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PROTOCOL

At the moment of signing of the Agreement between the Islamic Republic of Iran and the Republic of India for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, the undersigned have agreed upon the following provisions which shall form an integral part of the Agreement:

(1) It is understood that for the purposes of this Agreement:

  • (a) the term “fiscal year” means:
    • (i) in the case of India: the financial year beginning on the first day of April;
    • (ii) in the case of Islamic Republic of Iran: the tax year/fiscal year as defined under the Direct Taxes Act of the Islamic Republic of Iran.
  • (b) the term "tax" means Indian or Iranian tax, as the context requires, but shall not include any amount which is payable in respect of any default or omission in relation to the taxes to which this Agreement applies or which represents a penalty or fine imposed relating to those taxes. Further, the amounts payable for the aforementioned default, omission, penalty or fine shall not be taken into account for giving tax credit.

(2) For the purpose of computing the time limit in paragraph (3)(a) of Article 5, the period of 270 days begins on the date on which the construction activity itself begins. It does not take into account the time spent solely on preparatory activities such as obtaining permits or licences.

(3) With reference to paragraph (3) of Article 8 it is understood that:

Profits derived by a transportation enterprise of a Contracting State from the use, maintenance, or rental of containers (including trailers and other equipment for the transport of containers) used for the transport of goods or merchandise in international traffic which is supplementary or incidental to its operation of ships or aircrafts in international traffic, shall be taxable only in that Contracting State unless the containers are used solely within the other Contracting State.

(4) For the purpose of Article 11, in the case of India, the term Central Bank means “the Reserve Bank of India”.

(5) With reference to Article 15, it is understood that the Article applies only to a resident who is an individual.

(6) With reference to paragraph (1) of Article 21, it is understood that:

For the purpose of this Article, an individual shall be deemed to be a resident of a Contracting State if he is resident in that State in the fiscal year in which he visits the other Contracting State or in the immediately preceding fiscal year.

(7) With reference to paragraph (2) of Article 25 (Non-discrimination), it is understood that:

This provision shall not be construed as preventing a Contracting State from charging the profits of a permanent establishment which a company of the other Contracting State has in the first mentioned State at a rate of tax which is higher than that imposed on the profits of a similar company of the first mentioned Contracting State, nor as being in conflict with the provisions of paragraph (3) of Article 7. It is also understood that in no case the taxation of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall be less favourably levied than the taxation levied on a permanent establishment of an enterprise of a third State carrying on the same activities under a double taxation Agreement concluded by the other Contracting State with that third State.

(8) With reference to Article 27 (Exchange of Information), it is understood that:

  • (a) An exchange of information will only be requested once the requesting Contracting State has pursued all means available in its own territory to obtain the information, except those that would give rise to disproportionate difficulties.
  • (b) The requesting State shall provide the following information to the requested State when making a request for information under Article 27:
    • (i) the identity, including the name of the person under examination or investigation; as well as any other particulars facilitating that person's identification, such as address, TIN and National ID No., if available;
    • (ii) the period of time for which the information is requested;
    • (iii) a statement of the information sought including its nature and the form, if any, in which the requesting State wishes to receive the information from the requested State;
    • (iv) the tax purpose for which the information is sought;
    • (v) to the extent known, the name, address and other particulars mentioned in clause (i) of this sub-paragraph, of any person believed to be in possession of the requested information.
  • (c) The reference to “foreseeable relevance” is intended to provide for exchange of information in tax matters to the widest possible extent and, at the same time, to clarify that the Contracting States are not at liberty to engage in “fishing expeditions” or to request information that is unlikely to be relevant to the tax affairs of a given taxpayer.
  • (d) Automatic or spontaneous exchange of information may be applicable upon the conclusion of an implementation agreement between the competent authorities of both Contracting States.
  • (e) In cases where the exchange of information entails costs exceeding the usual administrative practice costs of the requested State, the requesting State will bear the excessive costs, as may be mutually agreed upon between the competent authorities of the Contracting States.
  • (f) The requested State shall be required to ensure that the data to be supplied is accurate. If it emerges that inaccurate data has been supplied, the requesting State shall be informed of this without delay. That State shall be required to correct such data without delay.
  • (g) The requested and the requesting States shall be required to take effective measures to protect the information supplied against unauthorised access, alteration and disclosure.

(9) It is understood that when Iran introduces a provision in its domestic law regarding assistance in collection of taxes to other treaty partners or agrees to extend such assistance to any other treaty partner, then the competent authorities of the two Contracting States shall by mutual agreement settle the mode of application for extending assistance in the collection of taxes to each other.

(10) As far as the entitlement to benefits of the Agreement is concerned, it is understood that the provisions of this Agreement shall in no case prevent a Contracting State from the application of the provisions of its domestic law and measures concerning tax avoidance or evasion.

DONE in duplicate at New Delhi on 28/11/1396 solar Hijra corresponding to 17/02/2018 in the Hindi, Persian and English languages, all texts being equally authentic. In case of any divergence of interpretation, the English text shall prevail.

IN WITNESS WHEREOF, the undersigned, being duly authorized thereto, have signed this Protocol.

FOR THE GOVERNMENT OF THE REPUBLIC OF INDIA:

SUSHIL CHANDRA

CHAIRMAN, CENTRAL BOARD OF DIRECT TAXES

FOR THE GOVERNMENT OF THE ISLAMIC REPUBLIC OF IRAN:

MOHAMMAD KHAZAEE

DEPUTY MINISTER OF ECONOMIC AFFAIRS AND FINANCE AND PRESIDENT OF THE ORGANIZATION FOR INVESTMENT, ECONOMIC AND TECHNICAL ASSISTANCE OF IRAN