prop · H50361 · 2018-03-20 00:00:00 — 3.In the event that the competent authority of a Contracting Jurisdiction fails to appoint a member of the arbitration panel in the and within the time periods specified in paragraph 2 or agreed to by the competent authorities of the Contracting Jurisdictions, a member shall be appointed on behalf of that competent authority by the highest ranking official of of that is not a national of either Contracting Jurisdiction. 4.If the two initial members of the arbitration panel fail to appoint the Chair in the and within the time periods specified in paragraph 2 or agreed to by the competent authorities of the Contracting Jurisdictions, the Chair shall be appointed by the highest ranking official of of operation and Development that is not a national of either Contracting Jurisdiction. Article 21 – Confidentiality of Arbitration Proceedings Solely for the purposes of the application of the provisions of this Part and of the provisions of the relevant Covered Tax Agreement and of the domestic laws of the Contracting Jurisdictions related to the exchange of information, confidentiality, and administrative assistance, members of the arbitration panel and a maximum of three staff per member (and prospective arbitrators solely to the extent necessary to verify their ability to fulfil the requirements of arbitrators) shall be considered to be persons or authorities to whom information may be disclosed. received by the arbitration panel or prospective arbitrators and information that the competent authorities receive from the arbitration panel shall be considered information that is exchanged under the provisions of the Covered Tax Agreement related to the exchange of information and The competent authorities of the Contracting Jurisdictions shall ensure that members of the arbitration panel and their staff agree in writing, prior to their acting in an arbitration proceeding, to treat any information relating to the arbitration proceeding consistently with the confidentiality and nondisclosure obligations described in the provisions of the Covered Tax Agreement related to exchange of information and administrative assistance and under the applicable laws of the Contracting Article 22 – Resolution of a Case Prior to the Conclusion of the For the purposes of this Part and the provisions of the relevant Covered Agreement that provide for resolution of cases through mutual 2017/18:61 Bilaga 1 agreement, the mutual agreement procedure, as well as the arbitration proceeding, with respect to a case shall terminate if, at any time after a request for arbitration has been made and before the arbitration panel has delivered its decision to the competent authorities of the Contracting Jurisdictions: a)the competent authorities of the Contracting Jurisdictions reach a mutual agreement to resolve the case; or b)the person who presented the case withdraws the request for arbitration or the request for a mutual agreement procedure. Article 23 – Type of Arbitration Process Except to the extent that the competent authorities of the Contracting Jurisdictions mutually agree on different rules, the following rules shall apply with respect to an arbitration proceeding pursuant to this Part: After a case is submitted to arbitration, the competent authority of each Contracting Jurisdiction shall submit to the arbitration panel, by a date set by agreement, a proposed resolution which addresses all unresolved issue(s) in the case (taking into account all agreements previously reached in that case between the competent authorities of the Contracting Jurisdictions). The proposed resolution shall be limited to a disposition of specific monetary amounts (for example, of income or expense) or, where specified, the maximum rate of tax charged pursuant to the Covered Tax Agreement, for each adjustment or similar issue in the case. In a case in which the competent authorities of the Contracting Jurisdictions have been unable to reach agreement on an issue regarding the conditions for application of a provision of the relevant Covered Tax Agreement (hereinafter referred to as a “threshold question”), such as whether an individual is a resident or whether a permanent exists, the competent authorities may submit alternative proposed resolutions with respect to issues the determination of which is contingent on resolution of such threshold questions. The competent authority of each Contracting Jurisdiction may also submit a supporting position paper for consideration by the arbitration panel. authority that submits a proposed resolution or supporting position paper shall provide a copy to the other competent authority by the date on which the proposed resolution and supporting position paper were due. authority may also submit to the arbitration panel, by a date set by agreement, a reply submission with respect to the 2017/18:61 Bilaga 1 proposed resolution and supporting position paper submitted by the other competent authority. A copy of any reply submission shall be provided to the other competent authority by the date on which the reply submission was due. c)The arbitration panel shall select as its decision one of the proposed resolutions for the case submitted by the competent authorities with respect to each issue and any threshold questions, and shall not include a rationale or any other explanation of the decision. The arbitration decision will be adopted by a simple majority of the panel members. The arbitration panel shall deliver its decision in writing to the competent authorities of the Contracting Jurisdictions. The arbitration decision shall have no precedential value. 2.For the purpose of applying this Article with respect to its Covered Tax Agreements, a Party may reserve the right for paragraph 1 not to apply to its Covered Tax Agreements. In such a case, except to the extent that the competent authorities of the Contracting Jurisdictions mutually agree on different rules, the following rules shall apply with respect to an arbitration proceeding: a)After a case is submitted to arbitration, the competent authority of each Contracting Jurisdiction shall provide any information that may be necessary for the arbitration decision to all panel members without undue delay. Unless the competent authorities of the Contracting Jurisdictions agree otherwise, any information that was not available to both competent authorities before the request for arbitration was received by both of them shall not be taken into account for purposes of the decision. b)The arbitration panel shall decide the issues submitted to arbitration in accordance with the applicable provisions of the Covered Tax Agreement and, subject to these provisions, of those of the domestic laws of the Contracting Jurisdictions. The panel members shall also consider any other sources which the competent authorities of the Contracting Jurisdictions may by mutual agreement expressly identify. c)The arbitration decision shall be delivered to the competent authorities of the Contracting Jurisdictions in writing and shall indicate the sources of law relied upon and the reasoning which led to its result. The arbitration decision shall be adopted by a simple majority of the panel members. The arbitration decision shall have no precedential value. A Party that has not made the reservation described in paragraph 2 may reserve the right for the preceding paragraphs of this Article not to apply with respect to its Covered Tax Agreements with Parties that have made such a reservation. In such a case, the competent authorities of the Contracting Jurisdictions of each such Covered Tax Agreement shall endeavour to reach agreement on the type of arbitration process that shall apply with respect to that Covered Tax Agreement. agreement is reached, Article 19 (Mandatory Binding Arbitration) shall not apply with respect to such a Covered Tax Agreement. A Party may also choose to apply paragraph 5 with respect to its Covered Tax Agreements and shall notify the Depositary accordingly. Paragraph 5 shall apply in relation to two Contracting Jurisdictions with respect to a Covered Tax Agreement where either of the Contracting Jurisdictions has made such a notification. Prior to the beginning of arbitration proceedings, the competent authorities of the Contracting Jurisdictions to a Covered Tax Agreement shall ensure that each person that presented the case and their advisors agree in writing not to disclose to any other person any information received during the course of the arbitration proceedings from either competent authority or the arbitration panel. procedure under the Covered Tax Agreement, as well as the arbitration proceeding under this Part, with respect to the case shall terminate if, at any time after a request for arbitration has been made and before the arbitration panel has delivered its decision to the competent authorities of the Contracting Jurisdictions, a person that presented the case or one of that person’s advisors materially breaches that agreement. Notwithstanding paragraph 4, a Party that does not choose to apply paragraph 5 may reserve the right for paragraph 5 not to apply with respect to one or more identified Covered Tax Agreements or with respect to all of its Covered Tax Agreements. A Party that chooses to apply paragraph 5 may reserve the right for this Part not to apply with respect to all Covered Tax Agreements for which the other Contracting Jurisdiction makes a reservation pursuant to Article 24 – Agreement on a Different Resolution For purposes of applying this Part with respect to its Covered Tax Agreements, a Party may choose to apply paragraph 2 and shall notify the Paragraph 2 shall apply in relation to two Contracting Jurisdictions with respect to a Covered Tax Agreement only where both Contracting Jurisdictions have made such a notification. Notwithstanding paragraph 4 of Article 19 (Mandatory Binding Arbitration), an arbitration decision pursuant to this Part shall not be binding on the Contracting Jurisdictions to a Covered Tax Agreement and 2017/18:61 Bilaga 1 shall not be implemented if the competent authorities of the Contracting Jurisdictions agree on a different resolution of all unresolved issues within three calendar months after the arbitration decision has been delivered to them. A Party that chooses to apply paragraph 2 may reserve the right for paragraph 2 to apply only with respect to its Covered Tax Agreements for which paragraph 2 of Article 23 (Type of Arbitration Process) applies. Article 25 – Costs of Arbitration Proceedings In an arbitration proceeding under this Part, the fees and expenses of the members of the arbitration panel, as well as any costs incurred in connection with the arbitration proceedings by the Contracting Jurisdictions, shall be borne by the Contracting Jurisdictions in a to be settled by mutual agreement between the competent authorities of the Contracting Jurisdictions. In the absence of such agreement, each Contracting Jurisdiction shall bear its own expenses and those of its appointed panel member. The cost of the chair of the arbitration panel and other expenses associated with the conduct of the arbitration proceedings shall be borne by the Contracting Jurisdictions in equal shares. Article 26 – Compatibility 1.Subject to Article 18 (Choice to Apply Part VI), the provisions of this Part shall apply in place of or in the absence of provisions of a Covered Tax Agreement that provide for arbitration of unresolved issues arising from a mutual agreement procedure case. Each Party that chooses to apply this Part shall notify the Depositary of whether each of its Covered Tax Agreements, other than those that are within the scope of a reservation under paragraph 4, contains such a provision, and if so, the article and paragraph number of each such provision. Where two Contracting Jurisdictions have made a notification with respect to a provision of a Covered Tax Agreement, that provision shall be replaced by the provisions of this Part as between those Contracting Jurisdictions. 2.Any unresolved issue arising from a mutual agreement procedure case otherwise within the scope of the arbitration process provided for in this Part shall not be submitted to arbitration if the issue falls within the scope of a case with respect to which an arbitration panel or similar body has previously been set up in accordance with a bilateral or multilateral convention that provides for mandatory binding arbitration of unresolved issues arising from a mutual agreement procedure case. 3.Subject to paragraph 1, nothing in this Part shall affect the fulfilment of wider obligations with respect to the arbitration of unresolved issues arising in the context of a mutual agreement procedure resulting from other conventions to which the Contracting Jurisdictions are or will become parties. 2017/18:61 Bilaga 1 A Party may reserve the right for this Part not to apply with respect to one or more identified Covered Tax Agreements (or to all of its Covered Tax Agreements) that already provide for mandatory binding arbitration of unresolved issues arising from a mutual agreement procedure case. Article 27 – Signature and Ratification, Acceptance or Approval 1.As of , this Convention shall be open for signature by: a)all States; b)(the of and Northern ); (the of and Northern ); (the of and Northern ); and c)any other jurisdiction authorised to become a Party by means of a decision by consensus of the Parties and Signatories. 2.This Convention is subject to ratification, acceptance or approval. Article 28 – Reservations Subject to paragraph 2, no reservations may be made to this Convention except those expressly permitted by: a)Paragraph 5 of Article 3 (Transparent Entities); b)Paragraph 3 of Article 4 (Dual Resident ); c)Paragraphs 8 and 9 of Article 5 (Application of Methods for Elimination of Double Taxation); d)Paragraph 4 of Article 6 (Purpose of a Covered Tax Agreement); e)Paragraphs 15 and 16 of Article 7 (Prevention of Treaty Abuse); f)Paragraph 3 of Article 8 (Dividend Transfer Transactions); g)Paragraph 6 of Article 9 (Capital Gains from Alienation of Shares or Interests of Entities Deriving their Value Principally from Immovable Property); h)Paragraph 5 of Article 10 (Anti-abuse Rule for Permanent Situated in Third Jurisdictions); i)Paragraph 3 of Article 11 (Application of Tax Agreements to Restrict a Party’s to Tax its Own Residents); j)Paragraph 4 of Article 12 (Artificial Avoidance of Permanent Status through Commissionnaire Arrangements and Similar Strategies); k)Paragraph 6 of Article 13 (Artificial Avoidance of Permanent Status through the Specific Activity Exemptions); l)Paragraph 3 of Article 14 (Splitting-up of Contracts); m)Paragraph 2 of Article 15 (Definition of a Person Closely Related to an Enterprise); n)Paragraph 5 of Article 16 (Mutual Agreement Procedure); o)Paragraph 3 of Article 17 (Corresponding Adjustments); p)Paragraphs 11 and 12 of Article 19 (Mandatory Binding Arbitration); q)Paragraphs 2, 3, 6, and 7 of Article 23 (Type of Arbitration Process); r)Paragraph 3 of Article 24 (Agreement on a Different Resolution); s)Paragraph 4 of Article 26 (Compatibility); t)Paragraphs 6 and 7 of Article 35 (Entry into Effect); and u)Paragraph 2 of Article 36 (Entry into Effect of Part VI). 2.a) Notwithstanding paragraph 1, a Party that chooses under Article 18 (Choice to Apply Part VI) to apply Part VI (Arbitration) may formulate one or more reservations with respect to the scope of cases that shall be eligible for arbitration under the provisions of Part VI (Arbitration). For a Party which chooses under Article 18 (Choice to Apply Part VI) to apply Part VI (Arbitration) after it has become a Party to this Convention, reservations pursuant to this subparagraph shall be made at the same time as that Party’s notification to the Depositary pursuant to Article 18 (Choice to Apply Part VI). b)Reservations made under subparagraph a) are subject to acceptance. A reservation made under subparagraph a) shall be considered to have been accepted by a Party if it has not notified the Depositary that it objects to the reservation by the end of a period of twelve calendar months beginning on the date of notification of the reservation by the Depositary or by the date on which it deposits its instrument of ratification, acceptance, or approval, whichever is later. For a Party which chooses under Article 18 (Choice to Apply Part VI) to apply Part VI (Arbitration) after it has become a Party to this Convention, objections to prior reservations made by other Parties pursuant to subparagraph a) can be made at the time of the first-mentioned Party’s notification to the Depositary pursuant to Article 18 (Choice to Apply Part VI). Where a Party raises an objection to a reservation made under subparagraph a), the entirety of Part VI (Arbitration) shall not apply as between the objecting Party and the reserving Party. 3.Unless explicitly provided otherwise in the relevant provisions of this Convention, a reservation made in accordance with paragraph 1 or 2 shall: a)modify for the reserving Party in its relations with another Party the provisions of this Convention to which the reservation relates to the extent of the reservation; and b)modify those provisions to the same extent for the other Party in its relations with the reserving Party. 4.Reservations applicable to Covered Tax Agreements entered into by or on behalf of a jurisdiction or territory for whose international relations a Party is responsible, where that jurisdiction or territory is not a Party to the Convention pursuant to subparagraph b) or c) of paragraph 1 of Article 27 (Signature and Ratification, Acceptance or Approval), shall be made by the responsible Party and can be different from the reservations made by that Party for its own Covered Tax Agreements. 5.Reservations shall be made at the time of signature or when depositing the instrument of ratification, acceptance or approval, subject to the provisions of paragraphs 2, 6 and 9 of this Article, and paragraph 5 of Article 29 (Notifications). However, for a Party which chooses under Article 18 (Choice to Apply Part VI) to apply Part VI (Arbitration) after it has become a Party to this Convention, reservations described in subparagraphs p), q), r) and s) of paragraph 1 of this Article shall be made at the same time as that Party’s notification to the Depositary pursuant to Article 18 (Choice to Apply Part VI). 2017/18:61 Bilaga 1 If reservations are made at the time of signature, they shall be confirmed upon deposit of the instrument of ratification, acceptance or approval, unless the document containing the reservations explicitly specifies that it is to be considered definitive, subject to the provisions of paragraphs 2, 5 and 9 of this Article, and paragraph 5 of Article 29 (Notifications). If reservations are not made at the time of signature, a provisional list of expected reservations shall be provided to the Depositary at that time. For reservations made pursuant to each of the following provisions, a list of agreements notified pursuant to ii) of subparagraph a) of paragraph 1 of Article 2 (Interpretation of Terms) that are within the scope of the reservation as defined in the relevant provision (and, in the case of a reservation under any of the following provisions other than those listed in subparagraphs c), d) and n), the article and paragraph number of each relevant provision) must be provided when such reservations are made: Subparagraphs b), c), d), e) and g) of paragraph 5 of Article 3 (Transparent Entities); Subparagraphs b), c) and d) of paragraph 3 of Article 4 (Dual Resident ); Paragraphs 8 and 9 of Article 5 (Application of Methods for Elimination of Double Taxation); Paragraph 4 of Article 6 (Purpose of a Covered Tax Subparagraphs b) and c) of paragraph 15 of Article 7 (Prevention of Treaty Abuse); i), ii), and iii) of subparagraph b) of paragraph 3 of Article 8 (Dividend Transfer Transactions); Subparagraphs d), e) and f) of paragraph 6 of Article 9 (Capital Gains from Alienation of Shares or Interests of Entities Deriving their Value Principally from Immovable Subparagraphs b) and c) of paragraph 5 of Article 10 (Anti- abuse Rule for Permanent Situated in Third Subparagraph b) of paragraph 3 of Article 11 (Application of Tax Agreements to Restrict a Party’s to Tax its Own Residents); j)Subparagraph b) of paragraph 6 of Article 13 (Artificial Avoidance of Permanent Status through the Specific Activity Exemptions); k)Subparagraph b) of paragraph 3 of Article 14 (Splitting-up of Contracts); l)Subparagraph b) of paragraph 5 of Article 16 (Mutual Agreement Procedure); m)Subparagraph a) of paragraph 3 of Article 17 (Corresponding Adjustments); n)Paragraph 6 of Article 23 (Type of Arbitration Process); and o)Paragraph 4 of Article 26 (Compatibility). The reservations described in subparagraphs a) through o) above shall not apply to any Covered Tax Agreement that is not included on the list described in this paragraph. which has made a reservation in accordance with paragraph 1 or 2 may at any time withdraw it or replace it with a more limited reservation by means of a notification addressed to the Depositary. Such Party shall make any additional notifications pursuant to paragraph 6 of Article 29 (Notifications) which may be required as a result of the withdrawal or replacement of the reservation. Subject to paragraph 7 of Article 35 (Entry into Effect), the withdrawal or replacement shall take effect: a)with respect to a Covered Tax Agreement solely with States or jurisdictions that are Parties to the Convention when the notification of withdrawal or replacement of the reservation is received by the Depositary: i)for reservations in respect of provisions relating to taxes withheld at source, where the event giving rise to such taxes occurs on or after 1 next following the expiration of a period of six calendar months beginning on the date of the communication by the Depositary of the notification of withdrawal or replacement of the reservation; and ii)for reservations in respect of all other provisions, for taxes levied with respect to taxable periods beginning on or after 1 next following the expiration of a period of six calendar months beginning on the date of the communication 2017/18:61 Bilaga 1 by the Depositary of the notification of withdrawal or replacement of the reservation; and b)with respect to a Covered Tax Agreement for which one or more Contracting Jurisdictions becomes a Party to this Convention after the date of receipt by the Depositary of the notification of withdrawal or replacement: on the latest of the dates on which the Convention enters into force for those Contracting Jurisdictions. Article 29 – Notifications Subject to paragraphs 5 and 6 of this Article, and paragraph 7 of Article 35 (Entry into Effect), notifications pursuant to the following provisions shall be made at the time of signature or when depositing the instrument of ratification, acceptance or approval: a)ii) of subparagraph a) of paragraph 1 of Article 2 (Interpretation of Terms); b)Paragraph 6 of Article 3 (Transparent Entities); c)Paragraph 4 of Article 4 (Dual Resident ); d)Paragraph 10 of Article 5 (Application of Methods for Elimination of Double Taxation); e)Paragraphs 5 and 6 of Article 6 (Purpose of a Covered Tax Agreement); f)Paragraph 17 of Article 7 (Prevention of Treaty Abuse); g)Paragraph 4 of Article 8 (Dividend Transfer Transactions); h)Paragraphs 7 and 8 of Article 9 (Capital Gains from Alienation of Shares or Interests of Entities Deriving their Value Principally from Immovable Property); i)Paragraph 6 of Article 10 (Anti-abuse Rule for Permanent Situated in Third Jurisdictions); j)Paragraph 4 of Article 11 (Application of Tax Agreements to Restrict a Party’s to Tax its Own Residents);