India–Namibia 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 none: no qualifying-holding tier, no minimum percentage of capital or shares, no holding period and no second residual rate, so a controlling parent and a portfolio investor are capped identically…	Article 10, paragraph 2
Interest	10 per cent of the gross amount of the interest — Art. 11(2), conditional on the recipient being the beneficial owner. A single flat ceiling.	Art. 11(3) is the most open-ended interest exemption of any treaty in this group, and the practical result is that it is the least useful. "Interest arising in a Contracting State shall be exempt from tax in…	Article 11, paragraph 2 and 3
Royalties	10 per cent of the gross amount of the royalties — Art. 12(2), conditional on the recipient being the beneficial owner. Fees for technical services are capped at the same 10 per cent but under a separate article, Article 14.	The Art. 12(3) definition is distinctive in two respects and both change answers. First, it expressly names "computer programme" as a category of royalty, which is unusual for an Indian treaty of 1997 and puts…	Article 12, paragraph 2 and 3
Fees for technical services	10 per cent of the gross amount of such fees — Art. 14(2), under a separate article of its own headed "Fees for technical services", conditional on the recipient being the beneficial owner.	There is a dedicated fees-for-technical-services article — Article 14 — and it has no make-available limb. Two structural points first. This is one of the few Indian treaties with a stand-alone article for…	Article 14, paragraph 2 and 3

Status

In force	The Convention between the Government of the Republic of India and the Government of the Republic of Namibia was signed at New Delhi on 15 February 1997. The notification recites that the Convention "has entered into force on 22nd January, 1999 on the notification by both the Contracting States to each other of the completion of the procedures as required by article 29 of the said Convention". Article 29 provides that each State notifies the other through diplomatic channels of the completion of its procedures and that "This Convention shall enter into force on the date of the later of these notifications". Its effect in India, under Article 29(b), is in respect of taxes withheld at source for amounts paid or credited on or after the first day of April in the calendar year next following that in which the Convention enters into force, and in respect of other taxes for any fiscal year beginning on or after the first day of April in that calendar year — on entry into force in calendar 1999, from 1 April 2000, that is fiscal year 2000-01. In Namibia the equivalent date is 1 March 2000, Namibia's tax year beginning in March. The operative part of the notification directs only that all the provisions "shall be given effect to in the Union of India", without repeating a date. Done in duplicate at New Delhi "in the English and Hindi languages, both the texts being equally authentic. In case of any divergence in interpretation, the English text shall prevail." Note that this Convention covers taxes on income and on capital gains, and that on the Namibian side the covered taxes include the non-resident shareholders' tax and the petroleum income-tax as well as the income-tax.
Given effect by	Notification No. G.S.R. 196(E), dated 8 March 1999, made "in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961)". The department's record prints the reference as "Notification : No. GSR 196(E), dated 8-3-1999" and carries no separate notification serial number, no F. No. And no signatory's name. The recital is drafted unusually: it refers not to an annexed Convention but to "the Convention stated in the Schedule below", and the operative direction is that "all the provisions of the Convention stated in the Schedule shall be given effect to in the Union of India". The Convention is described in the recital as being "for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains" — note "income and capital gains", not "income" alone and not "income and capital". That phrase is carried through into the title of the Convention itself and into Article 2, and it is a feature of this instrument rather than a slip: capital gains are treated as a distinct head of covered tax. The notification is made under section 90 alone, with no parallel invocation of section 44A of the Wealth-tax Act, 1957, so unlike the Mongolia and Georgia treaties there is no capital or wealth-tax limb. The recital records entry into force on 22 January 1999 "on the notification by both the Contracting States to each other of the completion of the procedures as required by article 29 of the said Convention". The section-90 direction carries no commencement date of its own, so the effective dates are those in Article 29.
Modified by the MLI	No synthesised text was found for this treaty in the source searched.

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 none: no qualifying-holding tier, no minimum percentage of capital or shares, no holding period and no second residual rate, so a controlling parent and a portfolio investor are capped identically. 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 condition is framed in the older way — "if the recipient is the beneficial owner of the dividends" — which requires the beneficial owner to be the recipient but does not add the further requirement, found in India's post-2010 treaties, that the beneficial owner be a resident of the other Contracting State. Residence enters only through Art. 10(1). Because no MLI applies, no 365-day holding requirement has been imported.
Where this comes from	Article 10, paragraph 2

Two points specific to this Convention. First, the Art. 10(3) definition is wider than the standard formula: dividends means "income from shares of all kinds or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident". "Shares of all kinds" is broader than the plain "shares" used in the Colombia, Georgia and Uganda definitions and is apt to cover preference and other special classes without argument. Second, there is no paragraph corresponding to the modern Art. 10(5) — the restriction on extra-territorial taxation of dividends and on taxing a company's undistributed profits. Article 10 stops at paragraph 4. Every other treaty in this group carries that paragraph, and its absence means the Convention places no treaty limit on a Contracting State taxing dividends paid by a company of the other State out of profits arising in the first State, nor on a secondary tax on undistributed profits. Art. 10(4) is the effectively-connected carve-out, and note the cross-reference: it refers the income to "article 7 or 15, as the case may be". Article 15 in this Convention is Independent Personal Services, not Article 14, because fees for technical services occupy Article 14 and push the personal services articles up by one. Every internal cross-reference of this kind in Articles 10, 11, 12 and 14 means Article 15, and a reference to "Article 14" lifted from another Indian treaty will land on the FTS article instead.

Interest

Rate	10 per cent of the gross amount of the interest — Art. 11(2), conditional on the recipient being the beneficial owner. A single flat ceiling.
Exemptions	Art. 11(3) is the most open-ended interest exemption of any treaty in this group, and the practical result is that it is the least useful. "Interest arising in a Contracting State shall be exempt from tax in that State provided it is derived and beneficially owned by: (a) the Government, a political sub-division or a local authority of the other Contracting State; or (b) such agency or instrumentality of the Government of the other Contracting State as may be agreed in writing between the competent authorities of both Contracting States." The usual double requirement is present — the claimant must both derive the interest and beneficially own it. But limb (b) names nobody. There is no list of institutions at all: not the Reserve Bank of India, not the Export-Import Bank of India, not the National Housing Bank, and not the Bank of Namibia. Every other treaty in this group names at least the two central banks in the text — Syria names the Reserve Bank and the Central Bank of Syria, Mongolia names the two central banks plus idbi and the Trade and Development Bank of Mongolia, Colombia names four institutions, Georgia and Albania name three on the Indian side. Namibia names none. Two consequences follow. First, the only exemption that operates on the face of the Convention is limb (a), for the Government, a political sub-division or a local authority. Second, any institutional exemption depends entirely on a written agreement between the competent authorities, and limb (b) is doubly confined: the beneficiary must be an "agency or instrumentality of the Government" — so a commercial bank cannot qualify however it is agreed, unlike the Uganda formulation which reaches "any other bank" — and the agreement must be "in writing", which is a stricter requirement than the "exchange of letters" contemplated by the Colombia and Georgia articles. The notified text reproduces no such agreement. As the record stands, a claim that the Reserve Bank of India or any Indian development institution is exempt at source on Namibian interest has no textual foothold and depends on producing a written competent-authority agreement. Penalty charges for late payment are excluded from the definition of interest by the closing sentence of Art. 11(4).
Where this comes from	Article 11, paragraph 2 and 3

Art. 11(6) is the source rule in the wide form, including the government-payer limb: "Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political sub-division, a local authority or a resident of that State", with the usual PE/fixed-base override in the second sentence where the indebtedness was incurred in connection with, and the interest is borne by, a permanent establishment or fixed base. That is wider than the Colombia, Georgia and Syria interest source rules, which omit the government-payer limb. Art. 11(4) defines interest as income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, expressly including government securities and bonds or debentures with their premiums and prizes; it does not sweep in amounts treated as interest under the source State's domestic law. Art. 11(5) refers effectively-connected debt-claims to "article 7 or 15" — Article 15 being Independent Personal Services in this Convention — and Art. 11(7) limits the article to the arm's-length amount. Note that the drafting throughout Article 11 uses "he or she", which is unusual for an Indian treaty of 1997 and reflects Namibian drafting practice; nothing turns on it.

Royalties

Rate	10 per cent of the gross amount of the royalties — Art. 12(2), conditional on the recipient being the beneficial owner. Fees for technical services are capped at the same 10 per cent but under a separate article, Article 14.
Where this comes from	Article 12, paragraph 2 and 3

The Art. 12(3) definition is distinctive in two respects and both change answers. First, it expressly names "computer programme" as a category of royalty, which is unusual for an Indian treaty of 1997 and puts beyond argument at the level of the treaty text that consideration for the use of or right to use a computer programme is a royalty. Second, and more consequentially, it qualifies the equipment limb. The definition 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 cinematograph films and films or tapes used for radio or television broadcasting, any patent, trade mark, design or model, computer programme, plan, secret formula or process, or for the use of, or the right to use industrial, commercial or scientific equipment involving a transfer of know-how or for information concerning industrial, commercial or scientific experience." On the face of the printed text the words "involving a transfer of know-how" attach to the equipment limb. If that is right — and the word order supports it — then bare equipment hire with no transfer of know-how is outside the royalty definition altogether and falls to Article 7, taxable in India only through a permanent establishment on a net basis. That is a materially narrower equipment limb than any other treaty in this group: Colombia, Georgia, Syria, Mongolia, Uganda and Kyrgyzstan all bring bare equipment rental into the royalty article without any know-how condition. The point is worth pressing in any case involving equipment leased into India by a Namibian lessor, and the counter-argument — that the qualifying words attach only to the immediately following information limb, or govern the whole enumeration — has to contend with the fact that the information limb already speaks of "information concerning industrial, commercial or scientific experience", which is itself the classic know-how formula and would be made redundant by such a reading. There is no protocol to resolve it. Art. 12(5) is the source rule in the wide form, including the government-payer limb, with the PE/fixed-base override. Art. 12(4) refers effectively-connected royalties to "article 7 or 15", and Art. 12(6) limits the article to the arm's-length amount. Note that royalties and technical fees are in separate articles here, so characterisation between them matters even though the rates coincide: the definitions differ, the articles have separate source rules, and Art. 5(3)(b) excludes Article 14 services from the service permanent establishment while saying nothing about royalties.

Fees for technical services

Rate	10 per cent of the gross amount of such fees — Art. 14(2), under a separate article of its own headed "Fees for technical services", conditional on the recipient being the beneficial owner.
Make-available requirement	No
Where this comes from	Article 14, paragraph 2 and 3

There is a dedicated fees-for-technical-services article — Article 14 — and it has no make-available limb. Two structural points first. This is one of the few Indian treaties with a stand-alone article for technical-service fees rather than a limb inside the royalties article; among the treaties in this group only Namibia and Kenya are drafted that way, and everywhere else — Uganda, Georgia, Colombia, Kyrgyzstan, Mongolia — the FTS provision sits in Article 12. The consequence is a numbering shift that runs through the whole Convention: Article 12 is Royalties, Article 13 Capital gains, Article 14 Fees for technical services, Article 15 Independent personal services, Article 16 Dependent personal services. Every internal cross-reference to "article 15" in Articles 10, 11, 12 and 14 means independent personal services, and a citation to "Article 14" lifted from another Indian treaty will land on the FTS article rather than on independent personal services. Now the definition. Art. 14(3): "The term 'fees for technical services' as used in this article means payments of any kind to any person, other than to an employee of the person making the payments, in consideration for any services of a technical, managerial or consultancy nature." The words "make available", "enable", "technical plan" and "technical design" appear nowhere in the Convention, and there is no protocol in which they could appear. A Namibian service provider cannot argue that nothing was transmitted to the Indian payer. Four features of the definition matter. (i) It is drafted by reference to the payee — "any person, other than to an employee of the person making the payments" — rather than by cross-reference to the personal services articles. There is no exclusion for payments falling within Articles 15 and 16, which the Uganda, Georgia, Colombia and Kyrgyz definitions all carry. So, as under the Mongolia Agreement, an individual consultant's fee is within the literal words of Art. 14(3) even though the same income answers the description in Art. 15, and the Convention supplies no express rule of priority between them. (ii) Three categories only — technical, managerial or consultancy. "Professional" services are not named, and note that the order differs from the usual Indian formula, which puts managerial first; nothing turns on the order. (iii) There is no inclusive limb for "the provision of services of technical or other personnel", which the Uganda, Georgia, Kyrgyz and Mongolia definitions all carry and which Colombia supplies by protocol. Whether a pure manpower-supply or secondment arrangement is "consideration for services of a technical, managerial or consultancy nature" is therefore a question the text leaves open, and the argument that it is not has more room here than under those treaties. (iv) There is no negative list. The interaction with the permanent establishment article is where this Convention is genuinely unusual, and it runs the opposite way from every other treaty in this group. Art. 5(3)(b) creates a service PE for "the furnishing of services, excluding those referred to in article 14" — so technical, managerial and consultancy services are expressly carved out of the service permanent establishment. Elsewhere an Indian-source service fee is exposed on two fronts at once, gross under the FTS article and net under Arts. 5 and 7 if the day count is crossed. Here the two are mutually exclusive by design: Article 14 services cannot generate a service PE however long the personnel remain, and the service PE limb is left to catch only services outside Article 14. Art. 14(4) still refers effectively-connected fees to Art. 7 where there is a permanent establishment arising on some other ground, and Art. 14(5) is a source rule which — unlike the royalty source rule in Art. 12(5) — refers only to a permanent establishment and omits "fixed base". Art. 14(6) is the special-relationship rule, and note its unusual drafting: it applies where the fees exceed "for whatever reason" the amount that would have been agreed between independent parties. There is no MFN clause in the Convention, so no make-available limb can be imported from a later Indian treaty.

Capital gains on shares

Treatment	Source taxation of share gains is preserved, and in the widest terms of any treaty in this group. Art. 13(5) is the general limb: "Gains derived by a resident of a Contracting State from the sale, exchange or other disposition, directly or indirectly, of shares other than those mentioned in paragraph 4, or similar rights in a company which is a resident of the other Contracting State may also be taxed in that other State." Three phrases take this well beyond the standard formula. "Sale, exchange or other disposition" is wider than the plain "alienation" used in the Uganda, Kyrgyz, Georgia, Mongolia and Colombia texts. "Directly or indirectly" is the striking one: it appears in the operative words describing the disposition, not merely in a land-rich asset test, so on its face the paragraph reaches an indirect disposal of shares in a resident company — a disposal effected through an intermediate holding vehicle — which the equivalent paragraphs in the other treaties in this group do not reach at all. And "or similar rights" extends the limb beyond shares to comparable participations. Art. 13(4) is the land-rich limb and it too is wide: "Gains from the alienation of shares or similar rights being shares in a company, the assets of which consist principally of immovable property situated in a Contracting State, may also be taxed in that State. Gains from the alienation of an interest in a partnership, trust or estate, the property of which consists principally of immovable property situated in a Contracting State, may also be taxed in that State." The second sentence extends source taxation to interests in a partnership, trust or estate — which is what MLI Article 9(4) supplies elsewhere, agreed here bilaterally in 1997 without needing the MLI. Art. 13(1) is wider still than its counterparts, because it folds the land-rich share limb into the immovable-property rule as well: gains from the alienation of immovable property referred to in Article 6, "or from the alienation of shares in a company the assets of which consist principally of such property", may also be taxed in the situs State. So land-rich share gains are caught twice over, by Art. 13(1) and by Art. 13(4). Art. 13(2) covers movable property of a permanent establishment or fixed base, including gains on alienating the PE itself. Art. 13(3) allocates gains on ships or aircraft operated in international traffic, and movable property pertaining to their operation, exclusively to "the Contracting State in which the place of effective management of the enterprise is situated" — the modern test, unlike Mongolia's composite registration-and-headquarters test. Art. 13(6) is the residual: gains from any property other than that referred to "hereinabove" are taxable only in the alienator's State of residence.
Grandfathering	None. The Convention fixes no grandfathering date, carries no acquisition-date cut-off for shares and has no transitional paragraph in Article 13 or Article 29. It has had effect in India from FY 2000-01 and has never been amended. Because no MLI applies, no 365-day look-back has been added to Art. 13(4) — but note that the parties supplied bilaterally what the MLI would otherwise have added, in the shape of the partnership, trust and estate extension in the second sentence of Art. 13(4) and the "directly or indirectly" language in Art. 13(5). A disposal is tested under the same rules whenever the shares were acquired, and there is no predecessor agreement whose transitional treatment would have to be considered: this is India's first and only Convention with Namibia on the sources used here.
Conditions	Art. 13(5) is unconditional as to holding: no percentage threshold, no minimum period, no listing carve-out and no de minimis. It does carry one requirement the equivalent paragraphs elsewhere do not state so explicitly — the company must be "a resident of the other Contracting State", framed from the alienator's perspective, so the paragraph is expressed to operate where a resident of one State disposes of shares in a company resident in the other. Art. 13(4) turns on the undefined word "principally": the Convention supplies no percentage, no valuation date and no averaging rule, and there is no protocol to supply them; contrast Colombia, where the equivalent paragraph writes the test into the text as more than 50 per cent of aggregate asset value. Note also that Art. 13(4) measures the test against "the assets of which" the company consists, where Art. 13(1) speaks of "the assets of which consist principally of such property" and the Uganda, Kyrgyz and Mongolia equivalents speak of "the property of which consists directly or indirectly principally" — the Namibian land-rich limb omits "directly or indirectly" from the asset test even though Art. 13(5) uses those words in its operative limb, so the two paragraphs are not drafted in parallel. Beneficial ownership is not required for capital gains; that condition appears only in Articles 10, 11, 12 and 14. There is no anti-abuse condition attached to Article 13 and no main-purpose test anywhere in the Convention (see anti_abuse), but a gain left to residence-State taxation by Art. 13(6) is nonetheless exposed to Article 24, the switch-over clause, if the residence State does not in fact tax it.
Where this comes from	Article 13, paragraph 1, 4, 5 and 6

Permanent establishment

Construction or installation PE	More than six months — Art. 5(3)(a): "a building site, a construction, assembly or installation project or supervisory activities in connection therewith, but only where such site, project or activity continues for a period of more than six months". The covered works are wide — building site, construction, assembly and installation projects with their connected supervisory activities are all named — so there is no gap for a pure installation contract of the kind the Uganda and Mongolia texts leave open. The threshold sits in Art. 5(3), a paragraph headed by the words "The term 'permanent establishment' likewise encompasses", which is a cleaner structure than burying it in the inclusive list. Note that Art. 5(3) joins its two sub-paragraphs with "or", so (a) and (b) are alternative routes and time under one is not aggregated with time under the other. The clock runs on the continuation of the site, project or activity; the Convention says nothing about when it starts, so there is no equivalent of the Kenya protocol's exclusion of purely preparatory mobilisation time, and there is no protocol here at all. There is no anti-splitting rule: no aggregation of related-enterprise time as in the Colombia Protocol, and no MLI Article 14, because no synthesised text exists. Separately, note Art. 5(2)(g), which carries a duration test of its own inside the inclusive list: "an installation or structure used for the exploration of natural resources, provided that the installation or structure continues for a period of not less than six months". Two points on it. The word is "exploration", not exploitation or extraction — a producing installation falls outside (g) and is tested under Art. 5(2)(f), "a mine, an oil or gas well, a quarry or any other place of extraction of natural resources", which carries no duration test at all. And the inequality is inclusive — "not less than six months" — so exactly six months is enough under (g), where Art. 5(3)(a) requires "more than" six months. The same figure appears twice in the same Article with opposite inequalities.
Service PE	Yes — more than six months within any twelve-month period, for the same or a connected project, and with a carve-out that no other treaty in this group carries. Art. 5(3)(b): "the furnishing of services, excluding those referred to in article 14, by an enterprise of a Contracting State through employees or other personnel engaged in the other Contracting State, provided that such activities continue for the same project or a connected project for a period or periods aggregating more than six months within any twelve month period." The words "excluding those referred to in article 14" are the point. Article 14 is Fees for technical services, so services of a technical, managerial or consultancy nature are taken out of the service permanent establishment altogether. Everywhere else in India's network a service provider faces two exposures at once — a gross withholding charge under the FTS provision and net-basis PE taxation if the day count is crossed. Under this Convention the two are mutually exclusive by design: an Article 14 service cannot create a service PE however long the personnel remain in India, and Art. 5(3)(b) is left to catch only services outside Article 14. What is left inside Art. 5(3)(b) is therefore services that are neither technical nor managerial nor consultancy in nature — a narrower residue than the paragraph appears to describe. The other elements are conventional but worth noting: the threshold is "more than" six months, so exactly six months does not create a PE; the window is "any twelve month period", a rolling test rather than the fiscal year; and aggregation is confined to "the same project or a connected project". The drafting of the personnel requirement is unusual — "through employees or other personnel engaged in the other Contracting State", where the other treaties say "engaged by the enterprise for such purpose". "Engaged in" reads as describing where the personnel are engaged in activity rather than by whom they are hired, which if anything widens the limb, but the Convention gives no guidance.
Agency PE	Yes — Art. 5(5), but in the two-limb form. A person other than an independent agent within Art. 5(6), acting in a Contracting State on behalf of an enterprise of the other State, creates a PE in respect of any activities which that person undertakes for the enterprise if such person: "(a) has and habitually exercises in that 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 under the provisions of that paragraph; or (b) has no such authority but nevertheless maintains habitually in the first-mentioned Contracting State a stock of goods or merchandise from which he or she regularly delivers goods or merchandise on behalf of the enterprise." There is no third limb. The "habitually secures orders" limb — present in the Uganda, Kyrgyz, Colombia, Georgia and Syria agency rules, and extended to group companies in the first two — is absent here, which narrows the agency test appreciably: an Indian agent who habitually secures orders for a Namibian enterprise but holds no contracting authority and maintains no stock is not a permanent establishment under this Convention. Note also that Art. 5(5) is expressed to operate "notwithstanding the provisions of paragraphs 1, 2 and 3", picking up paragraph 3 as well as 1 and 2, which the equivalent provisions elsewhere generally do not. Limb (a) uses the pre-beps "in the name of the enterprise" formulation and has not been replaced by the MLI commissionnaire rule. Art. 5(6) is the independent-agent exclusion with the single-limb anti-exclusivity rider — "However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, he or she will not be considered an agent of an independent status within the meaning of this paragraph" — so exclusivity alone defeats independence, without the cumulative non-arm's-length requirement found in the Kenya text. There is no insurance permanent establishment in this Convention: no counterpart to Art. 5(5) of the Uganda Convention or Art. 5(6) of the Colombia, Georgia and Syria agreements, so a Namibian insurer collecting premiums in India or insuring Indian risks through a dependent person is not deemed to have a PE on that ground alone. Art. 5(7) is the ordinary control rule.
Where this comes from	Article 5, paragraph 2(g), 3(a), 3(b), 5 and 6

Art. 5(2) is the inclusive list and it carries two items not found in the parallel lists elsewhere. Sub-paragraph (g) is the natural-resources exploration installation with its "not less than six months" test, discussed under construction_months. Sub-paragraph (i) is country-specific and unique in this group: "in the case of Namibia, a guest farm or other operation of a similar nature". It applies to Namibia only, has no duration test, and reflects the importance of tourism and hunting operations to the Namibian tax base; there is no reciprocal Indian limb. The list otherwise runs place of management, branch, office, factory, workshop, extraction site, and "(h) a warehouse, in relation to a person providing storage facilities for others" — the warehouse limb without the "on payment of charges" qualification that the Syrian text adds. Art. 5(4) is the specific-activity exclusion list and its treatment of delivery is unlike any other treaty in this group. Sub-paragraph (a) excludes the use of facilities solely for "storage or display or the occasional delivery of goods or merchandise belonging to the enterprise", and sub-paragraph (b) a stock held solely for "storage, display or occasional delivery". The qualifier is "occasional". Delivery is excluded, but only occasional delivery — so a regular or systematic delivery operation is outside the exclusion and capable of constituting a permanent establishment, while an occasional one is protected. Compare Uganda and Kyrgyzstan, which exclude delivery without qualification, and Colombia, Georgia and Syria, which omit delivery from the exclusions entirely. The Namibian formulation sits between the two and turns on a word the Convention does not define. Read it with Art. 5(5)(b), which affirmatively creates a PE where a dependent agent maintains a stock from which he or she "regularly delivers" — the two provisions use "occasional" and "regularly" as opposites, which is the clearest indication in the instrument of where the line is meant to fall. Sub-paragraphs (c) to (f) are standard, including the combination clause at (f). Because no MLI applies there is no anti-fragmentation overlay and no "closely related enterprise" concept.

Anti-abuse: limitation of benefits, and the MLI

LOB	Article 24 is headed "Limitation of benefits" and is not a limitation-of-benefits article in the modern sense at all. It is a reciprocal switch-over clause, and reading the heading without the text is the single easiest mistake to make about this Convention. In full: "1. If, in accordance with the provisions of this Convention, the right of India to tax income is limited and according to the Namibian tax laws, the income is regarded as income from foreign sources and, therefore, exempted from Namibian tax, India may tax such income as if this Convention did not exist. 2. If, in accordance with the provisions of this Convention, the right of Namibia to tax income from Namibian sources or deemed to be from Namibian sources is limited and if such income is in accordance with the Indian tax laws not taxed in India, Namibia may tax such income as if this Convention did not exist." There is no qualified-person test, no ownership test, no base-erosion test, no stock-exchange test, no active-trade-or-business clause, no competent-authority discretion, and no bona-fide-business-activities provision. Nor is there a main-purpose or principal-purpose test anywhere else in the Convention — Article 24 is the only article addressed to benefits at all, and it says nothing about purpose. What Article 24 does instead is address double non-taxation. It is the provision that decides cases where Namibia's source-based system leaves foreign-source income untaxed: where India's taxing right is limited by the Convention and Namibia treats the income as foreign-source and exempt, India recovers full domestic taxing rights "as if this Convention did not exist". That is a strong remedy — not a reduction of the treaty benefit but its complete withdrawal for that income — and it operates automatically on the stated conditions, without any competent-authority process, notification requirement or purpose enquiry. Paragraph 1 is the limb that matters for Indian practice, and any claim to Indian relief on income that Namibia does not tax should be tested against it before anything else. Note two limits on it. It is engaged only where the Namibian non-taxation arises because the income "is regarded as income from foreign sources and, therefore, exempted from Namibian tax" — non-taxation for some other reason, such as a holiday, a loss offset or a domestic exemption unconnected with source, is outside the words. And paragraph 2 is drafted asymmetrically: it applies where income from Namibian sources "is in accordance with the Indian tax laws not taxed in India", without the foreign-source condition, so Namibia's switch-over right is triggered by any Indian non-taxation whereas India's is triggered only by the source-based exemption. The two paragraphs are not mirror images.
Where this comes from	Article 24 (a two-paragraph switch-over clause, not a benefits-limitation article). There is no main-purpose test, no principal purposes test and no bona-fide-business provision anywhere in the Convention.

LOB

Article 24 is headed "Limitation of benefits" and is not a limitation-of-benefits article in the modern sense at all. It is a reciprocal switch-over clause, and reading the heading without the text is the single easiest mistake to make about this Convention. In full: "1. If, in accordance with the provisions of this Convention, the right of India to tax income is limited and according to the Namibian tax laws, the income is regarded as income from foreign sources and, therefore, exempted from Namibian tax, India may tax such income as if this Convention did not exist. 2. If, in accordance with the provisions of this Convention, the right of Namibia to tax income from Namibian sources or deemed to be from Namibian sources is limited and if such income is in accordance with the Indian tax laws not taxed in India, Namibia may tax such income as if this Convention did not exist." There is no qualified-person test, no ownership test, no base-erosion test, no stock-exchange test, no active-trade-or-business clause, no competent-authority discretion, and no bona-fide-business-activities provision. Nor is there a main-purpose or principal-purpose test anywhere else in the Convention — Article 24 is the only article addressed to benefits at all, and it says nothing about purpose. What Article 24 does instead is address double non-taxation. It is the provision that decides cases where Namibia's source-based system leaves foreign-source income untaxed: where India's taxing right is limited by the Convention and Namibia treats the income as foreign-source and exempt, India recovers full domestic taxing rights "as if this Convention did not exist". That is a strong remedy — not a reduction of the treaty benefit but its complete withdrawal for that income — and it operates automatically on the stated conditions, without any competent-authority process, notification requirement or purpose enquiry. Paragraph 1 is the limb that matters for Indian practice, and any claim to Indian relief on income that Namibia does not tax should be tested against it before anything else. Note two limits on it. It is engaged only where the Namibian non-taxation arises because the income "is regarded as income from foreign sources and, therefore, exempted from Namibian tax" — non-taxation for some other reason, such as a holiday, a loss offset or a domestic exemption unconnected with source, is outside the words. And paragraph 2 is drafted asymmetrically: it applies where income from Namibian sources "is in accordance with the Indian tax laws not taxed in India", without the foreign-source condition, so Namibia's switch-over right is triggered by any Indian non-taxation whereas India's is triggered only by the source-based exemption. The two paragraphs are not mirror images.

Where this comes from

Article 24 (a two-paragraph switch-over clause, not a benefits-limitation article). There is no main-purpose test, no principal purposes test and no bona-fide-business provision anywhere in the Convention.

The text notified in 1999 is what this record carries. The Income Tax Department publishes MLI synthesised texts for those of its treaties the MLI has modified, and a search of that collection returns no Namibia entry — Georgia has one, Namibia does not. There is therefore only one text of this Convention and nothing to reconcile. None of the MLI overlay is established as applying: no anti-treaty-shopping preamble, no MLI principal purposes test, no saving clause, no anti-fragmentation rule on Art. 5(4), no commissionnaire rule on Art. 5(5), no 365-day look-back on immovable-property share gains under Art. 13(4), and no splitting-up-of-contracts rule on the six-month thresholds in Art. 5(3). Two of those omissions matter less here than elsewhere, because the parties reached the same destination bilaterally in 1997. Art. 13(4) already extends source taxation to interests in a partnership, trust or estate holding immovable property, which is what MLI Article 9(4) supplies elsewhere; and Art. 13(5) already reaches dispositions "directly or indirectly" of shares "or similar rights", which is wider than anything the MLI would have added. What the absence of an MLI overlay does mean is that no principal purposes test applies — and, critically, this Convention has no bilateral main-purpose test either. Article 24 is headed "Limitation of benefits" but is a switch-over clause, not an anti-abuse article (see anti_abuse). So on the material used here there is no anti-treaty-shopping rule in the India-Namibia Convention from any source. Whether Namibia has signed or ratified the MLI, and whether India has listed this Convention as a Covered Tax Agreement, is not established from the sources used here.

The protocols, in order

A treaty read without its protocols is a wrong answer.

No Protocol is annexed and no amending notification appears in the department's record of this notification. The instrument notified is the Convention alone, as signed at New Delhi on 15 February 1997; the scheduled text runs from the preamble through Article 30 and the signature block with nothing following it, and the citation line names one notification and one date with no "as amended by", no corrigendum and no trailing footnote. The absence of a protocol matters here because two provisions would normally be glossed by one: Art. 5(3)(a) says nothing about when the six-month construction clock starts, and Art. 12(3) attaches the words "involving a transfer of know-how" to the equipment limb of the royalty definition without explaining their reach. Neither point is addressed anywhere in the instrument.
No synthesised text exists for Namibia, so no MLI change to this Convention is established here. See synthesised_text.

The words themselves

Quoted from the treaty as notified.

Gains derived by a resident of a Contracting State from the sale, exchange or other disposition, directly or indirectly, of shares other than those mentioned in paragraph 4, or similar rights in a company which is a resident of the other Contracting State may also be taxed in that other State.

Article 13, paragraph 5 of the treaty as notified.

the furnishing of services, excluding those referred to in article 14, by an enterprise of a Contracting State through employees or other personnel engaged in the other Contracting State, provided that such activities continue for the same project or a connected project for a period or periods aggregating more than six months within any twelve month period.

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

If, in accordance with the provisions of this Convention, the right of India to tax income is limited and according to the Namibian tax laws, the income is regarded as income from foreign sources and, therefore, exempted from Namibian tax, India may tax such income as if this Convention did not exist.

Article 24, paragraph 1 of the treaty as notified.

or for the use of, or the right to use industrial, commercial or scientific equipment involving a transfer of know-how or for information concerning industrial, commercial or scientific experience.

Article 12, paragraph 3 of the treaty as notified.

Items of income not dealt within the foregoing articles of this Convention and derived from sources within a Contracting State shall be taxable only in that State.

Article 22 of the treaty as notified.

What to watch

Article 22 (Other income) is a single sentence and it allocates the opposite way from every other treaty in this group: "Items of income not dealt within the foregoing articles of this Convention and derived from sources within a Contracting State shall be taxable only in that State." That is exclusive taxation in the State of source, not the State of residence. Uganda, Kyrgyzstan, Georgia, Syria, Colombia and Mongolia all give residence-only treatment in paragraph 1 with a carve-out for PE income and, in some, a gambling or general source limb. Namibia has no paragraphs, no PE carve-out and no residence rule at all. Any undealt-with item of income arising in India and derived by a Namibian resident is taxable only in India — and, read the other way, Indian residents get no treaty protection from Namibian tax on undealt-with Namibian-source income.
Article 24 is a switch-over clause, not a benefits-limitation article, and the heading is misleading. It is also the only article in the Convention addressed to benefits: there is no main-purpose test, no principal purposes test, no bona-fide-business test and no qualified-person machinery, and no MLI principal purposes test applies because no synthesised text exists for Namibia. Paragraph 1 is what decides Indian cases: where India's taxing right is limited by the Convention and Namibia treats the income as foreign-source and exempt, India may tax "as if this Convention did not exist". Test any claim to Indian relief against Art. 24(1) first. Note it is engaged only by non-taxation arising from the foreign-source characterisation, not by non-taxation for other reasons, and that paragraph 2 is drafted more widely in Namibia's favour.
Art. 5(3)(b) expressly excludes Article 14 services from the service permanent establishment. That is unique among the treaties in this group and it removes the usual double exposure: a Namibian provider of technical, managerial or consultancy services faces the 10 per cent gross charge under Article 14 and cannot create a service PE however long its personnel remain in India. The corollary is that Art. 5(3)(b) is left to catch only services that are neither technical nor managerial nor consultancy — a much narrower residue than the paragraph appears to describe.
The equipment limb of the royalty definition is qualified by "involving a transfer of know-how". On the word order of Art. 12(3) those words attach to "the use of, or the right to use industrial, commercial or scientific equipment", so bare equipment hire with no know-how transfer is arguably outside the royalty article altogether and falls to Article 7, taxable in India only through a permanent establishment. No other treaty in this group qualifies its equipment limb that way. The definition also expressly names "computer programme", which is unusual for 1997 and settles the software characterisation at the level of the text. There is no protocol to resolve the equipment point either way.
The numbering is shifted by one from the Indian norm and the cross-references follow it. Fees for technical services have their own Article 14, so Independent personal services is Article 15 and Dependent personal services is Article 16. Every effectively-connected carve-out in Articles 10, 11 and 12 refers the income to "article 7 or 15", meaning independent personal services. A paragraph reference or a cross-reference lifted from another Indian treaty will land on the wrong article.
Article 13 is the widest capital-gains article in this group. Art. 13(5) reaches the "sale, exchange or other disposition, directly or indirectly" of shares "or similar rights" — the words "directly or indirectly" qualify the disposition itself, not merely an asset test, so an indirect disposal is within its terms. Art. 13(4) extends source taxation to interests in a partnership, trust or estate holding immovable property, which is what MLI Article 9(4) supplies elsewhere and which the parties agreed bilaterally in 1997. And Art. 13(1) folds land-rich share gains into the immovable-property rule as well, so they are caught twice over. There is no grandfathering and no percentage test for "principally".
The interest exemption in Art. 11(3)(b) names no institution at all — no central bank, no development bank, on either side. It covers only "such agency or instrumentality of the Government of the other Contracting State as may be agreed in writing between the competent authorities", so the beneficiary must be a government agency or instrumentality (a commercial bank cannot qualify however it is agreed) and the agreement must be in writing. Nothing in the notified text records such an agreement. As matters stand only limb (a) — the Government, a political sub-division or a local authority — operates, and a claim that the Reserve Bank of India is exempt at source requires a written competent-authority agreement to be produced.
Three thresholds in Article 5 use different inequalities and it is worth checking which applies. The natural-resources exploration installation in Art. 5(2)(g) is caught at "not less than six months", so exactly six months qualifies; the construction limb in Art. 5(3)(a) and the service limb in Art. 5(3)(b) both require "more than" six months, so exactly six months does not. Art. 5(2)(g) also covers exploration only — a producing installation falls under Art. 5(2)(f), which has no duration test at all. Note too that the agency limb in Art. 5(5) has only two limbs, with no "habitually secures orders" limb, and that there is no insurance PE anywhere in the Convention.

What this page does not tell you. The notification as printed carries no notification serial number, no F. No. And no signatory's name, and the Gazette page and part reference is not given — only "Notification : No. GSR 196(E), dated 8-3-1999". Several questions are left open on the face of the instrument and there is no protocol to answer them. The reach of the words "involving a transfer of know-how" in the royalty definition at Art. 12(3) is unresolved: on the word order they qualify the equipment limb, but the Convention supplies nothing to confirm it, and the point decides whether bare equipment hire is a royalty at all. "Occasional delivery" in Art. 5(4)(a) and (b) is undefined; the contrast with "regularly delivers" in Art. 5(5)(b) is the only guidance in the instrument. "Principally" in Art. 13(4) is undefined — no percentage, no valuation date, no averaging rule, no look-back — and Art. 13(4) omits the words "directly or indirectly" from its asset test even though Art. 13(5) uses them in its operative limb, so the two paragraphs are not parallel and the instrument does not explain why. Art. 5(3)(b)'s phrase "personnel engaged in the other Contracting State" departs from the usual "engaged by the enterprise for such purpose" and its effect is not addressed. Art. 14(3) carves out only payments to the payer's employee and gives no rule of priority against Article 15, and it contains no inclusive limb for the provision of services of technical or other personnel, so whether a pure manpower-supply arrangement is within it is open. Art. 5(3)(a) says nothing about when the six-month construction clock starts. Art. 11(3)(b) contemplates a written competent-authority agreement designating exempt government agencies or instrumentalities; whether any such agreement has been made since 1997, and which bodies it names, is not established from the sources used here. Article 10 has no paragraph corresponding to the modern Art. 10(5), so the Convention places no treaty limit on extra-territorial taxation of dividends or on taxing undistributed profits, and the instrument offers no explanation. Namibia's MLI position is not established from the sources used here: the conclusion that no principal purposes test applies rests on the absence of a synthesised text in the Income Tax Department's collection and on the notified text carrying no modification marker, not on a check of the OECD Depositary listing. Domestic-law questions that decide many cases in practice — surcharge and cess on top of the treaty rate, section 206AA, and the certification requirements in Rule 21AB — are outside the notification and outside this record.

The India–Namibia tax treaty