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Botswana

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Updated atMarch 2010

AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE REPUBLIC OF BOTSWANA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

(Notification No. 70 /2008-FTD dt.18-Jun-08)

The Government of the Republic of India and the Government of the Republic of Botswana, desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, and with a view to promoting economic co-operation between the two countries, have agreed as follows:

Article 1

PERSONS COVERED

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

Article 2

TAXES COVERED

  1. This Agreement shall apply to taxes on income imposed on behalf of a Contracting State or of its political subdivisions or local authorities, irrespective of the manner in which they are levied.

  2. There shall be regarded as taxes on income all taxes imposed on total income, or on elements of income, including taxes on gains from alienation of movable or immovable property.

  3. The existing taxes to which the Agreement shall apply are in particular:

    1. In Botswana, the income tax (hereinafter referred to as "Botswana tax");

    2. In India, the income tax, including any surcharge thereon (hereinafter referred to as "Indian tax").

  4. Nothing in this Agreement shall limit the right of either Contracting State to charge tax on the profits of a mineral enterprise, at an effective rate different from that charged on the profits of any other enterprise. The term 'a mineral enterprise' means an enterprise carrying on the business of mining.

  5. The Agreement shall also apply to any identical or substantially similar taxes that are imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes that have been made in their respective taxation laws.

    Article 3

    GENERAL DEFINITIONS

  6. For the purposes of this Agreement, unless the context otherwise requires:

    1. 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 jurisdiction, according to the Indian law and in accordance with international law, including the UN Convention on the Law of the Sea;

    2. the term "Botswana" means the Republic of Botswana;

    3. the terms "Contracting State" and "the other Contracting State" mean the Republic of Botswana or the Republic of India, as the context requires;

    4. the term "person" includes an individual, a company, a trust, an estate of a deceased person, a body of persons and any other entity which is treated as a taxable unit under the taxation laws in force in the respective Contracting States;

    5. the term "company" means any body corporate or any entity which is treated as a body corporate for tax purposes;

    6. the term "enterprise" applies to carrying on of any business;

    7. the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" Mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;

    8. the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;

    9. the term "competent authority" means:

      (i) in Botswana, the Minister of Finance and Development Planning, represented by the Commissioner General of the Botswana Unified Revenue Service; and

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

    10. the term "national" means:

    11. any individual possessing the nationality of a Contracting State;

      ii) any legal person, partnership and association deriving its status as such from the laws in force in a Contracting State;

    12. the term "tax" means Botswana or Indian tax, as the context requires, but shall not include any amount which is payable in respect of any default or omission in relation to the taxes to which this Agreement applies or which represents a penalty or fine relating to those taxes;

    13. The term "fiscal year" means:

      (i) In the case of India, the financial year beginning on the 1st day of April;

      (ii) In the case of Botswana, a period of twelve months relating to the tax year beginning on the 1st day of July.

  7. 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 law of that State concerning the taxes to which the Agreement applies and any meaning under the applicable tax laws of that State shall prevail over a meaning given to the term under other laws of that State.

    Article 4

    RESIDENT

  8. 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 or any other criterion of a similar nature. This term, however, does not include any person who is liable to tax in that State in respect only of income from sources in that State.

  9. 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:

    1. he shall be deemed to be a resident only 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 resident of the State with which his personal and economic relations are closer (centre of vital interests);

    2. if the State in which he has his centre of vital interests cannot be determined, or if he has no permanent home available to him in either State, he shall be deemed to be a resident only of the State in which he has an habitual abode;

    3. if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national;

    4. if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall endeavour to settle the question by mutual agreement.

  10. 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. If the place in which its place of effective management is situated cannot he determined, then the competent authorities of the Contracting States shall endeavour to settle the question by mutual agreement.

    Article 5

    PERMANENT ESTABLISHMENT

  11. 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.

  12. The term "permanent establishment" includes especially:

    1. a place of management;

    2. a branch;

    3. an office;

    4. a factory;

    5. a workshop;

    6. a warehouse in relation to a person providing storage facilities for others;

    7. a farm, plantation or other place where agricultural, forestry, plantation or related activities are carried on;

    8. a mine, an oil or gas well, a quarry or any other place of extraction or exploitation of natural resources; and

    9. an installation or structure used for the exploration of natural resources, provided that the installation or structure continues for a period of not less than six months.

  13. a) A building site, a construction, assembly or installation project or supervisory activities in connection therewith constitutes a permanent establishment only if such site, project or activities last for more than six months.

    1. The furnishing of services, including consultancy services, by an enterprise through employees or other personnel engaged by the enterprise for such purpose, but only where activities of that nature continue (for the same or connected project) within the Contracting State for a period or periods aggregating more than 183 days in any twelve month period commencing on or ending in the fiscal year concerned.

  14. Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall be deemed not to include:

    1. the use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise;

    2. the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display;

    3. the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

    4. the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise;

    5. 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;

    6. the maintenance of a fixed place of business solely for any combination of activities mentioned in subparagraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.

  15. Notwithstanding the provisions of paragraphs 1 and 2, where a person - other than an agent of an independent status to whom paragraph 7 applies - is acting in a Contracting State on behalf of an enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent establishment in the first mentioned Contracting State in respect of any activities which that person undertakes for the enterprise, if such person:

    1. has and habitually exercises in that State an authority to conclude contracts...

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