Serbia & Montenegro
| Updated at | March 2010 |
Agreement for avoidance of double taxation and prevention of fiscal evasion with Serbia
Whereas the annexed Convention between the Government of Republic of India and the Council of Ministers of Serbia and Montenegro for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital was signed at New Delhi on 8-2-2006;
And whereas the State Union of Serbia and Montenegro was disintegrated into two independent States after Montenegro''s formal declaration of independence on 3-6-2006 and Serbia''s formal declaration of independence on 5-6-2006;
And whereas the National Assembly of the Republic of Serbia has ratified the said Convention as published in the Official Gazette of the Republic of Serbia - International Treaties No. 102/07, dated 7-11-2007 and accordingly reference in the said Convention to ''Serbia and Montenegro'' shall be read as reference to Serbia;
And whereas the date of entry into force of the said Convention is the 23rd day of September, 2008, being the date of later of the notifications of completion of the procedures as required by the respective laws for entry into force of this Convention, in accordance with paragraph 2 of Article 30 of the said Convention;
And whereas sub-paragraph (2) of paragraph 2 of Article 30 of the said Convention provides that the provisions of the Convention shall have effect in India in respect of the taxes on income derived and taxes on capital owned in each fiscal year beginning on or after the first day of April in the calendar year next following the year in which the Convention enters into force;
Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961) and section 44A of the Wealth-tax Act, 1957 (27 of 1957), the Central Government hereby directs that all the provisions of the said Convention shall be given effect to in the Union of India.
Notification: No. 5/2009 [F.No. 503/1/797-FTD-1]/S.O. 97(E), dated 7-1-2009.
Annexure
Convention BetweenThe Government of The Republic of India And The Council of Ministers of Serbia and Montenegro For The Avoidance of Double Taxation With Respect To Taxes On Income and On Capital The Government of The Republic of India And The Council of Ministers of Serbia and Montenegro
desiring to conclude a Convention for the avoidance of double taxation with respect to taxes on income and on capital and with a view to promoting economic cooperation between the two countries, have agreed as follows:
Article I
Personal Scope
This Convention shall apply to persons who are residents of one or both of the Contracting States.
Article 2
Taxes Covered
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This Convention shall apply to taxes on income and on capital imposed on behalf of a Contracting State or of its political subdivisions or local authorities, irrespective of the manner in which they are levied.
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There shall be regarded as taxes on income and on capital all taxes imposed on total income, on total capital, or on elements of income or of capital, including taxes on gains from the alienation of movable or immovable property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.
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The existing taxes to which the Convention shall apply are in particular:
in Serbia and Montenegro:
1) the tax on profit;
2) the tax on income;
3) the tax on capital;
4) the tax on revenue from international transport.
(hereinafter referred to as "Serbian and Montenegrin tax");
in India:
1) the income tax, including any surcharge thereon; and
2) the wealth tax.
(hereinafter referred to as "Indian tax").
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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 substantial changes which have been made in their respective taxation laws.
Article 3
General Definitions
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For the purposes of this Convention:
1) the terms "a Contracting State" and "the other Contracting State" mean Serbia and Montenegro or India, as the context requires;
2) the term "Serbia and Montenegro" means the state community Serbia and Montenegro and when used in a geographical sense it means the land territory of Serbia and Montenegro, its internal sea waters and the belt of the territorial sea, the air space thereover, as well as the seabed and subsoil of the part of the continental shelf outside the outer limit of the territorial sea over which Serbia and Montenegro exercises its sovereign rights for the purpose of exploitation and exploitation of their natural resources in accordance with its internal legislation and international law;
3) the term "India" means the territory of India and includes the territorial sea and airspace 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 U.N. Convention on the Law of the Sea;
4) the term "political subdivisions", in the state community Serbia and Montenegro, means Member States;
5) the term "national" means:
- any individual possessing the nationality of a Contracting State;
- any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State.
6) the term "person" includes an individual, a company, a body of persons and, in the case of India, any other entity which is treated as a taxable unit under the taxation laws in force in that country;
7) the term "company" means any body corporate or any entity which is treated as a body corporate for tax purposes;
8) 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;
9) 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;
10) the term "fiscal year" means:
- in the case of Serbia and Montenegro, the year beginning on the first day of January;
- in the case of India, the year beginning on the first day of April.
11) the term "competent authority" means:
- in the case of Serbia and Montenegro, the Ministry for International Economic Relations or its authorized representative;
- in the case of India, the Central Government in the Ministry of Finance (Department of Revenue) or their authorized representatives.
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As regards the application of the Convention at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Convention applies, any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State.
Article 4
Resident
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For the purposes of this Convention, 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, and also includes that State and any political subdivision or local authority thereof But this term does not include any person who is liable to tax in that State in respect only of income from sources in that State, or capital situated therein.
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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 a resident only 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 not a 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 only 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 settle the question by mutual agreement.
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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 only of the State in which its place of effective management is situated. If the State in which its place of effective management is situated cannot be determined, then the competent authorities of the Contracting States shall settle the question by mutual agreement.
Article 5
Permanent Establishment
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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.
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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 mine, an oil or gas well, a quarry or any other place of extraction of natural resources;
7) a sales outlet;
8) a warehouse in relation to a person providing storage facilities for others; and
9) a farm, plantation or other place where agricultural, forestry, plantation or related activities are carried on.
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The term "permanent establishment" likewise encompasses a building site, or a construction, assembly or installation project or supervisory activities in connection therewith, but only where such site, project or activities...
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