LEBANON

 

Agreement between the Government of India and the Government of the Republic of Lebanon for the Avoidance of Double Taxation of Income of enterprises operating aircraft

Notification No. 86/F. No. 11 (53)/63-TPL, dated 28 June, 1969

 

G.S.R. 1552-1553.--Whereas the annexed Agreement between the Government of India and the Government of the Republic of Lebanon for the avoidance of double taxation of income of enterprises operating aircraft has been ratified and the instruments of ratification exchanged, as required by Article V of the said Agreement.

 

Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961) and section 24A of the Companies (Profits) Surtax Act, 1964 (7 of 1964), the Central Government hereby directs that all the provisions of the said Agreement shall be given effect to in the Union of India.

 

ANNEXURE

 

Whereas the Government of India and the Government of the Republic of Lebanon desire to conclude an agreement for the avoidance of double taxation of income of enterprises operating aircraft chargeable to tax in the said countries in accordance with the respective laws;

 

Now therefore, the said two Governments do hereby agree as follows :

 

ARTICLE I: (1) The taxes to which the Agreement shall apply are:

 

(a)        in the case of India:

 

(i)         the income-tax including any surcharge on income-tax imposed under the Income-tax Act, 1961 (43 of 1961) as amended; and

            (ii)        the surtax imposed under the Companies (Profits) Surtax Act, 1964 (7 of 1964) as amended:

 

(hereinafter referred to as "Indian tax");

 

(b)        in the case of Republic of Lebanon: the income tax including any additional tax on income-tax prescribed under the Income-tax law issued by the Legislative Decree No. 144, dated June 12, 1959 as amended:

 

(hereinafter referred to as "Lebanese tax").

 

(2) This Agreement shall also apply to any identical or substantially similar taxes which are imposed after the date of signature of this Agreement in addition to, or in place of, the existing taxes.

 

ARTICLE II: (1) In this Agreement unless the context otherwise requires.--

 

(a)        the term "India" shall have the meaning assigned to it in Article I of the Constitution of India;

(b)        the term "the Republic of Lebanon" shall have the meaning assigned to it in the Lebanese Constitution;

(c)        the terms "a Contracting State" and the "other Contracting State" mean India or the Republic of Lebanon, as the context requires;

            (d)        the term "tax" means "Indian tax" or "Lebanese tax", as the context requires;

            (e)        the term "enterprise of a Contracting State" means--

 

(i)         an air-line designated by the Government of that State in pursuance of the Agreement dated September 19, 1964, as may be amended or revised from time to time, between the Government of India and the Government of the Republic of Lebanon relating to air services, or

(ii)        an airline which is authorised by the Government of that State by a general or special arrangement between the two Contracting State to operate charter flights between or beyond their territories.

 

(2). In the application of the provisions of this Agreement by one of the Contracting States, any term used but not defined herein shall, unless the context otherwise requires, have the meaning which it has under the laws in force in that State relating to the taxes to which this Agreement applies.

 

ARTICLE III: (1) Income derived from the operation of aircraft in international traffic by an enterprise of one of the Contracting States shall be exempt from tax in the other Contracting State.

 

(2) Paragraph (1) shall likewise apply in respect of participations in pools of any kind of enterprises engaged in air transport.

 

ARTICLE IV: The laws in force in either of the Contracting States will continue to govern the assessment and taxation of income in the Contracting States except where express provision to the contrary is made in this Agreement.

 

ARTICLE V: (1) This Agreement shall be ratified and the instruments of ratification shall be exchanged at Beirut as soon as possible.

 

(2) This Agreement shall enter into force on the date of the exchange of the instruments of ratification and its provisions shall have effect:

 

(a)        in India, in respect of the income assessable for any year of assessment commencing on or after the 1st day of April, 1962;

(b)        in Lebanon, in respect of income      assessable for any year of assessment commencing on or after the 1st day of April, 1962.

 

ARTICLE VI: This Agreement shall continue in effect indefinitely but either of the Contracting State, may on or before the 30th day of June in any calendar year after the year 1970, give notice of termination to the other Contracting State and in such event this Agreement shall cease to the effective:

 

(a)        in India, in respect of income assessable for any year of assessment commencing on or after the 1st day of April in the calendar year next following that year in which the notice is given;

(b)        in Lebanon, in respect of income assessable for any year of assessment commencing on or after the 1st day of April in the calendar year next following that year in which the notice is given.

 

In witness whereof the undersigned, duly authorised thereto, have signed the present Agreement.

 

Done in duplicate it Beirut, this 22nd day of February, one thousand nine hundred and sixty-eight in the Hindi, Arabic and English languages, all the three texts being equally authentic, except in the case of doubt, the English text shall prevail.

 

Sd. K. Srinivasan,                                                                                          Sd. Khalil Salem,

For the Government of India.                                                            For the Government of the

Republic of Lebanon.

 

PROTOCOL

 

Protocol between the Government of India and Government of the Republic of Lebanon

 

The Government of India and the Government of Republic of Lebanon.

 

Having entered into an Agreement for the avoidance of Double Taxation of Income of enterprises operating aircraft which is effected in respect of income assessable for any year of assessment commencing on or after the 1st day of April, 1962.

 

Recognizing that Air-India which is an enterprise of India and Middle East Airlines which is an enterprise of the Republic of Lebanon have been deriving income, respectively, in the Republic of Lebanon and India from the operation of aircraft in international traffic which is assessable for one or more years of assessment prior to the year of assessment commencing on the 1st day of April, 1962.

 

Considering that the Indian Income-tax Act, 1922 (11 of 1922) has been repealed with effect from the 1st day of April, 1962.

 

Have accordingly agreed at the time of signing of the said Agreement as follows :

 

The Government of India has not levied any Indian tax on the income of Middle East Airlines for any of the years of assessment aforementioned and hereby agrees not to levy such tax hereafter, and

 

The Government of the Republic of Lebanon has not levied any Lebanese tax on the income of Air-India for any of the years of Assessment aforementioned and hereby agrees not to levy such tax hereafter.

 

And, have further agreed that this Protocol shall constitute an integral part of the said Agreement.

 

In witness whereof the undersigned, duly authorised thereto, have signed the present Protocol.

 

Done in duplicate at Beirut this 22nd day of February, one thousand nine hundred and sixty-eight in the Hindi, Arabic and English languages, all the three texts being equally authentic, except in the case of doubt, the English text shall prevail.

 

Sd. K. Srinivasan,                                                                                          Sd. Khalil Salem

For the Government of India.                                                            For the Government of the

Republic of Lebanon.

 

 

SOCIALIST PEOPLES LIBYAN ARAB JAMAHIRIYA

 

Convention between the Socialist Peoples Libyan Arab Jamahiriya and the Government of the Republic of India for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income

Notification F. No. 501/17/73-FTD, dated 1, July 1982

 

G.S.R. 484(E).--Whereas the annexed Convention between the Socialist Peoples Libyan Arab Jamahiriya and the Government of the Republic of India for avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income has been ratified and the instruments of ratification exchanged as required by Article 25 of the said Convention;

 

Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961) and section 24A of the Companies (Profits) Surtax Act, 1964 (7 of 1964), the Central Government hereby directs that all the provisions of the said Convention shall given effect to in the Union of India.

 

CHAPTER I

Scope of the Convention

 

ARTICLE I: Taxes Covered.--1. This Convention shall apply to taxes on income imposed on behalf of each Contracting State or local authorities, irrespective of the manner in which they are levied.

 

2. They shall be regarded as taxes on  income all taxes imposed on total income, or on elements of income.

 

3.         The existing taxes to which this Convention  shall apply are:

 

A.        With regard to the Socialist Peoples Libyan  Arab Jamahiriya:

 

(i)         Real Estate Revenue Tax.

            (ii)        Agricultural Revenue Tax.

            (iii)       Taxes on Commercial, Industrial and professional profits, which comprise--

 

(a)        taxes on profits realised from commercial industrial and professional activities;

            (b)        taxes on Companies.

 

(iv)       Taxes on profits realised by practising Fee Professions;

            (v)        Taxes on wages, salaries and the like.

(vi)       Taxes on Income realised abroad.

            (vii)      General Tax on Income.

(viii)     Al-Jihad Tax (Defence Tax).

            (ix)       Income arising from depositing money in banks and savings accounts.

 

B.        With regard to the Republic of India:

 

(i)         The Income-tax including any surcharge thereon imposed under the Income-tax Act, 1961 (43 of 1961);

            (ii)        the surtax imposed under the Companies (Profits) Surtax Act, 1964 (7 of 1964).

 

4. The Convention shall also apply to any identical or substantially similar taxes which are subsequently imposed in addition, to, in the place of, the existing taxes. At the end of each year, the competent authorities of the Contracting States shall notify to each other any changes which have been made in their respective taxation laws.

 

CHARTER II

 

Definitions

 

ARTICLE II: General Definitions.--1. In this Convention, unless the context otherwise requires.--

 

(a)        the terms "a contracting State" and "the other Contracting State" mean 'India' or 'Libya', as the context requires;

            (b)        the term "person" comprises an individual, a company and any other body of persons;

(c)        the term "company" means any body corporate or any entity which is treated as a body corporate for tax purposes;

(d)        the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise by a resident of the other Contracting State;

(e)        the term "competent authority" with respect to the Socialist Peoples Libyan Arab Jamahiriya means the Ministry of Treasury, and with respect to India means the Ministry of Finance (Department of Revenue).

 

2. For the purposes of this Convention, the term "resident of a Contracting State" means any person who under the law of that state, is liable to taxation therein by reason of his domicile, resident, place of management or any other criterion of a similar nature;

 

3. As regards the application of the Convention by a Contracting State any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State relating to the taxes which are the subject of the Convention.

 

ARTICLE III: The Tax Home.--Without prejudice to the provisions of this Convention, the Tax Home of any income shall be deemed to be the Contracting State in which the income arises.

 

ARTICLE IV: Permanent Establishment.--1. For the purposes of this Convention, the term "permanent establishment" means a fixed place of business in which the business of the enterprise is wholly or partly carried on.

 

2. The term "permanent establishment" shall include especially :

 

(a)        a place of management;

            (b)        a branch;

            (c)        an office;

            (d)        a factory;

            (e)        a workshop;

            (f)        a mine, quarry or other place of extraction of natural resources.

            (g)        a building or building site which continues for a period of more than three months;

 

3.         The term "permanent establishment" shall not be deemed to include:

 

(a)        the use of facilities solely for the purpose of storage and display of goods or merchandise belonging to the enterprise;

(b)        the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage and display;

(c)        the maintenance of stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by any other enterprise;

(d)        the maintenance of a fixed place of business solely for the purpose purchasing goods or merchandise, or for collecting information, for the enterprise;

(e)        the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or for similar activities which have a preparatory or auxiliary character, for the enterprise.

 

4. A person acting in a Contracting State on behalf of an enterprise of the other Contracting State other than an agent of an independent status to whom paragraph 5 applies--shall be deemed to be a permanent establishment in the first-mentioned State if he has and habitually exercises in that State, an authority to conclude contracts in the name of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise.

 

5. An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, where such persons are acting independently in the ordinary course of their business.

 

6. The fact that company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in the other State (whether through a permanent establishment or otherwise) shall not itself constitute for either company a permanent establishment of the other.

 

CHAPTER III

 

Taxation of Income

 

ARTICLE V: Income from Immovable property.--1. Income from immovable property may be taxed in the Contracting State in which such property is situated.

 

2. The term "immovable property" shall be defined in accordance with the law of the Contracting State in which the property in question is situated.

 

ARTICLE VI: Business Profits.--1. The profits of an enterprise of a Contracting State shall be taxable in the State where the enterprise is situated and also in the State where it has a permanent establishment, in which case the tax shall be limited to the profits attributable to the permanent establishment.

 

2. Where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to the permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.

 

3. In the determination of the profits of a permanent establishment, there shall be allowed as deduction expenses which are incurred for the purpose of the permanent establishment whether such expenses have been incurred in the state in which the permanent establishment is situated or elsewhere in accordance with regulations of the State in which the income is taxable.

 

4. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

 

5. For the purpose of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.

 

6. Where profits include items of income which are dealt with separately in other Article of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.

 

ARTICLE VII: Shipping and Air Transport.--Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

 

ARTICLE VIII: Associated Enterprises.--Where--

 

(a)        an enterprise of a Contracting State participates directly or indirectly in the management, control or capital or an enterprise of the other Contracting State, or

(b)        the same person participate directly or indirectly in the management, control or capital of enterprise of a Contracting State, and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprise, then any profits which would but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

 

It is to be understood that the procedures available in the respective laws of each Contracting State in this regard shall be applied.

 

ARTICLE IX: Dividends.--1. Dividends paid by a Company which is registered in one of the Contracting States may be taxed in that State.

 

2. The term "dividends" shall be defined in accordance with the law of the Contracting State in which the company in question is registered.

 

ARTICLE X: Interest.--1. Interest arising in a Contracting State and paid to the resident of the other Contracting State may be taxed in the Contracting State where it arises.

 

2. The provisions of paragraph 1 shall not apply if the recipient of the interest, being a resident of a Contracting State, has in the other Contracting State in which the interest arises a permanent establishment with which the debt-claim from which the interest arises is effectively connected. In such a case, the provisions of Article 6 shall apply.

 

3. 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.

 

ARTICLE XI: Royalties.--1. Royalties arising in a Contracting State may be taxable in that State.

 

2. The term "royalties" as used in this Article means payments of any kind as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work, any patent, trade mark, design or model, plan, secret formula or process of for the use of the right to use, industrial, commercial, or scientific equipment, or for information concerning industrial, commercial or scientific experience.

 

3. The term "royalties" as used in this Article shall exclude rentals and other income in respect of cinematographic films. Such rentals, and income shall, for the purpose of this Convention, be considered the profits from business.

 

ARTICLE XII: Independent Personal Services.--1. Income derived by a resident of a Contracting State in respect of professional services or other independent activities of a similar character shall be taxable only in that State unless he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities. If he has such a fixed base, the income may be taxed in the other Contracting State but only so much of it as is attributable to that fixed base.

 

2. The term "professional services" means independent activities according to the laws and regulations in force in each Contracting State.

 

ARTICLE XIII: Dependent Personal Services.--Salaries, wages and similar emoluments arising in one of the Contracting States may be taxable in the State where the services giving rise to that income are performed but if such income is realised from work carried out on a ship or aircraft operating in the field of international transport, it shall only be taxable in the State where the place of effective management of the enterprise is situated.

 

ARTICLE XIV: Directors' Fees.--Directors' fees and similar payments derived by a resident of a Contracting State in his capacity as a member of the Board of Directors of a company which is a resident of the other Contracting State may be taxed in that other State.

 

ARTICLE XV: Artistes and Athletes.--Notwithstanding the provisions of Articles 12 and 13, income derived by public entertainers, such as theatre, motion picture, radio or television artistes and musicians and by athletes, from their personal activities as such may be taxed in the Contracting State in which these activities are exercised.

 

ARTICLE XVI: Pensions.--Pensions and other similar income paid to a resident of Contracting State in consideration of past employment shall be taxable only in that State.

 

ARTICLE XVII: Government Functions/Civil Service.--1. Remuneration paid by the Government of one of the Contracting States to any individual for services rendered to that Government in the discharge of governmental functions shall be exempt from tax in other State if the individual is not resident in that other State or is resident in other State solely for the purpose of rendering those services, so provided however, that such an individual has the nationality of that Contracting State.

 

2. The provision of this article shall not apply to payments in respect of services rendered in connection with any trade or business carried on by either of the Government for purposes of profit.

 

3. In this article, "Government" shall be deemed to include public corporation and any other similar parasitical bodies.

 

ARTICLE XVIII: Students.--1. Payments which a student or business apprentice who is or was formerly a resident of a Contracting State and who is present in the other Contracting State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that other State, provided that such payments are made to him from sources outside that other State.

 

2. The provision of this article shall also apply to the income which the student or business apprentice may derive from an employment in the other Contracting State; provided that such employment is related to his study or training and/or that the income deriving there from is required by the student or trainee to meet his living expenses.

 

ARTICLE XIX: Professors, Teachers and Researchers.--A professor, teacher or research worker from one of the Contracting States who receives remuneration for teaching or carrying out research work during a period of temporary residence not exceeding three months at a university, college or/other institute of higher education or scientific research in the other Contracting State shall be exempt from tax in that other State, in respect of that remuneration, provided that the period of three months may be extended by similar periods.

 

CHAPTER IV

 

Elimination of double taxation

 

ARTICLE XX: Tax Credits.--1. When a resident of a Contracting State derives income which has also suffered tax in the other Contracting State the first-mentioned State shall allow a deduction from its tax on the income of that person equal to the tax in the other Contracting State; provided that the deduction shall not exceed that part of the tax, as computed before the deduction is given which is applicable to the income taxed in the other Contracting State.

 

2. Nothing in this Article contained shall prevent the granting of such further relief as may be appropriate under the provisions of the law of either Contracting State in respect of any amount by which the tax in case of that States exceeds the credit allowed on its account in the other State in accordance with the provisions of this Article.

 

CHAPTER V

 

Special provisions

 

ARTICLE XXI: Non-discrimination.--1. The nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith  which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected.

 

2. The term "national" means :

 

(a)        all individuals possessing the nationality of a Contracting State;

(b)        all legal persons, partnerships and associations deriving their status as such from the law in force in a Contracting State.

 

3. The taxation of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. The provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowance, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.

 

4. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or any requirements connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first mentioned State are or may be subjected.

 

ARTICLE XXII: Mutual Agreement Procedure.--1. Where a resident of a Contracting State considers that the actions of one or both of the Contracting State result or will result for him in taxation not in accordance with this Convention he may, notwithstanding the remedies provided by the national laws of those States, present his case to the competent authority of the Contracting State of which he is a resident.

 

2. The competent authority shall endeavour if the objection appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with the Convention.

 

3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention.

 

4. The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States.

 

ARTICLE XXIII: Exchange of Information.--1. The competent authorities of the Contracting States shall exchange such information as is necessary for the carrying out of this Convention and of the domestic laws of the Contracting States concerning taxes covered by this Convention in so far as the taxation thereunder is in accordance with this Convention. Information shall also be exchanged as is necessary for the prevention of fiscal evasion of taxes which are the subject of this Convention. Any information so exchanged shall be treated as secret and shall not be disclosed to any persons or authorities other than those concerned with the assessment of collection of the taxes which are the subject of the Convention.

 

2. In no case shall the provisions of paragraph I be constituted so as to impose on one of the Contracting States the obligation :

 

(a)        to carry out administrative measures at variance with the laws or the administrative practice of that or of the other Contracting State;

(b)        to supply particulars which are not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

(c)        to supply information which would disclose any trade, business, industrial commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy.

 

ARTICLE XXIV: Diplomatic and Consular Officials.--Nothing in this Convention shall affect the fiscal privileges of diplomatic or consular officials under the general rules of international law or under the provisions of special agreements.

 

CHAPTER VI

 

Final provisions

 

ARTICLE XXV: Entry into Force.--The Convention shall enter into force upon the exchange of instruments of ratification and its provisions shall have effect from the tax year commencing after the said ratification.

 

Any agreement reached shall be implemented notwithstanding any time limits in the national laws of the Contracting State.

 

ARTICLE XXVI: Termination.--This Convention remains in force until denounced by one of the Contracting States. Either Contracting State may denounce the Convention through diplomatic channels by giving notice of termination at least 6 months before the end of any calendar year beginning 5 years after the agreement enters into force. In such event the Convention shall cease to have effect after the end of the calendar year during which notice of the denouncing of the Convention is given by one Contracting State to the other.

 

In witness of the agreement reached as above, the signatories have today signed this Convention in virtue of the authority delegated to them for this purpose by their respective Governments.

 

Done in duplicate at THIPOLI, on 2nd March, 1981 corresponding to 25 Rabiul Akhar 1390 P.D. in the English, Hindi and Arabic languages, all texts being equally authoritative except in the case of doubt, the English text shall prevail.

 

            Sd/-                                                                                                                              Sd/-

Narendra Singh,                                                                                                         Ammar Sasi Atiya,

Ambassador of India                                                                                      Director General Taxation

Socialist People Libyan Arab Jamahiriya.