India–Kazakhstan tax treaty — rates, PE and MLI

The rates, at a glance

Every figure below is taken from the article named beside it, not from a rates table. Read the condition in the same row before you use the rate — in this treaty the condition is usually the whole answer.

Income	Rate	The condition attached to it	Article
Dividends	10 per cent of the gross amount of the dividends — Art. 10(2). A single flat ceiling.	There is no shareholding threshold, no second tier and no holding period. Art. 10(2): 'However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident…	Article 10, paragraph 2
Interest	10 per cent of the gross amount of the interest — Art. 11(2), a single flat ceiling. Note the doubled condition as drafted: the cap applies 'if the recipient and the beneficial owner of the interest is A resident of other contracting state' — both the recipient and the beneficial owner must be residents of the other State, which is stricter than the usual single beneficial-ownership test. Art. 11(2) closes with 'The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation' — procedural, not a condition precedent.	The exemptions sit in the article itself, at art. 11(3), not in the protocol, and the list is the shortest in this batch — only two limbs. The chapeau: 'Notwithstanding the provisions of paragraph 2, interest…	Article 11, paragraph 2 and 3
Royalties	10 per cent of the gross amount — Art. 12(2). Royalties and fees for technical services share one article and one rate, with no split and no separate FTS rate. Conditional on the recipient being the beneficial owner.	The royalty definition in art. 12(3)(a) expressly includes software, and that is the most commercially important feature of this article. It reads: 'payments of any kind received as a consideration for the use…	Article 12, paragraph 2
Fees for technical services	10 per cent of the gross amount — the same rate as royalties, under the same Art. 12(2).	There is an FTS limb and IT has no make-available requirement. Art. 12(3)(b): 'The term fees for technical services means payment of any kind in consideration for the rendering of any managerial, technical or…	Article 12, paragraph 2 and 3(b)

Status

In force	2 october 1997 — the Introduction records that the annexed Convention 'will enter into force, on the second day of the October, 1997, thirty days after the receipt of the later of notification by both the Contracting States to each other ... In accordance with Article 30'. Note the thirty-day lag and note that the Introduction is written in the future tense ('will enter into force') even though the notification is dated 31-10-1997, after the stated date. Signed at new delhi on 9 december 1996 'in Hindi, Kazak, Russian and English languages, all texts being equally authentic. In case of divergence between the texts, the English text shall prevail.' effect under Art. 30(2): in India, income derived or capital held in any fiscal year beginning on or after 1 April next following the calendar year of entry into force — FY 1998-99 onwards; in Kazakhstan, income derived or capital held in any fiscal year beginning on or after 1 January next following. Note the Convention is drafted with kazakhstan named first in the Introduction's recital and india first in the Annexure's title.
Given effect by	G.S.R. 633(E) [No. 10449 (F. No. 501/6/94-ftd)], dated 31-10-1997 — issued under s.90 of the Income-tax Act 1961 and section 44A of the wealth-tax act 1957. The dual statutory basis matters: this is A taxes on income and on capital convention, with a full article 23 (capital) and with Art. 30(2) speaking of 'income derived or capital held'. Only two treaties in this batch cover capital — this one and the Czech Republic. India's Wealth-tax Act was repealed with effect from AY 2016-17, so Art. 23 has no Indian counterpart to restrain at present, but it remains in force and continues to restrain Kazakh taxation of Indian residents' Kazakh capital. Art. 2(3)(a), as replaced by the 2017 Protocol, now lists for Kazakhstan the corporate income tax, the individual income tax and the tax on property of legal persons and individuals.
Modified by the MLI	No synthesised text was found for this treaty in the source searched.
Principal purpose test	No MLI principal purposes test — no Synthesised Text for Kazakhstan has been identified from the sources used here. But there is A bilateral main-purpose test at Art. 28A(2), inserted in 2017 and effective in India from FY 2018-19, which does substantially the same work. Two differences from the MLI PPT matter. First, art. 28A(2) has no object-and-purpose escape — the MLI PPT allows the benefit where granting it would accord with the object and purpose of the relevant provisions; Art. 28A(2) contains no such proviso and is therefore harsher than the PPT. Second, Art. 28A(2) denies benefits to A resident whose affairs were arranged for the purpose (entity-focused), whereas the PPT denies a benefit in respect of an item of income arising from an arrangement or transaction (income-focused). Which paragraphs of an existing anti-abuse article did A PPT replace? None — no MLI PPT has been introduced into this treaty on the face of the record, so all three paragraphs of Article 28A stand, including the beneficial-ownership gate in paragraph 3. That is the same position as Kenya and Mexico: the bilateral tests survive intact precisely because nothing has replaced them.

Dividends

Rate	10 per cent of the gross amount of the dividends — Art. 10(2). A single flat ceiling.
The holding that unlocks it	There is no shareholding threshold, no second tier and no holding period. Art. 10(2): 'However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed 10 per cent of the gross amount of the dividends.' The only condition in the article is that the recipient be the beneficial owner. Note, however, that art. 28A(3) now adds A free-standing beneficial-ownership gate across the whole convention, so the condition is doubled. The paragraph closes with the standard saving that it does not affect taxation of the company on the profits out of which the dividends are paid. Because no MLI applies on the face of the record, no 365-day holding requirement has been imported.
Where this comes from	Article 10, paragraph 2

Art. 10(6) is A branch-profits tax authorisation sitting inside the dividends article, and unlike Brazil's it is reciprocal: 'Profits of a company of a Contracting State carrying on business in the other Contracting State through a permanent establishment situated therein may, after having been taxed under article 7, be taxed on the remaining amount in the Contracting State in which the permanent establishment is situated at A rate that does not exceed the rate set forth in paragraph 2 of this article.' So a second-tier tax on branch profits is permitted, on the amount remaining after the Art. 7 charge, capped at 10 per cent. The same structure as Turkey's Art. 10(4). Art. 10(3) is the ordinary dividend definition. Art. 10(4) refers effectively-connected holdings to Art. 7 or Art. 14. Art. 10(5) bars extra-territorial taxation and taxation of undistributed profits. Article 10 was covered by the now-deleted MFN clause — see practitioner_notes.

Interest

Rate	10 per cent of the gross amount of the interest — Art. 11(2), a single flat ceiling. Note the doubled condition as drafted: the cap applies 'if the recipient and the beneficial owner of the interest is A resident of other contracting state' — both the recipient and the beneficial owner must be residents of the other State, which is stricter than the usual single beneficial-ownership test. Art. 11(2) closes with 'The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation' — procedural, not a condition precedent.
Exemptions	The exemptions sit in the article itself, at art. 11(3), not in the protocol, and the list is the shortest in this batch — only two limbs. The chapeau: 'Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempt from tax in that State, provided IT is derived and beneficially owned by:' — the double requirement, derived and beneficially owned. Limb (i) — 'the Government, a political sub-division or a local authority of the other Contracting State'. Limb (ii) — 'the central bank of the other contracting state or any other governmental bank or financial institution/agency that may be mutually agreed upon between the two contracting states'. The central bank is named generically on both sides, so no question arises about which entity qualifies. But note what is absent: unlike the Czech Republic (seven named Indian institutions), Malta (three), Mexico (three) and Kenya (two), this treaty names no indian development bank at all. The Export-Import Bank of India, the National Housing Bank, sidbi, nabard and ifci are all outside the exemption unless and until they are 'mutually agreed upon between the two Contracting States'. The extension limb is also narrower than most: it is confined to a governmental bank or financial institution/agency, so a private lender could never be added. The extension limb is not self-executing — it requires mutual agreement between the two States. The sources used here reproduce no such agreement, so as the record stands only the government limb and the two central banks operate. Penalty charges for late payment are excluded from the interest definition by the closing sentence of Art. 11(4).
Where this comes from	Article 11, paragraph 2 and 3

The 2017 protocol narrowed the interest source rule and this is easy to miss. Article VII of the amending Protocol provides that 'In paragraph 6 of Article 11 (Interest) of the Convention, the words "that state itself, A political sub division, A local authority or" shall be deleted.' The result is printed as 'Interest shall be deemed to arise in a Contracting State when the payer is 1[***] a resident of that State'. So from FY 2018-19 in India, interest paid by A government, A political sub-division or A local authority is no longer deemed to arise in that state under the primary limb — only interest paid by a resident is. The PE/fixed-base deeming override in the second sentence is untouched. The same narrowing was made to the royalty and FTS source rule in Art. 12(5) by Article VIII of the Protocol. Article 11 was covered by the now-deleted MFN clause.

Royalties

Rate	10 per cent of the gross amount — Art. 12(2). Royalties and fees for technical services share one article and one rate, with no split and no separate FTS rate. Conditional on the recipient being the beneficial owner.
Where this comes from	Article 12, paragraph 2

The royalty definition in art. 12(3)(a) expressly includes software, and that is the most commercially important feature of this article. It reads: 'payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including software, cinematograph films, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience, and payments for the use of, or the right to use industrial, commercial or scientific equipment.' The words 'including software' appear in the copyright limb, agreed bilaterally in 1996. Very few Indian treaties say so expressly. A practitioner arguing about the treaty characterisation of software payments must start from the fact that this treaty puts software inside the copyright limb of the royalty definition on its face. Note also the structure: unlike most Indian treaties, the equipment limb comes at the end as a separate clause ('and payments for the use of, or the right to use industrial, commercial or scientific equipment'), after the information-concerning-experience limb, rather than in the middle. Art. 12(4) is the effectively-connected carve-out — but note it refers only to 'the beneficial owner of the royalties' and to 'the right or property in respect of which the royalties are paid', omitting fees for technical services, which is a drafting gap. Art. 12(5), as amended by Article VIII of the 2017 Protocol, now reads 'Royalties or fees for technical services shall be deemed to arise in a Contracting State when the payer is A resident of that contracting state' — the government-payer limb has been removed, as in Art. 11(6). Article 12 was covered by the now-deleted MFN clause, and that deletion matters most here.

Fees for technical services

Rate	10 per cent of the gross amount — the same rate as royalties, under the same Art. 12(2).
Make-available requirement	No
Where this comes from	Article 12, paragraph 2 and 3(b)

There is an FTS limb and IT has no make-available requirement. Art. 12(3)(b): 'The term fees for technical services means payment of any kind in consideration for the rendering of any managerial, technical or consultancy services including the provision of services by technical or other personnel but does not include payments for services mentioned in articles 14 and 15 of this convention.' This is the Hungarian formulation word for word. The words 'make available', 'enable', 'technical plan' and 'technical design' appear nowhere in the Convention, the 1996 Protocol or the 2017 amending Protocol — verified by full-text search. Four points, and the fourth is the one that separates kazakhstan from every other treaty in this batch. First, no make-available filter: the character of the service is the whole test. Second, managerial services are expressly included. Third, the only carve-out is for payments for services within Art. 14 (independent personal services) and Art. 15 (dependent personal services); there is no negative list of the US/Portugal kind — nothing excluded for construction, natural-resources services, teaching or personal-use services. Fourth — and this is the point — there was an MFN clause covering scope as well as rate, and IT was repealed in 2018. Until the 2017 amending Protocol took effect, the 1996 Protocol's paragraph 'With reference to Articles 10, 11 and 12' would have allowed a narrower FTS scope conceded by India to a third State to flow through to this Article 12 — which is precisely the make-available argument. Article xiv of the amending Protocol deleted that paragraph, with effect in India for fiscal years beginning on or after 1 April 2018. SO the make-available MFN argument is live for indian fiscal years up to and including FY 2017-18 and dead from FY 2018-19. That is a date-sensitive answer, and it is the opposite of the usual pattern in which MFN clauses are argued about prospectively. See practitioner_notes for the full text of the deleted clause. Also note the interaction with the new service PE: Art. 5(3)(c), inserted by the same 2017 Protocol, creates a 90-day service PE, so from FY 2018-19 a Kazakh service provider faces both a wider PE exposure and the loss of the MFN scope argument.

Capital gains on shares

Treatment	Full source-state taxing right over share gains. Article 13 has six paragraphs, splitting the shares limb in two. Art. 13(4): 'Gains from the alienation of shares of the capital stock of a company the property of which consists directly or indirectly principally of immovable property situated in a Contracting State may be taxed in that State.' Art. 13(5): 'Gains from the alienation of shares other than those mentioned in paragraph 4 of A company which is A resident of A contracting state may be taxed in that state.' Paragraph 5 is an unrestricted source-State taxing right over ordinary share gains — no percentage test, no minimum holding, no listing carve-out, no de minimis. India may tax a Kazakh resident's gain on shares of an Indian company whatever the company's asset mix. Art. 13(6) is the residual: gains from any property other than that in the preceding paragraphs are 'taxable only in the Contracting State of which the alienator is a resident'. Art. 13(3) allocates ship and aircraft gains to the State of residence of the alienator. Article 13 was not touched by the 2017 amending protocol — it carries no amendment marker.
Grandfathering	None. The taxing right has been in the treaty since it took effect in FY 1998-99, was not altered by the 2017 Protocol, and there is no shares-acquired-before date, no transition rate and no limitation-of-benefits gateway attached to Article 13 specifically. But note that article 28A now applies to every benefit of the convention from FY 2018-19, including the residence-only treatment in Art. 13(6): a Kazakh vehicle seeking to rely on Art. 13(6) must satisfy the main-purpose test in Art. 28A(2) and, under Art. 28A(3), must be the beneficial owner of the item of income or capital.
Conditions	Art. 13(5) is unconditional on its face. Art. 13(4) turns on the undefined word 'principally' — the treaty supplies no percentage, no valuation date and no 365-day look-back, because no MLI applies on the face of the record and the 2017 Protocol did not supply one. This is one of the few things an MLI overlay would still add to this treaty.
Where this comes from	Article 13, paragraph 4, 5 and 6

Permanent establishment

Construction or installation PE	More than twelve months — the longest construction-PE threshold in this batch, and IT was not shortened by the 2017 protocol. Art. 5(3)(a): 'a building site or construction or installation or assembly project, or supervisory activities connected therewith, only if such site, project or activity lasts for more than 12 months'. Installation, assembly and supervisory activity are all inside the twelve-month test. There is A second and shorter threshold in the next sub-paragraph and IT is the one the 2017 protocol changed. Art. 5(3)(b): 'an installation or structure used for the exploration of natural resources, or supervisory activities connected therewith, or A drilling rig or ship used for the exploration of natural resources, only if such use or activity lasts for more than 6 months' — Article IV(1) of the amending Protocol cut this from twelve months to six, with effect in India from FY 2018-19. Note that sub-paragraph (b) covers exploration only; it does not mention exploitation or production. There is no anti-splitting rule for either threshold and MLI Art. 14 has never been applied.
Service PE	Yes, but only since FY 2018-19 — more than 90 days within any twelve-month period. The service PE is new: it was inserted as Art. 5(3)(c) by Article IV(2) of the 2017 amending Protocol and did not exist in the treaty before. It reads: 'the furnishing of services, including consultancy services, by an enterprise through employees or other personnel engaged by the enterprise for such purpose, but only where activities of that nature continue (for the same or A connected project) within the Contracting State for a period or periods aggregating more than 90 days within any twelve-month period.' and IT comes with an associated-enterprise aggregation rule that no other service PE in this batch has, inserted in the same place: 'where an enterprise of a Contracting State that is performing services in the other Contracting State is, during a period of time, associated with another enterprise that performs substantially similar services in that other Contracting State for the same project or for connected projects through one or more individuals who are present and performing such services in that other Contracting State, the first-mentioned enterprise shall be deemed, during that period of time, to be performing services in [the] other contracting state for that same project or for connected projects through these individuals. For the purpose of the preceding sentence, an enterprise shall be associated with another enterprise if one is controlled directly or indirectly by the other, or both are controlled directly or indirectly by the same persons, regardless of whether or not these persons are residents of one of the contracting states.' So group service days are aggregated, the control test has no percentage and looks to actual control, and third-country group companies are expressly caught. Malta, Kenya and Mexico all have a 90-day service PE but none of them aggregates associated enterprises' days. The date point is essential: before FY 2018-19 this treaty had no service PE at all, so services alone could not create an Indian PE however long the personnel stayed. From FY 2018-19 they can, at ninety days, with group aggregation.
Agency PE	Yes but narrow — Art. 5(5) has only one limb, the narrowest agency rule in this batch: a PE arises where a person 'has, and habitually exercises, in a Contracting State an authority to conclude contracts in the name of the enterprise ... Unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment'. There is no stock-and-delivery limb and no order-securing limb — the second and third limbs found in the Malta, Kenya, Mexico, Hungary and Turkish treaties are simply absent. And because MLI Art. 12 has never been applied here, the commissionnaire rule does not apply either and the phrase 'in the name of the enterprise' stands unqualified. This is markedly taxpayer-favourable. Art. 5(7) is the independent-agent exclusion with the single-limb anti-exclusivity rider: 'when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, he will not be considered an agent of an independent status' — exclusivity alone defeats independence, with no additional arm's-length requirement (contrast Kenya, Mexico and the Philippines). Art. 5(6) is a separate insurance PE (premiums collected or risks insured in the other State through a person other than an independent agent, except re-insurance).
Where this comes from	Article 5

Art. 5(2) has nine inclusive limbs, none with a duration test, including '(g) a sales outlet', '(h) A warehouse in relation to A person providing storage facilities for others' and '(i) A farm, plantation or other place where agricultural[,] forestry, plantation or related activities are carried on'. Art. 5(4)(a) and (b) do include 'delivery' in the exclusions — 'storage, display or delivery' — unlike the Czech, Kenya and Mexico treaties, which omit it. So a delivery facility is excluded here, subject to the ordinary preparatory-or-auxiliary analysis. The exclusions are in the pre-beps unconditional form for limbs (a) to (d), with the preparatory-or-auxiliary test attaching only to (e) and (f); since no MLI applies there is no anti-fragmentation overlay and no 'closely related enterprise' concept. Taken together, article 5 is A study in contrasts after 2018: a very long 12-month construction threshold and a very narrow one-limb agency rule, but a new 90-day service PE with group aggregation, a 6-month exploration-installation PE, and a warehouse limb. The text as printed reads 'a sock of goods' for 'a stock of goods' in Art. 5(4)(c) and 'a company ... Control or is controlled' in Art. 5(8).

Anti-abuse: limitation of benefits, and the MLI

LOB	Yes since FY 2018-19 — article 28A, 'limitation of benefits', inserted by article xiii of the 2017 amending protocol. It is the short Indian form, three paragraphs, no objective safe harbours: '1. The provisions of this Convention shall in no case prevent A contracting state from the application of the provisions of its domestic law and measures against tax avoidance or evasion, whether or not described as such. 2. A resident of a Contracting State shall not be entitled to the benefits of this convention if its affairs were arranged in such A manner as if IT was the main purpose or one of the main purposes to take the benefits of this convention. 3. The benefits under this convention shall not be granted to A person, which is not the beneficial owner of the items of income derived from the other contracting state or of the items of capital situated therein.' paragraphs 1 and 2 are the same shape as kenya'S art. 29(1) and (2). Paragraph 3 is different from anything else in this batch and is worth dwelling on: it makes beneficial ownership A condition of every benefit of the convention, not just of the Article 10, 11 and 12 rate caps — and it extends expressly to items of capital as well as items of income. So a nominee or conduit is denied the benefit of Article 7, Article 13 and Article 23 as well as the rate articles. Kenya's Art. 29(3), by contrast, is a bona-fide-business-activities test; Kazakhstan's is a beneficial-ownership test. Note that article 28A did not exist before FY 2018-19: for Indian fiscal years up to FY 2017-18 this treaty had no limitation-of-benefits article, no main-purpose test and no general beneficial-ownership requirement outside Arts. 10, 11 and 12.
PPT	No MLI principal purposes test — no Synthesised Text for Kazakhstan has been identified from the sources used here. But there is A bilateral main-purpose test at Art. 28A(2), inserted in 2017 and effective in India from FY 2018-19, which does substantially the same work. Two differences from the MLI PPT matter. First, art. 28A(2) has no object-and-purpose escape — the MLI PPT allows the benefit where granting it would accord with the object and purpose of the relevant provisions; Art. 28A(2) contains no such proviso and is therefore harsher than the PPT. Second, Art. 28A(2) denies benefits to A resident whose affairs were arranged for the purpose (entity-focused), whereas the PPT denies a benefit in respect of an item of income arising from an arrangement or transaction (income-focused). Which paragraphs of an existing anti-abuse article did A PPT replace? None — no MLI PPT has been introduced into this treaty on the face of the record, so all three paragraphs of Article 28A stand, including the beneficial-ownership gate in paragraph 3. That is the same position as Kenya and Mexico: the bilateral tests survive intact precisely because nothing has replaced them.
Subject to tax	None. There is no subject-to-tax clause and no remittance-basis limitation. The nearest equivalents are Art. 28A(1), which preserves domestic anti-avoidance law in wide terms ('in no case prevent ... Whether or not described as such', enough to cover Chapter X-A GAAR, s.94A and s.94B), and Art. 28A(3), the beneficial-ownership gate. The 1996 protocol, as IT now stands, contains only one substantive paragraph — the Article 7 attribution rule — because the other two were deleted by Article xiv of the 2017 Protocol and are printed as '1 [ * ]' and '2 [ * ]'. That surviving paragraph is important for epc work: profits of a PE 'shall not be determined on the basis of the total amount received by the enterprise, but shall be determined only on the basis of the remuneration which is attributable to the actual activity of the permanent establishment ... Especially, in the case of contracts for the survey, supply, installation or construction of industrial, commercial or scientific equipment or premises, or of public works, when the enterprise has a permanent establishment, the profits of such permanent establishment shall not be determined on the basis of the total amount of the contract, but shall be determined only on the basis of that part of the contract which is effectively carried out by the permanent establishment in the Contracting State where the permanent establishment is situated.' That is an express bar on taxing turnkey contract value at the PE, and it is the mirror image of the force-of-attraction rules found in the Turkish, Hungarian and Mexican protocols.
Where this comes from	Article 28A (three paragraphs, inserted 2017, effective in India FY 2018-19); Protocol (1996) para on Article 7 attribution

No synthesised text for kazakhstan has been identified from the sources used here. There is only one text in the sources used here and nothing to reconcile. None of the MLI overlay appears: no anti-treaty-shopping preamble, no MLI principal purposes test, no saving clause, no anti-fragmentation rule, no commissionnaire rule, no 365-day look-back on immovable-property share gains, no splitting-up-of-contracts rule. This one needs the same caveat as mexico. Kazakhstan signed the MLI on 7 June 2017 and is an active MLI jurisdiction, so the absence of a synthesised text here may reflect the coverage of the sources used here rather than the underlying position — I record only what those sources establish and flag the point in gaps. What mitigates the gap: the 2017 bilateral Protocol already inserted a three-paragraph limitation of benefits article at article 28A, including a main-purpose test at Art. 28A(2) and a general beneficial-ownership requirement at Art. 28A(3), and rebuilt Articles 27 and 28 to the modern standard. So the treaty is not defenceless without the MLI. What is still missing relative to an MLI overlay: the anti-fragmentation rule on Art. 5(4), the commissionnaire rule (Art. 5(5) is still the narrow single-limb 'authority to conclude contracts in the name of the enterprise' form), and the 365-day look-back in Art. 13(4).

The protocols, in order

A treaty read without its protocols is a wrong answer.

S.O. 1589(E) [No. 20/2018 (F. No. 501/06/94-ftd-II)], dated 12-4-2018 — the one amending notification, and it is a substantial one. It gives effect to the protocol amending the convention, signed at new delhi on 6 january 2017, which entered into force on 12 march 2018 — 'being the date of receipt, through diplomatic channels, of later of written notifications informing in regard to the completion of internal procedures ... In accordance with paragraph 1 of Article xv of the said amending Protocol'. Effect dates, which are essential and which the notified text states expressly: Art. Xv(2)(a) — in india, in respect of income derived or capital held in any fiscal year beginning on or after the first day of april next following the date on which the protocol enters into force, i.e. FY 2018-19 onwards; Art. Xv(2)(b) — in Kazakhstan, fiscal years beginning on or after 1 January next following the calendar year of entry into force, i.e. From 1-1-2019. Note the asymmetry: the Indian effect date is 1-4-2018 and the Kazakh one is 1-1-2019, nine months apart.
The amending protocol was read in full — it is reproduced after Article 31, with its own recitals and Articles I to xv. What IT did, article by article. Art. I — replaced Art. 2(3)(a) (Kazakh taxes covered). Art. II — replaced the definition of 'Kazakhstan' in Art. 3(1)(a)(i) and added a sentence to Art. 3(2) providing that 'any meaning under the applicable tax laws of that contracting state prevailing over A meaning given to the term under other laws of that contracting state'. Art. III — replaced Art. 4(1), adding place of incorporation as a residence criterion and expressly including the State and its political subdivisions and local authorities, with an understanding that 'place of incorporation includes place of registration'. Art. IV — cut the threshold in Art. 5(3)(b) from more than 12 months to more than 6 months, and added A new service PE at Art. 5(3)(c) together with an associated-enterprise aggregation understanding. Art. V — added Art. 7(7) (apportionment method). Art. VI — numbered the existing Art. 9 as paragraph 1 and added A corresponding-adjustment paragraph 2. Art. VII — deleted the words 'that State itself, a political sub division, a local authority or' from the interest source rule in Art. 11(6). Art. VIII — replaced the first sentence of Art. 12(5), narrowing the royalty/FTS source rule in the same way. Art. IX — in Art. 21(1) changed 'two years from the date of his arrival' to 'two years from the date of his first arrival'. Art. X — replaced Art. 22(3) (Other Income). Art. XI — replaced article 27 (Exchange of Information) with the modern article. Art. XII — replaced article 28 (Assistance in the Collection of Taxes). Art. Xiii — inserted A new article 28A (limitation of benefits). Art. Xiv — deleted the most-favoured-nation clause from the 1996 protocol. See practitioner_notes; this is the single most consequential change.
There is no other amending instrument. The citation line names the parent notification and one amending notification, and nothing else.
No synthesised text exists in the sources used here, so no MLI overlay appears on the face of the record. See synthesised_text.

The words themselves

Quoted from the treaty as notified.

In respect of Articles 10, 11 and 12 if under any Convention, Agreement or Protocol between the Governments of the Republic of India and the Republic of Kazakhstan with a third State, either India or Kazakhstan limit their taxation on dividends (single rate) interest, royalties or fees for technical services to a rate lower or a scope more restricted than the rate or scope provided for in this Convention on the said items of income, the same rate or scope as provided for in that Convention, Agreement or Protocol on the said items of income shall also apply under this Convention.

Article 1996 Protocol, 'With reference to Articles 10, 11 and 12', paragraph DELETED by Article XIV of the amending Protocol of 6-1-2017; the text is quoted here as it appears in Article XIV of that Protocol, which sets out the sentences to be deleted. Operative in India up to FY 2017-18 only. of the treaty as notified.

The benefits under this Convention shall not be granted to a person, which is not the beneficial owner of the items of income derived from the other Contracting State or of the items of capital situated therein.

Article 28A, paragraph 3 of the treaty as notified.

the furnishing of services, including consultancy services, by an enterprise through employees or other personnel engaged by the enterprise for such purpose, but only where activities of that nature continue (for the same or a connected project) within the Contracting State for a period or periods aggregating more than 90 days within any twelve-month period

Article 5, paragraph 3(c) (inserted 2017) of the treaty as notified.

an enterprise shall be associated with another enterprise if one is controlled directly or indirectly by the other, or both are controlled directly or indirectly by the same persons, regardless of whether or not these persons are residents of one of the Contracting States.

Article 5, paragraph understanding accompanying para 3(c) (inserted 2017) of the treaty as notified.

any copyright of literary, artistic or scientific work including software, cinematograph films, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience, and payments for the use of, or the right to use industrial, commercial or scientific equipment.

Article 12, paragraph 3(a) of the treaty as notified.

a building site or construction or installation or assembly project, or supervisory activities connected therewith, only if such site, project or activity lasts for more than 12 months

Article 5, paragraph 3(a) of the treaty as notified.

in the case of contracts for the survey, supply, installation or construction of industrial, commercial or scientific equipment or premises, or of public works, when the enterprise has a permanent establishment, the profits of such permanent establishment shall not be determined on the basis of the total amount of the contract, but shall be determined only on the basis of that part of the contract which is effectively carried out by the permanent establishment in the Contracting State where the permanent establishment is situated.

Article 1996 Protocol, 'With reference to Article 7', paragraph (single unnumbered paragraph — the only surviving substantive paragraph of the 1996 Protocol) of the treaty as notified.

What to watch

There was A most-favoured-nation clause and IT has been repealed. This is the headline of this treaty and IT is the kind of finding that is invisible unless the amending protocol is read in full. The 1996 Protocol contained a paragraph headed 'With reference to Articles 10, 11 and 12' in the standard self-executing form: where, under any Convention, Agreement or Protocol with a third state, 'either india or kazakhstan' limits its taxation at source on dividends (single rate), interest, royalties or fees for technical services 'to A rate lower or A scope more restricted than the rate or scope provided for in this Convention', 'the same rate or scope ... Shall also apply under this convention'. Four features. It covered articles 10, 11 and 12 — dividends, interest, and royalties and FTS. It was tied to any third state, with no OECD-membership requirement, which makes it wider than the Hungarian clause in this same batch. It covered scope as well as rate, so it was capable of importing a narrower FTS definition — a make-available requirement — into an Article 12 that has none. And it was reciprocal, running in favour of residents of both States ('either India or Kazakhstan'), where Hungary's runs one way only. Article xiv of the amending protocol of 6 january 2017 deleted IT outright: 'In Protocol signed on the 9th December, 1996, the following sentences shall be deleted', followed by the whole paragraph. The resulting gap in the 1996 Protocol is printed as '1 [ *** ]'. The date is everything: the deletion takes effect in India for fiscal years beginning on or after 1 april 2018, so the MFN clause was operative for indian fiscal years up to and including FY 2017-18 and is dead from FY 2018-19. Any assessment, refund claim or appeal relating to FY 2017-18 or earlier is still governed by a treaty containing a wide, scope-covering, no-OECD-filter MFN clause. Was any notification ever issued under IT? None appears anywhere in the kazakhstan material — the citation line names only the parent notification of 31-10-1997 and the amending notification of 12-4-2018. The clause was drafted as self-executing ('shall also apply'), named no notification requirement and set no procedural condition; whether a separate notification under s.90(1) was nevertheless required before it could be invoked is a contested question of Indian law that the treaty text does not answer and that this record does not decide. See gaps.
Every material answer under this treaty is date-sensitive, and the dividing line is FY 2018-19. Before (up to FY 2017-18): no service PE at all; a 12-month threshold for exploration installations and drilling rigs; a live MFN clause covering rate and scope on Articles 10, 11 and 12; no limitation-of-benefits article, no main-purpose test and no general beneficial-ownership requirement; the old Article 27 and Article 28; a government-payer limb in the interest and royalty source rules; and a residence-only Other Income article. After (FY 2018-19 onwards): a 90-day service PE with associated-enterprise aggregation; a 6-month threshold for exploration installations; no MFN clause; Article 28A with a main-purpose test and a Convention-wide beneficial-ownership gate; the modern Article 27 and Article 28; source rules confined to payment by a resident; and a source-taxing Other Income article. A single set of facts can therefore produce opposite answers depending on the year — the amending Protocol has to be read.
The rates themselves did not move. Dividends 10 per cent, interest 10 per cent, royalties and FTS 10 per cent — all unchanged by the 2017 Protocol and all conditional on beneficial ownership. What changed was entitlement (Art. 28A), exposure (the new service PE) and the loss of the MFN scope argument.
Article 22 (other income) became A source-taxing article in 2018. Paragraph 1 is the residence-only rule and paragraph 2 is the ordinary PE/fixed-base carve-out, but paragraph 3 — replaced by Article X of the amending Protocol — now provides: 'Notwithstanding the provisions of paragraphs 1 and 2, items of income of a resident of a Contracting State not dealt with in the foregoing articles of this Convention and arising in the other contracting state may also be taxed in that other contracting state.' So from FY 2018-19 any income outside the distributive rules remains fully taxable at source. The marker shows paragraph 3 as substituted, so a paragraph 3 existed before; what it said is not reproduced and cannot be established from this record.
The surviving paragraph of the 1996 protocol is an anti-force-of-attraction rule for turnkey contracts and it is the mirror image of what the Turkish, Hungarian and Mexican protocols do. It bars determining PE profits on the total amount received by the enterprise or on the total contract value, and confines them to the remuneration attributable to the PE's actual activity — expressly naming contracts for the survey, supply, installation or construction of industrial, commercial or scientific equipment or premises, or of public works. For an epc contractor with an Indian PE this is a valuable provision and it survived the 2017 Protocol untouched.
The 2017 protocol also added A corresponding-adjustment obligation. Article VI numbered the existing Article 9 as paragraph 1 and added a paragraph 2 requiring the other State to 'make an appropriate adjustment to the amount of the tax charged therein on those profits' where a primary transfer-pricing adjustment is made, with the competent authorities to consult if necessary. Before 2018 this treaty had no corresponding-adjustment provision at all.
Two smaller 2017 changes worth knowing. Article III replaced Art. 4(1) to add place of incorporation as a residence criterion, with an express understanding that it 'includes place of registration' — which matters for entities registered but not incorporated in Kazakhstan. Article II added to Art. 3(2) the sentence 'Any meaning under the applicable tax laws of that Contracting State prevailing over a meaning given to the term under other laws of that Contracting State' — a tax-law-primacy rule for undefined terms, ungrammatical as printed but clear in intent.
Overall shape after 2018. Uniform 10 per cent rates with a reciprocal branch-profits tax at the same rate; a very long 12-month construction PE but a 6-month exploration PE and a 90-day service PE with group aggregation; a single-limb agency rule that is the narrowest in the batch; an FTS limb with no make-available filter and no MFN clause left to import one; unrestricted source taxation of share gains; a source-taxing Other Income article; and a short LOB whose paragraph 3 makes beneficial ownership a condition of every benefit of the Convention.

What this page does not tell you. Kazakhstan'S MLI position is not established from the sources used here, and this is the most significant gap in this record. Kazakhstan signed the MLI on 7 June 2017 — six months after signing the bilateral amending Protocol — yet no synthesised text has been identified from the sources used here. The conclusion that no MLI overlay applies rests solely on that absence, which may reflect the coverage of the sources used here rather than the underlying legal position. If both States have listed this Convention as a Covered Tax Agreement and Kazakhstan has deposited its instrument of ratification, an MLI PPT would apply in addition to Article 28A, and the anti-fragmentation, commissionnaire and 365-day rules would overlay Articles 5 and 13 — the last of which is the one thing the 2017 Protocol did not supply. The OECD Depositary listing must be checked before relying on this record's 'no PPT' conclusion. Whether any notification was ever issued under the now-deleted MFN clause: none appears in the Kazakhstan material, and I take that as establishing only that none is recorded here. Whether a separate notification under s.90(1) of the Income-tax Act was legally required before the clause could be invoked for FY 2017-18 and earlier — a question on which Indian authority has been divided — is not answered by the treaty text and is deliberately not decided in this record. Which third-State treaties actually satisfied the trigger, and what 'scope more restricted' was conceded in them, also cannot be established from the Kazakhstan records alone. The Gazette page/part references for G.S.R. 633(E) of 31-10-1997 and S.O. 1589(E) of 12-4-2018 are not given; only the numbers, internal numbers and file numbers. The Introduction states that the Convention 'will enter into force, on the second day of the October, 1997' — future tense, in a notification dated 31-10-1997, after that date. The discrepancy is not explained anywhere in the sources used here. The pre-2018 text of article 22(3), article 27 and article 28 is not reproduced. Each is shown as substituted but the superseded wording is not available here. Any question about Other Income, exchange of information or collection assistance for FY 2017-18 or earlier cannot be answered from this record. Art. 11(3)(ii) allows further exempt 'governmental bank or financial institution/agency' to be 'mutually agreed upon between the two Contracting States'. Whether any have been agreed, and by what instrument, is not established from the sources used here. Note also that no Indian development bank is named in the article as it stands. Art. 13(4) uses 'principally' without definition — no percentage, no valuation date, no look-back period; the 2017 Protocol did not supply one and no MLI applies on the face of the record. Art. 12(4) (the effectively-connected carve-out) refers only to 'the beneficial owner of the royalties' and to 'the right or property in respect of which the royalties are paid', omitting fees for technical services, even though Art. 12(5) and (6) both cover FTS expressly. Whether the omission is deliberate cannot be established from the sources used here. Art. 5(3)(b) covers installations, structures, drilling rigs and ships used for the exploration of natural resources. It says nothing about exploitation or production, which fall to be tested under Art. 5(2)(f) with no duration threshold. The line between the two is not drawn by the treaty.

The India–Kazakhstan tax treaty