Notification No. 63/2015 [F.No.500/02/2003-FTD-1]/S.O. 2192(E)

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MINISTRY OF FINANCE (Department of Revenue) NOTIFICATION New Delhi, the 12th August, 2015 . (INCOME-TAX) S.O . 2 I 92(E).- Whereas, an agreement (hereinafier referred to as the said agreement) between the Government of the Republic of India and the Government of the Republic of San Marino, for the exchange of information with respect to taxes was signed at Rome, on the 19th day of December, 2013;

2. And whereas, the date of entry into force of the said agreement is the 29th day of August, 2014, being the date of the later of the notifications of completion of the procedures as required by the respective laws for entry into force of the said agreement in accordance with paragraph J of Article II of the said agreement;

3. And whereas, paragraph 2 of Article II of the said agreement provides that the agreement shall enter into force on the date of later of the notifications and shall thereupon have cFfect Forthwith;

4. 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 provisions of the said agreement between the Government of the Rcpublic of India and the Government of the Republic of San Marino on the exchange of information with respect to taxes, as set out in the said agreement annexed hereto, shall have effect in the Union of India from the 29th day of August, 2014. [Notification No. 63/15/ F.No.500/02/2003-FTD-I] AKHILESH RANJAN, JI. Secy. AGREEMENT BETWEEN TIlE GOVERNMENT OF TIlE REPUBLIC OF INDIA AND THE GOVERNMENT OF TIlE REPUBLIC OF SAN MAR I NO FOR TIlE EXCHANGE OF INFORMATION WITH RESPECT TO TAXES The Government of the Republic of India and the Government of the Republic of San Marino, desiring to facilitate the exchange of information with respectto taxes have agreed as follows: Article I Object and Scope of the Agreement 1. The competent authorities of the Contracting Parties shall provide assistance through exchange of information that is foreseeably relevant to the administration and enforcement of the domestic laws of the Contracting Parties concerning taxes covered by this Agreement. Such information shall include information that is foreseeably relevant to the determination, assessment and collection of such taxes, the recovery and enforcement of tax claims or the investigation or prosecution of tax matters. Information shall be exchanged in accordance with the provisions of this Agreement and shall be treated as confidential in the manner provided in Article 8. The rights and safeguards secured to persons by the

['WI II - ~ 3( ii ) ] 9 laws or administ rative practice of the requested Pan y remain applicable to the extent that they do n ot u~dul y prevent o r delay effective exchange of infonnation. A,·tiele 2 Jurisdiction Information s hall be exchanged in accordance w ith this Ag reement witho ut re gard to whether th e person to whom Ih (' information relates is , or whet her the information is he ld by. a resident of a Contracting Party. Ho weve r, the Reques ted Pany is not obliged to provide in fo rm ation which is neither held by its aut horities nor ;s in the possession or control of persons who a rc within it s territorial jurisdiction. Artiele 3 Taxes Covered 1. The taxes which arc the sub ject of this Agreement are: a) in India. taxes of every kind and descr iption imposed by the Cen tra l Government or the Governments of politica l subdivisions or local authorities, irrespective orthe manner in which they are levied; b) San Ma rino, taxes of every kind and de scription. irrespective of the manner they are l ev i e d ~ 2. This Agreement sha ll also apply to any identical or substant ially similar taxes imposed after the date of s ignatu re of rhis Agreement in add iti on to, o r in place of , the exist in g taxes. The competen t autho rities of the Contracting Parties shall notif y each ot her of any s ubstantial changes to the taxati on and related information gather ing measures and ass istance in co ll ection measures whic h m ay affect the obUgations of that Party pursuant to th is Ag reement. Article 4 Definitions I. For the purposes of this Agreement , unless otherwise defined: a) 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 jur isdiction, according to the Ind ian law and in accordance with international law, including the U.N. Convention on the Law or the Sea; b) the term "Sa n Marino" means the territory of Repub li c of San Marino; e) the term " Contracting Party" means India or the San Marino, as the context requires; d) the term " co mpetent authority" means i) in the case of India, the Finance Minister, Government of India I or its autho rized representat ive; ii) in th e case of San Marino, the Central Liaison Office (CLO), as the Authority des i gned by domestic Law for the purpose of Exchange of information ; e) the term " person" includes an ind ividual, a company, a body of persons and any other entity which is treated as a taxab le un it under the ta xat io n laws in force in the respective Contracting Partie s~ I) the term " company" means any body corporate or any entity that is treated as a body corpora te for tax purposes; g) the term "pub licly traded compan y" means any company whose principal class of shares is li sted on a recognised stock exchange provided its li sted shar es can be readily purchased or so ld by the pUblic. Shares can be purchased or sold "by the public" ifthc purc hase or sa le of shares is not implicitly or explicitly restricted to a limited group of investors; h) the term "p ri ncipal class of shares" m eans the class or c lasses of shares representing a majority of the voting power and va lu e of the company; i) the term " recognised stock excha n ge" shell bear the meaning agreed upon by the competent authorities of the co ntracting parties; j) the tcnn "collective investment fund or scheme" means any pooled investment vehicle, irrespective of l ega l form; k) the term " public co ll ective in vestment fund or scheme" means any collective investment fund or sch eme provided the units, shares or other inter es ts in the fund or scheme can be readily purchased, sold or redeemed by the pub li c. Units, shares or other interests in the fund or scheme can be readily purchased, so ld or redeemed "by the public" if the purchase, sale or redemption is not implicitly or exp licitly restTicted to a limited group of investors; I) the term "tax" m eans any tax to which th is Agreement applies; m) the term "requesting Party" means the Contracting Party-

(i) subm itting a reque st for information to, or

(ii) having received information from the requested Party; n) the l crm " requested Party" means the Contract in g Party-

~-- ------.--- ... ---- --- --'-~-.- 10 THE GAZE TTE OF INDIA: EXTRAORD INARY [PART II - SEC. 3(ii) -'

(i) which is r eq uested to provide information, or

(ii) wh ic h has provided info rm at i on~ 0) the term " information gathering measures" means laws and administrati ve or judicial procedures that en ab le a Contracting Party to obtain and provide the requested infonnation; p) the term " information" means any fact, statement, documentar record in whatever form.

2. As regards the app lication of this Agreement at any time by a Co ntractin g Party, any term not defined therein shall, unless the context othe rwi se requires or the competent authorit i es agree to a common meaning pursuant to the provisions of Article 10 of this Agreement, have the meaning that it has at that time under the law of that Party, any meaning under the applicable tax l aws of that Party prevailing over a meaning given to the term under other laws of that Party. Article 5 Exchange of Information Up on Request I. The competent authority ofthe\equested Party shal l provide upon request information for the purposes referred to in Article I. Such information shall be exchanged without r egar d to whether the requested P arty needs such informa ti on for its own tax purpo ses or whet h er the conduct being in vestigated would const i tute a crime under the la ws of the requested Party i fsuch conduct occurred in the requested Party.

2. If the information in the possession of the competent autho rity of the requested Party is not sufficient to enable it to comply with the request for information, that Party s hall use all relevant information ga th er ing measures to provide the requesting Part y with the information requested , notwithstanding that the requested Party may not n eed such information for its own tax purpo ses.

3. If specifica lly requested by the competent authority of the requesting Party, the competent authority of the requested Patty s hall provide information under this Article, to the extent allowable under its domestic law s, in the form of depositions of witnesses and authenticated copies of original r eco rd s.

4. Each Contract ing Party shall ensure that its competent authority, for the purposes of thi s Agreement, has the authority to obtain and provide upon request: a) information held by banks, other financial institution s, arid any person acting in an agency, acting in an agency or fiduciary capacity; including nominees and trustees , b) in formation regarding the legal and beneficial owner sh ip ofcompan)es, partnerships , collective investment funds or sc heme s, tru st s, fou nd ations, " Anstalten" a nd other persons, including, within the constraint s of Article 2, ownership information on a ll such persons in an ownership chain; in the case of collective inve stment funds or schemes, info rmation on shar es, units and other interest s; in the case of trusts, information on settlors, t ru st ees a nd beneficiaries; in the case of foundations, information on founders , members of the foundation council and beneficiaries; and equiva l en t information in case of ent itie s that are neither tru sts nor foundations.

5. This Agreement docs not create an obligation on the Contracting Parties to obtain or provide owners hip information with respect to publicly traded companies or public collective investment funds or schemes unless such information can be obtained without giving ri se to disproportionate difficulties.

6. The competent authority oflhe requesting Party s hall provide the following information to th e competent authority of the reque sted Party when making a request for information under the Agreement to demonstrate the foreseeable relevance of the information to the requ est:

(a) the identity of the person under examination or inve s tigation ;

(b) the period for which information is requested;

(c) the nature of the i nformation requested and the form in which the requesting Party wou ld prefer to r eceive it ;

(d) the tax pu rpose for wh ich the information is soug ht;

(e) grounds for believing that the information req u ested is present in the requested Party or is in the pos sess ion or control ofa person within the jurisdiction of the requested Party; (I) to the extent known, the name and addres s of any person believed to be in possession or control of the requested inf ormat ion ;

(g) a statement that the request is in conformity with the l aws and administra tive practices of the requesting Party, that if the r equested inform at ion was within the jurisdiction of the requesting Party then the competent authority of the requesting Party would be able to obtain the information under the laws of the requesting Party or in the normal course of administrative practice and that it is in conformity with this Agreement;

(h) a statement that the requesting Party has pursued all means available in its own territory to obtain the information, except those that would g ive rise to disproportionate difficulties.

7. The competent authority of the requested Party sha ll forward the requested information as promptly as possible to the • ... , • {' 11.

, .' l'lJll 11 - @lS" 3(ii)] II a) Confi rm receipt of a request in writing to the competent authority of the requesting Party and sh ali notify the competent authority of th e req uesting Party of deficienc ies in the request, if any, within 60 days of the receipt of the request. b) If the competent authority of the requested Party has been unable to obtain and provide the information with in 90 days of receipt of the re qu est, including if it encounters obstacles in fu rnishing the information or it refuses to furn ish the information, it shall immediately inform the requesting Party, explaining the reason for it s inab ili ty, the nature of the obstacles or the reasons for its refusal. Article 6 Tax Examinat ions Abroad 1. At the request of the competent autho rit y qfthc requesting Party, the requested Party may, allow representatives of the competent authority of the requesting Party to enter the territory orthe requested Party, to the extent perm itted under its domesdc law s, to interview individuals and examine records with the prior written consent of the individuals or other persons concerned. The competent authority of the req uesting Party s hall notify th e competent author it y of the requested Pat1y of the time and place orthe intended meeting with the individuals concerned.

2. At the request of the competent authority orthe requesting Party, the requested Party may allow representatives of the compete nt authority of the requesting Party to be present at the appropriate part of a tax examination in the requested Pat1 y, in which case the competent authority of the requested Party conducting the examination sha ll , as soon as possible, notify the competent authority of the requesting Party about the time a nd place of the examination, the authority or offic i al designated to carry out the examination and the procedures and conditions required by the requested Party for the conduct of the exam in ation. All decisions with re spect to the conduct of the tax exam in atio n sha ll be made by the Party conduct ing the examination. Art icl e 7 Possibility of Declining a Request for information I. The competent authority of the requested Pat1y may decline to assist:

(a) where the request is not made in conformity with this Agreement; or

(b) where the requesting Party has not pursued a ll means available in its own territory to obta in the information, except where recourse to such mean s would gi ve rise to disproportionate difficulty; or

(c) where disclosurc ofthc information would be contrary to public policy (ordre pub li c) of the req uested Party.

2. This Agreement sha ll not impose on a Contracting P at 1y the obligation:

(a) to su pply infor!llation which wo uld disclose a ny trade, business, industrial , commercial or professional secret or trade process. Notw ith stand in£ foregoing information described in paragraph 4 of Article 5 sha ll not be treated as such a secret or trade process merely because it meets the criteria in that paragraph; or .

(b) to obtain or provide information , which would reveal confidential communications between a c li ent and an attorney, solic itor or other admitted lega l representative wherc such communications are:

(i) produced for the purposes of seck in g or prov iding legal advice or

(ii) produced for the purposes of use in existing or contemplated legal proceedings; or "'""":.

(c) to carry out administrative measures at variance with it s la ws and administrative practices, provided no th ing in th is subparagraph shall affect the ob ligations ora Contracting Party under paragraph 4 of Article 5.

3. A request for informat ion shall not be j'cfu sed on the ground that the tax claim giving rise to the request is di sputed.

4. The requested Pal1y shall not be req uired to obtain and provide information which the request in g Party would be un able to obtain in si milar circumstances under its own laws for the purpose of the administ ration or enforcement of it s own tax laws or in re sponse to a valid request from the requested Party under this Agreement.

5. The requested Party sha ll not dccline to provide info rm ation so lely because the request does not include a li the information required under Article 5 if the information can otherw ise be provided accord in g to the law of th e requested Party.

6. The requested Pat1y may decline a request for information ·if th e information is requested by th e requestin g Party to administer or enforce a provision of th e tax law of the requesti ng Party, or any requirement. connected therewith, which discriminates against a national or citizen of the requested Party as compared with a national or citizen of the requesting Party in the same circumstances. Art ic le 8 Confidentiality Any information received by a Contracting Party under thi s Agreement shall be treated as confidential and may be disclosed only to persons or authorities (including courts, administrative bodies) in the jurisdiction of t he Contracting Party concerned with the assessment or collection of. the e nfnrr:(,Olpnt f""lr .... rM"""·; ..... ~ :- ..••.. .. .... • .

- ------ -- -- ------------- '------ --- -- --:>--~ 12 THE GAZETTE OF I NDIA: EX TRAORDINARY [PART II - SEC 3( ii)] ~ or appea ls in rclation to, the taxes covered by this Agreement. Such persons or authorities sha ll use such inf ormat io n only for such purposes. They may disclose the inf ormation in public court proceedings or in judicial decisions. The information may not be disclosed to any other person or entity or authori ty or any other jurisdiction without the express written consent of the competent authority orthe requested Party. Article 9 Implementation Legislation The Contracting Parties shall enact any legis lation necessary to comply with, and give effect to, the terms of th e Agreement. Article 10 Mutual Agrccm.ent Procedure I. Where difficu lti es or doubts arise between the Contracting Parties regarding the implementation or interpretation of the Agreement, the competent authorities shall endeavour to resolve the matter by mutual agreeme nt. In add ition, the competent auth orities of the Contract in g Parties may mutually agree on the procedures to be used und er Articles 5 and 6 of th is Agreement.

2. The competent author ities of the Co ntracting Parties may communicate with each other directly for purposes of rcaching agreement under this Article. A rtiele II Entry into Force I. The Cont racting Pal1ies sha ll notify · each other in writing, through diplomatic channels, of the completion of the procedures required by the re spective laws for the entry into force of this Agreement.

2. This Agreement sha ll enter into foree on the date of the later of the notifications referred to in paragraph I of thi s Aliicle and shall thereupon have effect forthwith, A rtiele 12 Termination I. This Agreement shall r emain in force until terminated by e ith er Co ntractin g Pal1y.

2. Either Contract in g Party may , after the expiry of five years from the date of its entry into force, terminate the Agreement by serving a written notice of termination to the other Co ntracting Party throu gh diplomatic channels.

3. Such termination shall b ecome effective on the first day of the month following the expiration of a period of six months after the date of receipt of notice of termination by the ot her Contracting ·Party. All requests received up to the effective date of term inatio n shall be dealt w ith, in accordance with the provisions of the Agreement. In w it ness whereof . the undersigned, being duly authorised thereto, have signed th is Agreement. DONE in duplicate at Rome (italy) on the 19'" day of December , 20 13, each in the Hindi, Italian and Engl ish languages, all texts being equa ll y authentic. In case of divergence of int erp retatio n, the English text sha ll prevail. ror the Government of For th e Governme nt of the Republic of India: (Basant K, Gupta) Ambassador of India to Italy with concurrent accreditation to the republic of San Marino th e Republic of Sa n Marino: (Daniela Rotondaro) Ambassador of San Marino to Ital y Printed by th e Manager. Government of In dia Press, Ring Road. Mayapuri, New Delhi-I 10064 and Published by the Controller or Publications. Delhi-I 10054 .