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SECTION90OFTHEINCOMETAXACT,1961DOUBLETAXATIONAGREEMENTAGREEMENTFOR
AVOIDANCEOFDOUBLETAXATIONANDPREVENTIONOFFISCALEVASIONWITHFOREIGNCOUNTRIES
ORIENTALREPUBLICOFURUGUAY
NOTIFICATIONNO.53/2013[F.NO.500/138/2002FTDII]/SO2081(E),572013

Whereas, anAgreement between the Government of the Republic of India and the Government of the Oriental Republic of
Uruguayfortheavoidanceofdoubletaxationandpreventionoffiscalevasionwithrespecttotaxesonincomeandoncapital
wassignedinIndiaonthe8thdayofSeptember,2011(hereinafterreferredtoastheAgreement)
Andwhereas,thedateofentryintoforceoftheAgreementisthe21stdayofJune,2013,beingsixtydaysfromthedateofthe
later of the notifications of completion of the procedures as required by the respective laws for entry into force of the
Agreement,inaccordancewithparagraph2ofArticle31oftheAgreement
Now, therefore, in exercise of the powers conferred by section 90 of the Incometax Act, 1961 (43 of 1961), the Central
GovernmentherebynotifiesthatalltheprovisionsoftheAgreementbetweentheGovernmentoftheRepublicofIndiaandthe
GovernmentoftheOrientalRepublicofUruguayfortheavoidance of double taxation and prevention of fiscal evasion with
respecttotaxesonincomeandoncapital,assetoutintheAnnexurehereto,shallbegiveneffecttointheUnionofIndiawith
effectfromthe1stdayofApril,2014.
AGREEMENT
BETWEEN
THEGOVERNMENTOFTHEREPUBLICOFINDIA
AND
THEGOVERNMENTOFTHEORIENTALREPUBLICOFURUGUAY
FORTHEAVOIDANCEOFDOUBLETAXATIONANDTHEPREVENTION
OFFISCALEVASION
WITHRESPECTTOTAXESONINCOMEANDONCAPITAL
TheGovernmentoftheRepublicofIndiaandtheGovernmentoftheOrientalRepublicofUruguay,desiring to conclude an
Agreementfortheavoidanceofdoubletaxationandthepreventionoffiscalevasionwithrespecttotaxesonincomeandon
capitalandwithaviewtopromotingeconomiccooperationbetweenthetwocountrieshaveagreedasfollows:

ARTICLE1
PERSONSCOVERED
ThisAgreementshallapplytopersonswhoareresidentsofoneorbothoftheContractingStates.

ARTICLE2
TAXESCOVERED
1.ThisAgreementshallapplytotaxesonincomeandoncapitalimposedonbehalfofaContractingStateorofitspoliticalsub
divisionsorlocalauthorities,irrespectiveofthemannerinwhichtheyarelevied.
2.Thereshallberegardedastaxesonincomeandoncapitalalltaxesimposedontotalincome,ontotalcapital,oronelements
ofincomeorofcapital,includingtaxesongainsfromthealienationofmovableorimmovablepropertyandtaxesonthetotal
amountsofwagesorsalariespaidbyenterprises,aswellastaxesoncapitalappreciation.
3.TheexistingtaxestowhichtheAgreementshallapplyareinparticular:
(a)

inthecaseofIndia:

(i) theincomeax,includinganysurchargethereon
(ii) thewealthtax
(hereinafterreferredtoas"Indiantax")
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(b)

inthecaseofUruguay:

(i) thetaxonbusinessincome(ImpuestoalasRentasdelasActividadesEconomicasIRAE)
(ii) thepersonalincometax(ImpuestoalasRentasdelasPersonasFisicasIRPF)
(iii) thenonresidentsincometax(ImpuestoalasRentasdelasNo.ResidentesIRNR)
(iv) thetaxforsocialsecurityassistance(ImpuestodeAsistenciaalaSeguridad
SocialIASS)and
(v) thecapitaltax(ImpuestoalPatrimonioIP)
(hereinafterreferredtoas"Uruguayantax").
4.TheAgreementshallapply alsotoanyidenticalorsubstantiallysimilartaxesthatareimposedafterthedateofsignatureof
theAgreementinadditionto,orinplaceof,theexistingtaxes.Thecompetent authoritiesoftheContractingStatesshallnotify
eachotherofanysignificantchangesthathavebeenmadeintheirrespectivetaxationlaws.

ARTICLE3
GENERALDEFINITIONS
1.ForthepurposesofthisAgreement,unlessthecontextotherwiserequires:
(a)

the term "India" means the territory of India and includes the territorial sea and airspace
aboveit,aswellasanyothermaritimezoneinwhichIndiahassovereignrights,otherrights
and jurisdiction, according to the Indian law and in accordance with International law,
includingtheU.N.ConventionontheLawoftheSea

(b)

theterm"Uruguay"meanstheterritoryoftheOrientalRepublicofUruguay,andwhenused
in a geographical sense includes the airspace, the maritime areas, under Uruguayan
sovereignrightsorjurisdictioninaccordancewithInternationalLawandNationallaw

(c)

theterms"ContractingState"and"theotherContractingState"meantheRepublicofIndia
ortheOrientalRepublicofUruguayasthecontextrequires

(d)

theterm"person"includesanindividual,acompany,abodyofpersonsandanyotherentity
which is treated as a taxable unit under the taxation laws in force in the respective
ContractingStates

(e)

the term "company" means any body corporate or any entity that is treated as a body
corporatefortaxpurposes

(f)

theterm"enterprise"appliestothecarryingonofanybusiness

(g)

theterms"enterpriseofaContractingState"and"enterpriseoftheotherContractingState"
mean respectively an enterprise carried on by a resident of a Contracting State and an
enterprisecarriedonbyaresidentoftheotherContractingState

(h)

the term "international traffic" means any transport by a ship or aircraft operated by an
enterpriseofaContractingStateexceptwhentheshiporaircraftisoperatedsolelybetween
placesintheotherContractingState

(i)

theterm"competentauthority"means:

(i) inIndia:theFinanceMinister,GovernmentofIndia,orhisauthorizedrepresentative
(ii) inOrientalRepublicofUruguaytheMinistryofEconomyandFinanceoritsauthorizedrepresentative.
(j)

the term "national"


means:

(i) anyindividualpossessingthenationalityorcitizenshipofaContractingState
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(ii) any legal person, partnership or association deriving its status as such from the laws in force in a
ContractingState
(k)

the term "tax'' means Indian or Uruguayan tax, as the context


requires,butshallnotincludeanyamountwhichispayablein
respect of any default or omission in relation to the taxes to
whichthisAgreementappliesorwhichrepresentsapenaltyor
fineimposedrelatingtothosetaxes

(l)

Theterm"fiscalyear"means:

(i) inthecaseofIndia:thefinancialyearbeginningonthe1stdayofApril:
(ii) in the case of Uruguay: the calendar year beginning on the 1st day of January for the
purposesofindividualsandthetaxableperiodof12monthsforotherpersons.
2.AsregardstheapplicationoftheAgreementatanytimebyaContractingStateanytermnotdefinedthereinshall,unlessthe
contextotherwiserequires,havethemeaningthatithasatthattimeunderthelawofthatStateforthepurposesofthetaxesto
whichtheAgreementappliesandanymeaningunder theapplicabletaxlawsofthatStateprevailingoverameaninggivento
thetermunderotherlawsofthatState.

ARTICLE4
RESIDENT
1.ForthepurposesofthisAgreement,theterm"residentofaContractingState"meansanypersonwho,underthelawsofthat
State, is liable to tax therein by reason of his domicile, residence, place ofincorporation, place of management or any other
criterion of a similar nature and also includes that State and any political subdivision or local authority thereof. This term,
however,doesnotincludeanypersonwhoisliabletotaxinthatStateinrespectonlyofincomefromsourcesinthatStateor
capitalsituatedtherein.
2.Wherebyreasonoftheprovisionsofparagraph1anindividualisaresidentofbothContractingStates,thenhisstatusshall
bedeterminedasfollows:
(a)

heshallbedeemedtobearesidentonlyoftheStateinwhichhehasapermanenthomeavailabletohim
ifhehasapermanenthomeavailabletohiminbothStates,heshallbedeemedtobearesidentonlyofthe
Statewithwhichhispersonalandeconomicrelationsarecloser(centreofvitalinterests)

(b)

iftheStateinwhichhehashiscentreofvitalinterestscannotbedetermined,orifhehasnotapermanent
homeavailabletohimineitherState,heshallbedeemedtobearesidentonlyoftheStateinwhichhehas
anhabitualabode

(c)

ifhehasanhabitualabodeinbothStatesorinneitherofthem,heshallbedeemedtobearesidentonlyof
theStateofwhichheisanational

(d)

ifheisanationalofbothStatesorofneitherofthem,thecompetentauthoritiesoftheContractingStates
shallsettlethequestionbymutualagreement.

3.Wherebyreasonoftheprovisionsofparagraph1apersonotherthananindividualisaresidentofbothContractingStates,
thenitshallbedeemedtobearesidentonlyoftheStateinwhichitsplaceofeffectivemanagementissituated.IftheStatein
which its place of effective management is situated cannot be determined, then the competent authorities of the Contracting
Statesshallendeavourtosettlethequestionbymutualagreement.

ARTICLE5
PERMANENTESTABLISHMENT
1.ForthepurposesofthisAgreement,theterm"permanentestablishment"meansafixedplaceofbusinessthroughwhichthe
businessofanenterpriseiswhollyorpartlycarriedon.
2.Theterm"permanentestablishment"includesespecially:
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(a)

aplaceofmanagement

(b)

abranch

(c)

anoffice

(d)

afactory

(e)

aworkshop

(f)

asalesoutlet

(g)

awarehouseinrelationtoapersonprovidingstoragefacilitiesforothers

(h)

afarm,plantationorotherplacewhereagricultural,forestry,plantationorrelatedactivitiesarecarriedon
and

(i)

amine,anoilorgaswell,aquarryoranyotherplaceofextractionofnaturalresources.

3. (a) A building site or construction, installation or assembly project or supervisory activities in connection therewith
constitutesapermanentestablishmentonlyifsuchsite,projectoractivitieslast183daysormore.
(b)Thefurnishingofservices,includingconsultancyservices,byanenterprisethroughemployeesorotherpersonnelengaged
bytheenterpriseforsuchpurpose,butonlywhereactivitiesofthatnaturecontinue(forthesameorconnectedproject)within
thecountryforaperiodorperiodsaggregatingmorethan90dayswithinany12monthperiod.
4.NotwithstandingtheprecedingprovisionsofthisArticletheterm"permanentestablishment"shallbedeemednottoinclude:
(a)

theuseoffacilitiessolely for the purpose of storage, display of goods or merchandise belonging to the
enterprise

(b)

themaintenanceofastockofgoodsormerchandisebelongingtotheenterprisesolelyforthepurposeof
storage,display

(c)

themaintenanceofastockofgoodsormerchandisebelongingtotheenterprisesolelyforthepurposeof
processingbyanotherenterprise

(d)

themaintenanceofafixedplaceofbusinesssolelyforthepurposeofpurchasinggoodsormerchandiseor
ofcollectinginformation,fortheenterprise

(e)

themaintenanceofafixedplaceofbusinesssolelyforthepurposeofcarryingon,fortheenterprise,any
otheractivityofapreparatoryorauxiliarycharacter

(f)

themaintenanceof a fixed place of business solely for any combination of activities mentionedinsub
paragraphs(a)to(e),providedthattheoverallactivityofthefixedplaceofbusinessresultingfromthis
combinationisofapreparatoryorauxiliarycharacter.

5.Notwithstandingtheprovisionsofparagraphs1and2,whereapersonotherthananagentofanindependentstatustowhom
paragraph7appliesisactinginaContractingStateonbehalfofanenterpriseoftheotherContractingState,thatenterprise
shallbedeemedtohaveapermanentestablishmentinthefirstmentionedContractingStateinrespectofanyactivitieswhich
thatpersonundertakesfortheenterprise,ifsuchaperson:
(a)

hasandhabituallyexercisesinthatStateanauthoritytoconcludecontractsinthenameoftheenterprise,
unless the activities of such person are .limited to those mentioned in paragraph 4 which, if exercised
throughafixedplateofbusiness,wouldnotmakethisfixedplaceofbusinessapermanentestablishment
undertheprovisionsofthatparagraph,or

(b)

has no such authority, but habitually maintains in the firstmentioned State a stock of goods or
merchandisefromwhichheregularlydeliversgoodsormerchandiseonbehalfoftheenterprise

(c)

habituallysecuresordersinthefirstmentionedState,whollyoralmostwhollyfortheenterpriseitself.

6.NotwithstandingtheprecedingprovisionsofthisArticle,aninsuranceenterpriseofaContractingStateshall,exceptinregard
to reinsurance, be deemed to have a permanent establishment in the other Contracting State if it collects premiums in the
territory of that other State or insures risks situated therein through a person other than an agent of an independent status to
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whomparagraph7applies.
7.An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on
business in that State through a broker, general commission agent or any other agentofanindependentstatus,providedthat
such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted
wholly or almost wholly on behalf of that enterprise, he will not be considered an agent of an independent status within the
meaningofthisparagraph.
8.ThefactthatacompanywhichisaresidentofaContractingStatecontrolsoriscontrolledbyacompanywhichisaresident
oftheotherContractingStateorwhichcarriesonbusinessinthatotherState(whetherthroughapermanentestablishmentor
otherwise),shallnotofitselfconstituteeithercompanyapermanentestablishmentoftheother.

ARTICLE6
INCOMEFROMIMMOVABLEPROPERTY
1.IncomederivedbyaresidentofaContractingStatefromimmovablepropertysituatedintheotherContractingStatemaybe
taxedinthatotherState.
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, rights to which the provisions of general law respecting landed property apply,
usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to
work, mineral deposits, sources and other natural resources ships, boats and aircrafts shall not be regarded as immovable
property.
3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of
immovableproperty.
4.Theprovisionsofparagraphs1and3shallalsoapplytotheincomefromimmovablepropertyofanenterpriseandtoincome
fromimmovablepropertyusedfortheperformanceofindependentpersonalservices.

ARTICLE7
BUSINESSPROFITS
1.TheprofitsofanenterpriseofaContractingStateshallbetaxableonlyinthatStateunlesstheenterprisecarriesonbusiness
in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as
aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that
permanentestablishment.
2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other
ContractingStatethroughapermanentestablishmentsituatedtherein,thereshallineachContractingStatebeattributedtothat
permanentestablishmenttheprofitswhichitmightbeexpectedtomakeifitwereadistinctandseparateenterpriseengagedin
the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of
whichitisapermanentestablishment.
3.Indeterminingtheprofitsofapermanentestablishment,thereshallbeallowedasdeductionsexpenseswhichareincurredfor
thepurposesofthepermanentestablishment,includingexecutiveandgeneraladministrativeexpensessoincurred,whetherin
theStateinwhichthepermanentestablishmentissituatedorelsewhere,inaccordancewiththeprovisionsofandsubjecttothe
limitationsofthetaxlawsofthatState.
4.InsofarasithasbeencustomaryinaContractingStatetodeterminetheprofitstobeattributedtoapermanentestablishment
onthebasisofanapportionmentofthetotalprofitsoftheenterprisetoitsvariousparts,nothinginparagraph2shallpreclude
Contracting State from determining the profits to be taxed by such an apportionment as may be customary the method of
apportionmentadoptedshall,however,besuchthattheresultshallbeinaccordancewiththeprinciplescontainedinthisArticle.
5.Noprofitsshallbeattributedtoapermanentestablishmentbyreasonofthemerepurchasebythatpermanentestablishment
ofgoodsormerchandisefortheenterprise.
6.Forthepurposesoftheprecedingparagraphs,theprofitstobeattributedtothepermanentestablishmentshallbedetermined
bythesamemethodyearbyyearunlessthereisgoodandsufficientreasontothecontrary.
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7. Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the
provisionsofthoseArticlesshallnotbeaffectedbytheprovisionsofthisArticle.

ARTICLE8
SHIPPINGANDAIRTRANSPORT
1.ProfitsderivedbyanenterpriseofaContractingStatefromtheoperationofshipsoraircraftinInternationaltrafficshallbe
taxableonlyinthatState.
2.Iftheplaceofeffectivemanagementofashippingenterpriseisaboardaship,thenitshallbedeemedtobesituatedinthe
Contracting State in which the home harbour of the ship is situated, or, ifthere is no such home harbour, in the Contracting
Stateofwhichtheoperatoroftheshipisaresident.
3.Theprovisionsofparagraph1shallalsoapplytoprofitsfromtheparticipationinapool,ajointbusinessoranInternational
operatingagency.

ARTICLE9
ASSOCIATEDENTERPRISES
1.Where
(a)

anenterpriseofaContractingStateparticipatesdirectlyorindirectlyinthemanagement,controlorcapital
ofanenterpriseoftheotherContractingState,or

(b)

thesamepersonsparticipatedirectlyorindirectlyinthemanagement,controlorcapitalofanenterpriseof
aContractingStateandanenterpriseoftheotherContractingState,andineithercaseconditionsaremade
orimposedbetweenthetwoenterprisesintheircommercialorfinancialrelationswhichdifferfromthose
which would be made between independent enterprises, then any profits which would, but for those
conditions,haveaccruedtooneoftheenterprises,but,byreasonofthoseconditions,havenotsoaccrued,
maybeincludedintheprofitsofthatenterpriseandtaxedaccordingly.

2.WhereaContractingStateincludesintheprofitsofanenterpriseoftheStateandtaxesaccordinglyprofitsonwhichan
enterpriseoftheotherContractingStatehasbeenchargedtotaxinthatotherStateandtheprofitssoincludedareprofitswhich
wouldhaveaccruedtotheenterpriseofthefirstmentionedStateiftheconditionsmadebetweenthetwoenterpriseshadbeen
thosewhichwouldhavebeenmadebetweenindependententerprises,thenthatotherStateshallmakeanappropriateadjustment
totheamountofthetaxchargedthereinonthoseprofits.Indeterminingsuchadjustment,dueregardshallbehadtotheother
provisionsofthisAgreementandthecompetentauthoritiesoftheContractingStatesshallifnecessaryconsulteachother.
3.Theprovisionsofparagraph2shallnotapplywherejudicial,administrativeorotherlegalproceedingshaveresultedinafinal
ruling that by actions giving rise to an adjustment of profits underparagraph 1, one of the enterprises concerned is liable to
penaltywithrespecttofraud,grossnegligenceorwilfuldefault.

ARTICLE10
DIVIDENDS
1.DividendspaidbyacompanywhichisaresidentofaContractingStatetoaresidentoftheotherContractingStatemaybe
taxedinthatotherState.
2.However,suchdividendsmayalsobetaxedintheContractingStateofwhichthecompanypayingthedividendsisaresident
andaccordingtothelawsofthatState,butifthebeneficialownerofthedividendsisaresidentoftheotherContractingState,
thetaxsochargedshallnotexceed5percentofthegrossamountofthedividends.Thisparagraphshallnotaffectthetaxation
ofthecompanyinrespectoftheprofitsoutofwhichthedividendsarepaid.
3.Theterm"dividends"asusedinthisArticlemeansincomefromshares,orotherrights,notbeingdebtclaims,participatingin
profits,aswellasincomefromothercorporaterightswhichissubjectedtothesametaxationtreatmentasincomefromshares
bythelawsoftheStateofwhichthecompanymakingthedistributionisaresident.
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a
ContractingState,carriesonbusinessintheotherContractingStateofwhichthecompanypayingthedividendsisaresident,
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throughapermanentestablishmentsituatedtherein,orperformsinthatotherStateindependentpersonalservicesfromafixed
basesituatedtherein,andtheholdinginrespectofwhichthedividendsarepaidiseffectivelyconnectedwithsuchpermanent
establishmentorfixedbase.InsuchcasetheprovisionsofArticle7orArticle14,asthecasemaybe,shallapply.
5.WhereacompanywhichisaresidentofaContractingStatederivesprofitsorincomefromtheotherContractingState,that
other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a
residentofthatotherStateorinsofarastheholdinginrespectofwhichthedividendsarepaidiseffectivelyconnectedwitha
permanentestablishmentorafixedbasesituatedinthatotherState,norsubjectthecompany'sundistributedprofitstoataxon
thecompany'sundistributedprofits,evenifthedividendspaidortheundistributedprofitsconsistwhollyorpartlyofprofitsor
incomearisinginsuchotherState.

ARTICLE11
INTEREST
1.InterestarisinginaContractingStateandpaidtoaresidentoftheotherContractingStatemaybetaxedinthatotherState.
2.However,suchinterestmayalsobetaxedintheContractingStateinwhichitarises,andaccordingtothelawsofthatState,
butifthebeneficialowneroftheinterestisaresidentoftheotherContractingState,thetaxsochargedshallnotexceed10per
centofthegrossamountoftheinterest.
3.Notwithstandingtheprovisionsofparagraph2,interestarisinginaContractingStateshallbeexemptfromtaxinthatState,
providedthatitisderivedandbeneficiallyownedby:
(a)

theGovernment,apoliticalsubdivisionoralocalauthorityoftheotherContractingStateor

(b)

(i)inthecaseofIndia,theReserveBankofIndia,theExportImportbankofIndia,theNationalHousing
bankand

(ii ) in the case of Uruguay, Banco Central del Uruguay, Banco de la Republica Oriental del Uruguay,
BancoHipotecariodelUruguayor

(c)

anyotherinstitutionasmaybeagreeduponfromtimetotimebetweentheCompetentauthoritiesofthe
ContractingStatesthroughexchangeofletters.

4.Theterm"interest"asusedinthisArticlemeansincomefromdebtclaimsofeverykind,whetherornotsecuredbymortgage
andwhetherornotcarryingarighttoparticipateinthedebtor'sprofits,andinparticular,incomefromGovernmentsecurities
andincomefrombondsordebentures,includingpremiumsandprizesattachingtosuchsecurities,bondsordebentures.Penalty
chargesforlatepaymentshallnotberegardedasinterestforthepurposeofthisArticle.
5.Theprovisionsofparagraphs1and2shallnotapplyifthebeneficialowneroftheinterest,beingaresidentofaContracting
State,carriesonbusinessintheotherContractingStateinwhichtheinterestarises,throughapermanentestablishmentsituated
therein,orperformsinthatotherStateindependentpersonalservicesfromafixedbasesituatedtherein,andthedebtclaimin
respectofwhichtheinterestispaidiseffectivelyconnectedwithsuchpermanentestablishmentorfixedbase.Insuchcasethe
provisionsofArticle7orArticle14,asthecasemaybe,shallapply.
6.InterestshallbedeemedtoariseinaContractingStatewhenthepayerisaresidentofthatState.Where,however,theperson
payingtheinterest,whetherheisaresidentofaContractingStateornot,hasinaContractingStateapermanentestablishment
orafixedbaseinconnectionwithwhichtheindebtednessonwhichtheinterestispaidwasincurred,andsuchinterestisborne
bysuchpermanentestablishmentorfixedbase,thensuchinterestshallbedeemedtoariseintheStateinwhichthepermanent
establishmentorfixedbaseissituated.
7.Where,byreasonofaspecialrelationshipbetweenthepayerandthebeneficialownerorbetweenbothofthemandsome
otherperson,theamountoftheinterest,havingregardtothedebtclaimforwhichitispaid,exceedstheamountwhichwould
havebeenagreeduponbythepayerandthebeneficialownerintheabsenceofsuchrelationship,theprovisionsofthisArticle
shallapplyonlytothelastmentionedamount.Insuchcase,theexcesspartofthepaymentsshallremaintaxableaccordingto
thelawsofeachContractingState,dueregardbeinghadtotheotherprovisionsofthisAgreement.

ARTICLE12
ROYALTIESANDFFESFORTECHNICALSERVICES
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1.RoyaltiesorfeesfortechnicalservicesarisinginaContractingStateandpaidtoaresidentoftheotherContractingStatemay
betaxedinthatotherState.
2.However,suchroyaltiesorfees for technical services may also be taxed in the Contracting State in which they arise, and
accordingtothelawsofthatState,butifthebeneficialowneroftheroyaltiesorfeesfortechnicalservicesisaresidentofthe
otherContractingStatethetaxsochargedshallnotexceed10percentofthegrossamountoftheroyaltiesorfeesfortechnical
services.
3.(a)Theterm"royalties"asusedinthisArticlemeanspaymentsofanykindreceivedasaconsiderationfortheuseof,orthe
right to use, any copyright of literary, artistic or scientific work including cinematograph films or films or tapes used for
televisionorradiobroadcasting,anypatent,trademark,designormodel,plan,secretformulaorprocess,orfortheuseof,or
the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or
scientificexperience.
(b)Theterm"feesfortechnicalservices"asusedinthisArticlemeanspaymentsofanykind, otherthan those mentioned in
Articles 14 and 15 of this Agreement as consideration for managerial or technical or consultancy services, including the
provisionofservicesoftechnicalorotherpersonnel.
4.Theprovisionsofparagraph1and2shallnotapplyifthebeneficialowneroftheroyaltiesorfeesfortechnicalservicesbeing
aresidentofaContractingState,carriesonbusinessintheotherContractingStateinwhichtheroyaltiesorfeesfortechnical
servicesarise,throughapermanentestablishmentsituatedtherein,orperformsinthatotherStateindependentpersonalservices
fromafixedbasesituatedtherein,andtherightorpropertyinrespectofwhichtheroyaltiesorfeesfortechnicalservicesare
paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or
Article14,asthecasemaybe,shallapply.
5.(a)RoyaltiesandfeesfortechnicalservicesshallbedeemedtoariseinaContractingStatewhenthepayeristhatStateitself,
apoliticalsubdivision,alocalauthority,oraresidentofthatState.Where,however,thepersonpayingtheroyaltiesorfeesfor
technicalservices,whetherheisaresidentofaContractingStateornot,hasinaContractingStateapermanentestablishmentor
a fixed base in connection with which the liability to pay the royalties or fees for technical services was incurred, and such
royaltiesorfeesfortechnicalservicesarebornebysuchpermanentestablishmentorfixedbase,thensuchroyaltiesorfeesfor
technical services shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is
situated.
(b)Whereundersubparagraph(a)royaltiesorfeesfortechnicalservicesdonotariseinoneoftheContractingStates,andthe
royalties relate to the use of, or the right to use, the right or property, or the fees for technical services relate to services
performed, in one of the Contracting States, the royalties or fees for technical services shall be deemed to arise in that
ContractingState.
6.Where,byreasonofaspecial relationshipbetweenthepayerandthebeneficialownerorbetweenbothofthemandsome
otherperson,theamountoftheroyaltiesorfeesfortechnicalservices,havingregardtotheuse,rightorinformationforwhich
theyarepaid,exceedstheamountwhichwouldhavebeenagreeduponbythepayerandthebeneficialownerintheabsenceof
suchrelationship,theprovisionsofthisArticleshallapplyonlytothelastmentionedamount.Insuchcase,theexcesspart of
thepaymentsshallremaintaxableaccordingtothelawsofeachContractingState,dueregardbeinghadtotheotherprovisions
ofthisAgreement.

ARTICLE13
CAPITALGAINS
1. Gains derived by a resident ofaContractingStatefrom the alienationof immovablepropertyreferred to inArticle 6 and
situatedintheotherContractingStatemaybetaxedinthatotherState.
2.Gainsfromthealienationofmovablepropertyformingpartofthebusinesspropertyofapermanentestablishmentwhichan
enterpriseofaContractingStatehasintheotherContractingStateorofmovablepropertypertainingtoafixedbaseavailableto
a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services,
includingsuchgainsfromthealienationofsuchapermanentestablishment(aloneorwiththewholeenterprise)orofsuchfixed
base,maybetaxedinthatotherState.
3.GainsfromthealienationofshipsoraircraftoperatedinInternationaltraffic,ormovablepropertypertainingtotheoperation
ofsuchshipsoraircraftshallbetaxableonlyintheContractingStateofwhichthealienatorisaresident.
4.Gainsfromthealienationof shares of the capital stock of a company the property of which consists directlyorindirectly
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principallyofimmovablepropertysituatedinaContractingStatemaybetaxedinthatState.
5. Gains from the alienation of shares other than those mentioned in paragraph 4 in a company which is a resident of a
ContractingStatemaybetaxedinthatState.
6.Gainsfromthealienationofanypropertyotherthanthatreferredtoinparagraphs1,2,3,4and5,shallbetaxableonlyinthe
ContractingStateofwhichthealienatorisaresident.

ARTICLE14
INDEPENDENTPERSONALSERVICES
1.IncomederivedbyanindividualwhoisaresidentofaContractingStatefromtheperformanceofprofessionalservicesor
otherindependentactivitiesofasimilarcharactershallbetaxableonlyinthatexceptinthefollowingcircumstanceswhensuch
incomemayalsobetaxedintheotherContractingState:
(a)

if he has a fixed base regularly available to him in the other Contracting State for the purpose of
performinghisactivitiesinthatcase,onlysomuchoftheincomeusisattributabletothatfixedbasemay
betaxedinthatotherStateor

(b)

if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the
aggregate183daysinanyperiodof12monthsinthatcase,onlysomuch of the income as is derived
fromhisactivitiesperformedinthatotherStatemaybetaxedinthatotherState.

2.Theterm"professionalservices"includesespeciallyindependentscientific,literary,artistic,educationalorteachingactivities
aswellastheindependentactivitiesofphysicians,lawyers,engineers,architects,surgeons,dentistsandaccountants.

ARTICLE15
DEPENDENTPERSONALSERVICES
1. Subject to the provisions ofArticles 16, 18, 19, 20 and 21, salaries, wages and other similar remuneration derived by a
resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is
exercisedintheotherContractingState.Iftheemploymentissoexercised,suchremunerationasisderivedtherefrommaybe
taxedinthatotherState.
2.Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an
employmentexercisedintheotherContractingStateshallbetaxableonlyinthefirstmentionedStateif:
(a)

therecipientispresentintheotherStateforaperiodorperiodsnotexceedingintheaggregate183daysin
anytwelvemonthperiodcommencingorendinginthefiscalyearconcerned,and

(b)

theremunerationispaidby,oronbehalfof,anemployerwhoisnotaresidentoftheotherState,and

(c)

theremunerationisnotbornebyapermanentestablishmentorafixedbasewhichtheemployerhasinthe
otherState.

3.NotwithstandingtheprecedingprovisionsofthisArticle,remunerationderivedinrespectofanemploymentexercisedaboard
ashiporaircraftoperatedinInternationaltraffic,byanenterpriseofaContractingStatemaybetaxedinthatState.

ARTICLE16
DIRECTORS'FEES
Directors'feesandothersimilarpaymentsderivedbyaresidentofaContractingStateinhiscapacityasamemberoftheboard
ofdirectorsofacompanywhichisaresidentoftheotherContractingStatemaybetaxedinthatotherState.

ARTICLE17
ARTISTESANDSPORTSPERSONS
1.NotwithstandingtheprovisionsofArticles14and15,incomederivedbyaresidentofaContracting Stateasanentertainer,
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suchasatheatre,motionpicture,radioortelevisionartiste,oramusician,orasasportsperson,frompersonalactivitiesassuch
exercisedintheotherContractingState,maybetaxedinthatotherState.
2.Whereincomeinrespectofpersonalactivitiesexercisedbyanentertainerorasportspersoninhiscapacityassuchaccrues
nottotheentertainerorsportspersonhimselfbuttoanotherperson,thatincomemay,notwithstandingtheprovisionsofArticles
7,14and15,betaxedintheContractingStateinwhichtheactivitiesoftheentertainerorsportspersonareexercised.
3. The provisions of paragraphs 1 and 2, shall not apply to income from activities performed in a Contracting State by
entertainersorsportspersonsiftheactivitiesaresubstantiallysupportedbypublicfundsofoneorbothoftheContractingStates
orofpoliticalsubdivisionsorlocalauthoritiesthereof.Insuchacase,theincomeshallbetaxableonlyintheContractingState
ofwhichtheentertainerorsportspersonisaresident.

ARTICLE18
PENSIONS
Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a
ContractingStateinconsiderationofpastemploymentshallbetaxableonlyinthatState.

ARTICLE19
GOVERNMENTSERVICE
1. (a) Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting State or a political sub
division or a local authority thereof to an individual in respect of services rendered tothat State or subdivision or authority
shallbetaxableonlyinthatState.
(b)However,Salaries,wagesandothersimilarremunerationshallbetaxableonlyintheotherContractingStateiftheservices
arerenderedinthatStateandtheindividualisaresidentofthatStatewho:
(i)

isanationalofthatStateor

(ii)

didnotbecomearesidentofthatStatesolelyforthepurposeofrenderingtheservices.

2.(a)Anypensionpaidby,oroutoffundscreatedby,aContractingStateorapoliticalsubdivisionoralocalauthoritythereof
toanindividualinrespectofservicesrenderedtothatStateorsubdivisionorauthorityshallbetaxableonlyinthatState.
(b)However,suchpensionshallbetaxableonlyintheotherContractingStateiftheindividualisaresidentof,andanational
of,thatState.
3.TheprovisionsofArticles15,16,17and18shallapplytoSalaries,wagesandothersimilarremunerationandtopensionsin
respectofservicesrenderedinconnectionwithabusinesscarriedonbyaContractingStateorapoliticalsubdivisionoralocal
authoritythereof.

ARTICLE20
PROFESSORS,TEACHERSANDRESEARCHSCHOLARS
1.Aprofessor, teacherorresearch scholar who is or was a resident of the Contracting State immediately before visiting the
other Contracting State for the purpose of teaching or engaging in research, or both, at a university, college or other similar
approvedinstitutioninthatotherContractingStateshallbeexemptfromtaxinthatotherStateonanyremunerationforsuch
teachingorresearchforaperiodnotexceeding2yearsfromthedateofhisfirstarrivalinthatotherState.
2.ThisArticleshallapply toincomefromresearchonlyifsuchresearchisundertakenbytheindividualinthepublicinterest
andnotprimarilyforthebenefitofsomeprivatepersonorpersons.
3.ForthepurposesofthisArticle,anindividualshallbedeemedtobearesidentofaContractingStateifheisresidentinthat
StateinthefiscalyearinwhichhevisitstheotherContractingStateorintheimmediatelyprecedingfiscalyear.

ARTICLE21
STUDENTS
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1.AstudentwhoisorwasaresidentofoneoftheContractingStatesimmediatelybeforevisitingtheotherContractingStatean
who is present in that other Contracting State solely for the purpose of his education or training, shall besides grants and
scholarshipsbeexemptfromtaxinthatotherStateon:
(a)

paymentsmadetohimbypersonsresidingoutsidethatotherStateforthepurposesofhismaintenance,
educationortrainingand

(b)

remunerationwhichhederivesfromanemploymentwhichheexercisesintheotherContractingStateif
theemploymentisdirectlyrelatedtohisstudies.

2. The benefits of this Article shall extend only for such period of time as may be reasonable or customarily required to
completetheeducationortrainingundertaken,butinnoeventshallanyindividualhavethebenefitsofthisArticle,formore
thansixconsecutiveyearsfromthedateofhisfirstarrivalforthepurposesofhiseducationortraininginthatotherState.

ARTICLE22
OTHERINCOME
1. Items of income of a resident of a Contracting State, wherever arising, not dealt within the foregoing Articles of this
AgreementshallbetaxableonlyinthatState.
2.Theprovisionsofparagraph1shallnotapplytoincome,otherthanincomefromimmovablepropertyasdefinedinparagraph
2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other
Contracting State 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 income is paid is effectively
connectedwithsuchpermanentestablishmentorfixedbase.InsuchcasetheprovisionsofArticle7 orArticle14,asthecase
maybe,shallapply.
3.Notwithstandingtheprovisionsofparagraphs1and2,itemsofincomeofaresidentofaContractingStatenotdealtwithin
theforegoingarticlesofthisAgreementandarisingintheotherContractingStatemayalsobetaxedinthatotherState.

ARTICLE23
TAXATIONOFCAPITAL
1.CapitalrepresentedbyimmovablepropertyreferredtoinArticle6ownedbyaresidentofaContractingStateandsituatedin
theotherContractingState,maybetaxedinthatotherState.
2. Capital represented by movable property forming part of the business property of a permanent establishment which an
enterpriseofaContractingStatehasintheotherContractingStateorbymovablepropertypertainingtoafixedbaseavailable
toaresidentofaContractingStateintheotherContractingStateforthepurposeofperformingindependentpersonalservices,
maybetaxedinthatotherState.
3.CapitalrepresentedbyshipsandaircraftoperatedinInternationaltrafficandbymovablepropertypertainingtotheoperation
of such ships and aircraft shall be taxable only in the Contracting State of which the enterprise owning such property is a
resident.
4.AllotherelementsofcapitalofaresidentofaContractingStateshallbetaxableonlyinthatState.

ARTICLE24
METHODSFORELIMINATIONOFDOUBLETAXATION
Doubletaxationshallbeeliminatedasfollows:
1.InIndia:
(a)

Where a resident of India derives income which, in accordance with the provisions of thisAgreement,
maybetaxedinUruguay,Indiashallallowasadeductionfromthetaxontheincomeofthatresidentan
amountequaltothetaxpaidinUruguay.

Such deduction shall not, however, exceed that portion of the tax as computed before the deduction is
given,whichisattributabletotheincomewhichmaybetaxedinUruguay.

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(b)

WherearesidentofIndiaownscapitalwhich,inaccordancewiththeprovisionsoftheAgreementmaybe
taxedinUruguay,Indiashallallowasadeductionfromthetaxonwealthofthatresidentanamountequal
tothecapitaltaxpaidinUruguay.

Such deduction shall not, however, exceed that portion of the tax as computed before the deduction is
given,whichisattributabletothecapitalwhichmaybetaxedinUruguay.

(c)

WhereinaccordancewithanyprovisionoftheAgreementincomederivedorwealthownedbyaresident
of India is exempt from tax in India, India may nevertheless, in calculating the amount of tax on the
remainingincomeorwealthofsuchresident,takeintoaccounttheexemptedincomeorwealth.

2.InUruguay:
(a)

WherearesidentofUruguayderivesincomewhich,inaccordancewiththeprovisionsofthisAgreement,
maybetaxedinIndia,Uruguayshallallowasadeductionfromthetaxontheincomeofthatresident,an
amountequaltothetaxpaidinIndia.

Such deduction shall not, however, exceed that portion of the tax as computed before the deduction is
given,whichisattributabletotheincomewhichmaybetaxedinIndia.

(b)

Where a resident of Uruguay owns wealth which, in accordance with the provisions of theAgreement
may be taxed in India, Uruguay shall allow as a deduction from the tax on capital of that resident an
amountequaltotheWealthtaxpaidinIndia.

Such deduction shall not, however, exceed that portion of the tax as computed before the deduction is
given,whichisattributabletothewealthwhichmaybetaxedinIndia.

(c)

WhereinaccordancewithanyprovisionoftheAgreementincomederivedorcapitalownedbyaresident
ofUruguayisexemptfromtaxinUruguay,Uruguaymaynevertheless,incalculatingtheamountoftaxon
theremainingincomeorcapitalofsuchresident,takeintoaccounttheexemptedincomeorcapital.

ARTICLE25
NONDISCRIMINATION
1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement
connectedtherewith,whichisotherormoreburdensomethanthetaxationandconnected requirements to which nationals of
thatotherStateinthesamecircumstances,inparticularwithrespecttoresidence,areormaybesubjected.Thisprovisionshall,
notwithstandingtheprovisionsofArticle1,alsoapplytopersonswhoarenotresidentsofoneorbothoftheContractingStates.
2.ThetaxationonapermanentestablishmentwhichanenterpriseofaContractingStatehasintheotherContractingStateshall
notbelessfavourablyleviedinthatotherStatethanthetaxationleviedonenterprisesofthatotherStatecarryingonthesame
activities.Thisprovisionshallnotbeconstrued asobliging a Contracting State to grant to residents of the other Contracting
Stateanypersonalallowances,reliefsandreductionsfortaxationpurposesonaccountofcivilstatusorfamilyresponsibilities
whichitgrantstoitsownresidents.
3. Except where the provisions of paragraph 1 ofArticle 9, paragraph 7 ofArticle 11, or paragraph 6 of Article 12, apply,
interest,royalties,feesfortechnicalservicesandotherdisbursementspaidbyanenterpriseofaContractingStatetoaresident
oftheotherContractingStateshall,forthepurposeofdeterminingthetaxableprofitsofsuchenterprise,bedeductibleunderthe
sameconditionsasiftheyhadbeenpaidtoaresidentofthefirstmentionedState.Similarly,anydebtsofanenterpriseofa
ContractingStatetoaresidentoftheotherContractingStateshall,forthepurposeofdeterminingthetaxablecapitalofsuch
enterprise,bedeductibleunderthesameconditionsasiftheyhadbeencontractedtoaresidentofthefirstmentionedState.
4.EnterprisesofaContractingState,thecapitalofwhichiswhollyorpartlyownedorcontrolled,directlyorindirectly,byone
or more residents of the other Contracting State, shall not be subjected in the firstmentioned State to any taxation or any
requirementconnectedtherewithwhichisotherormore burdensome than the taxation and connected requirements to which
othersimilarenterprisesofthefirstmentionedStateareormaybesubjected.
5.TheprovisionsofthisArticleshall,notwithstandingtheprovisionsofArticle2,applytotaxesofeverykindanddescription.

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ARTICLE26
MUTUALAGREEMENTPROCEDURE
1.WhereapersonconsidersthattheactionsofoneorbothoftheContractingStatesresultorwillresultforhimintaxationnot
inaccordancewiththeprovisionsofthisAgreement,hemay,irrespectiveoftheremediesprovidedbythedomesticlawofthose
States,presenthiscasetothecompetentauthorityoftheContractingStateofwhichheisaresidentor,ifhiscasecomesunder
paragraph1ofArticle25,tothatoftheContractingStateofwhichheisanational.Thecasemustbepresentedwithin three
yearsfromthefirstnotificationoftheactionresultingintaxationnotinaccordancewiththeprovisionsoftheAgreement.
2.Thecompetentauthorityshallendeavour,iftheobjectionappearstoittobejustifiedandifitisnotitselfabletoarriveata
satisfactorysolution,toresolvethecasebymutualagreementwiththecompetentauthorityoftheotherContractingState,with
a view to the avoidance of taxation which is not in accordance with the Agreement. Any agreement reached shall be
implementednotwithstandinganytimelimitsinthedomesticlawoftheContractingStates.
3.ThecompetentauthoritiesoftheContractingStatesshallendeavourtoresolvebymutualagreementanydifficultiesordoubts
arisingastotheinterpretationorapplicationoftheAgreement.Theymay alsoconsulttogetherfortheeliminationofdouble
taxationincasesnotprovidedforintheAgreement.
4.ThecompetentauthoritiesoftheContractingStatesmaycommunicatewitheachotherdirectlyforthepurposeofreachingan
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
authoritiesoftheContractingStates.

ARTICLE27
EXCHANGEOFINFORMATION
1.ThecompetentauthoritiesoftheContractingStatesshallexchangesuchinformation(includingdocumentsorcertifiedcopies
of the documents) as is foreseeably relevant for carrying out the provisions of this Agreement or of the domestic laws
concerningtaxescoveredbythisAgreementinsofarasthetaxationthereunderisnotcontrarytotheAgreement.Theexchange
ofinformationisnotrestrictedbyArticles1and2.
2.AnyinformationreceivedbyaContractingStateshallbetreatedassecretinthesamemannerasinformationobtainedunder
the domestic laws of that State and shall be disclosed only to persons or authorities (including Courts and Administrative
Bodies)concernedwiththeassessmentorcollectionof,theenforcementorprosecutioninrespectof,orthedeterminationof
appealsinrelationtothetaxescoveredbytheAgreement.Suchpersonsorauthoritiesshallusetheinformationonlyforsuch
purposes.TheymaydisclosetheinformationinpublicCourtproceedingsorinjudicialdecisions.
3.Innocaseshalltheprovisionsofparagraph1beconstruedsoastoimposeonaContractingStatetheobligation:
(a)

tocarryoutadministrativemeasuresatvariancewiththelawsandadministrativepracticeofthatorofthe
otherContractingState

(b)

tosupplyinformation(includingdocumentsorcertifiedcopiesofthedocuments)whichisnotobtainable
underthelawsorinthenormalcourseoftheadministrationofthatoroftheotherContractingState

(c)

to supply information which would disclose any trade, business, industrial, commercial or professional
secretortradeprocess,orinformation,thedisclosureofwhichwouldbecontrarytopublicpolicy(ordre
public).

4. Ifinformation is requestedby a Contracting State in accordance with this article, the other Contracting State shall use its
information gathering measures to obtain the requested information, even though that other State may not need such
information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of
paragraph3butinnocaseshallsuchlimitationsbeconstruedtopermitaContractingStatetodeclinetosupplyinformation
solelybecauseithasnodomesticinterestinsuchinformation.
5.Innocaseshalltheprovisionsofparagraph3beconstruedtopermitaContractingStatetodeclinetosupplyinformation
solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a
fiduciarycapacityorbecauseitrelatestoownershipinterestsinaperson.

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ARTICLE28
ASSISTANCEINTHECOLLECTIONOFTAXES
1.TheContractingStatesshalllendassistancetoeachotherinthecollectionofrevenueclaims.Thisassistanceisnotrestricted
byArticles1&2.ThecompetentauthoritiesoftheContractingStatesmaybymutualagreementsettlethemodeofapplication
ofthisArticle.
2.Theterm"revenueclaim" asusedinthisArticlemeansanamountowedinrespectoftaxesofevery kindanddescription
imposed on behalf of the Contracting States, or of their political subdivisions or local authorities, insofar as the taxation
thereunder is not contrary to thisAgreement or any other instrument to which the Contracting States are parties, as well as
interest,administrativepenaltiesandcostsofcollectionorconservancyrelatedtosuchamount.
3.WhenarevenueclaimofaContractingStateisenforceableunderthelawsofthatStateandisowedbyapersonwho,atthat
time, cannot, under the laws of that State, prevent its collection, that revenue claim shall, at the request of the competent
authorityofthatState,beacceptedforpurposesofcollection by the competent authority of the other Contracting State, that
revenueclaimshallbecollectedbythatotherStateinaccordancewiththeprovisionsofitslawsapplicabletotheenforcement
andcollectionofitsowntaxesasiftherevenueclaimwerearevenueclaimofthatotherState.
4.WhenarevenueclaimofaContractingStateisaclaiminrespectofwhichthatStatemay,underitslaw,takemeasuresof
conservancywithaviewtoensureitscollection,thatrevenueclaimshall,attherequestofthecompetentauthorityofthatState,
be accepted for purposes of taking measures of conservancy by the competent authority of the other Contracting State.That
otherStateshalltakemeasuresofconservancyinrespectofthatrevenueclaiminaccordancewiththeprovisionsofitslawsas
iftherevenueclaimwerearevenueclaimofthatotherStateevenifatthetimewhensuchmeasuresareapplied,therevenue
claimisnotenforceableinthefirstmentionedStateorisowedbyapersonwhohasarighttopreventitscollection.
5. Notwithstanding the provisions of paragraphs 3 and 4, a revenue claim accepted by a Contracting State for purposes of
paragraph 3 or 4 shall not, in that State, be subject to the time limits or accorded any priority applicable to a revenue claim
underthelawsofthatStatebyreasonofitsnatureassuch.Inaddition,arevenueclaimacceptedbyaContractingStateforthe
purposesofparagraph3or4shallnot,inthatState,haveanypriorityapplicabletothatrevenueclaimunderthelawsofthe
otherContractingState.
6. Proceedings with respect to the existence, validity or the amount of a revenue claim of a Contracting State shall only be
brought before the Courts or Administrative Bodies of that State. Nothing in this Article shall be construed as creating or
providinganyrighttosuchproceedingsbeforeanyCourtorAdministrativeBodyoftheotherContractingState.
7. Where, at any time after a request has been made by a Contracting State under paragraph 3 or 4 and before the other
ContractingStatehascollectedandremittedtherelevantrevenueclaimtothefirstmentionedState,therelevantrevenueclaim
ceasestobe:
(a)

inthecaseofarequestunderparagraph3,arevenueclaimofthefirstmentionedStatethatisenforceable
underthelawsofthatStateandisowedbyapersonwho,atthattime,cannot,underthelawsofthatState,
preventitscollection,or

(b)

inthecaseofarequestunderparagraph4,arevenueclaimofthefirstmentionedStateinrespectofwhich
thatStatemay,underitslaws,takemeasuresofconservancywithaviewtoensureitscollection.

ThecompetentauthorityofthefirstmentionedStateshallpromptlynotifythecompetentauthorityoftheotherStateofthatfact
and,attheoptionoftheotherState,thefirstmentionedStateshalleithersuspendorwithdrawitsrequest.
8.InnocaseshalltheprovisionsofthisArticlebeconstruedsoastoimposeonaContractingStatetheobligation:
(a)

tocarryoutadministrativemeasuresatvariancewiththelawsandadministrativepracticeofthatorofthe
otherContractingState

(b)

tocarryoutmeasureswhichwouldbecontrarytopublicpolicy(ordrepublic)

(c)

toprovideassistanceiftheotherContractingStatehasnotpursuedallreasonablemeasuresofcollection
orconservancy,asthecasemaybe,availableunderitslawsoradministrativepractice

(d)

to provide assistance in those cases where the administrative burden for that State is clearly
disproportionatetothebenefittobederivedbytheotherContractingState.

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ARTICLE29
LIMITATIONOFBENEFITS
1.TheprovisionsofthisAgreement shallinnocasepreventaContractingStatefromtheapplicationoftheprovisionsofits
domesticlawsandmeasuresconcerningtaxavoidanceorevasion.
2.ExceptasotherwiseprovidedinthisArticle,aperson(otherthananindividual),whichisaresident ofaContractingState
and which derives income from the other Contracting State shall be entitled to all the benefits of thisAgreement otherwise
accordedtoresidentsofaContractingStateonlyifsuchapersonhasthequalificationsasdefinedinparagraph2andmeetsthe
otherconditionsofthisAgreementfortheobtainingofanyofsuchbenefits.
3.Apersonofacontractingstateisaqualifiedpersonforafiscalyearonlyifsuchapersoniseither:
(a)

Governmentalentityor

(b)

A company incorporated in either of the


ContractingStates,if

(i)

theprincipalclassofitssharesislistedonarecognisedstockexchangeasdefinedinparagraph6ofthisArticleand
isregularlytradedononeormorerecognisedstockexchanges,or

(ii)

atleast50%oftheaggregatevoteorvalueofthesharesinthecompanyisowneddirectlyorindirectly by one or
more individuals residents of either of the Contracting States or/and by other persons incorporated in either of the
ContractingStates,atleast50%oftheaggregatevoteorvalueofthesharesorbeneficialinterestofwhichisowned
directlyorindirectlybyoneormoreindividualsresidentsofeitheroftheContractingStatesor

(c)

Apartnershiporassociationofpersons,atleast50%ormoreofwhosebeneficial
interests is owned by one or more individuals residents of either of the
Contracting States or/and by other persons incorporated in either of the
Contracting States, at least 50% of the aggregate vote or value of the shares or
beneficial interest of which is owned directly or indirectly by one or more
individualsresidentsofeitheroftheContractingStatesor

(d)

A charitable institution or other tax exempt entity whose main activities are
carriedonineitheroftheContractingStates.

Provided that the persons mentioned above will not be entitled to the benefits of the Agreement if more than 50% of the
person'sgrossincomeforthetaxableyearispaidorpayabledirectlyorindirectlytopersonswhoarenotresidentsofeitherof
the Contracting States in the form of payments that are deductible for the purpose of computation of tax covered by this
Agreement in the person's state of residence (but not including arm's length payment in the ordinary course of business for
servicesortangiblepropertyandpaymentsinrespectoffinancialobligationstoabankincurredinconnectionwithatransaction
enteredintowiththePermanentEstablishmentofthebanksituatedineitheroftheContractingStates).
4.Theprovisionsofparagraphs2and3shallnotapplyandaresidentofaContractingStatewillbeentitledtobenefitsofthe
AgreementwithrespecttoanitemofincomederivedfromtheotherState,ifthepersonactivelycarriesonbusinessintheState
ofresidence(otherthanthebusinessofmakingormanaginginvestmentsfortheresident'sownaccountunlesstheseactivities
arebanking,insuranceorsecurityactivities)andtheincomederivedfromtheotherContractingStatesisderivedinconnection
withorisincidentaltothatbusinessandthatresidentsatisfiestheotherconditionsofthisAgreementfortheobtainingofsuch
benefits.
5.AresidentofaContracting StateshallneverthelessbegrantedthebenefitsoftheAgreementifthe CompetentAuthorityof
theotherContractingStatedeterminesthattheestablishmentoracquisitionormaintenanceofsuchpersonandtheconductofits
operationsdidnothaveasoneofitsprincipalpurposestheobtainingofbenefitsundertheAgreement.
6.ForthepurposesofthisArticletheterm'recognisedstockexchange'means:
(a)

in India, any stock exchange which for the time being is recognized by the Central Government under
section4oftheSecuritiesContracts(Regulation)Act,1956and

(b)

intheOrientalRepublicofUruguay,theBolsadeValoresdeMontevideoandthe Bolsa Electronica de


ValoresS.Aand

(c)

any other stock exchange which the CompetentAuthorities agree to recognise for the purposes of this

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Article.
7. Notwithstanding anything contained in thisArticle, a person shall not be entitled to the benefits of thisAgreement if its
affairswerearrangedinsuchamannerasifitwasthemainpurposeoroneofthemainpurposestoavoidtaxestowhichthis
Agreementapplies.

ARTICLE30
MEMBERSOFDIPLOMATICMISSIONSANDCONSULARPOSTS
Nothing in thisAgreement shall affect the fiscal privileges of members of diplomatic missions or consular posts under the
generalrulesofinternationallaworundertheprovisionsofspecialagreements.

ARTICLE31
ENTRYINTOFORCE
1.TheContractingStatesshallnotifyeachotherinwriting,throughdiplomaticchannels,ofthecompletionoftheprocedures
requiredbytherespectivelawsfortheentryintoforceofthisAgreement.
2.ThisAgreementshallenterintoforcesixtydaysafterthedateofthelaterofthenotificationsreferredtoinparagraph1ofthis
Article.
3.TheprovisionsofthisAgreementshallhaveeffect:
(a)

InIndia,

(i) inrespectofincomederivedinanyfiscalyearbeginningonorafterthefirstdayofAprilnextfollowingthecalendar
yearinwhichtheAgreemententersintoforceand
(ii) inrespectofwealthwhichisheldonthelastdayofanyfiscalyearonorafterthefirstdayofAprilnextfollowingthe
calendaryearinwhichtheAgreemententersintoforce
(b)

InUruguay,

(i) in respect of income derived in any fiscal year beginning on or after the first day of January next following the
calendaryearinwhichtheAgreemententersintoforce
(ii) inrespectofcapitalwhichisheldonthelastdayofanyfiscalyearonorafterthefirstdayofJanuarynextfollowing
thecalendaryearinwhichtheAgreemententersintoforce.

ARTICLE32
TERMINATION
ThisAgreementshallremaininforceindefinitelyuntilterminatedbyoneofthecontractingState.EitherContractingStatemay
terminatetheAgreement,throughdiplomaticchannels,bygivingnoticeofterminationatleastsixmonthsbeforetheendofany
calendaryearbeginningaftertheexpirationoffiveyearsfromthedateonwhichtheAgreemententersintoforce.Insuchevent,
theAgreementshallceasetohaveeffect:
(a)

InIndia,

(i) inrespectofincomederivedinanyfiscalyearonorafterthefirstdayofAprilnextfollowing thecalendaryearin


whichthenoticeisgivenand
(ii) inrespectofwealthwhichisheldonthelastdayofanyfiscalyearonorafterthefirstdayofAprilnextfollowingthe
calendaryearinwhichthenoticeisgiven
(b)

InUruguay,

(i) inrespectofincomederivedinanyfiscalyearonorafterthefirstdayofJanuarynextfollowingthecalendaryearin
whichthenoticeisgivenand
(ii) inrespectofcapitalwhichisheldonthelastdayofanyfiscalyearonorafterthefirstdayofJanuarynextfollowing
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1/6/2017

IncomeTaxDepartment

thecalendaryearinwhichthenoticeisgiven.
INWITNESSWHEREOFtheundersigned,dulyauthorizedthereto,havesignedthisAgreement.
DONEinduplicateatNewDelhithis8thdayofSeptember,2011,eachintheHindi,SpanishandEnglishlanguages,alltexts
beingequallyauthentic.Incaseofdivergenceofinterpretation,theEnglishtextshallprevail.

PROTOCOL
AtthesigningtodayoftheAgreementbetweentheRepublicofIndiaandtheOrientalRepublicofUruguayfortheAvoidance
ofDoubleTaxationandthepreventionofFiscalEvasionwithrespecttoTaxesonIncomeandonCapital,theundersignedhave
agreeduponthefollowingprovisions,whichshallformanintegralpartoftheAgreement:
I.

It is understood that the last sentence of paragraph 1 ofArticle 4 (Resident) does not exclude from the
scopeofthisagreement,anypersonwhoisliabletotax,intheOrientalRepublicofUruguaybyvirtueof
theapplicationoftheprincipleofterritorialsource.

II.

With reference to Article 8(Shipping and Air Transport), it is understood that, profits derived by a
transportationenterprisewhichisaresidentofaContractingStatefromtheuse,maintenance,orrentalof
containers(includingtrailersandotherequipmentforthetransportofcontainers)usedforthetransportof
goods or merchandise in International traffic shall be taxable only in that Contracting State unless the
containersareusedsolelywithintheotherContractingState.

III.

With reference toArticle 8 (Shipping andAir Transport), it is understood that, interest on investments
directlyconnectedwiththeoperationofshipsoraircraftininternationaltrafficshallberegardedasprofits
derivedfromtheoperationofsuchshipsoraircraftiftheyareintegraltothecarryingonofsuchbusiness,
andtheprovisionsofArticle11(Interest)shallnotapplyinrelationtosuchinterest.

IV.

WithreferencetoArticle8(ShippingandAirTransport)andArticle13(Capital gains),itisunderstoodthat
notwithstandinganythingcontainedthereinreadwiththedomesticlawoftheContractingStatesleadtoa
situationwhereanincomeisnottaxableintheresidentState,thesourceStateshallretaintherighttotax
suchincome.

V.

ItisunderstoodthattheprovisionsofArticle25(Nondiscrimination)shallnotbeconstruedaspreventing
a Contracting State from charging the profits of a permanent establishment which a company of other
ContractingStatehasinthefirstmentionedStateatarateoftaxwhichishigherthanthatimposedonthe
profitsofasimilarcompanyofthatfirstmentionedState,norasbeinginconflictwiththeprovisionsof
paragraph3ofArticle7(BusinessProfits).

VI.

With reference to Article 27 on Exchange of Information, it is understood that India may share the
informationreceivedunderparagraph1ofthatArticlefromUruguayinrespectofaresidentofIndia,with
otherlawenforcementagenciesofGovernmentofIndiaoritsParliament.

VII.

WithreferencetoArticle31(EntryintoForce),itisunderstoodthattheprovisionsofArticle27(Exchange
ofInformation)shallhaveeffect,relatingtoanyfiscalyear,nextfollowingthecalendaryearinwhichthe
Agreemententersintoforce.

INWITNESSWHEREOF,theundersigned,beingdulyauthorizedbytheirrespectiveGovernments,havesignedthisProtocol.
DoneinduplicateatNewDelhi,this8thdayofSeptember,2011,intheEnglish,SpanishandHindilanguages,alltextsequally
authentic.Incaseofdivergencebetweenthetexts,theEnglishtextshallprevail.

Copyright. Taxmann Publications Pvt. Ltd.

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