DTC Agreement Between Croatia and India

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IncomeTaxDepartment
SECTION90OFTHEINCOMETAXACT,1961DOUBLETAXATIONAGREEMENT
AGREEMENTFORAVOIDANCEOFDOUBLETAXATIONANDPREVENTIONOFFISCAL
EVASIONWITHFOREIGNCOUNTRIESCROATIA
NOTIFICATIONNO.24/2015[F.NO.501/09/1995FTDI],DATED1732015
Whereas,anAgreementandProtocol(hereinafterreferredtoasthesaid AgreementandtheProtocol)
as set out in the Annexure to this notification, was entered into between the Government of the
RepublicofIndiaandtheGovernmentoftheRepublicofCroatiafortheavoidanceofdoubletaxation
and for the prevention of fiscal evasion with respect to taxes on income thatwassigned onthe12th
February,2014
2.Andwhereas,thedateofentryintoforceofthesaidAgreement and Protocol is the 6thFebruary,
2015, being the date thirty days after the date of the latter of the notifications of completion of the
proceduresasrequiredbytherespectivelawsforentryintoforceofthesaidAgreement andProtocol,
inaccordancewithparagraph1ofarticle29ofthesaidAgreement
3. And whereas, clause (b) of paragraph 3 of article 29 of the said Agreement provides that the
provisionsofthesaidAgreementshallhave effectinIndiainrespectofincomearisinginanyfiscal
year beginning on or after the first day of April next following the calendar year in which the
Agreemententersintoforce.
4.Now,therefore,inexerciseofthepowersconferredbysection90oftheIncometaxAct,1961(43of
1961), the Central Government hereby directs that all the provisions of the said Agreement and
Protocol between the Government of the Republic of India and the Government of the Republic of
Croatia for the avoidance of double taxation and for the prevention of fiscal evasion with respect to
taxesonincome,assetoutintheAnnexure hereto,shallbegiveneffecttointheUnionofIndiawith
effectfromthefirstdayofApril,2016,beingthefirstdayofthefiscalyearnextfollowingthecalendar
yearinwhichthesaidAgreemententeredintoforce.
ANNEXURE
AGREEMENT
BETWEEN
THEGOVERNMENTOFTHEREPUBLICOFINDIA
AND
THEGOVERNMENTOFTHEREPUBLICOFCROATIA
FORTHEAVOIDANCEOFDOUBLETAXATIONANDFORTHEPREVENTIONOFFISCAL
EVASIONWITHRESPECTTOTAXESONINCOME
TheGovernmentoftheRepublicofIndiaandtheGovernmentoftheRepublicofCroatia,
DesiringtoconcludeanAgreementfortheavoidanceofdoubletaxationand the prevention of fiscal
evasionwithrespecttotaxesonincomeandwithaviewtopromotingeconomiccooperationbetween
thetwocountries,
Haveagreedasfollows:
ARTICLE1
PERSONALSCOPE
ThisAgreementshallapplytopersonswhoareresidentsofoneorbothoftheContractingStates.
ARTICLE2
http://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=http://www.incometaxindia.gov.in/dtaa/comprehensive%20agreements/croatia.htm&g 1/17
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TAXESCOVERED
1.ThisAgreementshallapplytotaxesonincomeimposed onbehalfofaContractingState or of its
politicalsubdivisionsorlocalauthorities,irrespectiveofthemannerinwhichtheyarelevied.
2. There shall be regarded as taxes on income all taxes imposed on total income, or on elements of
income, including taxes on gains from the alienation of movable or immovable property, as well as
taxesonthetotalamountsofwagesorsalariespaidbyenterprises.
3.TheexistingtaxestowhichtheAgreementshallapplyareinparticular:
a InIndia:
theincometax,includinganysurchargethereon
(hereinafterreferredtoas"Indiantax").
b InCroatia:
(i) theprofittaxand
(ii) theincometax,
(hereinafterreferredtoasthe"Croatiantax")
4. TheAgreement shall apply also to any identical or substantially similar taxes which are imposed
afterthedateofsignatureoftheAgreementinadditionto,orinplaceof,theexistingtaxesreferredto
in paragraph 3. The competent authorities of the Contracting States shall notify each other of
significantchangeswhichhavebeenmadeintheirrespectivetaxationlaws.
ARTICLE3
GENERALDEFINITIONS
1.ForthepurposesofthisAgreement,unlessthecontextotherwiserequires:
a theterm"RepublicofCroatia"meanstheterritoryoftheRepublicofCroatiaaswellasthose
maritime areas adjacent to the outer limit of territorial sea, including seabed and subsoil
thereof,overwhichtheRepublicofCroatiainaccordancewithinternationallaw(andthelaws
oftheRepublicofCroatia)exercisesitssovereignrightsandjurisdiction
b theterm"India"meanstheterritoryofIndiaandincludestheterritorialseaandairspaceabove
it, as well as any other maritime zone in which India has sovereign rights, other rights and
jurisdiction,accordingtotheIndianlawandinaccordancewithinternationallaw,including
theU.N.ConventionontheLawoftheSea
c theterm"person"includesanindividual,acompany,abodyofpersonsandanyotherentity
whichistreatedasataxableunitunderthetaxationlawsinforceintherespectiveContracting
States
d the term "company" means any body corporate or any entity which is treated as a body
corporatefortaxpurposes
e the terms "enterprise of a Contracting State" and "enterprise of the otherContractingState"
mean respectively an enterprise carried on by a resident of a Contracting State and an
enterprisecarriedonbyaresidentoftheotherContractingState
f the term "international traffic" means any transport by a ship or aircraft operated by an
enterprise which is a resident of a Contracting State, except when the ship or aircraft is
operatedsolelybetweenplacesintheotherContractingState
g theterm"competentauthority"means:
(i) inthecaseofCroatia,theMinisterofFinanceorhisauthorizedrepresentative
(ii) inthecaseofIndia,theCentralGovernmentintheMinistryofFinance(Department
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ofRevenue)oritsauthorizedrepresentative
h theterm"national"means:
(i) anyindividualpossessingthenationalityofaContractingState
(ii) anylegalperson,partnershiporassociationderivingitsstatusassuchfromthelaws
inforceinaContractingState
i theterm"fiscalyear"means:
(i) inthecaseofCroatia,thecalendaryear
(ii) inthecaseofIndia,thefinancialyearbeginningonthe1stdayofApril
j theterm"tax"meansCroatiantaxorIndiantax,asthecontextrequires,butshallnotinclude
anyamountwhichispayableinrespectofanydefaultoromissioninrelationtothetaxesto
whichthisAgreementappliesorwhichrepresentsapenaltyorfineimposed relatingtothose
taxes
k the terms "a Contracting State" and "the other Contracting State" mean the Republic of
CroatiaortheRepublicofIndiaasthecontextrequires.
2.As regards the application of theAgreement by a Contracting State any term not defined therein
shall,unlessthecontextotherwiserequires,havethemeaningwhichithasunderthelawofthatState
concerningthetaxestowhichtheAgreementapplies.
ARTICLE4
RESIDENT
1. For the purposes of thisAgreement, the term "resident of a Contracting State" means any person
who,underthelawsofthatState,isliabletotaxthereinbyreasonofhisdomicile,residence,placeof
managementoranyothercriterionofasimilarnature.Thistermdoesnot includeanypersonwhois
liabletotaxinthatStateinrespectonlyofincomefromsourcesinthatState.
2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting
States,thenhisstatusshallbedeterminedasfollows:
a heshallbedeemedtobearesidentoftheStateinwhichhehasapermanenthomeavailableto
himifhehasapermanenthomeavailabletohiminbothStates,heshallbedeemedtobea
residentoftheStatewithwhichhispersonalandeconomicrelationsarecloser(centreofvital
interests)
b iftheStateinwhichhehashiscentreofvitalinterestscannotbedetermined,orifhehasnota
permanenthomeavailabletohimineitherState,heshallbedeemedtobearesidentofthe
Stateinwhichhehasanhabitualabode
c ifhehasanhabitualabodeinbothStatesorinneitherofthem,heshall be deemedto bea
residentoftheStateofwhichheisanational
d if he is a national of both States or of neither of them, the competent authorities of the
ContractingStatesshallsettlethequestionbymutualagreement.
3.Wherebyreasonoftheprovisionsofparagraph1apersonotherthananindividualisaresidentof
both Contracting States, then it shall be deemed to be a resident of the State in which its place of
effectivemanagement is situated. If the State in which its place of effective management is situated
cannotbedetermined,thenthecompetentauthoritiesoftheContractingStatesshallsettlethequestion
bymutualagreement.
ARTICLE5
PERMANENTESTABLISHMENT
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1. For the purposes of thisAgreement, the term "permanent establishment" means a fixed place of
businessthroughwhichthebusinessofanenterpriseiswhollyorpartlycarriedon.
2.Theterm"permanentestablishment"includesespecially:
a aplaceofmanagement
b abranch
c anoffice
d afactory
e aworkshop
f amine,anoilorgaswell,aquarryoranyotherplaceofextractionofnaturalresources
g asalesoutlet
h awarehouseinrelationtoapersonprovidingstoragefacilitiesforothersand
i afarm,plantationorotherplacewhereagricultural,forestry,plantationorrelatedactivitiesare
carriedon.
3.Abuildingsiteorconstructionorassemblyprojectorsupervisory activitiesinconnectiontherewith
constituteapermanentestablishmentonlyifsuchsite,projectoractivitylastmorethan12months.
4.AnenterpriseshallbedeemedtohaveapermanentestablishmentinaContractingStateandtocarry
onbusinessthroughthatpermanentestablishmentifitprovidesservicesorfacilitiesinconnectionwith,
orsuppliesplantandmachineryonhireusedforortobeusedintheprospectingfor,orextractionor
exploitationofmineraloilsinthatState.
5.NotwithstandingtheprecedingprovisionsofthisArticle,theterm "permanentestablishment"shall
bedeemednottoinclude:
a the use of facilities solely for the purpose of storage, display or delivery of goods or
merchandisebelongingtotheenterprise
b themaintenanceofastockofgoodsormerchandisebelongingtotheenterprisesolelyforthe
purposeofstorage,displayordelivery
c themaintenanceofastockofgoodsormerchandisebelongingtotheenterprisesolelyforthe
purposeofprocessingbyanotherenterprise
d the maintenance of a fixed place of business solely for the purpose of purchasing goods or
merchandiseorofcollectinginformation,fortheenterprise
e the maintenance of a fixed place of business solely for the purpose of carrying on, for the
enterprise,anyotheractivityofapreparatoryorauxiliarycharacter
f the maintenance of a fixed place of business solely for any combination of activities
mentionedinsubparagraphs(a)to(e),providedthattheoverallactivityofthefixedplaceof
businessresultingfromthiscombinationisofapreparatoryorauxiliarycharacter.
6.Notwithstandingtheprovisionsofparagraphs1and2,whereapersonotherthananagentofan
independent status to whom paragraph 8 applies is acting in a Contracting State on behalf of an
enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent
establishment in the firstmentioned Contracting State in respect of any activities which that person
undertakesfortheenterprise,ifsuchaperson:
a hasandhabituallyexercisesinthatStateanauthoritytoconcludecontractsinthenameofthe
enterprise,unlesstheactivitiesofsuchpersonarelimitedtothosementionedinparagraph4
which, if exercised through a fixed place of business, would not make this fixed place of
businessapermanentestablishmentundertheprovisionsofthatparagraphor
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b hasnosuchauthority,buthabituallymaintainsinthefirstmentionedStateastockofgoodsor
merchandise from which he regularly delivers goods or merchandise on behalf of the
enterpriseor
c habitually secures orders in the firstmentioned State, wholly or almost wholly for the
enterpriseitselforfortheenterpriseandotherenterprisescontrolling,controlledby,orsubject
tothesamecontrol,asthatenterprise.
7. Notwithstanding the preceding provisions of thisArticle, an insurance enterprise of a Contracting
Stateshall,exceptinregardtoreinsurance,bedeemedtohaveapermanentestablishmentintheother
Contracting State if it collects premiums in the territory of that other State or insures risks situated
thereinthroughapersonotherthananagentofanindependentstatustowhomparagraph8applies.
8.Anenterpriseshallnotbedeemedtohaveapermanent establishmentinaContractingStatemerely
because it carries on business in that State through a broker, general commission agent or any other
agentof an independent status, provided that such persons are acting in the ordinary course of their
business.However,whentheactivitiesofsuchanagentaredevotedwhollyoralmostwhollyonbehalf
ofthatenterprise,hewillnotbeconsideredanagentofanindependentstatuswithinthemeaningof
thisparagraph.
9. The fact that a company which is a resident of a Contracting State controls or is controlled by a
companywhichisaresidentoftheotherContractingState,orwhichcarriesonbusinessinthatother
State (whether through a permanent establishment or otherwise), shall not of itself constitute either
companyapermanentestablishmentoftheother.
ARTICLE6
INCOMEFROMIMMOVABLEPROPERTY
1. Income derived by a resident of a Contracting State from immovable property (including income
fromagricultureorforestry)situatedintheotherContractingStatemaybetaxedinthatotherState.
2. The term "immovable property" shall have the meaning which it has under the law of the
Contracting State in which the property in question is situated. The term shall in any case include
property accessory to immovable property, livestock and equipment used in agriculture and forestry,
rightstowhichtheprovisionsofgenerallawrespectinglandedpropertyapply,usufructofimmovable
propertyandrightstovariableorfixedpaymentsasconsideration for the working of, or the right to
work,mineraldeposits,sourcesandothernaturalresourcesships,boats,aircraftandmotorcarsshall
notberegardedasimmovableproperty.
3.Theprovisionsofparagraph1shallapplytoincomederivedfrom thedirectuse,letting,orusein
anyotherformofimmovableproperty.
4.Theprovisionsofparagraphs1and3shallalsoapplytotheincomefromimmovablepropertyofan
enterpriseandtoincomefromimmovablepropertyusedfortheperformanceofindependentpersonal
services.
ARTICLE7
BUSINESSPROFITS
1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the
enterprisecarriesonbusinessintheotherContractingStatethroughapermanentestablishmentsituated
therein,iftheenterprisecarriesonbusinessasaforesaid,theprofitsoftheenterprisemayalsobetaxed
intheotherStatebutonlysomuchofthemasisattributabletothatpermanentestablishment.
2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on
businessintheotherContractingStatethroughapermanentestablishmentsituatedtherein,thereshall
in each Contracting State be attributed to that permanent establishment the profits which it might be
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expectedtomakeifitwereadistinctandseparateenterpriseengagedinthesameorsimilaractivities
underthesameorsimilarconditionsanddealingwhollyindependentlywiththeenterpriseofwhichit
isapermanentestablishment.
3. In determining the profits of a permanent establishment, there shall be allowed as deductions
expenseswhichareincurredforthepurposesofthepermanentestablishment,includingexecutiveand
generaladministrativeexpensessoincurred,whetherintheStateinwhichthepermanentestablishment
issituatedorelsewhere,inaccordancewiththeprovisionsofandsubjecttothelimitationsofthetax
lawsofthatState.
4.Noprofitsshallbeattributedtoapermanentestablishmentbyreasonofthemerepurchasebythat
permanentestablishmentofgoodsormerchandisefortheenterprise.
5. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent
establishmentshallbedeterminedbythesamemethodyearbyyearunlessthereisgoodandsufficient
reasontothecontrary.
6. Where profits include items of income which are dealt with separately in other Articles of this
Agreement,thentheprovisionsofthoseArticlesshallnotbeaffectedbytheprovisionsofthisArticle.
ARTICLE8
INTERNATIONALTRAFFIC
1. Income derived by an enterprise of a Contracting State from the operation of ships or aircraft in
internationaltrafficshallbetaxableonlyinthatContractingState.
2.IncomederivedbyatransportationenterprisewhichisaresidentofaContractingStatefromtheuse,
maintenance, or rental of containers (including trailers and other equipment for the transport of
containers)usedfortransportofgoodsormerchandiseininternationaltrafficshallbetaxableonlyin
thatContractingStateunlessthecontainersareusedsolelywithintheotherContractingState.
3.Iftheplaceofeffectivemanagementofashippingenterpriseisaboardaship,thenitshallbedeemed
tobesituatedintheContractingStateinwhichthehomeharbouroftheshipissituatedorifthereisno
suchhomeharbour,intheContractingStateofwhichtheoperatoroftheshipisaresident.
4.ForthepurposesofthisArticleinterestonfundsconnectedwiththeoperationofshipsoraircraftin
internationaltrafficshallberegardedasincomederivedfromtheoperationofsuchshipsoraircraftand
theprovisionsofArticle11shallnotapplyinrelationtosuchinterest.
5. The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint
businessoraninternationaloperationagency.
ARTICLE9
ASSOCIATEDENTERPRISES
1.Where
a an enterprise of a Contracting State participates directly or indirectly in the management,
controlorcapitalofanenterpriseoftheotherContractingState,or
b thesamepersonsparticipatedirectlyorindirectlyinthemanagement,controlorcapitalofan
enterpriseofaContractingStateandanenterpriseoftheotherContractingState,
andineithercaseconditionsaremadeorimposedbetweenthetwoenterprisesintheircommercialor
financialrelationswhichdifferfromthosewhichwouldbemadebetweenindependententerprises,then
anyprofitswhichwould,butforthoseconditions,haveaccruedtooneoftheenterprises,but,byreason
of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed
accordingly.
2. Where a Contracting State includes in the profits of an enterprise of that State and taxes
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accordinglyprofitsonwhichanenterpriseoftheotherContractingStatehasbeenchargedtotaxin
thatotherStateandtheprofitssoincludedareprofitswhichwouldhaveaccruedtotheenterpriseofthe
firstmentionedStateiftheconditionsmadebetweenthetwoenterpriseshadbeenthosewhichwould
have been made between independent enterprises, then that other State shall make an appropriate
adjustmenttotheamountofthetaxchargedthereinonthoseprofits.Indeterminingsuchadjustment,
dueregardshallbehadtotheotherprovisionsofthisAgreementandthecompetentauthoritiesofthe
ContractingStatesshall,ifnecessaryconsulteachother.
ARTICLE10
DIVIDENDS
1.DividendspaidbyacompanywhichisaresidentofaContractingState to a resident of the other
ContractingStatemaybetaxedinthatotherState.
2.However,suchdividendsmayalsobetaxedintheContractingStateofwhichthecompanypaying
thedividendsisaresidentandaccordingtothelawsofthatState,butiftherecipientisthebeneficial
ownerofthedividendsthetaxsochargedshallnotexceed:
a 5percentofthegrossamountofthedividendsifthebeneficialownerisacompany(other
than a partnership) which holds directly at least 10 per cent of the capital of the company
payingthedividends
b 15percentofthegrossamountofthedividendsinallothercases.
The competent authorities of the Contracting States shall by mutual agreement settle the mode of
applicationoftheselimitations.
Thisparagraphshallnotaffectthetaxationofthecompanyinrespectoftheprofitsoutofwhichthe
dividendsarepaid.
3.The term "dividends" as used in thisArticle means income from shares or other rights, not being
debtclaims,participatinginprofits,aswellasincomefromothercorporaterightswhichissubjectedto
the same taxation treatment as income from shares by the laws of the State of which the company
makingthedistributionisaresident.
4.Theprovisionsofparagraphs1and2shallnotapplyifthebeneficialownerofthedividends,beinga
residentofaContractingState,carriesonbusinessintheotherContractingStateofwhichthecompany
payingthedividendsisaresident,throughapermanentestablishmentsituatedtherein,orperformsin
that other State independent personal services from a fixed base situated therein, and the holding in
respectofwhichthedividendsarepaidiseffectivelyconnectedwithsuchpermanentestablishmentor
fixedbase.InsuchcasetheprovisionsofArticle7orArticle14,asthecasemaybe,shallapply.
5.WhereacompanywhichisaresidentofaContractingStatederivesprofitsorincomefromtheother
Contracting State, that other State may not impose any tax on the dividends paid by the company,
exceptinsofarassuchdividendsarepaidtoaresidentofthatotherStateorinsofarastheholdingin
respectofwhichthedividendsarepaidiseffectivelyconnectedwithapermanent establishmentora
fixedbasesituatedinthatotherState,norsubjectthecompany'sundistributedprofitstoataxonthe
company'sundistributedprofits,evenifthedividendspaidortheundistributedprofitsconsistwhollyor
partlyofprofitsorincomearisinginsuchotherState.
ARTICLE11
INTEREST
1.InterestarisinginaContractingStateandpaidtoaresidentoftheotherContractingStatemaybe
taxedinthatotherState.
2.However,suchinterestmayalsobetaxedintheContractingStateinwhichitarisesandaccordingto
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thelawsofthatState,butiftherecipientisthebeneficialowneroftheinterestthetaxsochargedshall
notexceed10percentofthegrossamountoftheinterest.ThecompetentauthoritiesoftheContracting
Statesshallbymutualagreementsettlethemodeofapplicationofthislimitation.
3.Notwithstandingtheprovisionsofparagraph2interestarisinginaContractingStateshallbeexempt
fromtaxinthatStateprovideditisderivedandbeneficiallyownedby:
i theGovernment,apoliticalsubdivisionoralocalauthorityoftheotherContractingStateor
ii theCentralBankoftheotherContractingStateoranyotherbankorgovernmentalfinancial
institutions/agenciesthatmaybemutuallyagreeduponbetweenthetwoContractingStates.
4.Theterm"interest"asusedinthisArticlemeansincomefromdebtclaimsofeverykind,whetheror
notsecuredbymortgageandwhetherornotcarryingarighttoparticipateinthedebtor'sprofits,andin
particular, income from government securities and income from bonds or debentures, including
premiumsandprizesattachingtosuchsecurities,bondsordebentures.Penaltychargesforlatepayment
shallnotberegardedasinterestforthepurposeofthisArticle.
5.Theprovisionsofparagraphs1and2shallnotapplyifthebeneficialowneroftheinterest,beinga
residentofaContractingState,carriesonbusinessintheotherContractingStateinwhichtheinterest
arises,throughapermanentestablishmentsituatedtherein,orperformsinthatotherStateindependent
personalservicesfromafixedbasesituatedtherein,andthedebtclaiminrespectofwhichtheinterest
is paid is effectively connected with such permanent establishment or fixed base. In such case the
provisionsofArticle7orArticle14,asthecasemaybe,shallapply.
6.InterestshallbedeemedtoariseinaContractingStatewhenthepayeristhatStateitself,apolitical
subdivision,alocalauthorityoraresidentofthatState.Where,however,thepersonpayingtheinterest,
whether he is a resident of a Contracting State or not, has in a Contracting State a permanent
establishmentorafixedbaseinconnectionwithwhichtheindebtednessonwhichtheinterestispaid
was incurred, and such interest is borne by such permanent establishment or fixed base, then such
interestshallbedeemedtoariseintheContractingStateinwhichthepermanentestablishmentorfixed
baseissituated.
7.Where,byreasonofaspecialrelationshipbetweenthepayerand thebeneficialownerorbetween
both of them and some other person, the amount of the interest, having regard to the debtclaim for
which it is paid, exceeds the amount which would have been agreed upon by the payer and the
beneficialownerintheabsenceofsuchrelationship,theprovisionsofthisArticleshallapplyonlyto
the lastmentioned amount. In such case, the excess part of the payments shall remain taxable
accordingtothelawsof each Contracting State, due regard being had to the other provisions of this
Agreement.
ARTICLE12
ROYALTIESANDFEESFORTECHNICALSERVICES
1.RoyaltiesorfeesfortechnicalservicesarisinginaContractingState and paid to a resident of the
otherContractingStatemaybetaxedinthatotherState.
2.However,suchroyaltiesorfeesfortechnicalservicesmayalsobetaxedintheContractingStatein
whichtheyarise,andaccordingtothelawsofthatState,butiftherecipientisthebeneficialownerof
theroyaltiesorfeesfortechnicalservices,thetaxsochargedshallnotexceed10percentofthegross
amountoftheroyaltiesorfeesfortechnicalservices.
3. (a) The term "royalties" as used in this Article means 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
includingcinematographfilms,filmsortapesorothermeansof"reproductionforradioortelevision
broadcasting,satelliteorcabletransmissionforbroadcastingtothegeneralpublicthroughanyformof
electronic media, any patent, trade mark, design or model, plan, secret formula or process, or any
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industrial,commercialorscientificequipment,orforinformationconcerningindustrial,commercialor
scientificexperience(knowhow).
(b)Theterm"feesfortechnicalservices"meanspaymentofanykindinconsiderationfortherendering
ofanymanagerial,technicalorconsultancyservicesincludingtheprovisionofservicesbytechnicalor
other personnel but does not include payments for services mentioned in Articles 14 and 15 of this
Agreement.
4.Theprovisionsofparagraphs1and2shallnotapplyifthebeneficialowneroftheroyaltiesorfees
for technical services being a resident of a Contracting State, carries on business in the other
Contracting State in which the royalties or fees for technical services arise, through a permanent
establishment situated therein, or performs in that other State independent personal services from a
fixed base situated therein, and the right or property in respect of which the royalties or fees for
technicalservicesarepaidiseffectivelyconnectedwithsuchpermanentestablishmentorfixedbase.In
suchcasetheprovisionsofArticle7orArticle14,asthecasemaybe,shallapply.
5. Royalties or fees for technical services shall be deemed to arise in a Contracting State when the
payer is that State itself, a political subdivision, a local authority or a resident of that State. Where,
however,the person paying the royalties or fees for technical services, whether he is a resident of a
Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in
connectionwithwhichtheliabilitytopaytheroyaltiesorfeesfortechnicalserviceswasincurred,and
suchroyaltiesorfeesfortechnicalservicesarebornebysuchpermanentestablishmentorfixedbase,
then such royalties or fees for technical services shall be deemed to arise in the State in which the
permanentestablishmentorfixedbaseissituated.
6.Where,byreasonofaspecialrelationshipbetweenthepayerand thebeneficialownerorbetween
bothofthemandsomeotherperson,theamountoftheroyaltiesorfeesfortechnicalservices,having
regardtotheuse,rightorinformationforwhichtheyarepaid,exceedstheamountwhichwouldhave
been agreed upon by the payer and the beneficial owner in the absence of such relationship, the
provisionsofthisArticleshallapplyonlytothelastmentionedamount.Insuchcase,theexcesspartof
thepayments shall remain taxable according to the laws of each Contracting State, due regard being
hadtotheotherprovisionsofthisAgreement.
ARTICLE13
CAPITALGAINS
1. Gains derived by a resident of a Contracting State from the alienation of immovable property
referredtoinArticle6andsituatedintheotherContractingStatemaybetaxedinthatotherState.
2.Gainsfromthealienationofmovablepropertyformingpartofthebusinesspropertyofapermanent
establishment which an enterprise of a Contracting State has in the other Contracting State or of
movablepropertypertainingtoafixedbaseavailabletoaresidentofaContractingStateinthe other
Contracting State for the purpose of performing independent personal services, including such gains
fromthealienationofsuchapermanentestablishment(aloneorwiththewholeenterprise)orofsuch
fixedbase,mayalsobetaxedinthatotherState.
3.GainsderivedbyanenterpriseofaContractingStatefromthealienationofshipsoraircraftoperated
ininternationaltrafficormovablepropertypertainingtotheoperationofsuchshipsoraircraftshallbe
taxableonlyinthatState.
4.Gainsfromthealienationofsharesofthecapitalstockofacompanythepropertyofwhichconsists
directlyorindirectlyprincipallyofimmovablepropertysituatedinaContractingStatemaybetaxedin
thatState.
5.Gainsfromthealienationofshares,otherthanthosementionedinparagraph4,inacompanywhich
isaresidentofaContractingStatemaybetaxedinthatContractingState.
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6.Gainsfromthealienationofanypropertyotherthanthatreferredtoinparagraphs1to5,shallbe
taxableonlyintheContractingStateofwhichthealienatorisaresident.
ARTICLE14
INDEPENDENTPERSONALSERVICES
1. Income derived by a resident of a Contracting State in respect of professional services or other
activities of an independent character shall be taxable only in that State except in the following
circumstances,whensuchincomemayalsobetaxedintheotherContractingState:
a ifhehasafixedbaseregularlyavailabletohimintheotherContractingStateforthepurpose
ofperforminghisactivitiesinthatcase,onlysomuchoftheincomeasisattributabletothat
fixedbasemaybetaxedinthatotherStateor
b ifhisstayintheotherStateisforaperiodorperiodsaggregating183daysormoreinany12
monthperiodcommencingorendinginthefiscalyearconcernedinthatcase,onlysomuch
oftheincomeasisderivedfromhisactivitiesperformedinthatotherStatemaybetaxedin
thatotherState.
2. The term "professional services" includes especially independent scientific, literary, artistic,
educationalorteachingactivitiesaswellastheindependentactivitiesofphysicians,lawyers,engineers,
architects,surgeons,dentistsandaccountants.
ARTICLE15
DEPENDENTPERSONALSERVICES
1.SubjecttotheprovisionsofArticles16,18and19,salaries, wagesandothersimilarremuneration
derivedbyaresidentofaContractingStateinrespectofanemploymentshallbetaxableonlyinthat
State unless the employment is exercised in the other Contracting State. If the employment is so
exercised,suchremunerationasisderivedtherefrommaybetaxedinthatotherState.
2.Notwithstandingtheprovisionsofparagraph1,remunerationderivedbyaresidentofaContracting
StateinrespectofanemploymentexercisedintheotherContractingStateshallbetaxableonlyinthe
firstmentionedStateif:
a therecipientispresentintheotherStateforaperiodorperiodsnotexceedingintheaggregate
183daysinany12monthperiodcommencingorendinginthefiscalyearconcerned,and
b theremunerationispaidby,oronbehalfof,anemployerwhoisnotaresidentoftheother
State,and
c the remuneration is not borne by a permanent establishment or a fixed base which the
employerhasintheotherState.
3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an
employmentexercisedaboardashiporaircraftoperatedininternationaltraffic,byanenterpriseofa
ContractingStatemaybetaxedinthatState.
ARTICLE16
DIRECTORS'FEES
Directors'feesandothersimilarpaymentsderivedbyaresidentofaContractingStateinhiscapacity
asamemberoftheboardofdirectorsofacompanywhichisaresidentoftheotherContractingState
mayalsobetaxedinthatotherState.
ARTICLE17
ARTISTESANDSPORTSPERSONS
http://www.incometaxindia.gov.in/_layouts/15/dit/Pages/viewer.aspx?path=http://www.incometaxindia.gov.in/dtaa/comprehensive%20agreements/croatia.htm& 10/17
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1.NotwithstandingtheprovisionsofArticles14and15,incomederivedbyaresidentofaContracting
Stateasanentertainer,suchasatheatre,motionpicture,radioortelevisionartiste,oramusician,oras
asportsperson, from his personal activities as such exercised in the other Contracting State, may be
taxedinthatotherState.
2.Whereincomeinrespectofpersonalactivitiesexercisedbyan entertainerorasportspersoninhis
capacity as such accrues not to the entertainer or sportsperson himself but to another person, that
incomemay,notwithstandingtheprovisionsofArticles7,14and15,betaxedintheContractingState
inwhichtheactivitiesoftheentertainerorsportspersonareexercised.
3. The provisions of paragraphs 1 and 2, shall not apply to income from activities performed in a
ContractingStatebyentertainersorsportspersonsifthevisittothatStateissubstantiallysupportedby
public funds of one or both of the Contracting States or of political subdivisions or local authorities
thereof.Insuchacase,theincomeistaxableonlyintheContractingStateofwhichtheentertaineror
sportspersonisaresident.
ARTICLE18
PENSIONS
Subjecttotheprovisionsofparagraph2ofArticle19,pensionsandothersimilarremunerationpaidto
aresidentofaContractingStateinconsiderationofpastemploymentshallbetaxableonlyinthatState.
ARTICLE19
GOVERNMENTSERVICE
1.(a)Remuneration,otherthanapension,paidbyaContractingStateorapoliticalsubdivisionora
localauthoritythereoftoan individual in respect of services rendered to that State or subdivision or
authorityshallbetaxableonlyinthatState.
(b)However,suchremunerationshallbetaxableonlyintheotherContractingStateiftheservicesare
renderedinthatStateandtheindividualisaresidentofthatStatewho:
i isanationalofthatStateor
ii didnotbecomearesidentofthatStatesolelyforthepurposeofrenderingtheservices.
2.(a)Anypensionpaidby,oroutoffundscreatedby,aContractingStateorapoliticalsubdivisionora
localauthoritythereoftoan individual in respect of services rendered to that State or subdivision or
authorityshallbetaxableonlyinthatState.
(b) However, such pension shall be taxable only in the other Contracting State if the individual is a
residentof,andanationalof,thatState.
3. The provisions ofArticles 15, 16 and 18 shall apply to remuneration and pensions in respect of
services rendered in connection with a business carried on by a Contracting State or a political
subdivisionoralocalauthoritythereof.
ARTICLE20
STUDENTSANDAPPRENTICES
1.Astudentorbusinessapprenticewhoisorwasaresidentofa ContractingStateimmediatelybefore
visiting the other Contracting State and who is present in that other Contracting State solely for the
purposeofhiseducationortrainingshallbeexemptfromtaxinthatotherStateon:
a payments made to him by persons residing outside that other State for the purposes of his
maintenance,educationortrainingand
b remunerationfromemploymentinthatotherState,inanamountnotexceedingUS$1000or
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itsequivalentamountduringanyfiscalyear,
asthecasemaybe,providedthatsuchemploymentisdirectlyrelatedtohisstudiesorisundertakenfor
thepurposeofhismaintenance.
2. The benefit of this Article shall extend only for such period of time as may be reasonable or
customarily required to complete the education or training undertaken, but in no event shall any
individualhavethebenefits of thisArticle for more than five consecutive years from the date of his
firstarrivalinthatotherContractingState.
ARTICLE21
PROFESSORS,TEACHERSANDRESEARCHSCHOLARS
1.AprofessororteacherwhoisorwasaresidentoftheContracting Stateimmediatelybeforevisiting
theotherContractingStateforthepurposeofteachingorengaginginresearch,orboth,atauniversity,
college,schoolorotherapprovedinstitutioninthatotherContractingStateshallbeexemptfromtaxin
thatotherStateonanyremunerationforsuchteachingorresearchforaperiodnotexceedingtwoyears
fromthedateofhisarrivalinthatotherState.
2.ThisArticleshallnotapplytoincomefromresearch,ifsuchresearchisundertakenprimarilyforthe
privatebenefitofaspecificpersonorpersons.
3.ForthepurposesofthisArticleandArticle20,anindividual shallbedeemedtobearesidentofa
ContractingStateifheisresidentinthatStateinthefiscalyearinwhichhevisitstheotherContracting
Stateorintheimmediatelyprecedingfiscalyear.
4.Forthepurposesofparagraph1"approvedinstitution"meansaninstitutionwhichhasbeenapproved
inthisregardbythecompetentauthorityoftheconcernedState.
ARTICLE22
OTHERINCOME
1.ItemsofincomeofaresidentofaContractingState,whereverarising,notdealtwithintheforegoing
ArticlesofthisAgreementshallbetaxableonlyinthatState.
2. The provisions of paragraph 1 shall not apply to income, other than income from immovable
propertyasdefinedinparagraph2ofArticle6, iftherecipientofsuchincome,beingaresidentofa
ContractingState,carriesonbusinessintheotherContractingStatethroughapermanentestablishment
situatedtherein,orperformsinthatotherStateindependentpersonalservicesfromafixedbasesituated
therein,andtherightorpropertyinrespectofwhichtheincomeispaidiseffectivelyconnectedwith
suchpermanentestablishmentorfixedbase.InsuchcasetheprovisionsofArticle7orArticle14,as
thecasemaybe,shallapply.
3.Notwithstandingtheprovisionsofparagraph1,ifaresidentofaContracting State derives income
from sources within the other Contracting State in the form of lotteries, crossword puzzles, races
includinghorseraces,cardgamesandothergamesofanysortorgamblingorbettingofanyformor
naturewhatsoever,suchincomemaybetaxedintheotherContractingState.
ARTICLE23
ELIMINATIONOFDOUBLETAXATION
1.ThelawsinforceineitheroftheContractingStatewillcontinuetogovernthetaxationofincomein
therespectiveContractingStatesexceptwhereprovisionstothecontraryaremadeinthisAgreement.
2.InthecaseofCroatiadoubletaxationshallbeeliminatedasfollows:
WherearesidentofRepublicofCroatiaderivesincomewhich,inaccordancewith the provisions of
thisAgreement,maybetaxedinIndia,Republicof Croatiashallallowasadeductionfromthetaxon
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theincomeofthatresidentanamountequaltotheincometaxpaidinIndia.Suchdeductionshallnot,
however, exceed that part of the income tax as computed before the deduction is given, which is
attributabletotheincomewhichmaybetaxedinIndia.
3.InthecaseofIndiadoubletaxationshallbeeliminatedasfollows:
WherearesidentofIndiaderivesincomewhich,inaccordancewiththeprovisionsofthisAgreement,
maybetaxedintheRepublicofCroatia,Indiashallallowasadeductionfromthetaxontheincomeof
that resident an amount equal to the income tax paid in Croatia whether directly or by deduction at
source. Such amount shall not however exceed that part of the income tax, as computed before the
deductionisgiven,whichisattributabletotheincomewhichmaybetaxedinCroatia.
4.IncomewhichinaccordancewiththeprovisionsofthisAgreement,isnottobesubjectedtotaxina
Contracting State, may be taken into account for calculating the rate of tax to be imposed in that
ContractingState.
ARTICLE24
NONDISCRIMINATION
1.NationalsofaContractingStateshallnotbesubjectedintheotherContractingStatetoanytaxation
or any requirement connected therewith, which is other or more burdensome than the taxation and
connectedrequirementstowhichnationalsofthatotherStateinthesamecircumstances,inparticular
withrespecttoresidence,areormaybesubjected.Thisprovisionshall,notwithstandingtheprovisions
ofArticle1,alsoapplytopersonswhoarenotresidentsofoneorbothoftheContractingStates.
2. The taxation on a permanent establishment which an enterprise of a Contracting State has in the
otherContractingStateshallnotbelessfavourablyleviedinthatotherStatethanthetaxationleviedon
enterprisesofthatotherStatecarryingonthesameactivities.Thisprovisionshallnotbeconstruedas
preventing a Contracting State from charging the profits of a permanent establishment which a
companyoftheotherContractingStatehasinthefirstmentionedStateatarateoftaxwhichishigher
thanthatimposedontheprofitsofasimilarcompanyofthefirstmentionedContractingState,noras
beinginconflictwiththeprovisionsofparagraph3ofArticle7ofthisAgreement.
ThisprovisionshallnotbeconstruedasobligingaContractingStatetogranttoresidentsoftheother
ContractingStateanypersonalallowances,reliefsandreductionsfortaxationpurposesonaccountof
civilstatusorfamilyresponsibilitieswhichitgrantstoitsownresidents.
3. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled,
directlyorindirectly,byoneormoreresidentsoftheotherContractingState,shallnotbesubjectedin
the firstmentioned State to any taxation or any requirement connected therewith which is other or
moreburdensomethanthetaxationandconnectedrequirements to which other similar enterprises of
thefirstmentionedStateareormaybesubjected.
4.Exceptwheretheprovisionsofparagraph1ofArticle9,paragraph7ofArticle11,orparagraph6of
Article12,apply,interest,royaltiesandotherdisbursementpaidbyanenterpriseofaContractingState
toaresidentoftheotherContractingStateshall,forthepurposeofdeterminingthetaxableprofitsof
suchenterprise,bedeductibleunderthesameconditionsasiftheyhadbeenpaidtoaresidentofthe
firstmentionedState.
5.The provisions of thisArticle shall, notwithstanding the provisions of Article 2, apply to taxes of
everykindanddescription.
ARTICLE25
MUTUALAGREEMENTPROCEDURE
1.WhereapersonconsidersthattheactionsofoneorbothoftheContractingStatesresultorwillresult
forhimintaxationnotinaccordancewiththeprovisionsofthisAgreement,hemay,irrespectiveofthe
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IncomeTaxDepartment
remediesprovidedbythedomesticlawofthoseStates,presenthiscasetothecompetentauthorityof
theContractingStateofwhichheisaresidentor,ifhiscasecomesunderparagraph1ofArticle24,to
thatoftheContractingStateofwhichheisanational.Thecasemustbepresentedwithinthreeyears
fromthefirstnotificationoftheactionresultingintaxationnotinaccordancewiththeprovisionsofthe
Agreement.
2.Thecompetentauthorityshallendeavour,iftheobjectionappearstoittobejustifiedandifitisnot
itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the
competentauthorityoftheotherContractingState,withaviewtotheavoidanceoftaxationwhichis
notinaccordancewiththeAgreement.Any agreementreachedshallbeimplementednotwithstanding
anytimelimitsinthedomesticlawoftheContractingStates.
3.ThecompetentauthoritiesoftheContractingStatesshallendeavourtoresolvebymutualagreement
any difficulties or doubts arising as to the interpretation or application of theAgreement. They may
alsoconsulttogetherfortheeliminationofdoubletaxationincasesnotprovidedforintheAgreement.
4.ThecompetentauthoritiesoftheContractingStatesmay communicatewitheachotherdirectlyfor
the purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems
advisableinordertoreachagreementtohaveanoralexchangeofopinions,suchexchangemaytake
place through a Commission consisting of representatives of the competent authorities of the
ContractingStates.
ARTICLE26
EXCHANGEOFINFORMATION
1. The competent authorities of the Contracting States shall exchange such information (including
documents),asisnecessaryforcarryingouttheprovisionsofthisAgreementorofthedomesticlaws
oftheContractingStatesconcerningtaxescoveredbytheAgreementinsofarasthetaxationthereunder
isnotcontrarytotheAgreementinparticularforthepreventionoffraudorevasionofsuchtaxes.The
exchangeofinformationisnotrestrictedbyArticle1.AnyinformationreceivedbyaContractingState
shallbetreatedassecretinthesamemannerasinformationobtainedunderthedomesticlawsofthat
Stateandshallbedisclosedonlytopersonsorauthorities(includingcourtsandadministrativebodies)
involved in the assessment or collection of, the enforcement or prosecution in respect of, or the
determinationofappealsinrelationto,thetaxescoveredbytheAgreement.Suchpersonsorauthorities
shall use the information only for such purposes.They may disclose the information in public court
proceedings or in judicial decisions. Notwithstanding the foregoing, information received by a
ContractingStatemaybeusedforotherpurposeswhensuchinformationmaybeusedforsuchother
purposesunderthelawsofbothContractingStatesandthecompetentauthorityofthesupplyingState
authorisessuchuse.
2.Innocaseshalltheprovisionsofparagraph1beconstruedsoastoimposeonaContractingStatethe
obligation:
a tocarryoutadministrativemeasuresatvariancewiththelawsandadministrativepracticeof
thatoroftheotherContractingState
b tosupplyinformationordocumentswhichisnotobtainableunderthelawsorinthenormal
courseoftheadministrationofthatoroftheotherContractingState
c to supply information which would disclose any trade, business, industrial, commercial or
professionalsecretortradeprocess,orinformation,thedisclosureofwhichwouldbecontrary
topublicpolicy.
3. If information is requested by a Contracting State in accordance with this Article, the other
ContractingStateshalluseitsinformationgatheringmeasurestoobtaintherequestedinformation,even
though that other State may not need such information for its own tax purposes. The obligation
containedintheprecedingsentenceissubjecttothelimitationsofparagraph2butinnocaseshallsuch
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IncomeTaxDepartment
limitationsbeconstruedtopermitaContractingStatetodeclinetosupplyinformationsolelybecauseit
hasnodomesticinterestinsuchinformation.
4.Innocaseshalltheprovisionsofparagraph2beconstruedtopermitaContractingStatetodeclineto
supply information solely because the information is held by a bank, other financial institution,
nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership
interestsinaperson.
ARTICLE27
ASSISTANCEINTHECOLLECTIONOFTAXES
1.TheContractingStatesshalllendassistancetoeachotherinthecollectionofrevenueclaims.This
assistanceisnotrestrictedbyArticles1and2.ThecompetentauthoritiesoftheContractingStatesmay
bymutualagreementsettlethemodeofapplicationofthisArticle.
2.Theterm"revenueclaim"asusedinthisArticlemeansanamount owedinrespectoftaxesofevery
kindanddescriptionimposedonbehalfoftheContractingStates,oroftheirpoliticalsubdivisionsor
local authorities, insofar as the taxation thereunder is not contrary to this Agreement or any other
instrumenttowhichtheContractingStatesareparties,aswellasinterest,administrativepenaltiesand
costsofcollectionorconservancyrelatedtosuchamount.
3.WhenarevenueclaimofaContractingStateisenforceableunderthelawsofthatStateandisowed
byapersonwho,atthattime,cannot,underthelawsofthatState,preventitscollection,thatrevenue
claim shall, at the request of the competent authority of that State, be accepted for purposes of
collection by the competent authority of the other Contracting State. That revenue claim shall be
collectedbythatotherStateinaccordancewiththeprovisionsofitslawsapplicabletotheenforcement
andcollectionofitsowntaxesasiftherevenueclaimwerearevenueclaimofthatotherState.
4.WhenarevenueclaimofaContractingStateisaclaiminrespectofwhichthatStatemay,underits
law,takemeasuresofconservancywithaviewtoensureitscollection,thatrevenueclaimshall,atthe
request of the competent authority of that State, be accepted for purposes of taking measures of
conservancy by the competent authority of the other Contracting State. That other State shall take
measuresofconservancyinrespectofthatrevenueclaiminaccordancewiththeprovisionsofitslaws
asiftherevenueclaimwerearevenueclaimofthatotherStateevenif,atthetimewhensuchmeasures
areapplied, the revenue claim is not enforceable inthe firstmentionedStateorisowedbyaperson
whohasarighttopreventitscollection.
5. Notwithstanding the provisions of paragraphs 3 and 4, a revenue claim accepted by a Contracting
Stateforpurposesofparagraphs3or4shallnot,inthatState,besubjecttothetimelimitsoraccorded
anypriorityapplicabletoarevenueclaimunderthelawsofthatStatebyreasonofitsnatureassuch.In
addition,arevenueclaimacceptedbyaContractingStateforthepurposesofparagraphs3or4shall
not, in that State, have any priority applicable to that revenue claim under the laws of the other
ContractingState.
6.Proceedingswithrespecttotheexistence,validityortheamountofarevenueclaimofaContracting
State shall only be brought before the courts or administrative bodies of that State. Nothing in this
Articleshallbeconstruedascreatingorprovidinganyrighttosuchproceedingsbeforeany court or
administrativebodyoftheotherContractingState.
7.Where,atanytimeafterarequesthasbeenmadebyaContractingStateunderparagraphs3or4and
before the other Contracting State has collected and remitted the relevant revenue claim to the first
mentionedState,therelevantrevenueclaimceasestobe:
a inthecaseofarequestunderparagraph3,arevenueclaimofthefirstmentionedStatethatis
enforceableunderthelawsofthatState and is owed by a person who, at that time, cannot,
underthelawsofthatState,preventitscollection,or
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b in the case of a request under paragraph 4, a revenue claim of the firstmentioned State in
respectofwhichthatStatemay,underitslaws,takemeasuresofconservancywithaviewto
ensureitscollection.
ThecompetentauthorityofthefirstmentionedStateshallpromptlynotifythecompetentauthorityof
theother State of that fact and,at the option of the other State, the firstmentioned State shall either
suspendorwithdrawitsrequest.
8.InnocaseshalltheprovisionsofthisArticlebeconstruedsoastoimposeonaContractingStatethe
obligation:
a tocarryoutadministrativemeasuresatvariancewiththelawsandadministrativepracticeof
thatoroftheotherContractingState
b tocarryoutmeasureswhichwouldbecontrarytopublicpolicy(ordrepublic)
c toprovideassistanceiftheotherContractingStatehasnotpursuedallreasonablemeasuresof
collection or conservancy, as the case may be, available under its laws or administrative
practice
d toprovideassistanceinthosecaseswheretheadministrativeburdenforthatStateisclearly
disproportionatetothebenefittobederivedbytheotherContractingState.
ARTICLE28
MEMBERSOFDIPLOMATICMISSIONSANDCONSULARPOSTS
Nothing in this Agreement shall affect the fiscal privileges of members of diplomatic missions or
consular posts under the general rules of international law or under the provisions of special
agreements.
ARTICLE29
ENTRYINTOFORCE
1. The Contracting States shall notify each other in writing, through diplomatic channels, of the
completionoftheprocedurerequiredbytherespectivelawsfortheentryintoforceofthisAgreement.
2. This Agreement shall enter into force thirty days after the date of receipt of the later of the
notificationsreferredtoinparagraph1ofthisArticle.
3.TheprovisionsofthisAgreementshallhaveeffect:
a inCroatia:inrespectofincomeorprofitsarisinginanyfiscalyearbeginningonorafterthe
first day of January next following the calendar year in which the Agreement enters into
forceand
b inIndia:inrespectofincomearisinginanyfiscalyearbeginningonorafterthefirstdayof
AprilnextfollowingthecalendaryearinwhichtheAgreemententersintoforce.
ARTICLE30
TERMINATION
This Agreement shall remain in force indefinitely until terminated by a Contracting State. Either
Contracting State may terminate the Agreement, through diplomatic channels, by giving notice of
termination in writing at least six months before the end of any calendar year beginning after the
expiration of five years from the date of entry into force of the Agreement. In such event, the
Agreementshallceasetohaveeffect:
a inCroatia:inrespectofincomeorprofitsarisinginanyfiscalyearbeginningonorafterthe
first day of January next following the calendar year in which the notice of termination is
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IncomeTaxDepartment
given
b inIndia:inrespectofincomearisinginanypreviousyearbeginningonorafterthe1stApril
nextfollowingthecalendaryearinwhichthenoticeofterminationisgiven.
INWITNESSWHEREOFtheundersigned,beingdulyauthorisedthereto,havesignedthisAgreement.
DONEintwooriginalsatZagrebthis12thdayofFebruary,2014intheHindi, English and Croatian
languages,allthreetextsbeingequallyauthentic.IncaseofdivergencebetweenthetextstheEnglish
textshallprevail.FORTHEGOVERNMENTOFFORTHEGOVERNMENTOFTHEREPUBLIC
OFINDIATHEREPUBLICOFCROATIA
PROTOCOL
At the signing of the Agreement between the Government of the Republic of Croatia and the
Government of the Republic of India for the avoidance of double taxation and for the prevention of
fiscal evasion with respect to taxes on income, the undersigned have agreed that the following shall
formanintegralpartoftheAgreement.
AdArticles10,11,12and13
a NotwithstandingtheprovisionsofthisAgreement,acompanyresidentinaContractingState
inwhichpersonswhoarenotresidentsofthatStatehold,directlyorindirectly,aparticipation
ofmorethan50percentofthesharecapital,shallnotbeentitledtotherelievesprovidedfor
bytheAgreementinrespectofdividends, interest, royalties and capital gains arising in the
otherContractingState.ThisprovisionshallnotapplywherethesaidCompanyisengagedin
substantive business operations, other than the mere holding of shares or property, in the
ContractingStateofwhichitisaresident.
b Acompanywhichundertheprecedingsubparagraphwouldnotbe entitledtothebenefitsof
theAgreementinrespectofthe aforementioneditemsofincome,couldstillbegrantedsuch
benefitsif the competent authorities of the Contracting States agree under Article 25 of the
Agreement that the establishment of the company and the conduct of its operations are
foundedonsoundbusinessreasonsandthusdonothaveasitsprimarypurposetheobtaining
ofsuchbenefits.
INWITNESSWHEREOFtheundersigned,beingdulyauthorisedthereto,havesignedthisProtocol.
DONEintwooriginalsatZagrebthis12thdayofFebruary2014intheCroatian, Hindi and English
languages,allthreetextsbeingequallyauthentic,thecaseofdivergencebetweenthetextstheEnglish
textshallprevail.

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