All the provisions of the said Second Protocol shall be given effect to in the Union of India directed under section 90
Notification No. 11202 was published on 12 January 2000. Its subject is All the provisions of the said Second Protocol shall be given effect to in the Union of India directed under section 90.
This one is about a tax treaty. India’s treaties enter Indian law by notification under section 90; where the instrument below is that notification, its date decides from when the treaty may be applied, and where it is a circular, it is the Board telling its officers how it reads the treaty — which is not the same thing.
The notification gives effect in the Union of India, under section 90 of the Income-tax Act, 1961, to the Second Protocol to the Convention between India and New Zealand for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, the Convention having been done at Auckland on 17 October 1986. The Second Protocol comes into force on 30 December 1999, thirty days after receipt of the later of the notifications under its Article 9. The Protocol replaces the definition of 'India' in paragraph 1(a)(ii) of Article 3; substitutes paragraph 3 of Article 4 so that a person other than an individual resident in both States is deemed resident where its place of effective management is situated, failing which the competent authorities settle the question by mutual agreement; substitutes paragraph 1 of Article 6 and paragraph 1 of Article 13 in the 'may also be taxed' form; reduces the rate in paragraph 2 of Article 10 from 20 per cent to 15 per cent, in paragraph 2 of Article 11 from 15 per cent to 10 per cent, and in paragraph 2 of Article 12 from 30 per cent to 10 per cent; and recasts Article 24, substituting paragraph 2 on permanent establishments and inserting a new paragraph 5 saying that the Article shall not apply to provisions of taxation law reasonably designed to prevent or defeat avoidance or evasion of taxes, the original paragraph 5 being renumbered paragraph 6.
| Under the 1961 Act | Now |
|---|---|
| s.90 | s.159 |
Notification No. 11202, dt. 12th Jan., 2000
Whereas the annexed Second Protocol to the 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 comes into force on 30th December, 1999, thirty days after the date of receipt of later of notifications by both the Contracting States to each other, under Article 9 of the Second Protocol, of the completion of the procedures required under their respective laws for bringing into force of the said Second Protocol.
Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that all the provisions of the said Second Protocol shall be given effect to in the Union of India.
ANNEXURE SECOND PROTOCOL TO THE 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
The Government of the Republic of India and the Government of New Zealand,
Having regard to the 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 done at Auckland on the 17th day of October, 1986 (hereinafter referred to as "the Convention").
Have agreed as follows :
ARTICLE 1 Paragraph 1(a)(ii) of Article 3 of the Convention is replaced by the following :
"(ii) the term "India" means the territory of India and includes the territorial sea and the 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; "
ARTICLE 2
Paragraph 3 of Article 4 of the Convention is replaced by the following :
"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. 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 3
Paragraph 1 of Article 6 of the Convention is replaced by the following :
1. Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may also be taxed in that other State."
ARTICLE 4
In paragraph 2 of Article 10 of Convention, "20 per cent" is replaced by "15 per cent".
ARTICLE 5
In paragraph 2 of Article 11 of the Convention, "15 per cent" is replaced by "10 per cent".
ARTICLE 6
In paragraph 2 of Article 12 of the Convention, "30 per cent" is replaced by "10 per cent".
ARTICLE 7
Paragraph 1 of Article 13 of the Convention is replaced by the following :
"1. Income or gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may also be taxed in that other State."
ARTICLE 8
1. Paragraph 2 of Article 24 of the Convention is replaced by the following :
"2. The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that State carrying on the same activities. This provision shall not be construed as preventing a Contracting State from charging the profits of a permanent establishment which a company of the other Contracting State has in the first-mentioned State at a rate of tax which is higher than that imposed on the profits of a similar company of the first-mentioned Contracting State."
2. A new paragraph 5 is inserted immediately after paragraph 4 of Article 24 of the Convention and the original paragraph 5 of the Article is renumbered paragraph 6.
"5. This Article shall not apply to any provisions of the taxation laws of a Contracting State which are reasonably designed to prevent or defeat the avoidance or evasion of taxes."
ARTICLE 9
1. The Contracting States shall notify each other through diplomatic channels of the completion of the procedures required by the respective laws for the entry into force of this Protocol.
2. This Protocol shall enter into force 30 days after the date of receipt of the later of the notifications referred to in paragraph 1 of this Article and its provisions shall have effect :
(a) in New Zealand : for any income year beginning on or after 1st April in the calendar year next following the date on which the Protocol enters into force ;
(b) in India : for any "previous year" (as defined in the Income-tax Act, 1961) beginning on or after 1st April in the calendar year next following the date on which the Protocol enters into force.
In witness whereof the undersigned, duly authorised by their respective Governments, have signed this Protocol.
Done in duplicate at New Delhi this twenty-first day of June, 1999 in the Hindi and English languages, both texts being equally authentic. In case of divergence between the two texts, the English text shall be the operative one.
For the Government of the Republic of For the Government of New India Zealand Sd/- Sd/- (Ravi Kant) (Adrian G. Simcock)
[F. No. 500/151/93-FTD]
30 December 1999, being the date the Second Protocol comes into force.
A reader meets this where tax is withheld at treaty rates on a payment to or from New Zealand, and in an assessment where the reduced Article 10, 11 or 12 rate is claimed.
Source: the Income Tax Department’s own published text — its page for this instrument.
