MenuClose

ARTICLE 6
INCOME FROM IMMOVABLE PROPERTY

 

1.         Income derived by a resident of a Contracting State from immovable property (including income from agriculture, forestry or fishing) situated in the other Contracting State may be taxed in that other State.

 

2.         The term “immovable property” shall have the meaning which it has under the laws of the Contracting State in which the property in question is situated.  The term shall in any case include:

             (a)        a lease of land and any other interest in or over land,

                          whether or not that land is improved;

             (b)        a right to explore for or exploit mineral, oil or gas deposits,

                          standing timber, fish or other natural resources;

             (c)        a right to receive variable or fixed payments either:

                         (i)         as consideration for or in respect of the exploitation of,

                                     or

                         (ii)        for the right to explore for or exploit, mineral, oil or gas

                                     deposits, standing timber, fish or other natural

                                     resources;

             (d)        livestock.

 

3.         The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.

 

4.         Any interest or right referred to in paragraph 2 shall be regarded as being situated where the land, mineral, oil or gas deposits, quarries or natural resources, as the case may be, are situated or where the exploration or exploitation may take place.

 

5.         The provisions of paragraphs 1, 3 and 4 shall also apply to income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.

 

 

ARTICLE 7
BUSINESS PROFITS

1.         The income or 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 in that other State.  If the enterprise carries on business in that manner, the income or profits of the enterprise may be taxed in the other State but only so much of them as is attributable to:

             (a)        that permanent establishment; or

             (b)        sales within that other Contracting State of goods or  

                          merchandise of the same or a similar kind as those sold, or

                          other business activities of the same or a similar kind as

                          those carried on, through that permanent establishment if

                          the sale or the business activities had been made or carried

                          on in that way with a view to avoiding taxation in that other

                         State.

 

2.         Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated in that other State, there shall in each Contracting State be attributed to that permanent establishment the income or 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 or with other enterprises with which it deals.

 

3.         In the determination of the profits of a permanent establishment, there shall be allowed as deductions expenses of the enterprise which are incurred for the purposes of the permanent establishment (including executive and general administrative expenses so incurred), whether incurred in the Contracting State in which the permanent establishment is situated or elsewhere.  However, no deduction is allowable in respect of expenses which are not deductible under the laws of the Contracting State in which the permanent establishment is situated.

 

4.         No income or profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

 

5.         If the information available to the taxation or competent authority of a Contracting State is inadequate to determine the profits to be attributed to the permanent establishment of an enterprise, nothing in this Article shall affect the application of any law of that State relating to the determination of the tax liability of a person provided that those laws shall be applied so far as the information available to the taxation or competent authority permits consistently with the principles of this Article.

 

6.         For the purposes of the preceding paragraphs of this Article, the income or profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.

 

7.         Where:

             (a)        a resident of a Contracting State is beneficially entitled,

                          whether directly or through one or more interposed trusts, to

                          a share of the business profits of an enterprise carried on in

                          the other Contracting State by the trustee of a trust other than

                          a trust which is treated as a company for tax purposes; and

             (b)        in relation to that enterprise, that trustee would, in

                          accordance with the principles of Article 5, have a

                          permanent establishment in that other State,

                          the enterprise carried on by the trustee shall be deemed to

                          be a business carried on in the other State by that resident

                          through a permanent establishment situated in that other

                          State and that share of business profits shall be attributed to

                          that permanent establishment.

 

8.         Where income or 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.

 

9.         Nothing in this Article shall affect any provisions of the laws of either Contracting State at any time in force as they affect the taxation of any income or profits from the business of any form of insurance.

 

 

ARTICLE 8
SHIP AND AIRCRAFT OPERATIONS

1.         Income or profits from aircraft operations derived by a resident of a Contracting State shall be taxable only in that State.

 

2.         Income or profits derived by an enterprise of a Contracting States from the operation of ships in international traffic may be taxed in that Contracting State and may also be taxed in the other Contracting State, but the tax imposed in that other State shall be reduced by an amount equal to 50 per cent of the amount which would be payable in respect of that income or those profits but for this paragraph.

 

3.         Notwithstanding the provisions of paragraph 1, such income or profits may be taxed in the other Contracting State where they are income or profits from aircraft operations confined solely to places in that other State.

 

4.         Notwithstanding the provisions of paragraph 2, such income or profits may be taxed in the other Contracting State without reduction where they are income or profits from ship operations confined solely to places in that other State.

 

5.         The provisions of paragraphs 1, 2, 3 and 4 shall apply in relation to the share of the profits from ship or aircraft operations derived by a resident of a Contracting State through participation in a pool service, in a joint business or operating organisation or in an international operating agency.

 

6.         For the purposes of this Article, profits derived from the carriage by ships or aircraft of passengers, livestock, mail, goods or merchandise which are shipped in a Contracting State for discharge at a place in that State shall be treated as profits from ship or aircraft operations confined solely to places in that State.

 

 

ARTICLE 9
ASSOCIATED ENTERPRISES

1.         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 operate between the two

                          enterprises in their commercial or financial relations which

                          differ from those which might be expected to operate

                          between independent enterprises dealing wholly

                          independently with one another, then any income or profits

                          which, but for those conditions, might have been expected to

                          accrue to one of the enterprises, but, by reason of those

                          conditions, have not so accrued, may be included in the

                          income or profits of that enterprise and taxed accordingly.

 

2.         Nothing in this Article shall affect the application of any laws of a Contracting State relating to the determination of the tax liability of a person, including determinations in cases where the information available to the taxation or competent authority of that State is inadequate to determine the income to be attributed to an enterprise, provided that those laws shall be applied, so far as it is practicable to do so, consistently with the principles of this Article.

 

3.         Where income or profits on which an enterprise of a Contracting State has been charged to tax in that State are also included, by virtue of paragraph 1 or 2, in the income or profits of an enterprise of the other Contracting State and charged to tax in that other State, and the income or profits so included are income or profits which might have been expected to have accrued to that enterprise of the other State if the conditions operative between the enterprises had been those which might have been expected to have operated between independent enterprises dealing wholly independently with one another, then the first-mentioned State shall make an appropriate adjustment to the amount of tax charged on that income or profits in the first-mentioned State.  In determining such an adjustment, due regard shall be had to the other provisions of this Agreement and for this purpose the taxation or competent authorities of the Contracting States shall if necessary consult each other.

 

 

ARTICLE 10
DIVIDENDS

1.         Dividends paid by a company which is a resident of a Contracting State for the purposes of its tax, being dividends to which a resident of the other Contracting State is beneficially entitled, may be taxed in that other State.

 

2.         Those dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident for the purposes of its tax, and according to the laws of that State, but the tax so charged shall not exceed 15 per cent of the gross amount of the dividends.

 

3.         The term "dividends" in this Article means income from shares and other income assimilated to income from shares by the laws, relating to tax, of the Contracting State of which the company making the payment is a resident for the purposes of its tax. 

 

4.         The provisions of paragraphs 1 and 2 shall not apply if the person beneficially entitled to 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 in that other State, or performs in that other State independent personal services from a fixed base situated in that other State, and the holding in respect of which the dividends are paid is effectively connected with that permanent establishment or fixed base.  In that case, the provisions of Article 7 or 15, as the case may be, shall apply.

 

5.         Where a company which is a resident of a Contracting State derives income or profits from the other Contracting State, that other State may not impose any tax on the dividends paid by that 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 effectively connected with a permanent establishment or a fixed base 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 income or profits arising in that other State.  This paragraph shall not apply in relation to dividends paid by any company which is a resident of New Zealand for the purposes of New Zealand tax and which is also a resident of Thailand for the purposes of Thai tax. 

 

 

 

Last updated: 08.12.2011