AGREEMENT BETWEEN THE GOVERNMENT OF INDIA AND THE GOVERNMENT OF NORWAY FOR THE AVOIDANCE OF DOUBLE TAXATION OF INCOME
New Delhi, 20 July 1959
Whereas the Government of India and the Government of Norway desire to conclude an Agreement for the avoidance of double taxation
of income Now, therefore, it is hereby agreed as follows
(1) The taxes which are the subject of the present Agreement are: (a) in India : the Income-tax, the Super-tax, the Surcharge, imposed
under the Indian Income-tax Act, 1922 (11 of 1922) (hereinafter referred to as "Indian Tax")
(b) in Norway:
The Communal Income-tax,
The Old Age Pensions Tax
War Pensions Tax,
(2) The present Agreement shall also apply to any other taxes of a substantially similar character imposed in India or Norway subsequent
to the date of signature of the present Agreement.
(1) In the present Agreement, unless the context otherwise requires
(a) the term "Norway" means the Kingdom of Norway excluding Svalbard (Spitzbergen), Jan Mayen and the Norwegian dependencies
(b) the terms "one of the territories" and "the other territory" mean Norway or India as the context requires;
(c) the term "person" includes natural persons, companies and all other entities which are treated as taxable units under
the tax laws in force in the respective territories;
(d) the term "company" means any entity which is treated as a body corporate or as a company for tax purposes;
(e) the term "tax" means the Norwegian tax or Indian tax, as the context requires;
(f) the terms "resident of Norway" and "resident of India" mean, respectively, a person who is resident in Norway
for the purposes of Norwegian tax and not resident in India for the purposes of Indian tax; and a person who is resident in India
for the purposes of Indian tax, and not resident in Norway for the purposes of Norwegian tax. A company shall be regarded as resident
in Norway if it is incorporated in Norway or its business is wholly managed and controlled in Norway; a company shall be regarded
as resident in India if it is incorporated in India or its business is wholly managed and controlled in India.
(g) the terms "Norwegian enterprise" and "Indian enterprise" mean, respectively, an industrial or commercial enterprise
or undertaking carried on by a resident of Norway and an industrial or commercial enterprise or undertaking carried on by a resident
of India; and the terms "enterprise of one of the territories" and "enterprise of the other territory" mean a
Norwegian enterprise or an Indian enterprise, as the context requires;
(h) the term "permanent establishment" means a fixed place of business in which the business of the enterprise is wholly
or partly carried on;
(aa) The term "fixed place of business" shall include a place of management, a branch, an office, a factory, a workshop,
a warehouse, a mine, quarry or other place of extraction of natural resources.
(bb) An enterprise of one of the territories shall be deemed to have a fixed place of business in the other territory if it carries
on in that other territory a construction, installation or assembly project or the like.
(cc) The use of mere storage facilities or the maintenance of a place of business exclusively for the purchase of goods or merchandise
and not for any processing of such goods or merchandise in the territory of purchase, shall not constitute a permanent establishment.
(dd) A person acting in one of the territories for or on behalf of an enterprise of the other territory shall be deemed to be a permanent
establishment of that enterprise in the first-mentioned territory, but only if
1. he has and habitually exercises in the first-mentioned territory a general authority to negotiate and enter into contracts for
or on behalf of the enterprise, unless the activities of the person are limited exclusively to the purchase of goods or merchandise
for the enterprise, or
2. he habitually maintains in the first-mentioned territory a stock of goods or merchandise belonging to the enterprise from which
the person regularly delivers goods or merchandise for or on behalf of the enterprise, or
3. he habitually secures orders in the first-mentioned territory wholly or almost wholly for the enterprise itself or for the enterprise
and other enterprises which are controlled by it or have a controlling interest in it.
(ee) A broker of a genuinely independent status who merely acts as an intermediary between an enterprise of one of the territories
and a prospective customer in the other territory shall not be deemed to be a permanent establishment of the enterprise in the last-mentioned
(ff) The fact that a company, which is a resident of one of the territories, has a subsidiary company which either is a resident of
the other territory or carries on a trade or business in that other territory (whether through a permanent establishment or otherwise)
shall not, of itself constitute that subsidiary company a permanent establishment of its parent company.
(i) the term "pension" means a periodic payment made in consideration of services rendered or by way of compension for injuries
(g) the term "annuity" means a stated sum payable periodically at stated time 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;
The term "competent authority" means in the case of India, the Central Government in the Ministry of Finance, Department
of Revenue, or its authorised representative and in the case of Norway, the Ministry of Finance and Customs or its authorised representative.
(2) In the application of the provisions of this Agreement in one of the territories any term not otherwise defined in this Agreement
shall, unless the context otherwise requires, have the meaning which it has under the laws in force in that territory relating to
the taxes which are the subject of this Agreement.
(1) Subject to the provisions of.paragraph (3) below, tax shall not be levied in one of the territories on the industrial or commercial
profits of an enterprise of the other territory unless profits are derived in the first-mentioned territory through a permanent establishment
of the said enterprise situated in first-mentioned territory. If profits are so derived, tax may be levied in the first-mentioned
territory on the profits attributable to the said permanent establishment.
(2) There shall be attributed to the permanent establishment of an enterprise of one of the territories situated in the other territory
the industrial or commercial profits which it might be expected to derive in that other territory if it were an independent enterprise
engaged in the same or similar activities under the same or similar conditions and dealing at arm's length with the enterprise of
which it is a permanent establishment. In any case, where the correct amount of profits attributable to a permanent establishment
is incapable of determination, or the ascertainment thereof presents exceptional difficulties, the profits attributable to the establishment
may be estimated on a reasonable basis.
(3) For the purposes of this Agreement the term "industrial or commercial profits!' shall not include income in the form of rents,
royalties, interest, dividends, management charges, remuneration for labour or personal services or income from the operation of
ships or aircraft.
(a) an enterprise of one of the territories participates directly or indirectly in the management, control or capital of an enterprise
of the other territory,
(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the territories
and an enterprise of, the other territory, and
in either case conditions are made or imposed between the two enterprises, in their commercial or financial relations, which differ
from those which would be made between independent enterprises, then any profits which but for those conditions would have accrued
to one of the enterprise but by reason of those conditions have not so accrued may be included in the profits of that enterprise
and taxed accordingly.
(1) Income derived from the operation of aircraft by an enterprise of one of the territories shall not be taxed in the other territory,
unless the aircraft is operated wholly or mainly between places within that other territory.
(2) Paragraph (1) shall likewise apply in respect of participations in pools of any kind by enterprises engaged in air transport.
(1) When a resident of Norway, operating ships, derives profits from India through such operations carried on in India, such profits
shall be subject to tax in Norway as well as in India; but the tax so charged in India shall be reduced by an amount equal to 50
per cent, of the tax so charged, and the reduced amount of Indian tax payable on the profits shall be allowed as a credit against
Norwegian tax charged on income accrued to or received by the resident of Norway during the year in which such reduced Indian tax
(2) When a resident of India, operating ships, derives profits from Norway through such operations carried on in Norway, such profits
shall be subject to tax in India as well as in Norway; but the tax so charged in Norway shall be reduced by an amount equal to 50
per cent of the tax so charged and the reduced amount of Norwegian tax payable on the profits shall be allowed as a credit against
Indian tax charged in respect of such income.
(3) Paragraphs (1) and (2) shall not apply to profits arising as a result of coastal traffic.
Royalties derived by a resident of one of the territories from sources in the other territory may be taxed only in that other territory.
In this Article, the term "Royalty" means any royalty or other like amount received as consideration for the right to use
copyright, artistic or scientific works, cinematographic films, patents, models, designs, plans, secret processes or formulae, trade
marks and other like property or rights, but does not include any royalty or other like amount in respect of the operation of mines,
quarries or other natural resources.
Dividends paid by a company which is a resident of one of the territories to a resident of the other territory may be taxed only in
the first-mentioned territory.
Interest on bonds, securities, notes, debentures or any other form of indebtedness, derived by a resident of one of the territories
from sources in the other territory may he taxed only in that other territory.
Income from immovable property may be taxed only in the territory in which the property is situated. For this purpose any rent or
royalty or other income derived from the operation of a mine, quarry or any other extraction of natural resources shall be regarded
as income from immovable property.
Capital gains derived from the sale, exchange or transfer of a capital asset, whether movable or immovable, may be taxed only in the
territory in which the capital asset is situated at the time of such sale, exchange or transfer.
(1) Remuneration other than pensions and annuities, paid in Norway for services rendered therein out of public funds of India shall
not be taxed in Norway unless the payment is made to a citizen of Norway.
(2) Remuneration other than pensions and annuities, paid in India for services rendered therein, out of public funds of Norway shall
not be taxed in India unless the payment is made to a citizen of India.
(3) The provisions of paragraph (1) and (2) of this Article shall not apply to payments in respect of services in connection with
any trade or business carried on by either of the Contracting Parties or political sub-divisions thereof for purposes of profit.
(4) The provisions of paragraph (1) and (2) of this Article shall also apply to remuneration other than pensions and annuities paid
by the Reserve Bank of India, the Public Railways Authorities and the Postal Administration of India and by the Bank of Norway (Norges
Bank), Norwegian State Railways (Norges Statsbaner) and the Norwegian Postal and Telegraphic Administration (Post-og-telegrafverket).
Any pension or annuity derived by a resident of one of the territories from sources in the other territory may be taxed only in that
(1) Profits or remuneration for professional services or for services as an employee (including services as a director) performed
in one of the territories by an individual who is a resident of the other territory may be taxed only in the territory in which such
services are performed.
(2) An individual who is a resident of India shall not be taxed in Norway on profits or remuneration referred to in paragraph (1)
(a) he is temporarily present in Norway for a period or periods not exceeding in the aggregate 183 days during the relevant taxable
(b) the services are performed for or on behalf of a resident of India,
(c) the profits or remuneration are subject to Indian tax, and
(d) the profits or remuneration are not deducted in computing profits of an enterprise chargeable to Norwegian tax.
(3) An individual who is a resident of Norway shall not be taxed in India on the profits or remuneration referred to in paragraph
(a) he is temporarily present in India for a period or periods not exceeding in the aggregate 183 days during the relevant Ccprevious
(b) the services are rendered for or on behalf of a resident of Norway;
(c) the profits or remuneration are subject to Norwegian tax, and
(d) the profits or remuneration are not deducted in computing the profits of an enterprise chargeable to Indian tax.
(4) Where an individual permanently or predominantly performs services on ships or aircraft in international traffic operated, by
an enterprise of one of the territories profits or remuneration from such services may be taxed only by the country of which the
individual is resident.
A professor or teacher from one of the territories, who receives remuneration for teaching, during a period of temporary residence
not exceeding two years, at a University, College, School or other educational institution in the other territory, shall not be taxed
in that other territory in respect of that remuneration.
An individual from one of the territories who is temporarily present in the other territory solely,
(a) as a student at a university, college or school in such other territory,
(b) as a business apprentice, or
(c) as the recipient of a grant, allowance or award for the primary purpose of study or research from a religious, charitable, scientific
or educational organisation shall not be taxed in the other territory in respect of remittances from abroad for the purposes of his
maintenance, education or training, in respect of scholarship, and in respect of any amount representing remuneration for services
rendered in that other territory, provided that such services are in connection with his studies or training or are necessary for
the purpose of his maintenance.
(1) The laws in force in either of the territories will continue to govern the assessment and taxation of income in the respective
territories except where express provision to the contrary is made in this agreement.
(2) Subject to the provision of Article VI income from sources within Norway which under the laws of Norway and in accordance with
this Agreement is subject to tax in Norway either directly or by deduction shall not be subject to Indian tax.
(3) Subject to the provision of Article VI income from sources within India which under the laws of India and in accordance with this
Agreement is subject to tax in India either directly or by deduction shall not be subject to Norwegian tax.
(4) The graduated rate of Norwegian tax to be imposed on residents of Norway and the graduated rate of Indian tax to be imposed on
residents of India may be calculated as though income which under this Agreement is not subject to Norwegian or Indian tax, as'the
case may be, were included in the amount of the total income.
The competent authorities shall exchange such information (being information which is at their disposal under their respective taxation
laws in the normal course of administration) as is necessary for carrying out the provisions of the present Agreement. Any information
so exchanged shall be treated as secret and shall not be disclosed to any persons other than those concerned with the assessment
and collection of the taxes which are the subject of the present Agreement. No information as aforesaid shall be exchanged by the
competent authority of one of the territories which would disclose any trade,
business, industrial or professional secret or any trade process to the authority of the other territory.
Where a resident of one of the territories shows proof that the action of the taxation authorities of the other territory has resulted
or will result in double taxation contrary to the provisions of the present Agreement, he shall be entitled to present his case to
the competent authority of the territory of which he is a resident. Should his claim be demeed worthy of consideration, the competent
authority to which the claim is made shall endeavour to come to an agreement with the competent authority of the other territory
with a view to avoiding double taxation.
(1) The present Agreement shall be ratified and the instruments of ratification shall be exchanged at OSLO as soon as possible.
(2) Upon exchange of the instruments of ratification, the present Agreement shall have effect :
(a) in India, for any year of assessment, beginning on or after the Ist April 1959,
(b) in Norway, for any taxable year, beginning on or after the Ist January 1958.
This Agreement shall continue in effect indefinitely but either of the Contracting Parties may on or before the 30th day of June in
any calendar year after 1960 give to the other Contracting Party notice of termination, and in such event this Agreement shall cease
to be effective
(a) in India, for any year of assessment beginning on or after the Ist April in the second calendar year following such written notice
(b) in Norway, for any taxable year beginning on or after the 1st January next following such written notice of termination.
IN WITNESS WHEREOF the undersigned duly authorised thereto have signed this Agreement and have affixed thereto their seals.
DONE in duplicate at New Delhi on the 20th July 1959 in the English language.
Sd/- (Dr. B. GOPALA REDDI)
Government of India.
Sd/- (HANS OLAV)
Minister for Revenue and Civil Ambassador of Norway Expenditure,
New Delhi, the 20th July, 1959
The Agreement between the Government of India and the Government of Norway for the Avoidance of Double Taxation of Income being signed
today, I have the honour, on behalf of the Government of India, to inform you that the two Contracting Parties have agreed that the
provisions of Article VI of the said Agreement will not affect the application of the provisions of Section 44A and 44B of the Indian
Income-tax Act, 1922 relating to the assessment of profits from occassional shipping and tramp steamers, provided that when an adjustment
is to be made under Section 44C of the Indian Income-tax Act, 1922, in the case of occasional shipping or tramp steamers, the provisions
of Article VI of the Agreement will apply.
I should be grateful if you confirm your agreement to the above understanding of the provisions of Article VI of the said Agreement,
and that in such case, this note and your reply thereto shall be deemed to be part of the Agreement.
Please accept, Mr. Ambassador, the assurance of my highest consideration.
(Sd.) Dr. B. GoPALA REDDI)
His Excellency Mr. HANS OLAV, Ambassador of Norway,
New Delhi, the 20th July, 1959
With reference to the Agreement signed today between the Government of Norway and the Government of India for the Avoidance of Double
Taxation of Income, you, on behalf of the Government of India, informed me of the following :
2. 1 have the honour to confirm that this proposal meets with the approval of the Government of Norway. Your Note of today's date
and my reply thereto shall, therefore, be part of the Agreement.
3. Please accept, Mr. Minister, the assurance of my highest consideration.
(Sd.) HANS OLAV.
Dr. B. GOPALA REDDI,
Minister for Revenue and Civil Expenditure,
Government of India, New Delhi.
Notification No. 32 (25/32/58-IT), dated 23-3-1960.
G.S.R. 367-Whereas the annexed agreement for the avoidance of double taxation of income between the Government of India and the Government
of Norway has been ratified and the Instruments of Ratification exchanged, as required by Article XX of the said Agreement :
Now, therefore, in exercise of the powers conferred by Section 49A of the Indian Income-tax Act, 1922 (11 of 1922), the Central Government
hereby directs that all provisions of the said Agreement shall be given effect to in the Union of India.