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Convention Between The Government Of The Republic Of India And The Government Of New Zealand For The Avoidance Of Douible Taxation And The Prevention Of Fiscal Evasion With Respect To Taxes On Income

Notification No.314 (E) Dated 27-3-1987

Whereas the annexed Convention between the Government of the Republic of India and the Government of New Zealand for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income has come into force on the 23rd December, 1986, on the notification by both the Contracting States to each other of the compliance of the constitutional requirements, as required by paragraph other o the compliance of the constitutional requirements, as required by paragraph (1) of Article 28 of the said Convention;

Now, therefore, in exercise of the power conferred by section 90 of the Income-tax Act, 1961 (43 of 1961) and section 24A of the Companies (Profits) Surtax Act, 1964 (7 of 1964), the Central Government hereby directs that all the provisions of the said Convention shall be given effect to in the Union of India.

Annexure

Convention between the government of the republic of india and the government of new zealand for the avoidance of double taxation and the prevention of fiscal evation with respect to taxes on income.

The Government of the Republic of India and the Government of New Zealand, desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, have agreed as follows:

Article 1

Personal Scope

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

Article 2

Taxes Covered

(1) The existing taxes to which the Convention shall apply are:

(a) in the case of New Zealand, the income-tax and the excess retention tax, (hereinafter referred to as "New Zealand tax");

(b) in the case of India, the income-tax including any surcharge thereon and the surtax

(hereinafter referred to as "Indian tax"):

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

Article 3

General Definitions

(1) For the purposes of this Convention, unless the context otherwise requires-

(a) (i) the term "New Zealand" means the territory of New Zealand but does not include Tokelau or the Associated Self Governing States of the Cork Islands and Niue: it also includes any area beyond the territorial sea which by New Zealand Legislation and in accordance with international law has been, or may here after be, designated as an area in which the rights of New Zealand with respect to natural resources may be exercised;

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

(b) the terms "a Contracting State" and "the other Contracting State" mean New Zealand or India as the context requires;

(c) the term "tax" means New Zealand tax 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 the Convention applies or which represents a penalty imposed relating to those taxes;

(d) the term "person" includes an individual a company, any other body of persons or entity which are defined as or deemed to be a person under the taxation laws in force in the respective Contracting States;

(e) the term "company" means anybody corporate or any entity which is treated as a body corporate for tax purposes;

(f) 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;

(g) the term "national" means -

(i) in respect of New Zealand, any individual possessing citizenship of New Zealand and any legal person partnership or association deriving its status as such from the law in force in New Zealand;

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

(h) 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;

(i) the term "competent authority" means -

(i) in the case of New Zealand the Commissioner of Inland Revenue or his authorised representative;

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

(2) As regards the application of the Convention by a Contracting State, any term not defined therein shall unless the context otherwise requires, have the meaning which it has under the laws of that State concerning the taxes to which the Convention applies.

Article 4

Resident

(1) For the purposes of this Convention, the term "resident of a Contracting State", means any person who, under the laws of that Contracting State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. But this term does not include any person who is liable to tax in that State in respect only income from sources in that State.

(2) Where by reason of the provisions of paragraph (1) an individual is a resident of both Contracting States, then his status shall be determined as follows:

(a) He shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (center of vital interests).

(b) If the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode.

(c) If he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national.

(d) If he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

(3) Where by reason of the provisions of paragraph (1) a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which its place of effective management is situated.

Article 5

Permanent Establishment

(1) For the purposes of this Convention the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

(2) The term "permanent establishment" includes especially -

(a) a place of management;

(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;

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

(g) a warehouse in relation to a person providing storage facilities for others:

(h) a farm, plantation or other place where agricultural, forestry or plantation activities are carried on;

(i) premises used as a sales outlet;

(j) a building site or a construction or installation or assembly project or supervisory activities in connection therewith, where such site or project or supervisory activities (together with other such sites or projects or activities, if any) or any combination there of continue for a period of more than six months; and

(k) an installation or structure for the exploration or exploitation of natural resources: Provided that for the purposes of this paragraph an enterprise shall be deemed to have a permanent establishment in a Contracting State and to carry on business through that permanent establishment if it carries on activities in that State in connection with the exploration or exploitation of natural resources in that State

(3) Notwithstanding the preceding provisions of this article, the term "permanent establishment" shall be deemed not to include -

(a) the use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of-goods or merchandise belonging to the enterprise solely for the purpose of storage or display;

(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise;

(e) the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or for any other activities which have a preparatory or auxiliary character, for the enterprise.

(4) Notwithstanding the provisions of paragraphs (1) and (2), where a person, other than an agent of an independent status to whom paragraph (5) applies, is acting 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 State if -

(a) he has and habitually exercises in that State an authority to conclude contracts on behalf of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise;

(b) he has no such authority, but habitually...

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