section 1 of the agreement for the avoidance of double taxation and
Prevention of tax evasion with respect to taxes on income
and fortune India Sweden and signed on
24 June 1997, this has by the Protocol on the
Amendment of the agreement which was signed on 7 February 2013, shall
apply that law in this country. The agreement is written in Swedish,
Hindi and English. The Swedish and English text shown
of annex 1 to this Act. Team (2013:373).
section 2 of The agreement between Sweden and India about respite
with the payment of taxes during the ongoing procedure for
mutual agreement, signed on 7 February
2013 to apply that law in this country. The agreement is
written in English. The English text and a Swedish
translation appears in annex 2 to this Act.
Team (2013:373).
paragraph 3 of the agreement's tax rules shall apply only if these
involves restriction of the tax liability in Sweden that would otherwise
would exist. Team (2013:373).
Transitional provisions
1997:918
1. this law shall enter into force on the day the Government determines.
2. This Act shall apply
(a)) with respect to taxes on income, on income which is acquired on 1
January of the year following the year in which the agreement enters into force, or
later, and
(b)) in respect of wealth tax, on taxes chargeable it
the second calendar year following the year in which the agreement enters into force, or
later.
3. Through law repeals Act (1988:1495) if
double taxation treaties between Sweden and India, as well as
the Ordinance (1988:1496) of double taxation agreements between
Sweden and India.
The repealed regulations shall continue to apply
(a)) with respect to taxes on income which is acquired before 1
January of the year following the year in which the law comes into force, and
(b)) in respect of tax on assets which are assessed first
the calendar year immediately following the year in which the law comes into force or
earlier.
1997:1020
The Government states that the Act on the double taxation agreement
between Sweden and India shall enter into force on 31 december
1997.
The agreement shall enter into force on 25 december 1997.
2013:373
This law shall enter into force on the day the Government determines. The new
they may be put into effect at different times and
apply from the entry into force.
Annex 1
AGREEMENT BETWEEN THE GOVERNMENT OF THE KINGDOM OF SWEDEN AND THE REPUBLIC OF
THE GOVERNMENT OF INDIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND
PREVENTION OF TAX EVASION WITH RESPECT TO TAXES ON INCOME
AND ON FORTUNE
The Government of the Kingdom of Sweden and the Government of India
that, in order to promote economic exchanges between the two
countries, wishes to conclude an agreement for the avoidance of
double taxation and the prevention of fiscal evasion with respect to
taxes on income and on capital, have agreed
the following:
Article 1
Persons to whom the agreement applies
This agreement shall apply to persons who are domiciled in a
Contracting State or in both Contracting States.
Article 2
Taxes covered by the agreement
1. this Agreement shall apply to taxes on income and on
wealth that accrues to a Contracting State, its
political underavdelningars or local authorities
regardless of the way in which taxes are levied.
2. taxes on income and on capital, of course, all
taxes paid on income or wealth in its entirety
or on elements of income or of capital, including
taxes on gains from the alienation of movable or immovable
property, taxes on the total amount of corporate
salary payments as well as taxes on capital appreciation.
3. The currently outgoing taxes, on which this agreement
apply, specifically:
(a)) in India:
1) income taxes (the income tax), therein included
all surcharges on this tax; and
2) wealth tax (the wealth tax)
(in the following referred to as "Indian tax");
b) in Sweden:
1) state income tax, seamen's tax and
the withholding tax rate in that involved,
2) the Special income tax for non-residents,
3) the Special income tax for non-residents
artists and others,
4) the municipal income tax,
5) expansion Fund tax, and
6) State property tax
(in the following referred to as "Swedish tax").
4. the agreement also apply to taxes for the same or essentially
Similarly, after the signing of this agreement will be incurred
In addition to or in place of the currently outgoing
the taxes listed in paragraph 3. The competent authorities of the
Contracting States shall communicate to each other the essential
changes implemented in the respective tax laws.
Article 3
General definitions
1. Unless the context gives rise to different, have in the application
by this agreement the following expressions the following meaning:
a) "India" refers to the Indian territory including
the territorial sea and the air space above as well as any other
Sea area over which India under Indian law and in
conformity with international law, United Nations
Convention on the law of the sea in that involved, may exercise sovereign
rights, other rights and jurisdiction;
b) "Sweden" means the Kingdom of Sweden and the includes, when
the expression is used in the geographical sense, the territory of Sweden,
Sweden's territorial sea and other maritime areas over which the
Sweden, in conformity with international law, exercises
sovereign rights or jurisdiction;
(c)) "a Contracting State" and "the other Contracting
the State "refers to India or Sweden, as the context requires;
d) "person" includes natural persons, companies, other
personal association and the other by the taxation be treated
as a taxable entity under the applicable tax laws in the respective
Contracting State;
e) "company" means any legal person or any other that at
taxation is treated as a legal person;
f) "enterprise of a Contracting State" and "enterprise of the other
Contracting State "refers to the business carried on by any person with
resident in one Contracting State or business conducted
by a resident of the other Contracting State;
g) "international transport" means transport by ship or
aircraft used by enterprises of a Contracting State except
When the ship or aircraft are used exclusively between
places in the other Contracting State;
h) "national" means:
1) natural person which has the nationality of a
Contracting State,
2) any legal person, partnership or other
Association incorporated under the legislation of
a Contracting State;
in) "competent authority" means:
1) in India: the Central Government in the Ministry of
Finance (Department of Revenue) or its authorized
agents,
2) in Sweden: the Minister of finance or his authorised
representative or the authority which has been assigned to be competent
authority for the purposes of this agreement;
j) "fiscal year" means:
1) in India, "previous year" (previous year) so that it
defined in section 3 of the income tax Act (the Income Tax
Act), 1961;
2) in Sweden, "tax year" as defined in
paragraph 3 of the kommunalskatte law,1928;
k) "tax" means Indian or Swedish tax, depending on the
context, but shall not include any amount
paid by reason of any omission or any withholding
in terms of the taxes to which this agreement applies or which
refers to the penalty imposed in respect of those taxes.
2. Where a Contracting State applies, unless the contract is considered
no context, causing the other, each expression that does not
defined in the agreement, have the same meaning as the expression has
According to the State in respect of such taxes on
the agreement shall apply.
Article 4
Resident
1. for the purposes of this agreement, the term "person with
resident in one Contracting State "person under
the laws of that State, is liable to tax there because of
domicile, residence, place of management or any other
similar circumstances and also includes that State, its
political subdivisions, local authorities and
institutions or bodies governed by public law. In the case of
partnership or estate the term applies only to the extent
commercial company or estate income is taxed in that State
in the same way as income that are acquired by resident
where, either by trading company or the estate, or of its
co-owner or a beneficiary.
However, the term does not include a person who is liable to tax
in this State, only of income from sources in that State or
for assets located there.
2. where by reason of the provisions of paragraph 1 an individual is
a resident of both Contracting States, is determined his residence on
the following ways:
(a)) he is considered to be resident only of the State in which he has a dwelling
permanently available to him. If he has a
such property in both States, he shall be deemed to be a resident of the State
with which his personal and economic relations are
the strongest (Centre of life interests);
(b)) if it cannot be settled in the State he has Center for
their living interests or if he's not in either State have
a dwelling that is permanently available to him, shall be deemed to
he be a resident only of the State where he usually resides.
(c)) if he usually resides in both States, or if he
not reside permanently in any of them, he shall be deemed to be a resident
only in the State of which he is a national;
d) if he is a national of both States or if he is not
nationals of any of them, the competent authorities of the
Contracting States may settle the question by mutual
agreement.
3. where by reason of the provisions of paragraph 1 a person other than the
an individual is a resident of both Contracting States, it is considered
the person concerned is resident in the State where it has its real
management. If it cannot be settled in the State the real
management is available, the competent authorities shall determine the question
by mutual agreement.
Article 5
Permanent establishment
1. for the purposes of this agreement the term "fixed
establishment means a fixed place of business, from
What a business is wholly or partly carried on.
2. The term "permanent establishment" includes especially:
a) place of business management,
b) branch,
c) offices,
d) factory,
e) workshop,
f) mine, an oil or gas well, a quarry or any other place of
the extraction of natural resources,
g) point of sale,
h) warehouse in which a person provides warehouse space
in the other, and
in) agriculture, plantation or other place where agriculture,
forestry, farming, or other similar activities.
3. Place for building, construction, Assembly or
installation activities or business that consists of
monitoring in connection therewith constitutes a permanent establishment only
If the operation is in progress over a period of more than six
months.
4. A company shall be deemed to have a permanent establishment in a Contracting
State and operate through this fixed place of business of
the company provides services or facilities in connection
with, or rent out facility or equipment which
used or intended to be used in the exploration,
extraction or exploitation of mineral oils in this State.
5. Notwithstanding the preceding provisions of this article shall be deemed to
the term "permanent establishment" shall not include:
(a)) the use of facilities solely for storage,
exhibition or disclosure of company-owned goods,
(b) holding of a company belonging to) stock in trade solely
for storage, exhibition or distribution,
(c) holding of a company belonging to) stock in trade solely
for working or processing by other company,
d) holding of fixed place of business
exclusively for the purchase of goods or obtaining information
for the company,
e) holding of fixed place of business
exclusively for the enterprise carrying on other activities of the
preparatory or auxiliary nature,
f) holding of fixed place of business
exclusively for combining activities listed in
points a to e, provided that the entire operation as
conducted from the permanent place of business in
because of this combination is of a preparatory or auxiliary
art.
6. If the person who not is such independent representative on
which paragraph 8 applies-is present in a Contracting State
for an enterprise of the other Contracting State is considered
company-notwithstanding the provisions of paragraphs 1 and 2
to have a permanent establishment in the first-mentioned Contracting State in
respect of any activities which that person undertakes
the company if this person
a) have and regularly uses full power to conclude agreements in
the company name in this State, unless the activities
This person carries is limited to that specified in paragraph
5 and as-if it was conducted from a fixed place of
business-would not make this fixed place
for business to the permanent establishment according to the
the provisions of that paragraph; or
(b)) do not have such power of attorney but regularly holds a
inventories in the first State from which he regularly
delivers the goods on behalf of the company; or
c) regularly takes up the order in the first State,
exclusively or almost exclusively on behalf of the company
or for the enterprise and other enterprises that control
the company, which is controlled by the company or which is controlled
by the same people as the company.
7. Notwithstanding the preceding provisions of this article shall be deemed to
an insurance enterprise of a Contracting State to have fixed
establishment in the other Contracting State shall, except in the case of
reinsurance, if it receives premiums in that other State
territory or insures risks in this State through the
mediation by a person other than the independent representative on
what point 8 shall apply.
8. the Enterprise is not considered to have a permanent establishment in a Contracting
State only on the basis that the company conducts
business in that State through the intermediary of brokers,
Commissioner, or other independent agent, in
in doing so, provided that such person is engaged in his customary
business operations. If such an agent's activities are pursued
exclusively or almost exclusively for the company, he shall be deemed to
not, however, be an independent representative referred to
in this paragraph.
9. the fact that a company resident in a
Contracting State controls or is controlled by a
a company resident in the other Contracting State or in a
companies doing business in the other State
(either from a permanent establishment or otherwise),
not in and of itself to constitute either company a permanent establishment
for the other.
Article 6
Income from immovable property
1. income, as a person resident in one Contracting State
acquires immovable property (in that included income of agriculture
or forestry) situated in the other Contracting State, may
be taxed in that other State.
2. The term "immovable property" has the meaning the term has
According to the legislation of the Contracting State in which the property
is located. However, the term always includes accessories
immovable property, the living and the dead furniture in agriculture and
forestry, rights to which the provisions of private law
If immovable property apply, buildings, tenancies of immovable
property, and the right of changing or fixed remuneration
for the use of, or the right to use mineral occurrence,
source or another natural resource. Ships, boats and aircraft
is not considered to be real property.
3. the provisions of paragraph 1 shall apply to income acquired
through immediate use, through rental or other
use of immovable property.
4. the provisions of paragraphs 1 and 3 shall also apply to income
of immovable property belonging to the company and on the income of the firm
property used by independent professional activities.
Article 7
Income from operating
1. the Income of an enterprise of a Contracting State
acquire, shall be taxable only in that State unless the enterprise
carries on business in the other Contracting State from where
permanent establishment situated. If the enterprise carries on business just now
specified manner, the company's income is taxed in the other
the State, but only so much of them as is attributable to that
permanent establishment.
2. enterprises of a Contracting State carries on business in the
other Contracting State from where the permanent establishment situated,
are entered, unless the provisions of paragraph 3 shall give rise to another, in
Each Contracting State to the permanent establishment the
income as it can be assumed that the establishment would have acquired,
If it was a standalone company, which is operated by
the same or similar nature under the same or similar conditions
and independently completed the business with the undertaking to which the
establishment belongs.
3. In determining permanent establishment income deduction is allowed
for expenses incurred for the permanent establishment, including
included expenses for management and General
management, whether the expenditure incurred in the State in which the
permanent establishment is situated or elsewhere in
conformity with the provisions and limitations
applicable under the laws of that State.
4. income not attributable to a permanent establishment by reason only of the
the reason to purchase goods through the permanent establishment
merchandise for the enterprise.
5. for the purposes of the preceding paragraphs, income is determined as
is attributable to the permanent establishment by the same procedure
from year to year, unless good and sufficient reasons causing the
other things.
6. Included in income by operating income are treated especially
in other articles of this agreement, the provisions of these
articles of the rules contained in this article.
Article 8
Sea and air transport
1. income, which is being acquired by an enterprise of a Contracting
State through the use of the ship or aircraft in
international traffic, be taxable only in that State.
2. income acquired by a transport company established in
a Contracting State from the use, maintenance or
rental of containers (including trailers and other
equipment for the transport of containers) used for the
the transport of goods or merchandise in international traffic shall be taxable
only in that Contracting State unless the containers
used only in the other Contracting State.
3. the provisions of paragraph 1 apply to the income
acquired by the Swedish, Danish and Norwegian aviation Consortium
Scandinavian Airlines System (SAS) only in respect of the part of the
the income corresponding to the share in the Consortium held by
SAS Sweden AB, the Swedish partner of Scandinavian Airlines
System (SAS).
4. the provisions of paragraphs 1 and 2 shall also apply to income
acquired through participation in a pool, a joint business
or an international operating agency.
Article 9
Companies with associated enterprises
In cases where the
a) an enterprise of a Contracting State, either directly or indirectly
participate in the management or control of a company in the other
Contracting State or owns part of the company capital,
or
(b)) the same person participates directly or indirectly in the management,
or control of an enterprise of a Contracting State
as an enterprise of the other Contracting State or own
part in both of these corporate capital, observed the following.
If between businesses in terms of trade relations or
financial relations agreed upon or prescribed conditions, as
differ from those which would have been agreed between each other
independent company, receives all the income, that without such conditions
would have been one company but who, because of
the terms in question did not come about this company, be included in the
This company's income and taxed accordingly.
On the application of this article results in
double taxation, it may be resolved by mutual
agreement.
Article 10
Dividend
1. Dividends paid by a company resident in one Contracting State
to a resident of the other Contracting State,
be taxed in that other State.
2. Dividends may, notwithstanding the provisions of paragraph 1,
taxed in the Contracting State in which the company
paying the dividends is a resident, according to the law of that
State, but if the beneficial owner of the dividends is a resident of
the other Contracting State may not exceed 10
per cent of the gross amount of the dividends.
This paragraph does not affect the company's taxation of profit of the
the dividend is paid.
3. The term "dividends" is understood in this article income by
shares or other rights, not being debt, with the right
to share in profits, as well as income from other investments in companies, which
According to the law of the State in which the distributing company has
domicile for tax purposes is treated in the same way as income
of shares.
4. the provisions of paragraphs 1 and 2 shall not apply if the
who is entitled to the dividends is a resident of a Contracting
State and carries on business in the other Contracting State,
which the company paying the dividends is a resident, from where
permanent establishment situated or exercising independent
professional activities in the other State from where located
permanent device, and the proportion due to the
dividend paid owns actual relation to the Permanent
the establishment or the permanent devices. In such a case
apply the provisions of article 7 or article 14.
5. If the company resident in one Contracting State acquires
income from the other Contracting State, that other
State does not tax dividends paid by the company, except to the
so far as the dividend is paid to a resident of the other
State or insofar as the percentage due to the dividend payment
paid owns truly connected with a permanent establishment or
permanent device in that other State, nor
taxing the company's undistributed profits, even if the dividend
or the undistributed profits consist wholly or partly of
income arising in that other State.
Article 11
Interest rate
1. interest, stemming from a Contracting State and which
paid to a resident of the other Contracting
the State, may be taxed in that other State.
2. interest may be taxed in the Contracting
State from which it is derived, under the laws of this
State, but if the beneficial owner of the interest is a resident of the
other Contracting State may not exceed 10
per cent of the gross amount of the interest.
3. interest arising from a Contracting State shall, without
by way of derogation from paragraph 2, be exempt from tax
in this Contracting State provided that the collected
and the benefit of the interest held by, or, if the interest rate earned on
because of a loan or a line of credit that it is granted or
approved by:
1) Government, a political subdivision, a
public law body or a local authority in the other
Contracting State;
2) in India, the Reserve Bank of India, the Industrial
Finance Corporation of India, the Industrial Development Bank
of India, the Export-Import Bank of India, the National Housing
Bank, the Small Industries Development Bank of India and the
Industrial Credit and Investment Corporation of India (ICICI);
and
in Sweden, the Swedish international development cooperation agency
(Page), SWEDECORP (Swedish International
business assistance), Swedfund International AB or
Export credits guarantee Board; or
3) every other institution that, from time to time, the
competent authorities meet with agreement.
4. The term "interest" for the purposes of this article the income of
each kind of claim, whether secured by mortgage
in immovable property or not, and whether it entails the right to
interest in the debtor's profits or not. The term refers to the particular
income from securities, issued by the State, and
bonds or debentures, including premiums and therein
profits pertaining to such securities, bonds
or debentures. Penalty for late payment is considered
not that interest for the purposes of this article.
5. the provisions of paragraphs 1, 2 and 3 shall not apply if the
who is entitled to the interest is resident in a Contracting State
and carries on business in the other Contracting State, from
What interest rate are derived, from where the permanent establishment situated or
exercising independent professional activities in the other State from where
located permanent device, as well as the claim for which
the interest is paid owns truly connected with the permanent establishment
or the permanent devices. In such a case be applied
the provisions of article 7 or article 14.
6. interest shall be deemed to arise from a Contracting State if
the payer is a resident of this State, If
However, the person paying the interest, whether he is
resident in a Contracting State or not, in a
Contracting State has a permanent establishment or a permanent
device in connection with which the liability arose at the rate
paid, and the interest rate borne by the permanent establishment or the
permanent device, considered the rate obtained from the State
in which the permanent establishment or the permanent devices
There is.
7. where by reason of a special relationship between the payer and the
the beneficial owner of the interest or between both of them and other
person the amount of the interest, having regard to the debt claim for which
the interest is paid, exceeds the amount which would have been agreed
between the payer and the beneficial owner of the interest on such
relations do not exist, the provisions of this
article only at the latter amount. In such a case be taxed
excess amounts in accordance with the legislation of each
Contracting State in compliance with the other provisions of
This agreement.
Article 12
Royalty and remuneration for technical
services
1. the Royalties and compensation for technical services, arising
from a Contracting State and paid to the person with
resident in the other Contracting State, may be taxed in the
that other State.
2. Such royalties and compensation for the technical services may, without
by way of derogation from paragraph 1, be taxed even in the
Contracting State from which it is derived, according to
the laws of that State, but if the recipient is entitled to
the royalty or consideration for technical services, tax
not exceed 10% of the royaltyns or the
gross amount.
3. a), the expression "royalty" is understood in this article each
kind of payment that is received as compensation for the use
of, or the right to use, copyright of literary,
artistic or scientific work, including
cinema films, any patent, trade mark, design or model, plan,
secret recipe or secret manufacturing process or for
information concerning industrial, commercial or
scientific nature.
(b)), the expression "compensation for technical services" means
every kind of payment to a person as compensation for
services as a business leader, technician or consultant,
including the provision of services of technical and
other staff. The term does not include payments for
services referred to in articles 14 and 15 of this agreement.
4. the provisions of paragraphs 1 and 2 shall not apply if the
who is entitled to royalties or compensation for technical
services is a resident of a Contracting State and carries on
on business in the other Contracting State, from which the royalty
or payment for technical services are derived, from where
permanent establishment situated or exercising independent
professional activities in the other State from where located
permanent device, and the right or property in
respect of which the royalty or remuneration for technical
services paid owns real connection with the fixed
the establishment or the permanent devices. In such a case
apply the provisions of article 7 or article 14.
5. Royalty or remuneration for technical services shall be deemed to originate
from a Contracting State where the payer is the person with
a resident of this State. If, however, the person paying the
the royalty or consideration for technical services, either he
domiciled in a Contracting State or not, in a
Contracting State has a permanent establishment or a permanent
device in connection with which the obligation to pay the royalty
or payment for technical services arise, and
the royalty or payment for technical services are charged to the
permanent establishment or permanent device, are considered to
the royalty or payment for technical services arise from
the State in which the permanent establishment or the Permanent
the device is available.
6. where by reason of a special relationship between the payer and the
the person entitled to the royalty or remuneration for technical
services or between both of them and any other person,
royalty amount or consideration for technical services with
regard to the use, right or information
for which the royalty or payment for technical services
paid, exceeds the amount which would have been agreed between
the payer and the beneficial owner of royalties or
payment for technical services if such services are not
exist, the provisions of this article shall apply only to
the latter amount. In such a case the taxable surplus amount
According to the law of each Contracting State with
observance of the other provisions of this agreement.
Article 13
Capital gain
1. Profit, as a person resident in one Contracting State
acquires from the alienation of such immovable property
referred to in article 6 and situated in the other Contracting
the State, may be taxed in that other State.
2. Gains from the alienation of movable property forming part
of the operating assets of a permanent establishment which an enterprise of the
a Contracting State has in the other Contracting State,
or of movable property, attributable to a permanent device
in order to exercise an independent profession, as a person with
resident of a Contracting State has in the other Contracting
the State, may be taxed in that other State. The same applies to profits
the alienation of such a permanent establishment (alone
or together with the whole enterprise) or of such a
permanent device.
3. Profit as a resident of a Contracting State
acquires from the alienation of ships or aircraft
used in international traffic, or movable property which is
attributable to the use of such ship or aircraft;
shall be taxable only in that State.
The provisions of this paragraph shall apply in respect of profits
acquired by the Swedish, Danish and Norwegian aviation Consortium
Scandinavian Airlines System (SAS), but only in the case of the
part of the profits as corresponds to the participation in the consortium which
held by SAS Sweden AB, the Swedish partner of Scandinavian
Scandinavian Airlines System (SAS).
4. Gain due to the sale of shares in a company
share capital whose assets primarily, directly or
indirectly, consists of immovable property situated in a Contracting
State may be taxed in that State.
5. Gains from the alienation of property other than that
referred to in paragraphs 1, 2, 3 and 4 shall be taxable only in the
Contracting State of which the alienator is a resident during the
provided that this person is taxed on the profit in this
State. If the assignor is not taxed on the profits of the State of residence
It may be taxed in the other Contracting State.
6. Profit, due to the disposal of assets, which are acquired by
a natural person who has been domiciled in a Contracting State
and a resident of the other Contracting State shall-without
by way of derogation from point 5-taxed in the
first-mentioned Contracting State if the transfer of
the assets occurs at any time during the four years
immediately after the date on which the person ceased to have
habitual residence in the former State.
Article 14
Independent professional activities
1. income, as a person resident in one Contracting State
acquires through the exercise of profession or other independent
activities, shall be taxable only in that State except in the following
circumstances, in which case income also may be taxed in
the other Contracting State:
(a)) if he's in the other Contracting State has a
permanent device which are regularly at his
disposal to exercise activities; in such a case, only
so much of the income as is attributable to that
permanent device to be taxed in the other Contracting
the State, or
b) if his stay in the other Contracting State lasts
for a period or periods that in total,
to or exceeding 183 days in any twelve-month period,
that begins or ends in the tax year in question; in
in such case, only so much of the income as is derived from
his activities in the other State shall be taxable in the
that other State.
2. The expression "liberal profession" includes especially independent
scientific, literary and artistic activities,
educational and teaching activities and such
independent operations, as a doctor, lawyer, engineer,
Architect, surgeon, dentist and an accountant.
Article 15
Single service
1. the provisions of articles 16, 18 and 19 shall give rise
other, taxable wages and other similar remuneration paid by person
resident in one Contracting State receives due
employment only in that State unless the work is carried out in
the other Contracting State. If the work is performed in this
other State, compensation received for work are taxed
there.
2. Notwithstanding the provisions of paragraph 1 shall be taxable
compensation, as a person resident in one Contracting State
receipt for work performed in the other Contracting State,
only in the first-mentioned State if
a) recipient residing in the other State during the time period or
time periods that in total not exceeding 183 days during a
twelve-month period commencing or ending in the
the tax year in question, and
b) the remuneration is paid by the employer who is not domiciled in
the other State or on his behalf, and
c) compensation does not affect the establishment or
permanent device which the employer has in the other
State.
3. Notwithstanding the preceding provisions of this article,
remuneration for work performed on board the ship or
aircraft, used in international traffic by an enterprise
in one Contracting State, be taxed in that State. For person with
resident in Sweden receives income from work, which is carried out
on board an aircraft used in international transport of
the Swedish, Danish and Norwegian air transport Consortium Scandinavian
Scandinavian Airlines System (SAS), income is taxed only in Sweden.
Article 16
Directors ' fees
Directors ' fees and other similar remuneration, as a person with
resident in one Contracting State receives as a member of the
Board or other similar bodies in companies established in the
other Contracting State, may be taxed in that other State.
Article 17
Artists and athletes
1. Notwithstanding the provisions of articles 14 and 15,
income, as a resident of a Contracting State
acquire through their personal activities in the other
Contracting State in his capacity as a performer, such as theatre or
movie actor, radio or television artiste, or a musician,
or as athletes, be taxed in that other State.
2. In cases where the income through personal activities, artist
or athletes exercising in that capacity, not become the property of
artist or sportutövaren yourself without the other person, this
income, notwithstanding the provisions of articles 7, 14 and
15, be taxed in the Contracting State in which the artist or
sportutövaren exercise activities.
3. the provisions of paragraphs 1 and 2 shall not apply to income
through activities such as artist or athletes engaged in a
Contracting State in cases where the visit to that State
mainly financed by public funds of the other
Contracting State or of its political subdivisions
or local authorities. In such a case the taxed income
only in the State in which the artist or sportutövaren.
Article 18
Pension, payment under
social security and annuity
1. Except where the provisions of article 19 paragraph 2 shall give rise to another
receive a pension or other similar remuneration due to previous
employment, annuities and payout under
social security legislation, which derives from a
Contracting State and paid to a resident of the
other Contracting State, be taxed in the first-mentioned
Contracting State.
2. The term "annuity" means a prescribed amount, which
be paid periodically at specified times during a person's
lifetime or during a specified or ascertainable period of time, and
that is because of the obligation to give effect to these
However, payments made as remuneration for fully answering
consideration in money or money value.
Article 19
Public service
1. a) Compensation (except for retirement), paid for by a
Contracting State, one of its political subdivisions
or local authorities to natural person because of work
performed in this State, the section or governmental
service, shall be taxable only in that State.
b However, such remuneration shall be taxable only) in the second
Contracting State in which the natural person has
the resident, if the work is performed in this State, and the person in question:
1) is a national of that State, or
2) were not allowed to live in this State solely to
carry out the work.
2. a) Pensions paid by, or out of funds created by,
a Contracting State, any of its political subdivisions
or local authorities to natural person because of work
performed in this State, the section or governmental
service, shall be taxable only in that State.
(b) However, such pension shall be taxable only) in the second
Contracting State of the habitual residence of the person concerned and is
citizens of this State.
3. the provisions of articles 15, 16 and 18 shall apply to
compensation and pension payable by reason of work
performed in connection with business carried on by a Contracting
State, one of its political subdivisions or local
authorities.
Article 20
Students and trainees
1. A student or business trainee who is, or immediately
before visiting a Contracting State a resident of the
other Contracting State and who is staying in the former
State exclusively for their education or training,
except in the case of loans on favourable terms as
provided by Government or any other organization
or institution of the first State and
tax-exempt contributions and grants, be exempt from
taxation in that State if:
a) amount that he receives for his livelihood, his teaching
or practice, from people residing outside the
first State; and
b) remuneration from employment in the first State with a
amount not exceeding 10,000 (ten thousand) Swedish kronor
or its equivalent during the tax year, depending on the
the case may be, provided that such employment has
directly related to the studies or to the employment held in
order to earn his living and that his stay in the
first State lasting six months or longer.
2. the exemption provided for in this article shall be allowed only for the
time reasonably or normally required to complete
teaching, training or practice. In no case
get tax exemption allowed by this item for longer
period of five consecutive years from his arrival
to the first State.
Article 21
Professors, teachers and researchers
1. A professor, teacher or researcher who is staying in a
Contracting State at the invitation of that State or a
University, College, school or other such institution in
This State for a period not exceeding three years
exclusively for teaching, lecturing or researching at a
such an institution, and persons domiciled or resident in the
other Contracting State immediately prior to this stay,
shall be exempt from taxation in the first State
for compensation for such activities during the first year from
and by the time of his arrival, provided that
the Department obtains approval by the competent
authority in that State. For the subsequent years shall
the tax exemption only income acquired from the source
outside this State.
2. This article shall not apply to income from research if
research is conducted primarily to benefit particular persons, or
Some people's private interests.
Article 22
Other income
1. income as a resident of a Contracting State
acquires and which are not dealt with in the foregoing articles of this
Agreement shall be taxable only in that State, regardless of the origin of income
derived.
2. the provisions of paragraph 1 shall not apply to income, with
excluding income from immovable property referred to in article 6
paragraph 2, if the recipient of the income is resident in a
Contracting State, carries on business in the other
Contracting State from where the permanent establishment situated or
exercising independent professional activities in the other State from where
located permanent device, as well as the right or
property in respect of which the income is paid owns real
connected with the permanent establishment or the Permanent
the device. In such cases, apply the provisions of article 7
and article 14.
3. Notwithstanding the provisions of paragraph 1, income
person resident in one Contracting State acquires and
derived from sources in the other Contracting State in the form of
lotteries, crossword puzzles, races (including
horse races), card games and all other games or in the form
of gambling and betting otherwise, be taxed in that other
Contracting State.
Article 23
Fortune
1. Fortune consisting of such immovable property referred to in
Article 6, any person resident in one Contracting State
holds and which is situated in the other Contracting
the State, may be taxed in that other State.
2. Assets consisting of movable property forming part of the
the operating assets of a permanent establishment which an enterprise of a
Contracting State has in the other Contracting State,
or of movable property pertaining to a permanent device for
to exercise an independent profession, as resident
of a Contracting State has in the other Contracting State,
may be taxed in that other State.
3. Assets held by an enterprise of a Contracting
State and which is made up of ships and aircraft used in the
international traffic and by movable property which are attributable to
the use of such ships and aircraft shall be taxable only in
This state.
In terms of wealth held by the Swedish, Danish and
Norwegian air transport Consortium Scandinavian Airlines System (SAS),
the provisions of this article shall apply only to the part of the
the fortune that represents the percentage of the Consortium held
SAS Sweden AB, the Swedish partner of SAS.
Article 24
The Elimination of
double taxation
1. The legislation in force in the Contracting States
shall continue to govern the taxation of income in the respective
State except where the provisions of this agreement leads to another
results.
2. in the case of India, double taxation shall be avoided in
the following ways:
a) where a resident of India receives income which, in accordance with
the provisions of this agreement, may be taxed in Sweden, shall
India from the Indian tax on that person's income offset a
amount equal to the income tax paid in Sweden on
the income either directly or by deduction at source.
Such amount shall not, however, exceed that part of the
income taxes, as calculated before the deduction, which is attributable to
the income which may be taxed in Sweden.
b) where a resident of India receives income which, in accordance with
the provisions of this Agreement shall be taxable only in Sweden,
India may yet in determining the amount of the tax on
This person's remaining income shall take into account the income
shall be taxable only in Sweden.
c) If resident in India holds
capital assets in accordance with the provisions of this agreement
may be taxed in Sweden, India from Indian taxes on
This person's assets offset an amount equal to the
property tax paid in Sweden. A
such amount shall not, however, exceed that part of the
the treasure, estimated before the settlement, which is attributable to the
assets that may be taxed in Sweden.
3. in the case of Sweden, double taxation shall be avoided in
the following ways:
a) where a resident of Sweden acquires income according to
Indian law and in accordance with the provisions of this
Agreement may be taxed in India, Sweden-with regard to the
the provisions in the Swedish legislation relating to the settlement of
foreign tax (even as they now can get through
to change without the general principle as stated this change)
-from the Swedish tax on income offset an amount
equivalent to the Indian tax paid on income.
b) where a resident of Sweden receives income, which
in accordance with the provisions of this Agreement shall be taxable only in India,
get in determining Sweden-Swedish progressive tax-
consider such income which shall be taxable only in India.
c) Notwithstanding the provisions of subparagraph (a)) in this paragraph is
dividends from companies established in India to companies with
resident in Sweden exempt from Swedish tax according to the
the provisions of Swedish law on tax exemption for dividends
obtained by Swedish companies by subsidiaries abroad.
d) for the purposes of (a)) of this paragraph are considered to the expression "the
Indian tax paid "include the tax in India as
would have been paid but not paid or paid with lower
amounts due to rules on incentive measures in the
legislation in India which is intended to promote economic
development to the extent that such exemption or
tax credit granted for profits from industrial activities
or production operations or from agriculture, fisheries or
tourism industry (in that included restaurants and hotels), during
condition that the activities carried out in India. At
the application of c) in this paragraph a tax of 15 per cent
on a Swedish tax base has been considered to have been paid for
the activities under the conditions mentioned in
the previous sentence.
The competent authorities may agree to extend the
the application of this provision to other
activities.
e) (d)) shall be applied only during the first
ten years that this agreement is applied. This time period may
may be extended by mutual agreement between the competent
authorities.
f) where a resident of Sweden owns
capital assets in accordance with the laws of India and in
accordance with the provisions of this agreement, may be taxed in the
India, Sweden from tax on that person's fortune
deduct an amount equal to the property tax that
paid in India on such fortune. Settlement amount
shall not, however, exceed that part of the Swedish
the wealth tax, calculated without such a settlement, charged
on the fortune that may be taxed in India.
Article 25
Prohibition of discrimination
1. nationals of a Contracting State shall not, in the second
Contracting State be subject to taxation or
coherent demands that are of a different kind or more onerous than
the taxation and related requirements as nationals of
the other State under the same circumstances are or may be
subject to. Notwithstanding the provisions of article 1
This provision also applies to any person who is not domiciled
of a Contracting State or in both Contracting States.
2. the taxation on a permanent establishment which businesses in a
Contracting State has in the other Contracting State,
in that other State shall not be less favourable than
taxation of the company in the other State, that carries
activities of the same kind. This provision is not considered to cause
the obligation of a Contracting State to grant to any person with
resident in the other Contracting State such personal
deduction for tax purposes, such exemption or
tax reduction on the basis of marital status or
dependants against family allowed resident of
their own State. This provision is considered nor prevent a
Contracting State from taxing the profits of a firm
establishment of a company of the other Contracting State has
in the first State with a tax rate that is higher than the
levied on the profits of a similar company in the former
the State, the taxation nor be deemed to be in breach of
the provisions of article 7 paragraph 3.
3. Except where the provisions of article 9, article 11
paragraph 7 or paragraph 6 of article 12 apply, interest, royalties
and other payments from the company in a Contracting State to the
a resident of the other Contracting State
deductible in determining taxable income
for such a company on the same terms and conditions as the payment to the person
established in the first State. Similarly, debt
as a company of a Contracting State to the person with
resident in the other Contracting State deductible
the determination of such corporate taxable fortune of
same conditions as debt to a resident of the
first State.
4. Enterprises of a Contracting State, the capital of which is wholly or
partly owned or controlled, directly or indirectly, by a
or more persons resident in the other Contracting
the State shall not be subjected in the first State for
taxation or related requirements of other
kind or more burdensome than the taxation and thus
coherent requirements as other similar companies in the
first State are or may be subjected.
5. Notwithstanding the provisions of article 2 shall be applied
the provisions of this article on the taxes of every kind and
nature.
Article 26
The procedure for the mutual
agreement
1. If a person believes that a Contracting State or both
Contracting States took measures to him causes
or will result in taxation contrary to
the provisions of this agreement, he may, without prejudice to
his right to make use of the remedies contained in these
the internal legal order of States, submit the matter to the competent
authority of the Contracting State in which he is domiciled
or, in the case of application of article 25, paragraph 1, of the
Contracting State of which he is a national. The matter shall be
within three years from the time the person in question had
knowing the action giving rise to taxation as
contrary to the provisions of the agreement.
2. If the competent authority finds the complaint justified but
Unable to achieve a satisfactory solution,
the authority shall seek to resolve the matter by mutual
agreement with the competent authority of the other
Contracting State in order to avoid taxation which
contrary to the agreement. Agreement is implemented
Notwithstanding the time limits in the Contracting States
internal legislation.
3. the competent authorities of the Contracting States shall
by mutual agreement, seek to determine or
doubts arising concerning the interpretation or
the application of the agreement. They can also initiate consultations with a view to
eliminate double taxation in cases not covered by
the agreement.
4. the competent authorities of the Contracting States may
enter into direct relations with each other in order to meet
agreement in the cases specified in the preceding paragraphs. If
oral deliberations considered to facilitate an agreement,
such consultations shall take place within a Commission consisting
of representatives of the competent authorities of the
Contracting States.
Article 27 Exchange of information
1. the competent authorities of the Contracting States shall
Exchange such information (documents and certified copies of
documents in that included) which can be assumed to be relevant to the
application of the provisions of this agreement or for
Administration or enforcement of internal law in
question about taxes of every kind and nature levied
for the Contracting States, or of their political
subdivisions or local authorities, on the taxation
According to this legislation is not contrary to the agreement. Exchange
of information is not restricted by articles 1 and 2.
2. information that a Contracting State received under
paragraph 1 shall be treated as secret in the same manner as
information obtained in accordance with the internal law
in this State and shall be disclosed only to persons or
authorities (including courts and administrative bodies)
establishing, receives or collects the taxes
referred to in paragraph 1 or dealing with prosecution or appeal in
These taxes or supervising those
activities. Such persons or authorities shall use the
the information only for such purposes. They may disclose
the information in public court proceedings or in
Court decisions. Notwithstanding this, information
a Contracting State received may be used for other purposes as
such information may be used for any other purpose
under the law of both States and the competent
authority of the State providing the information allows
such use.
3. the provisions of paragraphs 1 and 2 shall not obligation
for a Contracting State that:
a) take administrative measures derogating from the legislation
and administrative practices in force in that Contracting State, or in the
the other Contracting State,
b) provide information that is not available under
legislation or the usual administrative practice in this
Contracting State or of the other Contracting
the State,
c) supply information which would disclose any
commercial, industrial, commercial or professional secret
or used in the course of trade practice or
information, whose surrender would be contrary to the public
considerations of public policy.
4. Where a Contracting State requests information under this
Article, the other Contracting State shall use the funds
as this State has to obtain the required
the information, even though that other State may not need
information for its own tax purposes.
The obligation in the previous sentence is limited by the provisions
in paragraph 3, but this does not confer a right to a
Contracting State to decline to supply information
solely because this State has no own
interest in such information.
5. the provisions of paragraph 3 does not confer a right to a
Contracting State to decline to supply information
solely because the information is held by a bank,
other financial institution, agent, representative or
managers or information regarding ownership
in a person.
Article 28
Assistance with debt collection
1. the Contracting States undertake to provide each other
assistance with the collection of the taxes covered by this agreement
apply plus interest, costs and civil
penalty charges, which relate to such taxes, which
all denoted by the phrase "tax requirements" section of this article.
2. Representation by a competent authority of a Contracting
State assistance with the recovery of tax claims
contain certificates from such authority to tax the requirement has
final determined in accordance with the laws of that State.
tax requirements are considered, according to this article, in finally determined if
a Contracting State shall be entitled to recover the tax requirement
in accordance with its internal legislation and the taxpayer does not
no longer have the right to impede recovery.
3. Amounts recovered by the competent authority of a
Contracting State under this article, shall be forwarded to the
the competent authority of the other Contracting State. The
first-mentioned Contracting State, however, has the right to
compensation for any costs incurred in connection with
assistance with such assistance, to the extent that the competent
authorities mutually agreed on this.
4. This article does not entail an obligation for either
Contracting State to take administrative measures
the measures used in the recovery of its
own tax or which would be contrary to public attention.
Article 29
Members of the diplomatic
Embassy and consulates
The provisions of this Agreement shall not affect the privileges at the
taxation which, according to the General rules of international law or
provisions of specific agreements apply members
of the diplomatic mission and consular offices.
Article 30
Date of entry into force
1. the Contracting States shall by diplomatic means
notify each other when the measures taken
According to respective State law required that this agreement
to enter into force.
2. the agreement shall enter into force thirty days after the receipt of the
the last of the notifications referred to in paragraph 1 of this
article.
3. the provisions of this Agreement shall apply:
(a)) in India,
1) in the case of income acquired during the
tax year that begins on april 1 that most closely follows the
the year in which the agreement enters into force or later,
2) in respect of assets held on the last day
of the tax year that begins on april 1 that most closely follows the
After the year in which the agreement enters into force or later,
b) in Sweden,
1) in respect of taxes on income, the income
acquired on 1 January immediately following the year in which the
the agreement enters into force or later,
2) in respect of wealth tax, the tax imposed
the second calendar year following the year in which the agreement enters into force
or later.
4. the agreement on 7 June 1988 between the Kingdom of Sweden
the Government of the Republic of India's Government to avoid
of double taxation and the prevention of fiscal evasion with respect to taxes
on income and on capital the Protocol shall cease to
apply to this agreement and the attached Protocol enters into force.
The provisions of the said Protocol, the 1988 agreement with
cease to have effect from the date on which the corresponding provisions
in this agreement for the first time shall apply in accordance with
the provisions in paragraph 2 of this article.
Article 31
Termination
This agreement will remain in force until terminated by a
Contracting State. Each Contracting State may, at the
terminate the agreement through diplomatic channels by
notice at least six months before the expiry of any
calendar year. In such a case, the agreement ceases to be valid:
(a)) in India,
1) in the case of revenue acquired it
fiscal years beginning on 1 april of the calendar year following
immediately following the calendar year in which the notice of termination
submitted or later,
2) in respect of assets held on the last day
of the tax year that begins on april 1 of the calendar year
immediately after the calendar year in which the notice of
termination is submitted or later,
b) in Sweden,
1) in the case of income tax, on income acquired
on 1 January of the year immediately following the end of
the six-month period or later,
2) in respect of wealth tax, the tax imposed
the second calendar year that immediately after the end of
the six-month period or later.
In witness whereof the undersigned, being duly
authorised, have signed this agreement.
Done at New Delhi on 24 June 1997 in duplicate in the
Swedish, hindi and English, with all three texts have
the same validity. In the event of discrepancies between the texts
the English text shall prevail.
PROTOCOL
At the signing of the agreement between the Kingdom of Sweden
the Government of the Republic the Government of India for the avoidance of
double taxation and the prevention of fiscal evasion with respect to
taxes on income and on capital, the undersigned have come
agree on the following provisions which form an integral
part of the agreement:
To article 2:
Fees paid in accordance with the Swedish
social security legislation and in accordance with the provisions of the Act
(1990:659) if payroll tax on certain earned income and
Act (1991:687) if payroll tax on pension costs
are not covered by this agreement.
To article 7:
If a company resident in one Contracting State sells
merchandise or carries on business in the other Contracting State
through a permanent establishment situated therein, there shall be fixed
establishment of profit, in application of article 7 paragraphs 1
and 2, not to be determined on the basis of the entire amount
the company receives, no profit shall be determined by
the basis of the remuneration which is attributable to that permanent
establishment of real activity in such
such sales or business. If the company has
a permanent establishment shall not the permanent establishment profits
be determined on the basis of the entire amount of the contract, in
especially in the case of contracts for monitoring,
supply, installation or construction of
industrial, commercial or scientific equipment or
premises, or public works, without the profit shall be determined
on the basis of only the portion of the contract that actually
have been carried out by the permanent establishment in the Contracting State
where the permanent establishment is situated.
To articles 10, 11 and 12:
If India under any agreement, any agreement or any
Protocol between India and a third State which is a member of
OECD, limits its taxation at source in accordance with articles 10
(Distribution), 11 (interest) and 12 (Royalties and compensation for
technical services), on dividends, interest, royalties or
compensation for engineering services at a lower percentage
or a more limited scope than the percentage
or the scope specified in this agreement on the said
income, the same percentage or the scope of that
specified in the contract, the agreement or the
the Protocol also applies pursuant to this agreement.
To article 25:
Taxation in India of the Swedish company's permanent establishments
in no case shall deviate more from the taxation of
similar Indian companies than provided for in Indian law at the
the date of signing of this agreement.
To article 27:
1. A Contracting State may allow representatives of the
competent authority of the other Contracting State
is present in the first-mentioned Contracting State to hear
natural persons and review the documents after written
consent of the persons concerned. The competent authority
in the latter Contracting State shall notify the
competent authority of the first-mentioned Contracting State
If the time and place of the meeting with these people.
2. At the request of the competent authority of a Contracting
State, the competent authority of the other Contracting
the State allow the agents of the competent authority
in the first-mentioned Contracting State are present at
tax investigation in the latter Contracting State to
the part that is considered appropriate.
3. Awarded a request pursuant to paragraph 2, the competent
authority of the Contracting State which carries out the investigation
as soon as possible inform the competent authority of the
other Contracting State if the time and place of the investigation,
If the authority or person authorised to perform the
the investigation, as well as on the procedures and conditions under which the
first-mentioned Contracting State determined for execution
of the investigation. All decisions regarding the execution of the
the investigation shall be taken by the Contracting State that performs
the investigation.
In witness whereof the undersigned, being duly
authorised, have signed this Protocol.
Done at New Delhi on 24 June 1997 in duplicate in the
Swedish, hindi and English, with all three texts have
the same validity. In the event of discrepancies between the texts
the English text shall prevail.
CONVENTION BETWEEN THE GOVERNMENT OF THE KINGDOM OF SWEDEN AND
THE GOVERNMENT OF THE REPUBLIC OF INDIA FOR THE AVOIDANCE OF
DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH
RESPECT TO TAXES ON INCOME AND ON CAPITAL
The Government of the Kingdom of Sweden and the Government of
the Republic of India, desiring to conclude a Convention for
the avoidance of double taxation and the prevention of fiscal
evasion with respect to taxes on income and on capital and with
a view to promoting economic cooperation between the two
countries, have agreed as follows:
Article 1
Personal scope
This Convention shall apply to persons who are residents of one
or both of the Contracting States.
Article 2
Taxes covered
(1) This Convention shall apply to taxes on income and on
capital imposed on behalf of a Contracting State or of its
political subdivisions or local authorities, irrespective of
the manner in which they are levied.
(2) There shall be regarded as taxes on income and on capital
all taxes imposed on total income, on total capital, or on
elements of income or of capital, including taxes on gains from
the alienation of movable or immovable property, taxes on the
the total amounts of wages or salaries paid by enterprises, as well
as taxes on capital appreciation.
(3) The existing taxes to which this Convention shall apply are
in particular:
(a) In India:
(i) the income tax, including any surcharge thereon; and
(ii) the tax on capital (the wealth tax);
(hereinafter referred to as "Indian tax");
(b) in Sweden:
(i) the income tax, including the national income tax
(the State income tax), including the tax on employees
at sea (ship's treasure) and the withholding tax on dividends
(withholding tax);
(ii) the income tax on non-residents (the Special
income tax for non-residents);
(iii) the income tax on non-resident artistes and athletes
(the Special income tax for non-resident artists
etc.);
(iv) the municipal income tax (municipal
income tax);
(v) the tax on means intended for expansion purposes
(expansion Fund tax); and
(vi) the net wealth tax;
(hereinafter referred to as "Swedish tax").
(4) The Convention shall apply also to any identical or
substantially similar taxes which are imposed after the date of
signature of the Convention in addition to, or in place of, the
existing taxes referred to in paragraph (3). The competent
authorities of the Contracting States shall notify each other
of any substantial changes which have been made in their
respective taxation laws.
Article 3
General definition
(1) For the purposes of this Convention, unless the context
otherwise requires:
(a) the term "India" means the territory of India and includes
the territorial sea and airspace above it, as well as any other
maritime zone in which India has sovereign rights, other rights
and jurisdiction, according to the Indian law and in accordance
with international law, including the U.N. Convention on the
Law of the Sea;
(b) the term "Sweden" means the Kingdom of Sweden and, when
used in a geographical sense, includes the national territory,
the territorial sea of Canada as well as other maritime areas
over which Sweden in accordance with international law
exercises sovereign rights or jurisdiction;
(c) the terms "a Contracting State" and "the other Contracting
State "mean India or Sweden, as the context requires;
(d) the term "person" includes an individual, a company, a body
of persons and any other entity which is treated as a taxable
Unit under the taxation laws in force in the respective
Contracting States;
(e) the term "company" means any body corporate or any entity
which is treated as a body corporate for tax purposes;
(f) the terms "enterprise of a Contracting State" and
"enterprise of the other Contracting State" mean respectively
an enterprise carried on by a resident of a Contracting State
and an enterprise carried on by a resident of the other
Contracting State;
(g) the term "international traffic" means any transport by a
ship or aircraft operated by an enterprise of a Contracting
State, except when the ship or aircraft is operated solely
between places in the other Contracting State;
(h) the term "national" means:
(i) any individual possessing the nationality of a
Contracting State;
(ii) any legal person, partnership and association
deriving its status as such from the laws in force in: (a)
Contracting State;
(i) the term "competent authority" means:
(i) in India: the Central Government in the Ministry of
Finance (Department of Revenue) or their authorized
representative;
(ii) in Sweden: the Minister of Finance, his authorized
representative or the authority which is designated as the
competent authority for the purposes of this Convention;
(j) the term "fiscal year" means:
(i) in the case of India, "previous year" as defined
under section 3 of the Income Tax Act, 1961;
(ii) in the case of Sweden "tax year" as defined
under section 3 of the Act Kommunalskatte,1928;
(k) the term "tax" means Indian tax or Swedish tax, as the
context requires, but shall not include any amount which is
payable in respect of any default or omission in relation to
the taxes to which this Convention applies or which represents
a penalty imposed relating to those taxes.
(2) As regards the application of the Convention by a
Contracting State, any term not defined therein shall, unless
the context otherwise requires, have the meaning which it has
under the law of that State concerning the taxes to which the
Convention applies.
Article 4
Resident
(1) For the purposes of this Convention, the term "resident of
(a) "Contracting State" means any person who, under the laws of
that State, is liable to tax therein by reason of his domicile,
residence, place of management or any other criterion of a
similar nature, and also includes that State, a political
Subdivision, a local authority and any governmental body or
agency thereof. In the case of a partnership or estate the term
applies only to the extent that the income derived by such
partnership or estate is subject to tax in that State as the
the income of a resident, either in its hands or in the hands of
its partners or with.
The term "resident of a Contracting State" does not include any
person who is liable to tax in that State in respect only of
income from sources in that State or capital situated therein.
(2) Where by reason of the provisions of paragraph (1) an
individual is a resident of both Contracting States, then his
status shall be determined as follows:
(a) he shall be deemed to be a resident only of the State in
which he has a permanent home available to him; If he has a
a permanent home available to him in both States, he shall be
deemed to be a resident of the State with which his personal
and economic relations are closer (centre of vital interests);
(b) if the State in which he has his centre of vital interests
cannot be determined, or if he has not a permanent home
available to him in either State, he shall be deemed to be a
resident only of the State in which he has an habitual abode;
(c) if he has an habitual abode in both States or in neither of
them, he shall be deemed to be a resident only of the State of
which he is a national;
(d) if he is a national of both States or of neither of them,
the competent authorities of the Contracting States shall
settle the question by mutual agreement.
(3) Where by reason of the provisions of paragraph (1), (a)
person other than an individual is a resident of both
Contracting States, then it shall be deemed to be a resident of
the State in which its place of effective management is
situated. If the State in which its place of effective
management is situated cannot be determined, then the competent
authorities of the Contracting States shall settle the question
by mutual agreement.
Article 5
Permanent establishment
(1) For the purposes of this Convention, the term "permanent
establishment "means a fixed place of business through which
the business of an enterprise is wholly or partly carried on.
(2) The term "permanent establishment" includes especially:
(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop;
(f) a mine, an oil or gas well, a quarry or any other place of
extraction of natural resources;
(g) a sales outlet;
(h) a warehouse in relation to a person providing storage
facilities for others; and
(i) a farm, plantation or other place where agricultural,
forestry, plantation or related activities are carried on.
(3) A building site or a construction, assembly or installation
project or supervisory activities in connection therewith
constitute a permanent establishment only if such site, project
or activities continue for a period of more than six months.
(4) An enterprise shall be deemed to have a permanent
establishment in a Contracting State and to carry on business
through that permanent establishment if it provides services or
facilities in connection with, or supplies plant and machinery
on hire used for or to be used in the prospecting for, or
extraction or exploitation of mineral oils in that State.
(5) Notwithstanding the preceding provisions of this Article,
the term "permanent establishment" shall be deemed not to
include:
(a) the use of facilities solely for the purpose of storage,
display or delivery of goods or merchandise belonging to the
Enterprise;
(b) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of storage,
display or delivery;
(c) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of
processing by another enterprise;
(d) the maintenance of a fixed place of business solely for the
purpose of purchasing goods or merchandise or of collecting
information, for the enterprise;
(e) the maintenance of a fixed place of business solely for the
purpose of carrying on, for the enterprise, any other activity
of a preparatory or auxiliary character;
(f) the maintenance of a fixed place of business solely for any
combination of activities mentioned in sub paragraphs (a) to
(e), provided that the overall activity of the fixed place of
business resulting from this combination is of a preparatory or
auxiliary character.
(6) Notwithstanding the provisions of paragraphs (1) and (2),
where a person-other than an agent of an 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 first-mentioned Contracting State in
respect of any activities which that person undertakes for the
the enterprise, if such a person:
(a) has and habitually exercises in that State an authority to
conclude contracts in the name of the enterprise, unless the
activities of such person are limited to those mentioned in
paragraph (5) which, if exercised through a fixed place of
business, would not make this fixed place of business (a)
permanent establishment under the provisions of that paragraph;
or
(b) has no such authority, but habitually maintains in the
the first-mentioned State a stock of goods or merchandise from
which he regularly delivers goods or merchandise on behalf of
the enterprise; or
(c) habitually secure orders in the first-mentioned State;
wholly or almost wholly for the enterprise itself or for the
Enterprise and other enterprises controlling, controlled by, or
subject to the same control, as that enterprise.
(7) Notwithstanding the preceding provisions of this Article,
an insurance enterprise of a Contracting State shall, except in
regard to re-insurance, be deemed to have a permanent
establishment in the other Contracting State if it collect network
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 whom paragraph (8) applies.
(8) 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 agent of an independent status, provided
that 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
whithin the meaning of this paragraph.
(9) The fact that a company which is a resident of a
Contracting State controls or is controlled by a company which
is a resident of the other Contracting State, or which carries
on business in that other State (whether through a permanent
establishment or otherwise) shall not of itself constitute
either company a permanent establishment of the other.
Article 6
Income from immovable property
(1) Income derived by a resident of a Contracting State from
immovable property (including income from agriculture or
forestry) situated in the other Contracting State may be taxed
in that other State.
(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
the include property accessory to immovable property, livestock and
equipment used in agriculture and forestry, rights to which the
the provisions of general law respecting landed property apply,
buildings, 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
the natural resources; ships, boats and aircraft 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 immovable property.
(4) The provisions of paragraphs (1) and (3) shall also apply
to the income from immovable property of an enterprise and to
income from immovable property used for the performance of
independent personal services.
Article 7
Business profits
(1) The profits of an enterprise of a Contracting State shall
be taxable only in that State unless the enterprise carries on
business 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 permanent establishment.
(2) Subject to the provisions of paragraph (3), where an
Enterprise of a Contracting State carries on business in the
other Contracting State through a permanent establishment
situated therein, there shall in each Contracting State be
attributed to that permanent establishment the profits which it
might be expected to make if it were a distinct and separate
enterprise engaged in the same or similar activities under the
the same or similar conditions and dealing wholly independently
with the enterprise of which it is a permanent establishment.
(3) In determining the profits of a permanent establishment,
There shall be allowed as deductions expenses which are
incurred for the purposes of the permanent establishment,
including executive and general administrative expenses so
incurred, whether in the State in which the permanent
establishment is situated or elsewhere, in accordance with the
the provisions of and subject to the limitations of the tax laws of
that State.
(4) No profits shall be attributed to a permanent establishment
by reason of the mere purchase by that permanent establishment
of goods or merchandise for the enterprise.
(5) For the purposes of the preceding paragraphs, the profits
to be attributed to the permanent establishment shall be
determined by the same method year by year unless there is good
and sufficient reason to the contrary.
(6) Where profits include items of income which are dealt with
separately in other Articles of this Convention, then the
the provisions of those Articles shall not be affected by the
the provisions of this Article.
Article 8
Shipping and air transport
(1) the Profits of an enterprise of a Contracting State from the
operation of ships or aircraft in international traffic shall
be taxable only in that State.
(2) Profits derived by a transportation enterprise which is a
the resident of a Contracting State from the use, maintenance, or
rental of containers (including trailers and other equipment
for the transport of containers) used for the transport of
goods or merchandise in international traffic shall be taxable
only in that Contracting State unless the containers are used
solely within the other Contracting State.
(3) With respect to profits derived by the Swedish, Danish and
Norwegian air transport consortium Scandinavian Airlines System
(SAS) the provisions of paragraph (1) shall apply only to such
part of the profits as corresponds to the participation held in
that consortium by SAS Sweden AB, the Swedish partner of
Scandinavian Airlines System (SAS).
(4) The provisions of paragraphs (1) and (2) shall also apply
to profits from the participation in a pool, a joint business
or an international operating agency.
Article 9
Associated enterprises
Where:
(a) an enterprise of a Contracting State participates directly
or indirectly in the management, control or capital of an
Enterprise of the other Contracting State, or
(b) the same persons participate directly or indirectly in the
management, control or capital of an enterprise of a
Contracting State and an enterprise of the other Contracting
State,
and in either case conditions are made or imposed between the
the two enterprises in their commercial or financial relations
which differ from those which would be made between independent
enterprises, then any profits which would, but for those
conditions, have accrued to one of the enterprises, but, by
reason of those conditions, have not so accrued, may be
included in the profits of that enterprise and taxed
accordingly.
Any case resulting in double taxation from the application of
This Article may be resolved under the mutual agreement
procedure.
Article 10
Dividends
(1) Dividends paid by a company which is a resident of a
Contracting State to a resident of the other Contracting State
may be taxed in that other State.
(2) Notwithstanding the provisions of paragraph (1), such
dividends may also be taxed in the Contracting State of which
the company paying the dividends is a resident and according to
the laws of that State, but if the beneficial owner of the
dividends is a resident of the other Contracting State, the tax
so charged shall not exceed 10 per cent of the gross amount of
the dividends.
This paragraph shall not affect the taxation of the company in
respect of the profits out of which the dividends are paid.
(3) The term "dividends" as used in this Article means income
from shares or other rights, not being debt-claims,
participating in profits, as well as income from other
corporate rights which is subjected to the same taxation
treatment as income from shares by the laws of the State of
which the company making the distribution is a resident.
(4) The provisions of paragraphs (1) and (2) shall not apply if
the beneficial owner of the dividends, being a resident of a
Contracting State, carries on business in the other Contracting
State of which the company paying the dividends is a resident,
through a permanent establishment situated therein, or performs
in that other State independent personal services from a fixed
base situated therein, and the holding in respect of which the
dividends are paid is effectively connected with such permanent
establishment or fixed base. In such case the provisions of
Article 7 or Article 14, as the case may be, shall apply.
(5) Where a company which is a resident of a Contracting State
derives profits or income from the other Contracting State,
that other State may not impose any tax on the dividends paid
by the company, except insofar as such dividends are paid to a
the resident of that other State or insofar as the holding in
respect of which the dividends are paid is effectively
connected with a permanent establishment or a fixed base
situated in that other State, nor subject the company's
undistributed profits to a tax on the company's undistributed
profits, even if the dividends paid or the undistributed
profits consist wholly or partly of profits or income arising
in such other State.
Article 11
Interest
(1) Interest arising in a Contracting State and paid to a
resident of the other Contracting State may be taxed in that
other State.
(2) However, such interest may also be taxed in the Contracting
State in which it arises and according to the laws of that
State, but if the beneficial owner of the interest is a
resident of the other Contracting State, the tax so charged
shall not exceed 10 per cent of the gross amount of the
interest.
(3) Notwithstanding the provisions of paragraph (2) interest
arising in a Contracting State shall be exempt from tax in that
Contracting State provided it is derived and beneficially owned
by, or derived in connection with a loan or credit extended or
endorsed by:
(i) the Government, a political subdivision, a statutory
body, or a local authority of the other Contracting State; or
(ii) in the case of India, the Reserve Bank of India, the
Industrial Finance Corporation of India, the Industrial
Development Bank of India, the Export-Import Bank of India, the
National Housing Bank, the Small Industries Development Bank of
India and the Industrial Credit and Investment Corporation of
India (ICICI); and
in the case of Sweden, the Swedish International Development
Authority (page), SWEDECORP (Swedish International
business assistance), Swedfund International AB or The Swedish
Export Credits Guarantee Board (Exportkreditnämnden); or
(iii) any other institution as may be agreed from time to
time between the competent authorities of the Contracting
States.
(4) The term "interest" as used in this Article means income
from debt-claims of every kind, whether or not secured by
mortgage and whether or not carrying a right to participate in
the debtor's profits, and in particular, income from government
Securities and income from bonds or debentures, including
premiums and prizes attaching to such securities, bonds or
debentures. Penalty charges for late payment shall not be
regarded as interest for the purpose of this Article.
(5) The provisions of paragraphs (1), (2) and (3) shall not
apply if the beneficial owner of the interest, being a resident
of a Contracting State, carries on business in the other
Contracting State in which the interest arises, through a
permanent establishment situated therein, or performs in that
other State independent personal services from a fixed base
situated therein, and the debt-claim in respect of which the
the interest is paid is effectively connected with such permanent
establishment or fixed base. In such case the provisions of
Article 7 or Article 14, as the case may be, shall apply.
(6) Interest shall be deemed to arise in a Contracting State
When the payer is a resident of that State. Where, however, the
the person paying the interest, whether he is a resident of a
Contracting State or not, has in a Contracting State (a)
permanent establishment or a fixed base in connection with
which the indebtedness on which the interest is paid was
incurred, and such interest is borne by such permanent
establishment or fixed base, then such interest shall be deemed
to arise in the State in which the permanent establishment or
fixed base is situated.
(7) Where by reason of a special relationship between the payer
and the beneficial owner or between both of them and some other
person, the amount of the interest, having regard to the debt-
claim for which it is paid, exceeds the amount which would have
been agreed upon by the payer and the beneficial owner in the
absence of such relationship, the provisions of this Article
shall apply only to the last-mentioned amount. In such case,
the excess part of the payments shall remain taxable according
to the laws of each Contracting State, due regard being had to
the other provisions of this Convention.
Article 12
Royalties and fees for technical
services
(1) Royalties and fees for technical services arising in a
Contracting State and paid to a resident of the other
Contracting State may be taxed in that other State.
(2) Notwithstanding the provisions of paragraph (1) such
royalties and fees for technical services may also be taxed in
the Contracting State in which they arise, and according to the
the laws of that State, but if the recipient is the beneficial
owner of the royalties or fees for technical services, the tax
so charged shall not exceed 10 per cent of the gross amount of
the royalties or fees for technical services.
(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 including cinematograph films, any patent,
trade mark, design or model, plan, secret formula or process,
or for information concerning industrial, commercial or
scientific experience.
(b) The term "fees for technical services" means the payment of any
cheek in consideration for the rendering of any managerial,
technical or consultancy services including the provision of
services by technical or other personnel but does not include
payments for services mentioned in Articles 14 and 15 of this
Convention.
(4) The provisions of paragraphs (1) and (2) shall not apply if
the beneficial owner of the royalties or fees 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 technical services are paid is
effectively connected with such permanent establishment or
fixed base. In such case the provisions of Article 7 or Article
14, as the case may be, shall apply.
(5) Royalties or fees for technical services shall be deemed to
arise in a Contracting State when the payer is 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 connection with
which the liability to pay the royalties or fees for technical
services was incurred, and such royalties or fees for technical
services are borne by such permanent establishment or fixed
base, then such royalties or fees for technical services shall
be deemed to arise in the State in which the permanent
establishment or fixed base is situated.
(6) Where by reason of a special relationship between the payer
and the beneficial owner or between both of them and some other
person, the amount of the royalties or fees for technical
services, having regard to the use, right or information for
which they are paid, exceeds the amount which would have been
agreed upon by the payer and the beneficial owner in the
absence of such relationship, the provisions of this Article
shall apply only to the last-mentioned amount. In such case,
the excess part of the payments shall remain taxable according
to the laws of each Contracting State, due regard being had to
the other provisions of this Convention.
Article 13
Capital gains
(1) Gains derived by a resident of a Contracting State from the
alienation of immovable property referred to in Article 6 and
situated in the other Contracting State may be taxed in that
other State.
(2) Gains from alienation of movable property forming part of
the business property of a permanent establishment which an
Enterprise of a Contracting State has in the other Contracting
State or of movable property pertaining to a fixed base
available to a resident of a Contracting State in the other
Contracting State for the purpose of performing independent
personal services, including such gains from the alienation of
such a permanent establishment (alone or with the whole
Enterprise) or of such fixed base, may be taxed in that other
State.
(3) Gains derived by a resident of a Contracting State from the
alienation of ships or aircraft operated in international
traffic or movable property pertaining to the operation of such
ships or aircraft, shall be taxable only in that State.
With respect to gains derived by the Swedish, Danish and
Norwegian air transport consortium Scandinavian Airlines System
(SAS), the provisions of this paragraph shall apply only to
such portion of the gains as corresponds to the participation
held in that consortium by SAS Sweden AB, the Swedish partner
of Scandinavian Airlines System (SAS).
(4) Gains from the alienation of shares of the capital stock of
a company the property of which consists directly or indirectly
principally of immovable property situated in a Contracting
State may be taxed in that State.
(5) Gains from the alienation of any property other than that
referred to in paragraphs (1), (2), (3) and (4), shall be
taxable only in the Contracting State of which the alienator is
a resident, provided that such resident is subject to tax
thereon in that State. If the resident is not subject to tax
thereon, then such gains may be taxed in the other Contracting
State.
(6) Notwithstanding the provisions of paragraph (5), gains from
the alienation of any property derived by an individual who has
been a resident of a Contracting State and who has become a
resident of the other Contracting State, may be taxed in the
the first-mentioned State if the alienation of the property occurs
at any time during the four years next following the date on
which the individual has ceased to be a resident of the first-
mentioned State.
Article 14
Independent personal services
(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, when such income may be
taxed in the other Contracting State:
(a) if he has a fixed base regularly available to him in the
other Contracting State for the purpose of performing his
activities; in that case only so much of the income as is
attributable to that fixed base may be taxed in the other
State; or
(b) if his stay in the other State is for a period or periods
aggregating 183 days or more in any twelve month period
commencing or ending in the fiscal year concerned; in that
case, only so much of the income as is derived from his
the activities performed in that other State may be taxed in that
other State.
(2) The term "professional services" includes especially
independent scientific, literary, artistic, educational or
teaching activities as well as the independent activities of
physicians, lawyers, engineers, architects, surgeons, dentists
and accountants.
Article 15
Dependent personal services
(1) Subject to the provisions of Articles 16, 18 and 19,
salaries, wages and other similar remuneration derived by a
the resident of a Contracting State in respect of an employment
shall be taxable only in that State unless the employment is
exercised in the other Contracting State. If the employment is
so exercised, such remuneration as is derived therefrom may be
taxed in that other State.
(2) Notwithstanding the provisions of paragraph (1),
remuneration derived by a resident of a Contracting State in
respect of an employment exercised in the other Contracting
State shall be taxable only in the first-mentioned State if:
(a) the recipient is present in the other State for a period or
period not exceeding in the aggregate 183 days in any twelve
month period commencing or ending in the fiscal year concerned;
and
(b) the remuneration is paid by, or on behalf of, an employer
the who is not a resident of the other State; and
(c) the remuneration is not borne by a permanent establishment
or a fixed base which the employer has in the other State.
(3) Notwithstanding the preceding provisions of this Article,
remuneration derived in respect of an employment exercised
aboard a ship or aircraft operated in international traffic by
an enterprise of a Contracting State may be taxed in that
State. Where a resident of Sweden derives remuneration in
respect of an employment exercised aboard an aircraft operated
in international traffic by the Swedish, Danish and Norwegian
air transport consortium Scandinavian Airlines System (SAS),
such remuneration shall be taxable only in Malaysia.
Article 16
Directors ' fees
Directors ' fees and other similar payments derived by a
the resident of a Contracting State in his capacity as a member of
the board of directors of a company which is a resident of the
other Contracting State may be taxed in that other State.
Article 17
Artistes and sportspersons
(1) Notwithstanding the provisions of Articles 14 and 15,
income derived by a resident of a Contracting State as an
artiste, such as a theatre, motion picture, radio or television
artiste, or a musician, or as a sportsperson, from his personal
activities as such exercised in the other Contracting State,
may be taxed in that other State.
(2) Where income in respect of personal activities exercised by
an artiste or a sportsperson in his capacity as such accrues
not to the artiste or sportsperson himself but to another
person, that income may, notwithstanding the provisions of
Articles 7, 14 and 15, be taxed in the Contracting State in
which the activities of the artiste or sportsperson are
exercised.
(3) The provisions of paragraphs (1) and (2), shall not apply
to income from activities performed in a Contracting State by
artistes or sportspersons if the visit to that State is
substantially supported by public funds of the other
Contracting State or of a political subdivision or local
authority thereof. In such a case, the income shall be taxable
only in the Contracting State of which the artiste or
sportsperson is a resident.
Article 18
Retirement, social security payments
and annuities
(1) Subject to the provisions of paragraph 2 of Article 19,
pensions and other similar remuneration in consideration of
past employment, annuities and payments under the Social
Security legislation arising in a Contracting State and paid to
a resident of the other Contracting State may be taxed in the
the first-mentioned Contracting State.
(2) The term "annuity" means a stated sum payable periodically
at stated times during life or during a specified or
ascertainable period of time under an obligation to make the
payments in return for adequate and full consideration in money
or money's worth.
Article 19
Government service
(1) (a) Remuneration, other than a pension, paid by a
Contracting State or a political subdivision or a local
authority thereof to an individual in respect of services
rendered to that State or subdivision or authority shall be
taxable only in that State.
(b) However, such remuneration shall be taxable only in the
other Contracting State if the services are rendered in that
other State and the individual is a resident of that State who:
(i) is a national of that State; or
(ii) did not become a resident of that State solely for
the purpose of rendering the services.
(2) (a) Any pension paid by, or out of funds created by, a
Contracting State or a political subdivision or a local
authority thereof to an individual in respect of services
rendered to that State or subdivision or authority shall be
taxable only in that State.
(b) However, such pension shall be taxable only in the other
Contracting State if the individual is a resident of, and a
national of, that State.
(3) The provisions of Articles 15, 16 and 18 shall apply to
remuneration and to pensions in respect of services rendered in
connection with a business carried on by a Contracting State or
a political subdivision or a local authority thereof.
Article 20
Students and apprentices
(1) A student or business apprentice who is or was immediately
before visiting a Contracting State a resident of the other
Contracting State and who is present in the first-mentioned
State solely for the purpose of his education or training
shall, besides loans on preferential conditions provided by the
Government or any other organization or institution of the
the first-mentioned State and tax exempt grants and scholarships,
be exempt from tax in the first-mentioned State on:
(a) payments made to him by persons residing outside the first-
mentioned State for the purpose of his maintenance, education
or training; and
(b) remuneration from employment in the first-mentioned State;
in an amount not exceeding 10.000 (ten thousand) Swedish Kronor
or its equivalent amount during any fiscal year, as the case
may be, provided that such employment is directly related to
his studies or is below the ceilings for the purpose of his maintenance
and that his stay in the first-mentioned State Marine for six
months or more.
(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 below the ceilings, but in no event
shall any individual have the benefits of this Article for more
than five consecutive years from the date of his first arrival
in the first-mentioned State.
Article 21
Professors, teachers and research
scholars
(1) A professor, teacher or research scholar who visits a
Contracting State at the invitation of that State or of a
University, college, school or other such institution of that
State not exceeding three years solely for the purpose of
teaching, giving lectures or carrying out research at such
institution and who is, or was immediately before that visit, a
resident of the other Contracting State shall be exempt from
tax in the first-mentioned State, provided that the institution
in question receives approval from the competent authority of
that Contracting State on his remuneration for such activity
during the period of the first year from the date of his
arrival and in the subsequent years the exemption will be only
in respect of remuneration derived by him from outside that
State.
(2) This Article shall not apply to income from research, if
such research is under taken primarily for the private benefit
of a specific person or persons.
Article 22
Other income
(1) Items of income of a resident of a Contracting State,
wherever arising, not dealt with in the foregoing Articles of
This Convention shall be taxable only in that State.
(2) The provisions of paragraph (1) shall not apply to income,
other than income from immovable property as defined in
paragraph (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 connected with such permanent establishment or
fixed base. In such case the provisions of Article 7 or Article
14, as the case may be, shall apply.
(3) Notwithstanding the provisions of paragraph (1), if a
the resident of a Contracting State derives income from sources
within the other Contracting State in the form of lotteries,
crossword puzzles, races including horse races, card games and
other games of any sort or gambling or betting of any form or
nature whatsoever, such income may be taxed in the other
Contracting State.
Article 23
Capital
(1) Capital represented by immovable property referred to in
Article 6, owned by a resident of a Contracting State and
situated in the other Contracting State, may be taxed in that
other State.
(2) Capital represented by movable property forming part of the
business property of a permanent establishment which an
Enterprise of a Contracting State has in the other Contracting
State or by movable property pertaining to a fixed base
available to a resident of a Contracting State in the other
Contracting State for the purpose of performing independent
personal services, may be taxed in that other State.
(3) Capital represented by ships and aircraft operated in
international traffic by an enterprise of a Contracting State
and by movable property pertaining to the operation of such
ships and aircraft, shall be taxable only in that State.
With respect to capital owned by the Swedish, Danish and
Norwegian air transport consortium Scandinavian Airlines System
(SAS) the provisions of this Article shall apply only to such
part of the capital as relates to the participation held in
that consortium by SAS Sweden AB, the Swedish partner of SAS.
Article 24
Elimination of double taxation
(1) The laws in force in either of the Contracting State will
continue to govern the taxation of income in the respective
Contracting States except where provisions to the contrary are
made in this Convention.
(2) In the case of India, double taxation shall be avoided as
follows:
(a) Where a resident of India derives income which, in
accordance with the provisions of this Convention, may be taxed
in Sweden, India shall allow as a deduction from the tax on the
the income of that resident an amount equal to the income tax paid
in Sweden whether directly or by way of deduction at source.
Such amount shall not however exceed that part of the income
the tax, as computed before the deduction is given, which is
attributable to the income which may be taxed in Sweden.
(b) Where a resident of India derives income which, in
accordance with the provisions of this Convention, shall be
taxable only in Sweden, India may, when determining the
graduated rate of Indian tax, take into account the income
which shall be taxable only in Malaysia.
(c) Where a resident of India owns assets which, in accordance
with the provisions of this Convention, may be taxed in Sweden,
India shall allow as a deduction from the tax on such assets an
amount equal to the tax on net wealth paid in Malaysia in respect
of such assets. Such deduction shall not, however, exceed that
part of the Indian tax on net wealth as computed before the
deduction is given which is appropriate to the assets which may
be taxed in Sweden.
(3) In the case of Sweden, double taxation shall be avoided as
follows:
(a) Where a resident of Sweden derives income which under the
the laws of India and in accordance with the provisions of this
Convention may be taxed in India, Sweden shall allow-subject
to the provisions of the laws of Sweden concerning credit for
foreign tax (as it may be amended from time to time without
changing the general principle hereof)-as a deduction from
the tax on such income, an amount equal to the Indian tax paid
in respect of such income.
(b) Where a resident of Sweden derives income which, in
accordance with the provisions of this Convention, shall be
taxable only in India, Sweden may, when determining the
graduated rate of Swedish tax, take into account the income
which shall be taxable only in India.
(c) Notwithstanding the provisions of sub-paragraph (a) of this
paragraph, dividends paid by a company which is a resident of
India to a company which is a resident of Sweden shall be
exempt from Swedish tax according to the provisions of Swedish
law governing the exemption of tax on dividends paid to Swedish
companies by subsidiaries abroad.
(d) For the purposes of sub-paragraph (a) of this paragraph the
the term "Indian tax paid" shall be deemed to include the Indian
tax which would have been paid but for any exemption or
reduction of tax granted under incentive provisions contained
in the Indian law designed to promote economic development to
the extent that such exemption or reduction is granted for
profits from industrial or manufacturing activities or from
Agriculture, fishing or tourism (including restaurants and
Hotels) provided that the activities have been carried out
within India. For the purpose of sub-paragraph (c) of this
paragraph a tax of 15 per cent calculated on a Swedish tax base
shall be considered to have been paid for such activities under the
those conditions mentioned in the previous sentence.
The competent authorities may agree to extend the application
of this provision also to other activities.
(e) The provisions of paragraph (d) shall apply only for the
first ten years during which this Convention is effective. This
period may be extended by a mutual agreement between the
competent authorities.
(f) Where a resident of Sweden owns assets which, in accordance
with the provisions of this Convention, may be taxed in India,
Sweden shall allow as a deduction from the tax on such assets an
amount equal to the tax on net wealth paid in India in respect
of such assets. Such deduction shall not, however, exceed that
part of the Swedish tax on net wealth as computed before the
deduction is given which is appropriate to the assets which may
be taxed in India.
Article 25
Non-discrimination
(1) nationals of a Contracting State shall not be subjected in
the other Contracting State to any taxation or any requirement
connected therewith, which is other or more burdensome than the
taxation and connected requirements to which nationals of that
other State in the same circumstances are or may be subjected.
This provision shall, notwithstanding the provisions of Article
1, also apply to persons who are not residents of one or both
of the Contracting States.
(2) The taxation on a permanent establishment which an
Enterprise of a Contracting State has in the other Contracting
State shall not be less favourably levied in that other State
than the taxation levied on enterprises of that other State
carrying on the same activities. This provision shall not be
construed as obliging a Contracting State to grant to residents
of the other Contracting State any personal allowances, reliefs
or reductions for taxation purposes on account of civil status
or family responsibilities which it grants to its own
residents. Further this provision shall not be construed as
preventing a Contracting State from charging the profits of a
permanent establishment which a company of the other
Contracting State has in the first-mentioned State at a rate of
tax which is higher than that imposed on the profits of a
similar company of the first-mentioned Contracting State, nor
as being in conflict with the provisions of paragraph 3 of
Article 7 of this Convention.
(3) Except where the provisions of Article 9, paragraph (7) of
Article 11, or paragraph (6) of Article 12, apply, interest,
royalties and other disbursements paid by an enterprise of a
Contracting State to a resident of the other Contracting State
shall, for the purpose of determining the taxable profits of
such enterprise, be deductible under the same conditions as if
they had been paid to a resident of the first-mentioned State.
Similarly, any debts of an enterprise of a Contracting State to
a resident of the other Contracting State shall, for the
purpose of determining the taxable capital of such enterprise,
be deductible under the same conditions as if they had been
contracted to a resident of the first-mentioned State.
(4) Enterprises of a Contracting State, the capital of which is
wholly or partly owned or controlled, directly or indirectly,
by one or more residents of the other Contracting State, shall
not be subject in the first-mentioned State to any taxation or
any requirement connected therewith which is other or more
burdensome than the taxation and connected requirements to
which other similar enterprises of the first-mentioned State
are or may be subjected.
(5) The provisions of this Article shall, notwithstanding the
the provisions of Article 2, apply to taxes of every kind and
Description.
Article 26
Mutual agreement procedure
(1) Where a person considers that the actions of one or both of
the Contracting States result or will result for him in
taxation not in accordance with the provisions of this
Convention, he may, irrespective of the remedies provided by
the domestic law of those States, present his case to the
competent authority of the Contracting State of which he is a
resident or, if his case comes under paragraph (1) of Article
25, to that of the Contracting State of which he is a national.
The case must be presented within three years from the first
notification of the action resulting in taxation not in
accordance with the provisions of the Convention.
(2) The competent authority shall endeavour, if the objection
appears to it to be justified and if it is not itself able to
arrive at a satisfactory solution, to resolve the case by
mutual agreement with the competent authority of the other
Contracting State, with a view to the avoidance of taxation
which is not in accordance with the Convention. Any agreement
reached shall be implemented notwithstanding any time limits in
the domestic law of the Contracting States.
(3) The competent authorities of the Contracting States shall
endeavour to resolve by mutual agreement any difficulties or
doubts arising as to the interpretation or application of the
Convention. They may also consult together for the elimination
of double taxation in cases not provided for in the Convention.
(4) The competent authorities of the Contracting States may
communicate with each other directly for the purpose of
reaching an agreement in the sense of the preceding paragraphs.
When it seems advisable in order to reach agreement to have an
oral exchange of opinion, such exchange may take place through
a Commission consisting of representatives of the competent
authorities of the Contracting States.
Article 27 Exchange of information
(1) The competent authorities of the Contracting States shall
Exchange such information (including documents or certified
copies of the documents) as is foreseeably relevant for
carrying out the provisions of this Convention or to the
Administration or enforcement of the domestic laws concerning
taxes of every kind and description imposed on behalf of the
Contracting States, or of their political subdivisions or
local authorities, insofar as the taxation thereunder is not
contrary to the Convention. The exchange of information is
not restricted by Articles 1 and 2.
(2) Any information received under paragraph 1 by a
Contracting State shall be treated as secret in the same
manner as information obtained under the domestic laws of
that State and shall be disclosed only to persons or
authorities (including courts and administrative bodies)
concerned with the assessment or collection of, the
enforcement or prosecution in respect of, the determination
of appeals in relation to the taxes referred to in paragraph
1, or the oversight of the above. Such persons or authorities
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 Contracting State may be used for
other purposes when such information may be used for such
other purposes under the laws of both States and the
competent authority of the supplying State authorises such
use.
(3) In no case shall the provisions of paragraphs 1 and 2 be
construed so as to impose on a Contracting State the
bond:
(a) to carry out administrative measures at variance with the
laws and administrative practice of that or of the other
Contracting State;
(b) to supply information which is not obtainable under the
laws or in the normal course of the administration of that or
of the other Contracting State;
(c) to supply information which would disclose any trade,
business, industrial, commercial or professional secret or
trade process, or information the disclosure of which would
be contrary to public policy (ordre public).
(4) If information is requested by 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 paragraph 3 but in no case shall such
limitations be construed to permit a Contracting State to
decline to supply information solely because it has no
domestic interest in such information.
(5) In no case shall the provisions of paragraph 3 be
construed to permit a Contracting State to decline to 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 interests in a person.
Article 28
Collection assistance
(1) The Contracting States undertake to lend assistance to each
other in the collection of taxes to which this Convention
relates, together with interest, costs, and civil penalties
relating to such taxes, referred to in this Article as a
"revenue claim".
(2) the Request for assistance by the competent authority of a
Contracting State in the collection of a revenue claim shall
include (a) certification by such authority that, under the laws
of that State, the revenue claim has been finally determined.
For the purposes of this Article, a revenue claim is finally
determined when a Contracting State has the right under its
internal law to collect the revenue claim and the taxpayer has
no further rights to restrain collection.
(3) the Amount collected by the competent authority of a
Contracting State pursuant to this Article shall be forwarded
to the competent authority of the other Contracting State.
However, the first-mentioned Contracting State shall be
entitled to reimbursement of costs, if any, incurred in the
course of rendering such assistance to the extent mutually
agreed between the competent authorities of the two States.
(4) Nothing in this Article shall be construed as imposing on
either Contracting State the obligation to carry out
administrative measures of a different nature from those used
in the collection of its own taxes or those which would be
contrary to its public policy.
Article 29
Members of diplomatic missions
and consular posts
Nothing in this Convention shall affect the fiscal privileges
of members of diplomatic missions and consular posts under the
General rules of international law or under the provisions of
Special agreements.
Article 30
Entry into force
(1) The Contracting States shall notify each other in writing,
through diplomatic channels, the completion of the procedures
required by the respective laws for the entry into force of
This Convention.
(2) This Convention shall enter into force thirty days after
the receipt of the latter of the notifications referred to in
paragraph (1) of this Article.
(3) The provisions of this Convention shall have effect:
(a) in India,
(i) in respect of income arising in any fiscal year
beginning on or after the first day of April next following the
calendar year in which the Convention enters into force;
(ii) in respect of capital which is held on the last day
of any fiscal year beginning on or after the first day of April
following the calendar year in which this Convention enters
into force;
(b) in Sweden,
(i) in respect of taxes on income, on income derived on
or after the first day of January of the year next following
that of the entry into force of the Convention;
(ii) in respect of tax on net wealth, for tax which is
assessed on or after the second calendar year following that in
which the Convention enters into force.
(4) The Convention of 7 June 1988 between the Government of the
Republic of India and the Government of the Kingdom of Sweden
for the avoidance of double taxation and the prevention of
fiscal evasion with respect to taxes on income and on capital
with Protocol shall terminate upon the coming into force of
This Convention and accompanying Protocol. The provisions of
the PM said the 1988 Convention with Protocol shall cease to have
effect from the date on which the corresponding provisions of
This Convention and accompanying Protocol shall, for the first
time, have effect according to the provisions of paragraph (2)
of this Article.
Article 31
Termination
This Convention shall remain in force until terminated by a
Contracting State. Either Contracting State may terminate the
The Convention, through diplomatic channels, by giving written
notice of termination at least six months before the end of any
calendar year. In such case, the Convention shall cease to have
effect:
(a) in India,
(i) in respect of income arising in any fiscal year
beginning on or after the first day of January following the
calendar year in which the notice of termination is given;
(ii) in respect of capital which is held on the last day
of any fiscal year beginning on or after the first day of April
following the calendar year in which the notice of termination
is given;
(b) in Sweden,
(i) in respect of taxes on income, on income derived on
or after the first day of January of the year next following
the end of the six months period;
(ii) in respect of tax on net wealth, for tax which is
assessed in or after the second calendar year following the end
of the six months period.
In witness whereof the undersigned being duly authorized
thereto have signed this Convention.
Done in duplicate at New Delhi, this 24th day of June 1997, in
the Swedish, Hindi and English languages, all three texts being
equally authentic. In case of divergence between the texts the
The English text shall be the operative one.
PROTOCOL
At the signing of the Convention between the Government of the
Kingdom of Sweden and the Government of the Republic of India
for the avoidance of double taxation and the prevention of
fiscal evasion with respect to taxes on income and on capital,
the undersigned have agreed that the following shall form an
integral part of the Convention:
With reference to Article 2:
The fees paid under the Social Security Legislation and Swedish
According to the provisions of the Act (1990:659) on Special
salary tax on earned income and the Act (1991:687) on Special
salary tax on pension costs are not included in this
Convention.
With reference to Article 7:
In respect of paragraphs (1) and (2) of Article 7, where an
the enterprise of one of the Contracting States sells goods or
merchandise or carries on business in the other Contracting
State through a permanent establishment situated therein, the
profits of that permanent establishment shall not be determined
on the basis of the total amount received by the enterprise,
but shall be determined only on the basis of the remuneration
which is attributable to the actual activity of the permanent
establishment for such sales or business. Especially, in the
case of contracts for the survey, supply, installation or
construction of industrial, commercial or scientific equipment
or premises, or of public works, when the enterprise has a
permanent establishment, the profits of such permanent
establishment shall not be determined on the basis of the total
amount of the contract, but shall be determined only on the
the basis of that part of the contract which is effectively carried
out by the permanent establishment in the Contracting State
where the permanent establishment is situated.
With reference to Articles 10, 11 and 12:
In respect of Articles 10 (Dividends), 11 (Interest) and 12
(Royalties and fees for technical services), if under any
Convention, Agreement or Protocol between India and a third
State which is a member of the OECD, India limits its taxation
at source on dividends, interest, royalties or fees for
technical services to a rate lower or a scope more restricted
than the rate or the scope provided for in this Convention on the
said items of income, the same rate or scope as provided for in
that Convention, Agreement or Protocol on the said items of
income shall also apply during this Convention.
With reference to Article 25:
The taxation in India of permanent establishments of Swedish
companies, shall in no case differ more from the taxation of
similar Indian companies than is provided by the Indian law on
the date of signature of this Convention.
With reference to Article 27:
1. A Contracting State may allow representatives of the
competent authority of the other Contracting State to enter
the territory of the first-mentioned Contracting State to
interview individuals and examine records with the written
consent of the person concerned. The competent authority of
the second-mentioned Contracting State shall notify the
competent authority of the first-mentioned Contracting State
of the time and place of the meeting with the individuals
concerned.
2. At the request of the competent authority of one
Contracting State, the competent authority of the other
Contracting State may allow representatives of the competent
authority of the first-mentioned Contracting State to be
present at the appropriate part of a tax examination in the
second-mentioned Contracting State.
3. If the request referred to in paragraph 2 is acceded to,
the competent authority of the Contracting State conducting
the examination shall, as soon as possible, notify the
competent authority of the other Contracting State about the
time and place of the examination, the authority or official
designated to carry out the examination and the procedures
and conditions required by the first-mentioned Contracting
State for the conduct of the examination. All decisions with
respect to the conduct of the tax examination shall be made
by the Contracting State conducting the examination.
In witness whereof the undersigned being duly authorized
thereto have signed this Protocol.
Done in duplicate at New Delhi, this 24th day of June 1997, in
the Swedish, Hindi and English languages, all three texts being
equally authentic. In case of divergence between the texts the
The English text shall be the operative one.
Team (2013:373).
Annex 2 MEMORANDUM OF UNDERSTANDING BETWEEN THE COMPETENT AUTHORITY
OF SWEDEN AND THE COMPETENT AUTHORITY OF INDIA REGARDING
SUSPENSION OF COLLECTION OF TAXES DURING MUTUAL AGREEMENT
PROCEDURE
The Competent Authority of Sweden and the Competent Authority
of India;
Having regard to the hardship faced by the taxpayers during
the pendency of a Mutual Agreement Procedure, under Article
26 of the Convention between the Government of the Kingdom of
Sweden and the Government of the Republic of India for the
avoidance of double taxation and the prevention of fiscal
evasion with respect to taxes on income and on capital, which
the was signed on 24th June 1997 (the "Convention");
Having determined and agreed that efficient processing of
Mutual Agreement Procedure ("MAP") cases will be facilitated
by suspending collection of any amounts of tax, including
also any related interest or penalties, for any taxable years
which are the subject of the MAP proceedings;
WHEREAS:
(A) The Competent Authorities have arranged and desired to
agree that with regard to amounts of taxes covered under
Article 2 of the Convention and potentially payable to the
The Government of Sweden, the Swedish Tax Authority will suspend
collection in accordance with this Memorandum; and
(B) The Competent Authorities have arranged and desired to
agree that with regard to amounts of taxes covered under
Article 2 of the Convention and potentially payable to the
Government of India, the Assessing Officer will suspend
collection in accordance with this Memorandum;
NOW THEREFORE, in consideration of the premises, covenants
and conditions herein contained and in implementing this
arrangement:
HAVE AGREED as follows:
(1) The tax authorities of India and Sweden shall retain the
right to demand security in appropriate cases, as deemed fit
and necessary to avoid prejudicing the interests of their
respective governments.
(2) In India, as security, a taxpayer shall provide an
irrevocable Bank Guarantee issued by any scheduled bank, or
by an Indian branch of a foreign bank approved by the Reserve
Bank of India to carry out banking business in India, as per
annexure "A" to this Memorandum.
(3) In Sweden, as security, a taxpayer shall, upon demand,
provide an irrevocable Bank Guarantee issued by a bank that
is authorized by the Swedish Financial Supervisory Authority
or any other form of security deemed adequate by the Swedish
Tax Authority.
(4) The amount, if any, for which security is demanded under
paragraph (2) or (3) above, as the case may be, shall not
exceed the amount of additional tax demanded by the tax
Authority requiring the security (aggregated for all the
period pending before the Competent Authorities), and, if
applicable, as adjusted by the Assessing Officer in
accordance with domestic laws, and subject to further
adjustment for interest on these amounts calculated at the
statutory rate on non-payments.
(5) the Collection of any interest or penalty levied from the
concerned taxpayer, in relation to amounts suspended from
collection under this Memorandum, shall also be suspended
subject to paragraph (4). For the avoidance of doubt,
interest, if appropriate, will continue to run while the
collection is suspended.
(6) The Competent Authorities shall endeavour to either
resolve or close the case within a period of two years from
the date on which one Competent Authority notifies the other
that the application from the Taxpayer (s) for assistance
during the MAP has been received.
(7) The maximum period for which collection can be suspended
under this Memorandum shall be two years unless extended by
mutual consent by both the Competent Authorities. However, in
no case shall the aggregate period for which collection is
suspended exceed five years.
(8) Any draw-down upon a Bank Guarantee referred to in
paragraph (2) or (3) above will be done only after
notification by one Competent Authority to the other about
the completion of the Mutual Agreement Procedure, or of the
time limit under paragraph (7), whichever earlier.
(9) In the event of a lapse of security under paragraph (2)
or (3), the taxpayer shall be permitted to substitute another
form of security under such paragraph, provided such
substitution takes effect not less than 30 days prior to the
lapse of the prior security. Such substitution will relieve
the bank, which provided the first Bank Guarantee from its
bond to the concerned Government of India or Singapore
During that first security.
(10) The terms of this Memorandum may be reviewed by the
Competent Authorities at anytime in the future upon the
request of either party.
(11) This Agreement shall enter into force on the thirtieth
day after the notification in writing by the Competent
Authority of Thailand to the Competent Authority of India of
the completion of the procedures required by its law for the
entry into force of this Agreement.
Dated at Stockholm, 7 February 2013
For the Competent Authority of Sweden
Ingela Willfors
For the Competent Authority of India
Sanjay Kumar Mishra
(Translation)
AGREEMENT OF THE COMPETENT AUTHORITY IN THE UNITED KINGDOM AND
THE COMPETENT AUTHORITY IN INDIA FOR DEFERMENT OF PAYMENT OF
TAXES DURING THE ONGOING PROCEDURE FOR THE EXCHANGE OF
AGREEMENT
The competent authority of Sweden and the competent
authority of India,
Considering the difficulties faced by taxpayers in
pending mutual agreement procedure pursuant to
Article 26 of the agreement between the Government of the Kingdom of Sweden
and the Government of India for the avoidance of
double taxation and the prevention of fiscal evasion with respect to
taxes on income and on capital, signed on 24
June 1997 (the "agreement"),
Who have agreed that an efficient handling of cases
According to the mutual agreement procedure, promoted by the
that deferment is permitted with payment of the amount of tax, in that the
including interest or penalty relating to
tax year that is the subject of a procedure for the
mutual agreement,
IN THE TO:
A. the competent authorities are required to agree to
The Swedish tax authority, under this agreement, to grant
deferment of payment of such tax amount
Article 2 of the agreement and payable in Sweden, and
B. the competent authorities are required to agree to the
Assessing Officer, under this agreement, to grant
deferment of payment of such tax amount
Article 2 of the agreement and payable in India,
HAS, with regard to the rates, terms and conditions
arising out of this agreement, as well as through
the implementation of this,
Agreed as follows:
1. The tax authorities of India and Sweden has left right
to request security in cases where such is deemed necessary
in order to avoid the public interests in each State
damaged.
2. In India, the taxable person must give security, in accordance
with Annex "A" to this agreement, in the form of a
irrevocable bank guarantee issued by a registered bank
or by a foreign bank's Indian branch, which of the
The Reserve Bank of India authorized to conduct banking business in
India.
3. In Sweden, the taxable person must, on request, provide
security in the form of an irrevocable bank guarantee issued by the
a bank that does business with the State of
The Swedish financial supervisory authority, or such other form of security
The Swedish tax authority considers appropriate.
4. any amount in respect of which security is requested under paragraph 2
and (3) above, shall not exceed the tax (total
calculated for all fiscal periods that are subject to
ongoing procedure of mutual agreement between the
competent authorities) levied by the tax authority
requesting safety and, where appropriate, such as this
tax has been adjusted by the Assessing Officer, according to the internal
law and subject to any further adjustment for
statutory interest for non-payment.
5. Payment shall-with the limitations
paragraph 4 – also allowed for interest or penalty
imposed the concerned taxable and which relates to the amount
for which deferment has been granted pursuant to this agreement. For
to avoid doubt, where applicable, interest
be calculated during the period for which deferment of payment
granted.
6. the competent authorities shall seek to resolve or end
matter within two years from the day on which a competent authority
notifies the other that it has received an application for
mutual agreement from the taxpayer.
7. Deferment under this arrangement may be granted for a maximum of two
years, unless the competent authorities agree
that the moratorium should be extended. The total time period for
the deferment may be granted, shall in no case, however,
exceed five years.
8. Bank guarantee referred to in paragraph 2 or 3 above may be
be called after one competent authority
informed the others that mutual
agreement is completed, or that the time period
set out in point 7 expired, whichever occurs
first.
9. In the event that the security referred to in paragraph 2 or 3
expires, the taxpayer may replace this with other
security in accordance with one of these items, unless this
occurs no later than 30 days before the previous safety stops.
When such substitution is freed the bank exhibited
former bank guarantee from their obligations under the
the warranty vis-à-vis relevant authority in India or Sweden.
10. the provisions of this agreement may, at the request of
either party may at any time be subject to review by the
competent authorities.
11. This agreement shall enter into force on the thirtieth day
After the date on which the competent authority of Sweden
the competent authority in writing in India about
to the constitutional measures necessary to
the agreement shall come into force has been made.
Stockholm, 7 February 2013
For the competent authority of Sweden
Ingela Willfors
For the competent authority in India
Sanjay Kumar Mishra
Team (2013:373).