07 Dec Double Taxation Avoidance Agreement Article 12
1. The income of a resident of a contracting state, to the extent that it occurs and is not covered under the previous articles of this agreement, is taxable only in that state. 4. The competent authorities of the contracting states may, by mutual agreement, determine how the provisions of this agreement apply to exemption or reduction. 3. Legislation in one of the contracting states continues to govern the taxation of income and capital in the contracting states concerned, unless this agreement expressly provides otherwise. 4. The term “technical services charges” used in this article refers to payments of any amount for service delivery, technical or advisory services, including the provision of services by technical or other personnel, but not payments for services covered by Article 15 of this agreement. (d) the term “person” refers to a natural person, a corporation and any other entity considered a taxable entity under the tax legislation in force in the relevant contracting states; Ruti Machinery Works AG, a company founded in Switzerland, has set a 130-year record in the manufacture of weaving machines. A collaboration has been launched with Lakshmi Automobile Loom Works Ltd.
There was an Indian subsidiary in which Ruti had a 25% stake. For products manufactured by the Indian company and marketed in India and abroad, royalties were due. All manufacturing documents were to be handed over only in Switzerland and, in Switzerland, they had to be paid for remuneration. Royalties were payable at 5% of national turnover. It is clear that the cooperation agreement dealt with both know-how and royalties. The Supreme Court of Madras (243 ITR 442) found that the consideration for documents handed over to Switzerland was not related to Indian income tax. This income was not generated or generated in India. B. Other income subject to the same tax treatment as the income of the shares, under the legislation of the state in which the light company is established. Any amount received by a non-resident under an agreement reached before 1.4.2003 is subject to the provisions of section 44D of the Income Tax Act; the words “according to the domestic law of the contracting state in which the economic and economic university is located” in Article 7, paragraph 3, J-C, of the DBAA between India and Germany, are the words of meaning that would only mean that the expenses incurred by the non-resident notator for the commercial activity of the EP in India, in accordance with the provisions of domestic law, i.e. the Income Tax Act , 1961; Therefore, there is no deduction of revenue from royalties or royalties collected for technical services in the case of a non-resident corporation, even though the profits from those revenues must be calculated in accordance with Section 7 of the DBAA.