
forcarryingouttheprovisionsofthisConventionorofthedomesticlawsoftheContractingStatesconcerningtaxescoveredby
the Convention insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not
restricted by Article 1. Any information received by a Contracting State shall be treated as secret in the same manner as
information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including
courtsandadministrativebodies)involvedintheassessmentorcollectionof,theenforcementorprosecutioninrespectof,or
the determination of appeals, in relation to, the taxes covered by the Convention. Such persons or authorities shall use the
informationonlyforsuchpurposes.Theymaydisclosetheinformationinpubliccourtproceedingsorinjudicialdecisions.
2.Innocaseshalltheprovisionsofparagraph1beconstruedsoastoimposeonaContractingStatetheobligation:
(a)

tocarryoutadministrativemeasuresatvariancewiththelawsandadministrativepracticeofthatorofthe
otherContractingState

(b)

tosupplyinformationordocumentswhicharenotobtainableunderthelawsorinthenormalcourseofthe
administrationofthatoroftheotherContractingState

(c)

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

ARTICLE28
COLLECTIONASSISTANCE
1.TheContractingStatesundertaketolendassistancetoeachotherinthecollectionoftaxestowhichthisConventionrelates,
togetherwithinterest,costsandcivilpenaltiesrelatingtosuchtaxes,referredtointhisArticleasa"revenueclaim".
2.RequestforassistancebythecompetentauthorityofaContractingStateinthecollectionofarevenueclaimshallincludea
certificationbysuchauthoritythat,underthelawsofthatState,therevenueclaimhasbeenfinallydetermined.Forthepurposes
ofthisArticle,arevenueclaimisfinallydeterminedwhenaContractingStatehastherightunderitsinternallawtocollectthe
revenueclaimandthetaxpayerhasnofurtherrightstorestraincollection.
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3. Amounts collected by the competent authority of a Contracting State pursuant to this Article shall be forwarded to the
competent authority of the other Contracting State. However, the firstmentioned Contracting State shall be entitled to
reimbursementofcosts,ifany,incurredinthecourseofrenderingofsuchassistancetotheextentmutuallyagreedbetweenthe
competentauthoritiesofthetwoStates.
4.NothinginthisArticleshall beconstruedasimposingoneitherContractingStatetheobligationtocarryoutadministrative
measuresofadifferentnaturefromthoseusedinthecollectionofitsowntaxesorthosewhichwouldbecontrarytoitspublic
policy.

ARTICLE29
DIPLOMATICAGENTSANDCONSULAROFFICERS
NothinginthisConventionshallaffectthefiscalprivilegesofdiplomaticagentsorconsularofficersunderthegeneralrulesof
internationallaworundertheprovisionsofspecialagreements.

ARTICLE30
ENTRYINTOFORCE
1.EachoftheContractingStatesshallnotifytotheotherthecompletionoftheproceduresrequiredbyitslawforthebringing
into force of this Convention.This Convention shall enter into force on the dateof the later of these notifications and shall
thereuponhaveeffect:
(a)

in India, in respect of income or capital arising in any fiscal year beginning on or after the first day of
AprilnextfollowingthecalendaryearinwhichtheConventionentersintoforceand

(b)

inTurkmenistan,inrespectofincomeorcapitalarisinginanyfiscalyearbeginningonorafterthefirst
dayofJanuarynextfollowingthecalendaryearinwhichtheConventionentersintoforce.

ARTICLE31
TERMINATION
This Convention shall remain in force indefinitely until terminated by a Contracting State. Either Contracting State may
terminatetheConvention,throughdiplomaticchannels,bygivingnoticeofterminationatleastsixmonthsbeforetheendof
anycalendaryearbeginningaftertheexpirationoffiveyearsfromthedateofentryintoforceoftheConvention.Insuchevent,
theConventionshallceasetohaveeffect:
(a)

in India, in respect of income arising in any previous year beginning on or after the 1st April next
followingthecalendaryearinwhichthenoticeisgiveninrespectofcapitalwhichisheldattheexpiryof
anypreviousyearbeginningonorafterthe1stAprilnextfollowingthecalendaryearinwhichthenotice
ofterminationisgiven

(b)

inTurkmenistan,inrespectofincomearisinginanyyearofincomebeginningonorafterthe1stJanuary
nextfollowingthecalendaryearinwhichthenoticeisgivenandinrespectofcapitalwhichisheldatthe
expiryofanyyearofincomenextfollowingthecalendaryearinwhichthenoticeofterminationisgiven.

INWITNESSwhereof,theundersigned,beingdulyauthorisedthereto,havesignedthisConvention.
DONEinduplicateatNewDelhithis25thdayofFebruary,1997intheTurkmen,HindiandEnglishLanguages,allthreetexts
beingequallyauthentic.Incaseofdivergencebetweenthetexts,theEnglishtextshallbetheoperativeone.

PROTOCOL
AtthesigningoftheConventionbetweentheGovernmentoftheRepublicofIndiaandtheGovernmentofTurkmenistanfor
theAvoidance of DoubleTaxation and the Prevention of Fiscal Evasion with respect to taxes on income and on capital, the
undersignedhaveagreedthefollowingshallformanintegralpartoftheConvention.
WithreferenceofArticle7:
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Inrespectofparagraphs1and2ofArticle7,whereanenterpriseofoneoftheContractingStatessellsgoodsormerchandiseor
carries on business in the other Contracting State through a permanent establishment situated therein, the profits of that
permanent establishment shall not be determined on the basis of the total amount received by the enterprise, but shall be
determinedonlyonthebasisoftheremunerationwhichisattributedtotheactualactivityofthepermanentestablishmentfor
suchsalesorbusiness. For instance, in the case of contracts for the survey, supply, installation or construction of industrial,
commercial or scientific equipment or premises, or of public works, when the enterprise hasa permanent establishment, the
profitsofsuchpermanentestablishmentshallnotbedeterminedonthebasisofthetotalamountofthecontract,butshallbe
determinedonlyonthebasisofthatpartofthecontractwhichiseffectivelycarriedoutbythepermanentestablishmentinthe
ContractingStatewherethepermanentestablishmentissituated.
INWITNESSwhereof,theundersigned,beingdulyauthorisedthereto,havesignedthisProtocol.
DONE in duplicate at New Delhi this 25th day of February, 1997 in Turkmen, Hindi and English languages, all texts being
equallyauthentic.Incaseofdivergencebetweenthetexts,theEnglishtextshallprevail.

Copyright. Taxmann Publications Pvt. Ltd.

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