Tax Characterization and Scope (Article 7 vs Article 12 FIS)

The parties acknowledge that the character of the fees payable under this Agreement for income-tax purposes depends on the nature and scope of the Services and is to be determined under applicable law and the Convention between the United States and India for the avoidance of double taxation (the "Treaty"). The parties' shared expectation, subject to the representations below and to the Treaty and applicable law, is that the Services constitute the development of software and related work performed by Vendor as an independent enterprise, and that the resulting payments are intended to be treated as business profits of Vendor under the Treaty (India-US DTAA Article 7), generally not subject to United States income-tax withholding in the absence of a United States permanent establishment of Vendor as addressed in USI_TX_05. The parties further acknowledge that, to the extent any portion of the Services makes available technical knowledge, experience, skill, know-how, or processes, or consists of the development and transfer of a technical plan or design, such portion may instead be characterized as royalties or fees for included services under the Treaty (India-US DTAA Article 12), in which case Treaty-rate considerations may apply, and that this characterization turns on the 'make available' standard contained in the Treaty text. This Agreement does not warrant any particular tax treatment, and each party remains responsible for its own tax position. The parties shall cooperate in good faith, and exchange the documentation contemplated by USI_TX_02, USI_TX_03, and USI_TX_04, to support the characterization actually applicable to the Services.