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ETHIOPIA

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SECTION 90 OF THE INCOMETAXACT, 1961 DOUBLE TAXATIONAGREEMENT AGREEMENT FOR

AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH FOREIGN
COUNTRIESETHIOPIA
Whereas the annexed Agreement between the Government of the Republic of India and the Government of the Federal
Democratic Republic of Ethiopia for theAvoidance of DoubleTaxation and the Prevention of fiscal evasion with respect to
taxesonincomesignedinAddisAbabaonthe25thMay,2011shallcomeintoforceonthe15thdayofOctober,2012,beingthe
dateoflaterofthenotificationsaftercompletionoftheproceduresasrequiredbytherespectivelawsfortheentryintoforceof
thisAgreement,inaccordancewithArticle30ofthesaidAgreement.
Now, therefore, in exercise of the powers conferred by section 90 of the Incometax Act, 1961 (43 of 1961), the Central
GovernmentherebynotifiesthatalltheprovisionsofthesaidAgreementannexedheretoshallbegiveneffecttointheUnionof
Indiawitheffectfromthe1stdayofApril,2013.
Notification:No.14/2013FT&TRII[F.NO.503/01/1996FT&TRII]/SO418(E),dated2122013
AGREEMENTBETWEENTHEGOVERNMENTOFTHEREPUBLICOFINDIAANDTHEGOVERNMENTOF
THEFEDERALDEMOCRATICREPUBLICOFETHIOPIAFORTHEAVOIDANCEOFDOUBLETAXATIONAND
THEPREVENTIONOFFISCALEVASIONWITHRESPECTTOTAXESONINCOME
The Government of the Republic of India and the Government of the Federal Democratic Republic of Ethiopia, desiring to
conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on
incomeandwithaviewtopromotingeconomiccooperationbetweenthetwocountries,haveagreedasfollows:

ARTICLE1
PERSONSCOVERED
ThisAgreementshallapplytopersonswhoareresidentsofoneorbothoftheContractingStates.

ARTICLE2
TAXESCOVERED
1.ThisAgreementshallapplytotaxesonincomeimposedonbehalfofa ContractingStateorofitspoliticalsubdivisionsor
localauthorities,irrespectiveofthemannerinwhichtheyarelevied.
2.Thereshallberegardedastaxesonincomealltaxesimposedontotalincome,oronelementsofincome,includingtaxeson
gains from the alienation of movable or immovable property and taxes on the total amounts of wages or salaries paid by
enterprises.
3.TheexistingtaxestowhichthisAgreementshallapplyareinparticular:
(a)

inthecaseofIndia,theincometax,includinganysurchargethereon
(hereinafterreferredtoas"Indiantax")

(b)

inthecaseofEthiopia:

(i) ThetaxonincomeandprofitimposedbytheIncomeTaxProclamationNo.286/2002and
(ii) The tax on income from mining, petroleum and agricultural activities imposed by the respective Proclamations
(hereinafterreferredtoas"Ethiopiantax").
4.TheAgreementshallapplyalsotoanyidenticalorsubstantiallysimilartaxes,whichareimposedafterthedateofsignatureof
thisAgreementinadditionto,orinplaceof,theexistingtaxes.The competentauthoritiesoftheContractingStatesshallnotify
eachotherofanysignificantchanges,whichhavebeenmadeintheirrespectivetaxationlaws.

ARTICLE3
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GENERALDEFINITIONS
1.ForthepurposesofthisAgreement,unlessthecontextotherwiserequires:
(a)

theterm"India"meanstheterritoryofIndiaandincludestheterritorialseaandairspaceaboveit,aswellasany
othermaritimezoneinwhichIndiahassovereignrights,otherrightsandjurisdiction,accordingtotheIndianlaw
andinaccordancewithinternationallaw,includingtheU.N.ConventionontheLawoftheSea

(b)

theterm"Ethiopia"means the Federal Democratic Republic of Ethiopia, when used in a geographicalsense,it

meansthenationalterritoryandanyotherareawhichinaccordancewithinternationallaworthelawsofEthiopia
isormaybedesignatedasanareainwhichEthiopiaexercisessovereignrightsoritsjurisdiction

(c)

the terms a "Contracting State" and "the other Contracting State" mean the Republic of India or Federal
DemocraticRepublicofEthiopiaasthecontextrequires

(d)

theterm"person"includesanindividual,acompany,abodyofpersonsandanyotherentitywhichistreatedasa
taxableunitunderthetaxationlawsinforceintherespectiveContractingStates

(e)

theterm"company"meansanybodycorporateoranyentitythatistreatedasabodycorporatefortaxpurposes

(f)

theterm"enterprise"appliestothecarryingonofanybusiness

(g)

theterms"enterpriseofaContractingState"and"enterpriseoftheotherContractingState"meanrespectivelyan
enterprisecarriedonbyaresidentofaContractingStateandanenterprisecarriedonbyaresidentoftheother
ContractingState

(h)

theterm"internationaltraffic"meansanytransportbyashiporaircraftoperatedbyanenterpriseofaContracting
State,exceptwhentheshiporaircraftisoperatedsolelybetweenplacesintheotherContractingState

(i)

theterm"competentauthority"means:

(i)

inthecaseofIndia:theFinanceMinister,GovernmentofIndia,orhisauthorizedrepresentative

(ii)

inthecaseofEthiopia,theMinisterofFinanceandEconomicDevelopmentorhisauthorizedrepresentative

(j)

the term "national"

means:

(i)

anyindividualpossessingthenationalityofaContractingState

(ii)

any legal person, partnership or association deriving its status as such from the laws in force in a
ContractingState

(k)

theterm"tax"meansIndianorEthiopiantax,asthecontextrequires,butshallnotinclude
anyamountwhichispayableinrespectofanydefaultoromissioninrelationtothetaxes
towhichthisAgreementappliesorwhichrepresentsapenaltyorfineimposedrelatingto
thosetaxes

(l)

Theterm"fiscalyear"means:

(i)

inthecaseofIndia:thefinancialyearbeginningonthe1st
dayofApril

(ii)

inthecaseofEthiopia:theyearbeginningonthe8thdayof
July.

2.AsregardstheapplicationoftheAgreementatanytimebyaContracting Stateanytermnotdefinedthereinshall,unlessthe
contextotherwiserequires,havethemeaningthatithasatthattimeunderthelawofthatStateforthepurposesofthetaxesto
whichtheAgreementappliesandanymeaningundertheapplicabletaxlawsofthatStateprevailingoverameaninggiventothe
termunderotherlawsofthatState.

ARTICLE4
RESIDENT
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1.ForthepurposesofthisAgreement,theterm"residentofaContractingState"meansanypersonwho,underthelawsofthat
State, is liable to tax therein by reason of his domicile, residence, place of management, or any other criterion of a similar
nature,andalsoincludesthatStateandanypoliticalsubdivisionorlocalauthoritythereof.Thisterm,however,doesnotinclude
anypersonwhoisliabletotaxinthatStateinrespectonlyofincomefromsourcesinthatState.
2.Wherebyreasonoftheprovisionsofparagraph1anindividualisaresidentofbothContractingStates,thenhisstatusshall
bedeterminedasfollows:
(a)

heshallbedeemedtobearesidentonlyoftheStateinwhichhehasapermanenthomeavailabletohim
ifhehasapermanenthomeavailabletohiminbothStates,heshallbedeemedtobearesidentonlyofthe
Statewithwhichhispersonalandeconomicrelationsarecloser(centreofvitalinterests)

(b)

iftheStateinwhichhehashiscentreofvitalinterestscannotbedetermined,orifhehasnotapermanent
homeavailabletohimineitherState,heshallbedeemedtobearesidentonlyoftheStateinwhichhehas
anhabitualabode

(c)

ifhehasanhabitualabodeinbothStatesorinneitherofthem,heshallbedeemedtobearesidentonlyof
theStateofwhichheisanational

(d)

ifheisanationalofbothStatesorofneitherofthem,thecompetentauthoritiesoftheContractingStates
shallsettlethequestionbymutualagreement.

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

ARTICLE5
PERMANENTESTABLISHMENT
1.ForthepurposesofthisAgreementtheterm"permanentestablishment" meansafixedplaceofbusinessthroughwhichthe
businessofanenterpriseiswhollyorpartlycarriedon.
2.Theterm"permanentestablishment"includesespecially:
(a)

aplaceofmanagement

(b)

abranch

(c)

anoffice

(d)

afactory

(e)

aworkshop

(f)

asalesoutlet

(g)

awarehouseinrelationtoapersonprovidingstoragefacilitiesforothers

(h)

afarm,plantationorotherplacewhereagricultural,forestry,plantationorrelatedactivitiesarecarriedon
and

(i)

amine,anoilorgaswell,aquarryoranyotherplaceofextractionofnaturalresources.

3. (a) A building site or construction, installation or assembly project or supervisory activities in connection therewith
constitutesapermanentestablishmentonlyifsuchsite,projectoractivitieslastmorethan183days.
(b)Thefurnishingofservices,includingconsultancyservices,byanenterprisethroughemployeesorotherpersonnelengaged
bytheenterpriseforsuchpurpose,butonlyifactivitiesofthatnaturecontinue(forthesameoraconnectedproject)withina
ContractingStateforaperiodorperiodsaggregatingmorethansixmonthswithinanytwelvemonthperiod.
4.NotwithstandingtheprecedingprovisionsofthisArticle,theterm"permanentestablishment'shallbedeemednottoinclude:
(a)

theuseoffacilitiessolelyforthepurposeofstorageordisplayofgoodsormerchandisebelongingtothe
enterprise

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(b)

themaintenanceofastockofgoodsormerchandisebelongingtotheenterprisesolelyforthepurposeof
storageordisplay

(c)

themaintenanceofastockofgoodsormerchandisebelongingtotheenterprisesolelyforthepurposeof
processingbyanotherenterprise

(d)

themaintenanceofafixedplaceofbusinesssolelyforthepurposeofpurchasinggoodsormerchandiseor
ofcollectinginformation,fortheenterprise

(e)

themaintenanceofafixedplaceofbusinesssolelyforthepurposeofcarryingon,fortheenterpriseany
otheractivityofapreparatoryorauxiliarycharacter,

(f)

the maintenance of a fixed place of business solely for any combination of activities mentioned in
subparagraphs(a)to(e)providedthattheoverallactivityofthefixedplaceofbusinessresultingfromthis
combinationisofapreparatoryorauxiliarycharacter.

5.Notwithstandingtheprovisionsofparagraphs1and2,whereapersonotherthananagentofanindependentstatustowhom
paragraph7appliesisactinginaContractingStateonbehalfofanenterpriseoftheotherContractingState,thatenterpriseshall
bedeemedtohaveapermanentestablishmentinthefirstmentionedContractingStateinrespectofanyactivitieswhichthat
personundertakesfortheenterprise,ifsuchaperson:
(a)

hasandhabituallyexercisesinthatStateanauthoritytoconcludecontractsinthenameoftheenterprise,
unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised
throughafixedplaceofbusiness,wouldnotmakethisfixedplaceofbusinessapermanentestablishment
undertheprovisionsofthatparagraphor

(b)

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

(c)

habituallysecuresordersinthefirstmentionedState,whollyoralmostwhollyfortheenterpriseitself.

6.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 within the
meaningofthisparagraph.
7.ThefactthatacompanywhichisaresidentofaContractingStatecontrolsoriscontrolledbyacompanywhichisaresident
oftheotherContractingStateorwhichcarriesonbusinessinthatotherState(whetherthroughapermanentestablishmentor
otherwise),shallnotofitselfconstituteeithercompanyapermanentestablishmentoftheother.

ARTICLE6
INCOMEFROMIMMOVABLEPROPERTY
1.IncomederivedbyaresidentofaContractingStatefromimmovablepropertysituatedintheotherContractingStatemaybe
taxedinthatotherState.
2.The term "immovable property" shall have the meaning which it has under the law of the Contracting State in which the
property in question is situated.The term shall in any case include property accessory to immovable property, livestock and
equipment used in agriculture and forestry, rights to which the provisions of general . law respecting landed property apply,
usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to
work, mineral deposits, sources and other natural resources ships, boats and 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
immovableproperty.
4.Theprovisionsofparagraphs1and3shallalsoapplytotheincomefromimmovablepropertyofanenterpriseandtoincome
fromimmovablepropertyusedfortheperformanceofindependentpersonalservices.

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ARTICLE7
BUSINESSPROFITS
1.TheprofitsofanenterpriseofaContractingStateshallbetaxableonlyinthatStateunlesstheenterprisecarriesonbusiness
in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as
aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that
permanentestablishment
2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other
ContractingStatethroughapermanentestablishmentsituatedtherein,thereshallineachContractingStatebeattributedtothat
permanentestablishmenttheprofitswhichitmightbeexpectedtomakeifitwereadistinctandseparateenterpriseengagedin
the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of
whichitisapermanentestablishment.
3.Indeterminingtheprofitsofapermanentestablishment,thereshallbeallowedasdeductionsexpenseswhichareincurredfor
thepurposesofthepermanentestablishment,Includingexecutiveandgeneraladministrativeexpensestsoincurred,whetherin
theStateinwhichthepermanentestablishmentissituatedorelsewhere,inaccordancewiththeprovisionsofandsubjecttothe
limitations of the tax laws of that State. However, no such deduction shall be allowed in respect of amounts, if any, paid
(otherwisethantowardsreimbursementofactualexpenses)bythepermanentestablishmenttotheheadofficeoftheenterprise
oranyofitsotheroffices,bywayofroyalties,feesorothersimilarpaymentsinreturnforthe.useofpatents,knowhowor
otherrights,orbywayofcommissionorotherchargesforspecificservicesperformedorformanagement,or,exceptinthecase
ofbankingenterprises,bywayofinterestonmoneyslenttothepermanentestablishment.Likewise,noaccountshallbetaken,
inthedeterminationoftheprofitsofapermanentestablishment,foramountscharged(otherwisethantowardreimbursementof
actual expenses), by the permanent establishment to the head office of the enterprise or any of its other offices, by way of
royalties,feesorothersimilarpaymentsinreturnfortheuseofpatents,knowhoworotherrights,orbywayofcommissionor
other charges for specific services performed or for management, or, except in the case of a banking enterprise, by way of
interestonmoneyslenttotheheadofficeoftheenterpriseoranyofitsotheroffices.
4.InsofarasithasbeencustomaryinaContractingStatetodeterminetheprofitstobeattributedtoapermanentestablishment
onthebasisofanapportionmentofthetotalprofitsoftheenterprisetoitsvariousparts,nothinginparagraph2shallpreclude
thatContractingStatefromdeterminingtheprofitstobetaxedbysuchanapportionmentasmaybecustomarythemethodof
apportionmentadoptedshall,however,besuchthattheresultshallbeinaccordancewiththeprinciplescontainedinthisArticle.
5.Noprofitsshallbeattributedtoapermanentestablishmentbyreasonofthemerepurchasebythatpermanentestablishmentof
goodsormerchandisefortheenterprise.
6.Forthepurposesoftheprecedingparagraphs,theprofitstobeattributedtothepermanentestablishmentshallbedetermined
bythesamemethodyearbyyearunlessthereisgoodandsufficientreasontothecontrary.
7.WhereprofitsincludeitemsofincomewhicharedealtwithseparatelyinotherArticlesofthisAgreementthentheprovisions
ofthoseArticlesshallnotbeaffectedbytheprovisionsofthisArticle.

ARTICLE8
SHIPPINGANDAIRTRANSPORT
1.ProfitsderivedbyanenterpriseofaContractingStatefromtheoperationofshipsoraircraftininternationaltrafficshallbe
taxableonlyinthatState.
2.Iftheplaceofeffectivemanagementofashippingenterpriseisaboardaship,thenitshallbedeemedtobesituatedinthe
ContractingStateinwhichthehomeharboroftheshipissituated,or,ifthereisnosuchhomeharbor,intheContractingState
ofwhichtheoperatoroftheshipisaresident.
3.ForthepurposesofthisArticleprofitsfromtheoperationofshipsoraircraftininternationaltrafficshallincludeprofitsfrom
theuse,maintenanceorrentalofcontainers(includingtrailersandrelatedequipmentforthetransportofcontainers)usedforthe
transportofgoodsormerchandise,wheresuchuse,maintenanceorrental,asthecasemaybe,issupplementaryorincidentalto
theoperationofshipsoraircraftininternationaltraffic.
4. For the purposes of this Article interest on investments directly connected with the operation of ships or aircraft in
internationaltrafficshallberegardedasprofitsderivedfromtheoperationofsuchshipsoraircraftiftheyareintegraltothe
carryingonofsuchbusiness,andtheprovisionsofArticle11shallnotapplyinrelationtosuchinterest.
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5.Theprovisionsofparagraph1shallalsoapplytoprofitsfromtheparticipationinapool,ajointbusinessoraninternational
operatingagency.
6.ItisunderstoodthattheprovisionsofthisArticleshallreplacetheprovisionsoftheAgreementbetweentineGovernmentof
theRepublicofIndiaandtheProvincialMilitaryGovernmentofSocialistEthiopiafortheAvoidanceofDoubleTaxationof
IncomeofEnterprisesOperatingAircraftsignedonNovember25,1976.

ARTICLE9
ASSOCIATEDENTERPRISES
1.Where:
(a)

anenterpriseofaContractingStateparticipatesdirectlyorindirectlyinthemanagement,controlorcapital
ofanenterpriseoftheotherContractingStateor

(b)

thesamepersonsparticipatedirectlyorindirectlyinthemanagement,controlorcapitalofanenterpriseof
aContractingStateandanenterpriseoftheotherContractingState,

andineithercaseconditionsaremadeorimposedbetweenthetwoenterprisesintheircommercialorfinancialrelationswhich
differ from those which would be made between independent enterprises, then any profits which would, but for those
conditions,haveaccruedtooneoftheenterprises,but,byreasonofthoseconditions,havenotsoaccrued,maybeincludedin
theprofitsofthatenterpriseandtaxedaccordingly.
2.WhereaContractingStateincludesintheprofitsofanenterpriseofthatStateandtaxesaccordinglyprofitsonwhichan
enterpriseoftheotherContractingStatehasbeenchargedtotaxinthatotherStateandtheprofitssoincludedareprofitswhich
wouldhaveaccruedtotheenterpriseofthefirstmentionedStateiftheconditionsmadebetweenthetwoenterpriseshadbeen
thosewhichwouldhavebeenmadebetweenindependententerprises,thenthatotherStateshallmakeanappropriateadjustment
totheamountofthetaxchargedthereinonthoseprofits.Indeterminingsuchadjustment,dueregardshallbehadtotheother
provisionsofthisAgreementandthecompetentauthoritiesoftheContractingStatesshallofnecessaryconsulteachother.

ARTICLE10
DIVIDENDS
1.DividendspaidbyacompanywhichisaresidentofaContractingStatetoaresidentoftheotherContractingStatemaybe
taxedinthatotherState.
2.However,suchdividendsmayalsobetaxedintheContractingStateofwhichthecompanypayingthedividendsisaresident
andaccordingtothelawsofthatState,butifthebeneficialownerofthedividendsisaresidentoftheotherContractingState,
thetaxsochargedshallnotexceed7.5percentofthegrossamountofthedividends.Thisparagraphshallnotaffectthetaxation
ofthecompanyinrespectoftheprofitsoutofwhichthedividendsarepaid.
3.Theterm"dividends"asusedinthisArticlemeansincomefromsharesorotherrights,notbeingdebtclaims,participatingin
profits,aswellasincomefromothercorporaterightswhichissubjectedtothesametaxationtreatmentasincomefromshares
bythelawsoftheStateofwhichthecompanymakingthedistributionisaresident
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a
ContractingState,carriesonbusinessintheotherContractingStateofwhichthecompanypayingthedividendsisaresident,
throughapermanentestablishmentsituatedtherein,orperformsinthatotherStateindependentpersonalservicesfromafixed
basesituatedtherein,andtheholdinginrespectofwhichthedividendsarepaidiseffectivelyconnectedwithsuchpermanent
establishmentorfixedbase.InsuchcasetheprovisionsofArticle7orArticle14,asthecasemaybe,shallapply.
5.WhereacompanywhichIsaresidentofaContractingStatederivesprofitsorincomefromtheotherContractingState,that
other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a
residentofthatotherStateorinsofarastheholdinginrespectofwhichthedividendsarepaidiseffectivelyconnectedwitha
permanentestablishmentorafixedbasesituatedinthatotherState,norsubjectthecompany'sundistributedprofitstoataxon
thecompany'sundistributedprofits,evenifthedividendspaidortheundistributedprofitsconsistwhollyorpartlyofprofitsor
incomearisinginsuchotherState.

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

theGovernment,apoliticalsubdivisionoralocalauthorityoftheotherContractingStateor

(b)

(i)inthecaseofIndia,theReserveBankofIndiaand

(c)

(ii)inthecaseofEthiopia,theNationalBankofEthiopiaor
anyotherinstitutionasmaybeagreeduponfromtimetotimebetweentheCompetentauthoritiesofthe
ContractingStatesthroughexchangeofletters.

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

ARTICLE12
ROYALTIESANDFEESFORTECHNICALSERVICES
1.RoyaltiesorfeesfortechnicalservicesarisinginaContractingStateandpaidtoaresidentoftheotherContractingStatemay
betaxedinthatotherState.
2. However, such royalties or fees for technical services may also be taxed inthe Contracting State in which they arise, and
accordingtothelawsofthatState,butifthebeneficialowneroftheroyaltiesorfeesfortechnicalservicesisaresidentofthe
otherContractingStatethetaxsochargedshallnotexceed10percentofthegrossamountoftheroyaltiesorfeesfortechnical
services.
3.(a)Theterm"royalties"asusedinthisArticlemeanspaymentsofanykindreceivedasaconsiderationfortheuseof,orthe
right to use, any copyright of literary, artistic or scientific work including cinematograph films or films or tapes used for
televisionorradiobroadcasting,anypatent,trademark,designormodel,plan,secretformulaorprocess,orfortheuseof,or
the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or
scientificexperience.
(b)Theterm"feesfortechnicalservices"asusedinthisArticlemeanspaymentsofanykind, otherthan those mentioned in
Articles 14 and 15 of this Agreement as consideration for managerial or technical or consultancy services, including the
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provisionofservicesoftechnicalorotherpersonnel.
4.Theprovisionsofparagraph1and2shallnotapplyifthebeneficialowneroftheroyaltiesorfeesfortechnicalservicesbeing
aresidentofaContractingState,carriesonbusinessintheotherContractingStateinwhichtheroyaltiesorfeesfortechnical
servicesarise,throughapermanentestablishmentsituatedtherein,orperformsinthatotherStateindependentpersonalservices
fromafixedbasesituatedtherein,andtherightorpropertyinrespectofwhichtheroyaltiesorfeesfortechnicalservicesare
paidiseffectivelyconnectedwithsuchpermanentestablishmentorfixedbase.InsuchcasetheprovisionsofArticle7orArticle
14,asthecasemaybe,shallapply.
5.(a)Royaltiesandfeesfortechnicalservicesshallbedeemedtoarisein.aContractingStatewhenthepayerisaresidentof
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
bornebysuchpermanentestablishmentorfixedbase,thensuchroyaltiesorfeesfortechnicalservicesshallbedeemedtoarise
intheContractingStateinwhichthepermanentestablishmentorfixedbaseissituated.
(b)Whereundersubparagraph(a)royaltiesorfeesfortechnicalservicesdonotariseinoneoftheContractingStates,andthe
royalties relate to the use of, or the right to use, the right or property, or the fees for technical services relate to services
performed, in one of the Contracting States, the royalties or fees for technical services shall be deemed to arise in that
ContractingState.
6.Where,byreasonofaspecialrelationshipbetweenthepayerandthe beneficialownerorbetweenbothofthemandsome
otherperson,theamountoftheroyaltiesorfeesfortechnicalservices,havingregardtotheuse,rightorinformationforwhich
theyarepaid,exceedstheamountwhichwouldhavebeenagreeduponbythepayerandthebeneficialownerintheabsenceof
suchrelationship,theprovisionsofthisArticleshallapplyonlytothelastmentionedamountInsuchcase,theexcesspartofthe
paymentsshallremaintaxableaccordingtothelawsofeachContractingState,dueregardbeinghadtothe'otherprovisionsof
thisAgreement.

ARTICLE13
CAPITALGAINS
1. Gains derived by a resident of a Contracting State from the alienation of immovable property referred to inArticle 6 and
situatedintheotherContractingStatemaybetaxedinthatotherState.
2.Gainsfromthealienationofmovablepropertyformingpartofthebusinesspropertyofapermanentestablishment,whichan
enterpriseofaContractingStatehasintheotherContractingStateorofmovablepropertypertainingtoafixedbaseavailableto
a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services,
includingsuchgainsfromthealienationofsuchapermanentestablishment(aloneorwiththewholeenterprise)orofsuchfixed
base,maybetaxedinthatotherState.
3.Gainsfromthealienationofshipsoraircraftoperatedininternationaltraffic,ormovablepropertypertainingtotheoperation
ofsuchshipsoraircraftshallbetaxableonlyintheContractingState,ofwhichthealienatorisaresident.
4.Gainsfromthealienationofsharesofthecapitalstockofacompanythe property of which consistsdirectly or indirectly
principallyofimmovablepropertysituatedinaContractingStatemaybetaxedinthatState.
5. Gains from the alienation of shares other than those mentioned in paragraph 4 in a company which is a resident of a
ContractingStatemaybetaxedinthatState.
6.Gainsfromthealienationofanypropertyotherthanthatreferredtoinparagraphs1,2,3,4and5,shallbetaxableonlyinthe
ContractingStateofwhichthealienatorisaresident.

ARTICLE14
INDEPENDENTPERSONALSERVICES
1.IncomederivedbyanindividualwhoisaresidentofaContractingStatefromtheperformanceofprofessionalservicesor
otherindependentactivitiesofasimilarcharactershallbetaxableonlyinthatStateexceptinthefollowingcircumstanceswhen
suchincomemayalsobetaxedintheotherContractingState.
(a)

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

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performinghisactivitiesinthatcase,onlysomuchoftheincomeasisattributabletothatfixedbasemay
betaxedinthatotherStateor
(b)

if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the
aggregate 183 days in any period of 12 months period commencing or ending in the fiscal year
concerned in that case, only so much of the income as is derived from his activities performed in that
otherStatemaybetaxedinthatotherState.

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

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

therecipientispresentintheotherStateforaperiodorperiodsnotexceedingintheaggregate183daysin
anytwelvemonthperiodcommencingorendinginthefiscalyearconcernedand

(b)

theremunerationispaidby,oronbehalfof,anemployerwhoisnotaresidentoftheotherStateand

(c)

theremunerationisnotbornebyapermanentestablishmentorafixedbasewhichtheemployerhasinthe
otherState.

3.NotwithstandingtheprecedingprovisionsofthisArticle,remunerationderivedinrespectofanemploymentexercisedaboard
ashiporaircraftoperatedininternationaltraffic,byanenterpriseofaContractingStatemaybetaxedinthatState.

ARTICLE16
DIRECTORS'FEES
Directors'feesandothersimilarpaymentsderivedbyaresidentofaContractingStateinhiscapacityasamemberoftheboard
ofdirectorsinacompanywhichisaresidentoftheotherContractingStatemaybetaxedinthatotherState.

ARTICLE17
ARTISTESANDSPORTSPERSONS
1.NotwithstandingtheprovisionsofArticlesUand15,incomederivedbyaresidentofaContractingState as an entertainer,
suchasatheatre,motionpicture,radioortelevisionartiste,oramusician,orasasportspersonfromhispersonalactivitiesas
suchexercisedintheotherContractingState,maybetaxedinthatotherState.
2.Whereincomeinrespectofpersonalactivitiesexercisedbyanentertainerorasportspersoninhiscapacityassuchaccrues
nottotheentertainerorsportspersonhimselfbuttoanotherperson,thatincomemay,notwithstandingtheprovisionsofArticles
7,14and15,betaxedintheContractingStateinwhichtheactivitiesoftheentertainerorsportspersonareexercised.
3. The provisions of paragraphs 1 and 2, shall not apply to income from activities performed in a Contracting State by
entertainersorsportspersonsiftheactivitiesaresubstantiallysupportedbypublicfundsofoneorbothoftheContractingStates
orofpoliticalsubdivisionsorlocalauthoritiesthereof.Insuchacase,theincomeshallbetaxableonlyintheContractingState
ofwhichtheentertainerorsportspersonisaresident.

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

ARTICLE19
GOVERNMENTSERVICE
1.(a)Salaries,wagesandothersimilarremuneration,otherthanapension,paidbyaContractingStateorapoliticalsubdivision
or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be
taxableonlyinthatState.
(b) However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the
servicesarerenderedinthatStateandtheindividualisaresidentofthatStatewho:
(i)

isanationalofthatStateor

(ii)

didnotbecomearesidentofthatStatesolelyforthepurposeofrenderingtheservices.

2.(a)Anypensionpaidby,oroutoffundscreatedby,aContractingStateorapoliticalsubdivisionoralocalauthoritythereof
toanindividualinrespectofservicesrenderedtothatStateorsubdivisionorauthorityshallbetaxableonlyinthatState.
(b)However,suchpensionshallbetaxableonlyintheotherContractingStateiftheindividualisaresidentof,andanationalof,
thatState.
3.TheprovisionsofArticles15,16,17and18shallapplytosalaries,wagesandothersimilarremuneration,andtopensions,in
respectofservicesrenderedinconnectionwithabusinesscarriedonbyaContractingStateorapoliticalsubdivisionoralocal
authoritythereof.

ARTICLE20
PROFESSORS,TEACHERSANDRESEARCHSCHOLARS
1.A professor, teacher or research scholar who is or was a resident of the Contracting State immediately before visiting the
other Contracting State for the purpose of teaching or engaging in research, or both, at a university, college, school or other
similarapprovedinstitution,inthatotherContractingState,shallbeexemptfromtaxinthatotherStateonanyremunerationfor
suchteachingorresearchforaperiodnotexceedingtwoyearsfromthedateofhisfirstarrivalinthatotherContractingState.
2.Theprovisionsofparagraph1ofthisArticleshallnotapply:
(a)

toincomefromresearchifsuchresearchisundertakennotinthepublicinterestbutfortheprivatebenefit
ofaspecificpersonorpersons

(b)

in the case of Ethiopia, to income from teaching if such teaching is undertaken in an educational
institutionestablishedunderorinaccordancewiththeCommercialCodeofEthiopia,1960.

3.ForthepurposesofthisArticle,anindividualshallbedeemedtobearesidentofaContractingStateifheisresidentinthat
StateinthefiscalyearinwhichhevisitstheotherContractingStateorintheimmediatelyprecedingfiscalyear.

ARTICLE21
STUDENTS
1.AstudentwhoisorwasaresidentofoneoftheContractingStates immediatelybeforevisitingtheotherContractingState
andwhoispresentinthatotherContractingStatesolelyforthepurposeofhiseducationortraining,shallbesidesgrants,loans
andscholarshipsbeexemptfromtaxinthatotherStateon:
(a)

paymentsmadetohimbypersonsresidingoutsidethatotherStateforthepurposesofhismaintenance,
educationortrainingand

(b)

remunerationwhichhederivesfromanemploymentwhichheexercisesintheotherContractingStateif
theemploymentisdirectlyrelatedtohisstudiesandtheremunerationconstitutesearningsnecessaryfor
hismaintenance.

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

ARTICLE22
OTHERINCOME
1. Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this
AgreementshallbetaxableonlyinthatState.
2.Theprovisionsofparagraph1shallnotapplytoincome,otherthanincomefromimmovablepropertyasdefinedinparagraph
2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other
Contracting State through a permanent establishment situated therein, or performs in that other State independent personal
services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively
connectedwithsuchpermanentestablishmentorfixedbase.InsuchcasetheprovisionsofArticle7 orArticle14,asthecase
maybe,shallapply.
3.Notwithstandingtheprovisionsofparagraph1,ifaresidentofaContractingStatederivesincomefromsourceswithinthe
otherContractingStateinformoflotteries,crosswordpuzzles,racesincludinghorseraces,cardgamesandothergamesofany
sortorgamblingorbettingofanynaturewhatsoever,suchincomemaybetaxedintheotherContractingState.

ARTICLE23
METHODSFORELIMINATIONOFDOUBLETAXATION
1. The laws in force in either of the Contracting States will continue to govern the taxation of income in the respective
ContractingStatesexceptwhereprovisionstothecontraryaremadeinthisAgreement.
2.Doubletaxationshallbeeliminatedasfollows:
(a)

WherearesidentofaContractingStatederivesincomewhich,inaccordancewiththeprovisionsofthis
Agreement may be taxed in the other Contracting State, the firstmentioned State shall allow as a
deductionfromthetaxontheincomeofthatresident,anamountequaltothetaxpaidinthatotherState.

Suchdeductionshallnot,however,exceedthatpartoftheincometaxascomputedbeforethedeductionis
given,whichisattributable,asthecasemaybe,totheincomewhichmaybetaxedinthatotherState.

(b)

WhereinaccordancewithanyprovisionoftheAgreement,incomederivedbyaresidentofaContracting
StateisexemptfromtaxinthatState,suchStatemaynevertheless,incalculatingtheamountoftaxonthe
remainingincomeofsuchresident,takeintoaccounttheexemptedincome.

ARTICLE24
NONDISCRIMINATION
1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement
connectedtherewith,whichisotherormoreburdensomethanthetaxationandconnected requirements to which nationals of
thatotherStateinthesamecircumstances,inparticularwithrespecttoresidence,areormaybesubjected.Thisprovisionshall,
notwithstandingtheprovisionsofArticle1,alsoapplytopersonswhoarenotresidentsofoneorbothoftheContractingStates.
2.ThetaxationonapermanentestablishmentwhichanenterpriseofaContractingStatehasintheotherContractingStateshall
notbelessfavorablyleviedinthatotherStatethanthetaxationleviedonenterprisesofthatotherStatecarryingonthesame
activities.Thisprovisionshallnotbeconstrued asobliging a Contracting State to grant to residents of the other Contracting
Stateanypersonalallowances,reliefsandreductionsfortaxationpurposesonaccountofcivilstatusorfamilyresponsibilities
whichitgrantstoitsownresidents.
3. Except where the provisions of paragraph 1 ofArticle 9, paragraph 7 ofArticle 11, or paragraph 6 of Article 12, apply,
interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting
Stateshall,forthepurposeofdeterminingthetaxableprofitsofsuchenterprise,bedeductibleunderthesameconditionsasif
theyhadbeenpaidtoaresidentofthefirstmentionedState.
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4.EnterprisesofaContractingState,thecapitalofwhichiswhollyorpartlyownedorcontrolled,directlyorindirectly,byone
ormoreresidentsoftheotherContractingState,shallnotbesubjectedinthefirstmentionedContractingStatetoanytaxation
oranyrequirementconnectedtherewithwhichisotherormoreburdensomethanthetaxationandconnectedrequirementsto
whichothersimilarenterprisesofthefirstmentionedStateareormaybesubjected.
5.TheprovisionsofthisArticleshallapplyonlytotaxeswhicharecoveredbythisAgreement.

ARTICLE25
MUTUALAGREEMENTPROCEDURE
1.WhereapersonconsidersthattheactionsofoneorbothoftheContractingStatesresultorwillresultforhimintaxationnot
inaccordancewiththeprovisionsofthisAgreement,hemay,irrespectiveoftheremediesprovidedbythedomesticlawofthose
theContractingStates,presenthiscasetothecompetentauthorityoftheContractingStateofwhichheisaresidentor,ifhis
case comes under paragraph 1 of Article 24, to that of the Contracting State of which he is a national. The case must be
presentedwithinthreeyearsfromthefirstnotificationoftheactionresultingintaxationnotinaccordancewiththeprovisionsof
theAgreement.
2.Thecompetentauthorityshallendeavour,iftheobjectionappearstoittobejustifiedandifitisnotitselfabletoarriveata
satisfactorysolution,toresolvethecasebymutualagreementwiththecompetentauthorityoftheotherContractingState,witha
viewtotheavoidanceoftaxationwhichisnotinaccordancewiththeAgreement.Anyagreementreachedshallbeimplemented
notwithstandinganytimelimitsinthedomesticlawsoftheContractingStates.
3.ThecompetentauthoritiesoftheContractingStatesshallendeavourtoresolvebymutualagreementanydifficultiesordoubts
arisingastotheinterpretationorapplicationoftheAgreementTheymay alsoconsult together for the elimination of double
taxationincasesnotprovidedforintheAgreement.
4.ThecompetentauthoritiesoftheContractingStatesmaycommunicatewitheachotherdirectlyforthepurposeofreachingan
agreement, in the sense of the preceding paragraphs. When it seems advisable in order to reach agreement to have an oral
exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent
authoritiesoftheContractingStates.

ARTICLE26
EXCHANGEOFINFORMATION
1.ThecompetentauthoritiesoftheContractingStatesshallexchangesuchinformation(includingdocumentsorcertifiedcopies
ofthedocuments)asisnecessaryforcarryingouttheprovisionsofthisAgreementorofthedomesticlawsconcerningtaxesof
every kind and description imposed on behalf of the Contracting States, or of their political subdivisions or local authorities
insofarasthetaxationthereunderisnotcontrarytotheAgreement.TheexchangeofinformationisnotrestrictedbyArticles 1
and2.
2. Any information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as
informationobtainedunderthedomesticlawsofthatStateandshallbedisclosedonlytopersonsorauthorities(includingcourts
andadministrativebodies)concernedwiththeassessmentorcollectionof,theenforcementorprosecutioninrespectof,orthe
determination of appeals in relation to, the taxes referred to in paragraph 1, or the oversight of the above. Such persons or
authoritiesshallusetheinformationonlyforsuchpurposes.Theymaydisclosetheinformationinpubliccourtproceedingsorin
judicialdecisions.Notwithstandingtheforegoing,informationreceivedbyaContractingStatemaybeusedforotherpurposes
whensuchinformationmaybeusedforsuchotherpurposesunderthelawsofbothStatesandthecompetentauthorityofthe
supplyingStateauthorisessuchuse.
3.Innocaseshalltheprovisionsofparagraph1beconstruedsoastoimposeonaContractingStatetheobligation:
(a)

tocarryoutadministrativemeasuresatvariancewiththelawsandadministrativepracticeofthatorofthe
otherContractingState

(b)

tosupplyinformation(includingdocumentsorcertifiedcopiesofthedocuments)whichisnotobtainable
underthelawsorinthenormalcourseoftheadministrationofthatoroftheotherContractingState

(c)

to supply information which would disclose any trade, business, industrial, commercial or professional
secretortradeprocess,orinformation,thedisclosureofwhichwouldbecontrarytopublicpolicy(order

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public).
4.IfinformationisrequestedbyaContractingStateinaccordancewiththisArticle,theother ContractingStateshalluseits
informationgatheringmeasurestoobtaintherequestedinformation,eventhoughthatotherStatemaynotneedsuchinformation
foritsowntaxpurposes.Theobligationcontainedintheprecedingsentenceissubjecttothelimitationsofparagraph3butinno
caseshallsuchlimitationsbeconstruedtopermitaContractingStatetodeclinetosupplyinformationsolelybecauseithasno
domesticinterestinsuchinformation.
5.Innocaseshalltheprovisionsofparagraph3beconstruedtopermita Contracting State to declinetosupplyinformation
solelybecausetheinformationisheldbyabank,otherfinancialinstitution,nomineeorpersonactinginanagencyorafiduciary
capacityorbecauseitrelatestoownershipinterestsinaperson.

ARTICLE27
ASSISTANCEINTHECOLLECTIONOFTAXES
1.TheContractingStatesshalllendassistancetoeachotherinthecollectionofrevenueclaims.Thisassistanceisnotrestricted
byArticles1and2.ThecompetentauthoritiesoftheContractingStatesmaybymutualagreementsettlethemodeofapplication
ofthisArticle.
2.Theterm"revenueclaim"asusedinthisArticlemeansan amountowedinrespectoftaxesofeverykindanddescription
imposed on behalf of the Contracting States, or of their political subdivisions or local authorities, insofar as the taxation
thereunder is not contrary to thisAgreement or any other instrument to which the Contracting States are parties, as well as
interest,administrativepenaltiesandcostsofcollectionorconservancyrelatedtosuchamount.
3.WhenarevenueclaimofaContractingStateisenforceableunderthelawsofthatStateandisowedbyapersonwho,atthat
time, cannot, under the laws of that State, prevent its collection, that revenue claim shall, at the request of the competent
authorityofthatState,beacceptedforpurposesofcollectionbythecompetentauthorityoftheotherContractingState.That
revenueclaimshallbecollectedbythatotherStateinaccordancewiththeprovisionsofitslawsapplicabletotheenforcement
andcollectionofitsowntaxesasiftherevenueclaimwerearevenueclaimofthatotherState.
4.WhenarevenueclaimofaContractingStateisaclaiminrespectofwhichthatStatemay,underitslaw,takemeasuresof
conservancywithaviewtoensureitscollection,thatrevenueclaimshall,attherequestofthecompetentauthorityofthatState,
be accepted for purposes of taking measures of conservancy by the competent authority of the other Contracting State.That
otherStateshalltakemeasuresofconservancyinrespectofthatrevenueclaiminaccordancewiththeprovisionsofitslawsas
iftherevenueclaimwerearevenueclaimofthatotherStateevenif,atthetimewhensuchmeasuresareapplied,therevenue
claimisnotenforceableinthefirstmentionedStateorisowedbyapersonwhohasarighttopreventitscollection.
5. Notwithstanding the provisions of paragraphs 3 and 4, a revenue claim accepted by a Contracting State for purposes of
paragraph 3 or 4 shall not, in that State, be subject to the time limits or accorded any priority applicable to a revenue claim
underthelawsofthatStatebyreasonofitsnatureassuch.Inaddition,arevenueclaimacceptedbyaContractingStateforthe
purposesofparagraph3or4shallnot,inthatState,haveanypriorityapplicabletothatrevenueclaimunderthelawsofthe
otherContractingState.
6. Proceedings with respect to the existence, validity or the amount of a revenue claim of a Contracting State shall only be
brought before the courts or administrative bodies of that State. Nothing in this Article shall be construed as creating or
providinganyrighttosuchproceedingsbeforeanycourtoradministrativebodyoftheotherContractingState.
7. Where, at any time after a request has been made by a Contracting State under paragraph 3 or 4 and before the other
ContractingStatehascollectedandremittedtherelevantrevenueclaimtothefirstmentionedState,therelevantrevenueclaim
ceasestobe
(a)

inthecaseofarequestunderparagraph3,arevenueclaimofthefirstmentionedStatethatisenforceable
underthelawsofthatStateandisowedbyapersonwho,atthattime,cannot,underthelawsofthatState,
preventitscollectionor

(b)

inthecaseofarequestunderparagraph4,arevenueclaimofthefirstmentionedStateinrespectofwhich
that State may, under its laws, take measures of conservancy with a view to ensure its collection the
competentauthorityofthefirstmentionedStateshallpromptlynotifythecompetentauthorityoftheother
State of that fact and, at the option of the other State, the firstmentioned State shall either suspend or
withdrawitsrequest.

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8.InnocaseshalltheprovisionsofthisArticlebeconstruedsoastoimposeonaContractingStatetheobligation:
(a)

tocarryoutadministrativemeasuresatvariancewiththelawsandadministrativepracticeofthatorofthe
otherContractingState

(b)

tocarryoutmeasureswhichwouldbecontrarytopublicpolicy(orderpublic)

(c)

toprovideassistanceiftheotherContractingStatehasnotpursuedallreasonablemeasuresofcollection
orconservancy,asthecasemaybe,availableunderitslawsoradministrativepractice

(d)

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

ARTICLE28
LIMITATIONOFBENEFITS
1.TheprovisionsofthisAgreementshallinnocasepreventaContracting Statefromtheapplicationoftheprovisionsofits
domesticlawandmeasuresconcerningtaxavoidanceorevasion,whetherornotdescribedassuch.
2.AresidentofaContractingStateshallnotbeentitledtothebenefits ofthisAgreementifitsaffairs werearrangedinsucha
mannerasifitwasthemainpurposeoroneofthemainpurposestotakethebenefitsofthisAgreement.
3.ThecaseoflegalentitiesnothavingbonafidebusinessactivitiesshallbecoveredbytheprovisionsofthisArticle.

ARTICLE29
MEMBERSOFDIPLOMATICMISSIONSANDCONSULARPOSTS
Nothing in thisAgreement shall affect the fiscal privileges of members of diplomatic missions or consular posts under the
generalrulesofinternationallaworundertheprovisionsofspecialagreements.

ARTICLE30
ENTRYINTOFORCE
1.TheContractingStatesshallnotifyeachotherinwriting,throughdiplomaticchannels,ofthecompletionoftheprocedures
requiredbytherespectivelawsfortheentryintoforceofthisAgreement.
2.ThisAgreementshallenterintoforceonthedateofthelaterofthenotificationsreferredtoinparagraph1ofthisArticle.
3.TheprovisionsofthisAgreementshallhaveeffect:
(a)

In India, in respect of income derived in any fiscal year beginning on or after the 1st of April next
followingthecalendaryearinwhichtheAgreemententersintoforceand

(b)

InEthiopia,inrespectofincomederivedinanyfiscalyearbeginningonorafterthe8thdayofJulynext
followingthecalendaryearinwhichtheAgreemententersintoforce.

ARTICLE31
TERMINATION
This Agreement shall remain in force indefinitely until terminated by a Contracting State. Either Contracting State may
terminatetheAgreement,throughdiplomaticchannels,bygivingnoticeofterminationatleastsixmonthsbeforetheendofany
calendaryearbeginningaftertheexpirationoffiveyearsfromthedateofentryintoforceoftheAgreement.Insuchevent,the
Agreementshallceasetohaveeffect:
(a)

InIndia,inrespect of income derived in any fiscal year on or after the 1st ofApril nextfollowingthe
calendaryearinwhichthenoticeisgivenand

(b)

InEthiopia,inrespectofincomederivedinanyfiscalyearonorafterthe8thofJulynextfollowingthe
calendaryearinwhichthenoticeisgiven

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INWITNESSWHEREOFtheundersigned,dulyauthorizedthereto,havesignedthisAgreement.
DONE in duplicate atAddisAbaba this 25th day of May, 2011, each in the Hindi and English languages, both texts being
equallyauthentic.Incaseofdivergenceofinterpretation,theEnglishtextshallprevail.

PROTOCOL
At the moment of signing the Agreement this day concluded between the Government of the Republic of India and the
GovernmentoftheFederalDemocraticRepublicofEthiopiafortheAvoidanceofDoubleTaxationandthePreventionofFiscal
EvasionwithrespecttoTaxesonIncome,theundersignedhaveagreeduponthefollowingprovisionswhichshallbeanintegral
partoftheAgreement.
1.Forthepurposeofcomputingthetimelimitinparagraph3(a)ofArticle 5(PermanentEstablishment),the183daysperiod
beginsasofthedateonwhichtheconstruction,installationorassemblyprojectorsupervisoryactivityitselfbeginsitdoesnot
take into account the time spent solely on preparatory activities. The time taken for obtaining licenses etc., shall also be
excludedforthispurpose.
2.WithrespecttoArticle24(Nondiscrimination):itisunderstoodthat theprovisionsofthisArticleshallnotbeconstruedas
preventingIndiafromchargingtheprofitsofapermanentestablishmentofanEthiopiancompanyinIndiaatarateoftaxwhich
ishigherthanthatimposedontheprofitsofasimilarcompanyofthefirstmentionedContractingState,norasbeingInconflict
withtheprovisionsofparagraph3ofArticle7(BusinessProfits).
3.ItisunderstoodthatifthedomesticlawofaContractingStateismorebeneficialtoaresidentoftheotherContractingState
thantheprovisionsofthisAgreement,thentheprovisionsofthedomesticlaw ofthefirstmentionedStateshallapplytothe
extenttheyaremorebeneficialtosucharesident.
INWITNESSWHEREOFtheundersigned,dulyauthorizedthereto,havesignedthisProtocol.
DONE in duplicate atAddisAbaba this 25th day of May, 2011, each in the Hindi and English languages, both texts being
equallyauthentic.Incaseofdivergenceofinterpretation,theEnglishtextshallprevail.

Copyright. Taxmann Publications Pvt. Ltd.

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