India - Lithuania Tax Treaty

AGREEMENT

BETWEEN THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA 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 Repubiic of Lithuania and the Government of the Republic of India,

desiring 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 and with a

view to promoting economic cooperation between the two Contracting States,

have agreed as follows:

Article 1

Persons covered

This Agreement shall apply to persons who are residents of one or both of the

Contracting States.

Article 2

Taxes covered

This Agreement 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.

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 0r of capital, including taxes

on gains from the alienation of movable 0r immovable property.

The existing taxes to which the Agreement shall apply are in particular: a) in India:

(i) the income tax, including any surcharge thereen;

(ii) the wealth tax, including any surcharge thereon;

(hereinafter referred to as "Indian tax");

b) in Lithuania:

(1) the proﬁt tax (pelno mokestis);

(ii) the income tax (pajama mokestis);

(iii) the immovable property tax (nekilnojamojo turto mokestis);

(hereinafter referred to as “Lithuanian tax");

The Agreement shall apply also to any identical or substantially simiiar taxes that are imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each

other of any signiﬁcant changes that have been made in their taxation laws.

(3)

Article 3

General deﬁnitions

For the purposes of this Agreement, 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 UN Convention on the Law of the Sea;

b) the term “Lithuania" means the Republic of Lithuania and, when used in the geographicai sense, means the territory of the Repubiie of Lithuania and any other area adjacent to the territorial sea of the Republic of Lithuania within which under the laws of the Republic of Lithuania and in accordance with international law, the rights of Lithuania may be exercised with respect to the sea bed and its sub—soii and their natural resources;

(2) the terms ” a Contracting State" and "the other Contracting State” mean Lithuania or India, as the context requires;

d) the term "person" includes an individuai, 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 State;

e) the term "company" means any body corporate or any entity that 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;

the term "competent authority" means:

(i) in India: the Finance Minister, Government of India, or his authorised representative;

(ii) in Lithuania: the Minister ofFinance or his authorised representative;

i) the term "national" means:

(i) any individual possessing the nationality of a Contracting State;

(ii) any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State;

j) the term "tax" means Lndian or Lithuanian tax, as the context requires, but shall not include any amount which is payable in respect of any defauit or omission in relation to the taxes to which this Agreement applies or which represents a penalty or ﬁne imposed relating to those taxes;

k) the term "ﬁscal year" means:

(i) in India: the ﬁnancial year beginning on the 15: day of April;

(ii) in Lithuania: the taxation period as deﬁned in the respective tax laws of

Lithuani a.

As regards the application of the Agreement at any time by a Contracting State, any term not deﬁned therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Agreement applies, any meaning under the applicable tax laws of that State

prevailing over a meaning given to the term under other laws of that State.

Article 4 Resident

For the purposes of this Agreement, the term "resident of a Contracting State" means any person Who, under the laws of that State, is liable to tax therein by reason ef his domicile, residence, place of management, place of incorporation or any other criterion of a similar nature, and also includes that State and any political subdivision or local authority thereof. This term, however, does not include any person who is Eiabie to tax in that State in respect only of income from sources in that State or

capital situated therein

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 permanent home available to him in both States, he shah be deemed to be a resident only 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 earmot 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 shalt settle the question by mutual agreement.

Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, the competent authorities of the Contracting States shall endeavour to settle the question by mutual agreement having regard to the person’s place of incorporation, the place of effective management and any other relevant factors. In the absence of such agreement: for the purposes of the Agreement, the person shail not be entitled to claim any beneﬁts provided by this

Agreement.

Article 5

Permanent establishment

For the purposes of this Agreement, the term "permanent establishment" means a ﬁxed place of business through which the business of an enterprise is wholly or

partly carried on.

The term "permanent establishment" includes especially:

a) a place of management;

b) a branch;

an office;

(:1) a factory;

e) a workshop;

i) a store or premises used as a sales outlet;

g) a warehouse in relation to a person providing storage facilities for others, and h) a mine, an oil or gas well= a quarry or any other place of extraction of natural

resources.

a) A building site, or construction, installation or assembly project or supervisory activities connected therewith constitute a permanent establishment only if such site, project or activities last more than nine months.

b) The furnishing of services, including consuitancy services, by an enterprise through employees or other personnel engaged by the enterprise for such purpose constitutes a permanent establishment. but only where activities of that nature continue (for the same or connected project) within the Contracting State for a period or periods aggregating more than six months within any twelve month period.

C) Activities carried on offshore in a Contracting State in connection with the exploration or exploitation of the sea bed and suh-soil and their natural resources constitute a permanent establishment if such activities are carried on for a period or

periods exceeding in the aggregate 30 days in any twelve month period.

Notwithstanding the preceding provisions of this Article, the term "permanent estabiishment" shall be deemed not to include:

a) the use of facilities solely for the purpose of storage, display or occasional delivery of goods or merchandise belonging to the enterprise;

b) the maintenance of a stock of goods or merchandise beionging to the enterprise solely for the purpose of storage, display or occasional delivery;

c) the maintenance of a stock of goods or merchandise belonging to the

enterprise solely for the purpose ofprocessing by another enterprise;

d) the maintenance of a fixed place of business soleiy 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;

t) the maintenance of a ﬁxed place of business solely for any combination of activities mentioned in suhparagraphs 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.

Notwithstanding the provisions of paragraphs 1 and 2, where a person - other than an agent of an independent status to whom paragraph 6 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 enterprise, if such 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 iimited to those mentioned in paragraph 4 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 habituaily maintains in 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 secures orders in the ﬁrst—rnentioned State, wholly or almost wholly

for the enterprise itself.

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, generai 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 meaning of this paragraph.

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

Income derived by a resident of a Contracting State from immovable property (including income from agriculture or foreshy) situated in the other Contracting State may

be taxed in that other State.

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 immovabie property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, any option or simiiar right to acquire immovable property: 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, rights to assets to be produced by the exploration or exploitation of the sea bed and sub- soil and their natural resources, including rights to interests in or to the beneﬁt of such

assets. Ships, boats and aircraft shall not be regarded as immovable property.

The provisions of paragraph 1 shall apply to income derived from the direct

use, letting, or use in any other form of immovable property.

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.

Artieie 7

Business proﬁts

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.

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 same or similar conditions and dealing wholly independently with the enterprise of which it is a

permanent establishment.

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, inciuding executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or eisewhere, in accordance with the domestic laws of the Contracting State in which the permanent

establishment is situated.

Insofar as it has been customary in a Contracting State to determine the proﬁts to be attributed to a permanent establishment on the basis of an apportionment of the total proﬁts of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the proﬁts to be taxed by such an apportionment as may he customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principies contained in

this Article.

No proﬁts shalt be attributed to a permanent estabiishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the

enterprise.

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 suﬁcient reason to the contrary.

Where proﬁts include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article.

Article 8

Shipping and air transport

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.

The provisions ofparagraph 1 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 two enterprises in their commerciai or ﬁnancial relations which differ from those which wouid 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 he inciuded in the proﬁts of that enterprise and taxed accordingly.

Where a Contracting State includes in the proﬁts of an enterprise of that State

and taxes accordingly - proﬁts on which an enterprise of the other Contracting State has been charged to tax in that other State and the proﬁts so included are proﬁts which would have accrued to the enterprise of the ﬁrst-rnentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State may make an appropriate adjustment to the amount of the tax charged therein on those proﬁts. In determining such adjustment, due regard shall be had to the other provisions of this Agreement and the competent authorities of the

Contracting States shaii if necessary consult each other.

Article 10 Dividends

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.

However, 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:

a) 5 per cent of the gross amount of the dividends if the beneﬁcial owner is a company (other than a partnership) which holds directly at least 10 per cent of the capital of the company paying the dividends;

b) 15 per cent of the gross amount of the dividends in all other cases.

This paragraph shali not affect the taxation of the company in respect of the proﬁts

out of which the dividends are paid.

The term "dividends" as used in this Articie means income from shares or other rights, not being debt—claims, participating in proﬁts, as weli as income from other 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.

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.

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 resident of that other State or insofar as the holding in respect of which the dividends are paid is effectiveiy 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

Interest arising in a Contracting State and paid to a resident of the other

Contracting State may be taxed in that other State.

17 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.

Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempt ﬁorri tax in that State, provided that it is derived and beneﬁcially owned by:

a) the Government, a political subdivision or a local authority of the other Contracting State; or

b) (i) in India, the Reserve Bank of india, the Export~hnport bank of India, the National Housing bank; and

(ii) in Lithuania, the Bank of Lithuania; or

c) any other ﬁnancial institution wholly owned by the Government of the other

Contracting State as may be agreed upon between the competent authorities of the

Contracting States.

The term "interest" as used in this Article means income from debt-clairns 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. The term ”interest" shall not include any income which is treated as a dividend under the provisions of Article 10. Penalty charges for late payment

shail not be regarded as interest for the purpose of this Article.

The provisions of paragraphs 1 and 2 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 interest is paid is effectively connected with such permanent estabiishment or ﬁxed base. in such case the provisions of

Article 7 or Article i4, as the case may be, shall apply.

interest shall be deemed to arise in a Contracting State when the payer is a resident of that State. 'Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent estabiishment 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.

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—ciaims for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneﬁciai 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

Agreement.

Article 12

Royalties and fees for technical services

Royalties or 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.
However, such royalties or fees for technical services may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the beneﬁcial owner of the royalties or fees for technical services is a resident of the other Contracting State, the tax so chaIged shall not exceed 10 per cent of the gross amount of

the royalties or fees for technical services.

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 or ﬁims or tapes and other means of image or sound reproduction used for television or radio broad—casting, any patent= tade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientiﬁc equipment, or for information concerning indushial, commercial or scientiﬁc experience.

b) The term “fees for technical services” as used in this Article means payments of any kind, other than those mentioned in Articles 14 and 15 of this Agreement in consideration for the services of a managerial or technical or consultancy nature,

including the provision of services of technical or other personnel.

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 or service in respect of which the royalties or fees for technical services are paid is effectively connected with such permanent establishment or ﬁxed base. 111 such

case the provisions of Article 7 or Article 14, as the case may be, shall apply.

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 estabhshment 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 Contracting State in which the permanent establishment or ﬁxed

base is situated.

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 or service 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 shat] apply only to the lastumentioned 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 Agreement.

Article 13 Capital gains

Gains or income 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.

Gains from the 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 an enterprise of a Contracting State operating ships or aircraft in international trafﬁc 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.

Gains from the alienation of shares in a company which is a resident of a

Contracting State may be taxed in that State.

Gains from the alienation of any property other than that referred to in the preceding paragraphs shall be taxable only in the Contracting State of which the alienator

is a resident.

Article 14

Independent personal services

Income derived by an individual who is 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. However, such income may also be taxed in the other Contracting State if:

a) the individual 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; or

b) the individual is present in the other Contracting State for a period or periods amounting to or exceeding in the aggregate 183 days 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 activities performed in that other Contracting State.

The term "professional serviceS" includes eSpecially independent scientiﬁc,

literary, artistic, educational or teaching activities as wet! as the independent activities of

physicians, lawyers, engineers, architects, surgeons, dentists and accountants.

Article 15

Dependent personal services

Subject to the provisions of Articles 16, 18, 19 and 20, 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 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.

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 periods 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 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.

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.

Article 16

Directors' fees

Directors' fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors or any other similar organ of a

company which is a resident of the other Contracting State may be taxed in that other

State.

Article 17

Artistes and sportspersons

Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsperson, from personal activities as such

exercised in the other Contracting State, may be taxed in that other State.

Where income in reSpect of personal activities exercised by an entertainer or a sportsperson in his capacity as such accrues not to the entertainer 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 entertainer or

sportsperson are exercised.

The provisions of paragraphs 1 and 2 shall not appiy to income derived from activities exercised in a Contracting State by an entertainer or a sportsperson if the activities are substantially supported by public funds of one or both of the Contracting States or of political subdivision or local authorities thereof. In such a case, the income shall be taxable only in the Contracting State of which the entertainer or sportsperson is a

resident.

Article 18

Pensions

Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past

employment shall be taxable only in that State.

2, Notwithstanding the provisions of paragraph 1, and subject to the provisions of paragraph 2 of Article 19, pensions paid and other beneﬁts, whether paid periodically or in a lump-sum, granted under the social security legislation of a Contracting State shall

be taxable in that State.

Article 19

Government service

a) Salaries, wages and other similar 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 salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that 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.

The provisions ofArticles 15, 16, 17, and 18 shall apply to salaries, wages and other similar 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

Professors, teachers and research scholars

A professor, teacher or research scholar who is or was a resident of a Contracting State immediately before Visiting the other Contracting State for the purpose of teaching or engaging in research, or both, at a university, college or other similar approved institution in that other Contracting State shall be exempt from tax in that other State on any remuneration for such teaching or research for a period not exceeding two

years from the date of his ﬁrst arrival in that other State.

This Article shall apply to income from research only if such research is undertaken by the individual in the public interest and not primarily for the beneﬁt of

some private person or persons.

Article 21 Students

Payments which a student, an apprentice or a trainee 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 receives for the purpose of his maintenance, education or Raining shall not be taxed in

that State, provided that such payments arise from sources outside that State.

Article 22

Other income

Items of income of a resident of a Contracting State, wherever arising, not

dealt with in the foregoing Articles of this Agreement shall be taxable only in that State.

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.
Notwithstanding the provisions of paragraphs 1 items of inCOme of a resident of a Contracting State not dealt with in the foregoing Articles of this Agreement and

arising in the other Contracting State may also be taxed in that other State.

Article 23 Capital

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.

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.

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.

All other elements of capital of a resident of a Contracting State shall be taxable only in that State.

Article 24

Methods for elimination of double taxation

1n india, double taxation shall be eliminated as follows:

a) Where a resident of India derives income or owns capital which, in accordance with the provisions of this Agreement, may be taxed in Lithuania, india shall allow:

(i) as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Lithuania;

(ii) as a deduction ﬁom the tax on the capital of that resident, an amount equal to the capital tax paid in Lithuania.

Such deduction in either case shall not, however, exceed that portion of the income tax or capital tax, as computed before the deduction is given, which is attributable, as the case may be, to the income or the capital which may be taxed in Lithuania.

b) Where in accordance with any provision of the Agreement income derived or capital owned by a resident of India is exempt from tax in India, India may nevertheless, in calculating the amount of tax on the remaining income or capital of such resident, take

into account the exempted income or capitai.

In Lithuania, double taxation shall be eliminated as follows:

Where a resident of Lithuania derives income or owns capital which, in accordance with this Agreement, may be taxed in India, unless a more favourable treatment is provided in its domestic law, Lithuania shall allow:

a} as a deduction from the tax on the income of that resident, an amount equal to the income tax paid thereon in India;

b) as a deduction from the tax on the capital of that resident, an amount equal to

the capital tax paid thereon in lndia.

Such deduction in either case shall not, however, exceed that part of the income tax or capital tax in Lithuania, as computed before the deduction is given, which is

attributable, as the case may be, to the income or the capital which may be taxed in India.

Article 25

Non-discrimination

l. 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, in particular with respect to residence, 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.

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 and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents. 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 provisions of paragraph 3 of

Article 7. However, the difference in tax rates shall not exceed 10 percentage points.

Except where the provisions of paragraph 1 of Article 9, paragraph 7 of Article 11, or paragraph 6 of Article 12, apply, interest, royalties or fees for technical services 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.

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 subjected 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.

The provisions of this Article shall, notwithstanding the provisions of Article

2, apply to taxes of every kind and description.

Article 26

Mutual agreement procedure

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 Agreement, 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 Agreement.

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 Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the domestic

law of the Contracting States.

The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difﬁculties or doubts arising as to the interpretation or appheation of the Agreement. They may also consult together for the elimination of

double taxation in cases not provided for in the Agreement.

The competent authorities of the Contracting States may communicate with each other directiy, including through a joint commission consisting of themselves or their representatives, for the purpose of reaching an agreement in the sense of the preceding

paragraphs.

Article 27

Exchange of information

The competent authorities of the Contracting States shaii exchange such information (including documents or authenticated copies of the documents) as is foreseeable relevant for carrying out the provisions of this Agreement or to ﬂie 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 Agreement.

The exchange of information is not restricted by Articles 1 and 2.

Any information received under paragraph 1 by a Contracting State shall he 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, or the determination of appeals in reiation to the taxes referred to in paragraph 1, or the oversight of the above. Such persons or authorities shall use the information oniy 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 authorizes such use.

in no case shall the provisions of paragraph 1 and 2 be construed so as to impose on a Contracting State the obligation:

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 (including documents or authenticated copies of the documents) 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 disciose any trade, business, industn’al, commercial or professional secret or trade process, or information the disclosure of which

wouid be contrary to public policy (onire public).

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 soieiy because it has no domestic

interest in such information.

in no case shah the provisions of paragraph 3 be construed to permit Contracting State to dechne 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 owuership interests in a person.

Article 28

Assistance in the collection of taxes

I. The Contracting States shall lend assistance to each other in the collection of revenue claims. This assistance is not restricted by Articles 1 and 2. The competent authorities of the Contracting States may by mutual agreement settle the mode of

application of this Aiticie.

The term “revenue claim” as used in this Articie means an amount owed in respect of 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 this Agreement or any other instrument to which the Contracting States are parties, as well as interest, administrative penalties and costs of

collection or conservancy related to such amount.

When a revenue claim of a Contracting State is enforceable under the laws of that State and is owed by a person who, at that time, cannot= under the laws of that State, prevent its collection, that revenue claim shall, at the request of the competent authority of that Sate= be accepted for purposes of coilection by the competent authority of the other Contracting State. That revenue claim shall be collected by that other State in accordance with the provisions of its laws applicable to the enforcement and collection of its owu

taxes as if the revenue claim were a revenue claim of that other State,

When a revenue claim of a Contracting State is a claim in resPect of which that State may, under its law, take measures of conservancy with a view to ensure its

coliection, that revenue claim shall, at the request of the competent authority of that State,

be accepted for purposes of taking measures of conservancy by the competent authority of the other Contracting State. That other State shall take measures of conservancy in respect of that revenue claim in accordance with the provisions of its laws as if the revenue claim were a revenue claim of that other State even if, at the time when such measures are applied, the revenue claim is not enforceable in the ﬁrst—mentioned State or is owed by a person who has a right to prevent its collection.

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 hmits or accorded any priority applicable to a revenue claim under the laws of that State by reason of its nature as such. In addition, a revenue claim accepted by a Contracting State for the purposes of paragraph 3 or 4 shall not, in that State, have any

priority applicable to that revenue claim under the laws of the other Contracting State.

Proceedings with respect to the existence= validity or the amount of a revenue claim of a Contracting State shall not be brought before the courts or adminishative

bodies of the other Contracting State.

Where, at any time after a request has been made by a Contracting State under paragraph 3 or 4 and before the other Contracting State has collected and remitted the relevant revenue claim to the first—mentioned State, the relevant revenue claim ceases to be

a) in the case of a request under paragraph 3, a revenue claim of the ﬁrst— mentioned State that is enforceable under the laws of that State and is owed by a person who, at that time, cannot, under the laws of that State= prevent its collection. or

b) in the case of a request under paragraph 4, a revenue claim of the ﬁrst- mentioned State in respect of which that State may, under its laws, take measures of conservancy with a view to ensure its collection

the competent authority of the ﬁrst—Inentioned State shaii promptly notify the competent authority of the other State of that fact and, at the option of the other State, the

first—nientioned State shall either suspend or withdraw its request.

8, In no case shall the provisions of this Articie be construed so as to impose on a Contracting State the obligation:

a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;

b) to carry out measures which would be contrary to public policy (ordre public);

c) to provide assistance if the other Contracting State has not pursued all reasonabie measures of collection or conservancy, as the case may be, available under its laws or administrative practice;

d) to provide assistance in those cases where the administrative burden for that

State is clearly disproportionate to the beneﬁt to be derived by the other Contracting State.

Artieie 29

Members of diplomatic missions and consular posts

Nothing in this Agreement shall affect the ﬁscal priviieges of members of diplomatic missions or consular posts under the general rules of international 1aw or under

the provisions of Special agreements.

Article 30

Limitation of beneﬁts

Beneﬁts of this Agreement shall not be available to a resident of a Contracting State, or with respect to any transaction undertaken by such a resident= if the main purpose of creation or existence of such a resident or of the transaction undertaken by him, was to

obtain the benefits under this Agreement that would not otherwise be available.

Where by reason of the provisions of paragraph 1 resident of a Contracting State is denied the beneﬁt of this Agreement in the other Contracting State, the competent authority of the other Contracting State denying the beneﬁts shall notify the competent

authority of the ﬁrst-mentioned State.

Article 31 Entry into force

The Governments of the Contracting States shall notify each other in writing of the completion of the procedures required by the reSpective laws for the entry into force

of this Agreement.

This Agreement shall enter into force on the date of the later of the

notiﬁcations referred to in paragraph 1 of this Article.

The provisions of this Agreement shall have effect:

a) in lndia:

(i) in respect of taxes withheld at source, on income derived on or after the ﬁrst day of April next following the calendar year in which the Agreement enters into force;

(ii) in respect of other taxes on income and taxes on capital, for taxes chargeable for any ﬁscal year beginning on or after the ﬁrst day of April next following the calendar year in which the Agreement enters into force;

b) in Lithuania:

(i) in respect of taxes withheld at source, on income derived on or after the ﬁrst day of January in the calendar year next following the year in which the Agreement enters into force;

(ii) in respect of other taxes on income and taxes on capital, for taxes chargeable for any ﬁscal year beginning on or after the ﬁrst day of January in the calendar year next

following the year in which the Agreement enters into force.

Article 32

Termination

This Agreement shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Agreement, through diplomatic channels, by giving written notice of termination at least six months before the end of any calendar year beginning after the expiration of ﬁve years from the date of entry into force of the Agreement. In such event Agreement shall cease to have effect:

a) in India:

(i) in respect of taxes withheld at source, on income derived on or after the ﬁrst day of April next following the calendar year in which the notice is given;

h) in Lithuania:

(1) in respect of taxes withheld at source, on income derived on or after the ﬁrst day of January in the calendar year next following the year in which the notice is given;

(ii) in respect of other taxes on income and taxes on capital, for taxes chargeable for any ﬁscal year beginning on or after the ﬁrst day of January in the calendar

year next following the year in which the notice is given.

1N WITNESS WHEREOF the undersigned, duly authorized thereto, have signed

this Agreement.

DONE in duplicate at Delhi this 26 day of July 2011, each in

the Lithuanian, Hindi and English languages, all texts being equally authentic. In the case

of divergence of interpretation, the English text shall prevail.

For the Government of the For the Government of the Republic of Lithuania Republic of India

PROTOCOL

At the moment of signing the Agreement between the Government of the Republic of Lithuania and the Government of the Republic of India for the avoidance of double taxation and prevention of ﬁscal evasion with respect to taxes on income and on capital, the undersigned have agreed that the following provisions shall form an integral part of the Agreement:

Ad Article 5

It is understood that on the date of this Agreement none of the agreements for the avoidance of double taxation concluded by Lithuania provide for special provision deeming an insurance enterprise of a Contracting State to have a permanent establishment in the other Contracting State if it collects premiums or insures risks in the territory of that other State through a dependent agent.

However= if after that date, such special provision is included in any agreement for the avoidance of double taxation concluded by Lithuania, then, after consultations between the competent authorities of the Contracting States, such provision shall also be

considered for this Agreement.

Ad Article 6

Where the ownership of shares or other corporate rights in a company entitles the owner of such shares or corporate rights to the enjoyment of immovable property held by the company, the income from the direct use, letting, or use in any other form of such right to the enjoyment may be taxed in the Contracting State in which the immovable

property is situated.

Ad Article 7 paragraph 3

It is understood that the deductions in respect of the head ofﬁce expenses as referred to in paragraph 3 of Article 7 shall in no case be less than those allowable under the Indian Income- tax Act as on the date of entry into force of this Agreement.

No deduction shail be allowed in respect of amounts paid or charged (otherwise

than towards reimbursement of actual expenses) by the permanent establishment to the

head ofﬁce of the enterprise or any of its other ofﬁces, by way of:

(i) royalties, fees or other similar payments in return for the use of patents or other rights;

(ii) commission for speciﬁc services performed or for management; and

(iii) interest on moneys lent to the permanent establishment except in case of a

banking institution.

Ad Article 8 paragraph 1

It is understood that:

(i) proﬁts from the operation of ships or aircraft in international trafﬁc shall include proﬁts from the use, maintenance or rental of containers (including trailers and related equipment for the transportation of containers) used for the transportation of goods or merchandise in international trafﬁc, where such kind of activities are supplementary or incidental to the operation of ships or aircraft by the enterprise in international trafﬁc, unless the containers are used solely within the other Contracting State;

(ii) interest on funds directly connected with the Operation of ships or aircraft in international trafﬁc shall be regarded as profits ﬁom the operation of such ships or aircraft if they are integral to the carrying on of such business, and the provisions of Article 11

shall not apply in relation to such interest.

DONE in duplicate at Delhi this 26 day of July 2011, each in

the Lithuanian, Hindi and English languages, all texts being equally authentic. In the case

of divergence of interpretation, the English text shall prevail.

For the Government of the For the Government of the Republic of Lithuania Republic of India

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