prop · GL0332 · 1998-01-01 00:00:00 — If in any convention for the avoidance of double taxation concluded by with a third State, being on the date hereof a member of velopment (), would agree to exempt dividends referred to in sub-paragraph a) of paragraph 2 arising in from tax or to limit the rate of tax provided in that sub- paragraph, such exemption or lower rate shall automatically apply in relation to as if it had been specified in sub-paragraph a) of paragraph 2 and in paragraph 6 of this Article. Interest arising in a Con- tracting State and paid to a resident of the other may be taxed in that other State. However, such interest may also be taxed in the in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the interest the tax so charged shall not exceed 10 per cent of the gross amount of the interest. Notwithstanding the provi- sions of paragraph 2 interest shall be taxable only in the where the recipient of the interest is a resident if one of the following requirements is fulfilled: a) the payer or the recipient of the interest is a itself, a political subdivision or a local authority thereof or the of a Contracting State; b) the interest is paid in respect of a loan granted or guaranteed by (), or () or any other institution of a public character with the objective to promote exports or development, if the credit is granted or guaranteed on preferential conditions. The term interest as used in this Article means income from debt-claims 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, in- cluding premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the interest, being a resident of a , on or has carried on business in the other in which the interest arises, through a permanent situated therein, or performs or has performed 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 or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. Interest shall be deemed to arise in a when the payer is a resident of that State. Where, however, the person paying the interest, whether he is a resident of a or not, has or had in a a per- manent 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 or fixed base, then such interest shall be deemed to arise in the State in which the permanent or fixed base is or was 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-claim for which it is 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 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 , due regard being had to the other provisions of this Convention. If in any convention for the avoidance of double taxation concluded by with a third State, being on the date hereof a member of (), would agree to exempt interest mentioned in paragraph 2 arising in from tax on interest or to limit the rate of tax provided in that paragraph, such exemption or lower rate shall automatically apply as if it had been specified in paragraph 2 of this Article. If in any such conven- tion were to agree to extend the exemptions referred to in paragraph 3 of this Article to interest paid in respect of loans granted by a bank or in respect of indebtedness arising on the sale on credit, by an enterprise of a , of any merchandise or industrial, com- mercial or scientific equipment to an enterprise of the other Con- tracting State, such exemptions shall automatically apply in relation to . Royalties arising in a Con- tracting State and paid to a resident of the other may be taxed in that other State. However, such royalties may also be taxed in the in which they arise and according to the laws of that State, but if the recipient is the beneficial owner of the royalties, the tax so charged shall not exceed 10 per cent of the gross amount of the royalties. In the case of royalties described in sub-paragraph b) of paragraph 3, the beneficial owner may elect to compute the tax on such income on a net basis as if such income were attributable to a permanent or fixed base in the in which the royalties arise. The term royalties as used in this Article means: a) 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 computer programs, video cassettes, and cinematograph films and tapes for radio and television broadcasting, any patent, trademark, design or model, plan, secret formula or process, or other like right or property, or for information concerning industrial, commercial, or scientific experi- ence; and b) payments for the use of, or the right to use, industrial, commercial, or scientific equipment. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a , on or has carried on business in the other in which the royalties arise, through a permanent situated therein, or performs or has performed in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. Royalties shall be deemed to arise in a when the payer is a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a or not, has or had in a a permanent or a fixed base in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent or fixed base, then such royalties shall be deemed to arise in the State in which the permanent or fixed base is or was 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, having regard to the use, right or information 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 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 , due regard being had to the other provisions of this Convention. If in any convention for the avoidance of double taxation concluded by with a third State, being on the date hereof a member of (), would agree to exempt any royalties mentioned in paragraph 2 arising in from tax on royalties or to limit the rate of tax provided in that paragraph, such exemption or lower rate shall automatically apply in relation to any such royalties as if it had been specified in this Article. Gains derived by a resident of a from the alienation of immovable property referred to in Article 6 and situated in the other may be taxed in that other State. Gains derived by a resident of a from the alienation of: a) shares, other than shares in which there is substantial and regular trading on an approved , deriving their value or the greater part of their value directly or indirectly from immovable property situated in the other , or b) an interest in a partnership the assets of which consist principally of immovable property situated in the other , or of shares referred to in sub-paragraph a) above, may be taxed in that other State. Gains from alienation of movable property forming part of the business property of a permanent which an enterprise of a has or had in the other or of movable property pertaining to a fixed base available to a resident of a in the other for the purpose of performing in- dependent personal services, in- cluding such gains from the alienation of such a permanent (alone or with the whole enterprise) or of such fixed base, may be taxed in that other State. Gains derived by a resident of a 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 . With respect to gains derived by the air transport consortium Scandi- navian (), the provisions of this paragraph shall apply only to such portion of the gains as corresponds to the partici- pation held in that consortium by AB Aerotransport (ABA), the Swe- dish partner of Scandinavian Air- lines System (SAS). Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3 and 4, shall be taxable only in the of which the alienator is a resident. Notwithstanding the provi- sions of paragraph 5, gains from the alienation of shares or other cor- porate rights of a company which is a resident of one of the Contracting States derived by an individual who has been a resident of that State and who has become a resident of the other , may be taxed in the first-mentioned State if the alienation of the shares or other corporate rights occur at any time during the ten years next following the date on which the individual has ceased to be a resident of the first- mentioned State. Income derived by an indi- vidual who is a resident of a in respect of professional services or other activities of an independent character shall be taxable only in that State unless he has or had a fixed base regularly available to him in the other for the purpose of performing his activities. If he has or had such a fixed base, the income may be taxed in the other State but only so much thereof as is or was attributable to that fixed base. The term professional ser- vices includes especially in- dependent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants. Subject to the provisions of Articles 16, 18, and 19, salaries, wages and other similar remu- neration derived by a resident of a in respect of an employment shall be taxable only in that State unless the employment is or was exercised in the other . If the employ- ment is or was so exercised, such remuneration as is derived there- from may be taxed in that other State. Notwithstanding the provi- sions of paragraph 1, remuneration derived by a resident of a Con- tracting State in respect of an employment exercised in the other be taxable only in the first-mentioned State if: a) the recipient is or was present in the other State for a period or periods not exceeding in the aggregate 183 days in any con- secutive 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 or a fixed base which the employer has or had in the other State. Notwithstanding the preceding provisions of this Article, remu- neration derived in respect of an employment exercised aboard a ship or aircraft operated in inter- national traffic by an enterprise of a may be taxed in that State. Where a resident of derives remuneration in respect of an employment exercised aboard an aircraft operated in international traffic by the air transport consortium (), such remuneration shall be taxable only in . Directors fees and other similar payments derived by a resident of a in his capacity as a member of the board of directors or similar organ of a company which is a resident of the other may be taxed in that other State. Notwithstanding the provi- sions of Articles 14 and 15, income derived by a resident of a Con- tracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsman, from his personal activities as such exercised in the other , may be taxed in that other State. Where income in respect of personal activities exercised by an entertainer or a sportsman in his capacity as such accrues not to the entertainer or sportsman himself but to another person, that income may, notwithstanding the pro- visions of Articles 7, 14 and 15, be taxed in the in which the activities of the enter- tainer or sportsman are exercised. Pensions, annuities and similar payments Pensions and other similar remuneration, disbursements under the social security legislation and annuities arising in a and paid to a resident of the other may be taxed in the first-mentioned Con- tracting State. The term annuity means a stated sum payable periodically at stated times 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. 1. a) Remuneration, other than a pension, paid by a or a political subdivision or a local authority thereof to an indi- vidual in respect of services render- ed to that State or subdivision or authority shall be taxable only in that State. b) However, such remuneration shall be taxable only in the other if the services are rendered in that other 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. The provisions of Articles 15 and 16 shall apply to remuneration in respect of services rendered in connection with a business carried on by a or a political subdivision or a local authority thereof. Payments which a student or trainee who is or was immediately before visiting a a resident of the other 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 training shall not be taxed in that State, provided that such payments arise from sources outside that State. Items of income of a resident of a , wherever arising, not dealt with in the foregoing Articles of this Con- vention 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 , on or has carried on business in the other through a permanent situated therein, or performs or has performed 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 or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. Elimination of double taxation In the case of , double taxation shall be avoided as follows: a) Where a resident of Kazakh- stan derives income which, in accordance with the provisions of this Convention, may be taxed in , allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in . Such deduction shall not, how- ever, exceed that part of the income tax, as computed before the de- duction is given, which is attribut- able, as the case may be, to the income which may be taxed in . b) Where a resident of Kazakh- stan derives income, which in accordance with the provisions of this Convention, shall be taxable only in , may include this income in the tax base but only for purposes of deter- mining the rate of tax on such other income as is taxable in . In the case of , double taxation shall be avoided as follows: a) Where a resident of derives income which under the laws of and in accord- ance with the provisions of this Convention may be taxed in , allow subject to the provisions of the laws of concerning credit for foreign tax (as it may be amended from time to time without changing the general principle hereof) as a deduction from the tax on such income, an amount equal to the tax paid in respect of such income. b) Where a resident of derives income which, in accordance with the provisions of this Convention, shall be taxable only in , may, when determining the graduated rate of Swedish tax, take into account the income which shall be taxable only in . c) Notwithstanding the provi- sions of sub-paragraph a) of this paragraph, dividends paid by a company which is a resident of to a company which is a resident of be exempt from Swedish tax according to the provisions of Swedish law governing the exemption of tax on dividends paid to Swedish com- panies by subsidiaries abroad. Nationals of a not be subjected in the other to any taxation or any requirement con- nected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. This provision shall, notwithstanding the provi- sions of Article 1, also apply to persons who are not residents of one or both of the Contracting States. The taxation on a permanent which an enterprise of a has in the other not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. Except where the provisions of paragraph 1 of Article 9, paragraph 7 of Article 11, or paragraph 6 of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a to a resident of the other , 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 Con- tracting State to a resident of the other , for the purpose of determining the taxable capital of such enterprise, be deductible under the same con- ditions as if they had been con- tracted to a resident of the first- mentioned State. Enterprises of a , the capital of which is or partly owned or controlled, directly or indirectly, by one or more residents of the other Con- tracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement con- nected 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. Nothing contained in this Article shall be construed as obliging either to grant to residents of the other any personal allowances, reliefs and reductions for tax purposes on account of civil status or family responsibilities which are granted to its residents. The provisions of this Article shall, notwithstanding the pro- visions of Article 2, apply to taxes of every kind and description. 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 Convention, he may, irre- spective of the remedies provided by the domestic law of those States, present his case to the competent authority of the of which he is a resident or, if his case comes under paragraph 1 of Article 23, to that of the 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 Convention. 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 com- petent authority of the other , with a view to the avoidance of taxation which is not in accordance with the Con- vention. agreement reached shall be implemented notwith- standing 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 application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention. The competent authorities of the Contracting States may commu- nicate with each other directly for the purpose of reaching an agree- ment in the sense of the preceding paragraphs. The competent authorities of the Contracting States shall ex- change such information as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Con- tracting States concerning taxes covered by the Convention, insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Article 1. in- formation received by a Con- tracting State shall be treated as secret in the same as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in re- spect of, or the determination of appeals in relation to, the taxes covered by the Convention. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. In no case shall the provisions of paragraph 1 be construed so as to impose on a 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 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 disclose any trade, business, industrial, commercial or pro- fessional secret or trade process, or information, the disclosure of which would be contrary to public policy (ordre public). Diplomatic missions and consular officers Nothing in this Convention shall affect the fiscal privileges of diplomatic missions and consular officers or employees of a consular under the general rules of international law or under the provisions of special agree- ments. Notwithstanding any other provisions of this Convention, where a) a company that is a resident of a derives its income primarily from other States (i) from activities such as bank- ing, , financing or insurance or (ii) from being the headquarters, co-ordination centre or similar entity providing administrative services or other support to a group of companies which carry on business primarily in other States; and b) except for the application of the method of elimination of double taxation normally applied by that State, such income would bear a significantly lower tax under the laws of that State than income from similar activities carried out within that State or from being the head- quarters, co-ordination centre or similar entity providing admini- strative services or other support to a group of companies which carry on business in that State, as the case may be, any provisions of this Convention conferring an exemption or a reduction of tax shall not apply to the income of such company and to the dividends paid by such com- pany.