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ARTICLE 6

 

1.         Income derived by a resident of a Contracting State from immovable property situated in the other Contracting State may be taxed in that other Contracting State.

 

2.         Ther 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.  Ther term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting immovable property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right ot work, mineral deposits, sources and other natural resources; ships and  aircraft shall not be regarded as immovable property.

 

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

 

4.         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.

 

 

ARTICLE 7

 

1.         The income or profits of an enterprise of a Contracting State shall be taxable only in that Contracting 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 income or profits of the enterprise may be taxed in that other Contracting State but only so much of them as is attributable to that permanent establishment.

 

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 therein, 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.

 

3.         In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the business of the permanent establishment, including executive and general administrative expenses so incurred, whether in the Contracting State in which the permanent establishment is situated or elsewhere.

 

4.         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 be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article.

 

5.         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.

 

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

 

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

 

8.         For the purposes of this Article, the term “income or profits” does not include payments of any kind received as a consideration for the use of, or the right to use, any property (other than immovable property), which is not property in respect of which the royalties referred to in paragraph 3 of Article 12 are paid.

 

 

ARTICLE 8

 

1.         Income or profits derived by an enterprise of a Contracting State from the operation of aircraft in international traffic shall be taxable only in that Contracting State.

 

2.         Income or profits derived by an enterprise of a Contracting State from the operation of ships in international traffic may be taxed in the other Contracting State, but the tax so charged in that other Contracting State shall be reduced by an amount equal to 50 per cent thereof.

 

3.         The provisions of paragraphs 1 and 2 shall also apply to income or profits from the participation in a pool, a joint business or an international operating agency.

 

 

ARTICLE 9

 

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

                         aContracting State and an enterprise of the other Contracting

                         State, 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 income or

                         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 be included in the income or

                         profits of that enterprise and taxed accordingly.

 

2.         Where a Contracting State includes, in accordance with the provisions of  paragraph 1, in the income or profits of an enterprise of that Contracting state-and taxes accordingly-income or profits on which an enterprise of the other Contracting State has  been charged to tax in that other Contracting State and where the competent authorities of the Contracting States agree, upon consultation, that all or part of the income or profits so included are income or profits which would have accrued to the enterprise of the first-mentioned Contracting State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other  Contracting state shall make an appropriate adjustment to the amount of the tax charged therein on those agreed income or profits.  In determining such adjustment, due regard shall be had to the other provisions of this Convention.

 

 

ARTICLE 10

 

1.         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 Contracting State.

 

2.         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 Contracting State, but if the recipient is the beneficial owner of the dividends and is a company which owns at least 25 per cent of the voting shares of the company paying the dividends during  the period of six months immediately before the end of the accounting period for which  the distribution of profits takes place, the tax so charged shall not exceed:

            (a)        15 per cent of the gross amount of the dividends in the case

                          of the dividends paid by a company engaged in an industrial

                          undertaking; or

            (b)         20 per cent of the gross amount of the dividends in other

                          cases.

            This paragraph shall not affect the taxation of the company in respect of the profits out of  which the dividends are paid.

 

3.         (a)        The term "dividends" as used in this Article means income

                          from shares or other rights,not being debt-claims,

                          participating in profits, as well as  income from other

                          corporate rights which is subjected to the same taxation 

                          treatment as income from shares by the taxation laws of the

                          Contracting State of which the company making the 

                          distribution is a resident.

            (b)        The term "industrial undertaking" as used in paragraph 2

                          means:

                          (i)         any undertaking engaged in

                                       (aa)      manufacturing assembling and processing,

                                       (bb)      construction, civil engineering and

                                                    shipbuilding,

                                        (cc)      production of electricity or gas or the supply of

                                                     water, or

                                        (dd)      agriculture, forestry, fishery, and the carrying

                                                     on of a plantation, and

                          (ii)        any other undertaking which may be declared to be

                                       an“industrial undertaking” for the purposes of

                                       thisArticle by the competent authority of the

                                       Contracting State in  which the undertaking is

                                       situated.

 

4.         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, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment. In such case, the provisions of Article 7 shall apply.

 

5.         Where a company which is resident of a Contracting state derives profits or  income from the other Contracting State, that other Contracting 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 Contracting State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment situated in  that other Contracting 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 that other Contracting State.

 

 

 

Last updated: 08.12.2011