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ARTICLE 11
INTEREST

 

1.          Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

 

2.         However, such interest may also be taxed in the Contracting State 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:

            a)         10 per cent of the gross amount of the interest if it is received

                         by a bank, an insurance company or any other financial

                         insitution;

            b)         25 per cent of the gross amount of the interest if it is received

                         by any other company.

            The  competent  authorities  of the Contracting States shall by mutual agreement settle the mode of application of these limitations.

 

3.         Notwithstanding the provisions of paragraph 2, interest arising in a Contracting state and paid to the Government of the other Contracting State or the  Central  Bank  of  that other State shall be exempt from tax in the first-mentioned State.

 

4.         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, including premiums and prizes attaching to such securities, bonds or debentures.  Penalty charges for late payment not be regarded as interest for the purpose of this Article.

 

5.         The  provisions  of  paragraphs  1  and  2 shall not apply if the beneficial  owner  of  the  interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State  independent  services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with

            a)         such permanent establishment or fixed base, or with   

            b)         sales or other business activities referred to under

                         paragraph 2 of Article 7. In  such cases the provisions of

                         Article 7 or Article 14, as the case  may be, shall apply.

 

 

6.          Interest shall be deemed to arise in a Contracting State when the  payer  is  that  State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the interest, whether he  is a resident of a Contracting State or not, has in a Contracting State a permanent  establishment  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 establishment or fixed base, then such interest shall be deemed to arise in the State in whcih the permanent establishment or fixed base is situated.

 

7.         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 only to the last-mentioned amount. In such case, the excess part of the payments shall  remain  taxable  according  to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

 

 

ARTICLE 12
ROYALTIES

1.         Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

 

2.         However, such royalties may also be taxed in the Contracting State 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  15  per  cent  of  the  gross  amount of the royalties. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation.

 

3.         The term "royalties" as used in this Article means payments of any kind  received as a Consideration for the alienation of, or the use of, or the right to use, any  copyright of literary, artistic or scientific work including, cinematograph films or films or tapes used for radio or television broadcasting, any patent, trademark, design or model, plan, secret formula or process, or for  the  use  of,  or  the right to use industrial, commercial, or scientific equipment, or for information concerning industrial, commercial, or scientific experience.

 

4.         The  provisions  of  paragraphs  1  and  2 shall not apply if the beneficial  owner  of  the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, or performs 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

            a)         such permanent establishment or fixed base, or with

            b)         sales or other business activities referred to under

                         paragraph  2 of Article 7.

            In  such cases the provisions of Article 7 or Article 14, as the case  may be, shall apply.  

5.         Royalties shall be deemed to arise in a Contracting State when the  payer  is  that  State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the royalties, whether he  is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to  pay  the  royalties  was  incurred,  and  such royalties are borne by such permanent establishment or fixed base, then such royalties shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.

 

6.         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 Contracting  State,  due  regard  being  had  to  the other provisions of this Convention.

 

 

ARTICLE 13 
GAINS FROM THE ALIENATION OF PROPERTY

1.         Gains  derived  by  a  resident  of  a Contracting State from the  alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.

 

2.         Gains from the alienation  of movable property forming part of the business  property  of  a  permanent  establishment  which  an enterprise of a Contracting  State  has  in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other  Contracting  State  for the purpose of performing independent personal services,  including  such  gains  from  the  alienation  of  such a permanent establishment (alone or with the whole enterprise) or of such fixed base, may be taxed in that other State.

 

3.         Gains  derived  by  an enterprise of a Contracting State 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 State.

 

4.         Gains from the alienation of any property other than that referred to in paragraphs 1,2 and 3 of this Article and paragraph 3 of Article 12, shall be taxable only in the Contracting State of which the alienator is a resident.

 

5.         Notwithstanding  the  provisions  of  paragraph 4, gains from the alienation  of  shares or similar rights in a company which is a resident of a Contracting State may be taxed in that state.

 

 

ARTICLE 14
INDEPENDENT PERSONAL SERVICES

1.         Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable  only  in  that State except in the following circumstances, when such income may also be taxed in the other Contracting State :

            a)         If he has a fixed base available to him in the other

                         Contracting State for the purpose of performing his activities;

                         in that case, only so much of the income as is attributable

                         too that fixed base may be taxed in that other State; or

            b)         If  his stay in the other Contracting state is for a period or

                         periods  amounting  to or exceeding in the aggregate 90

                         days within any twelve-month period; in that case, only so

                         much of the income as is derived from his activities

                         performed in that other State may be taxed in that other State;

                         or

            c)         If the remuneration for his activities in the other contracting

                        State is paid by a resident of that Contracting State or is

                        borne by a permanent establishment or a fixed base situated

                        in that Contracting State; in that case, only so much of the

                        remuneration as is derived therefrom may be taxed in that

                        other State.

 

2.          The  term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.

 

 

ARTICLE 15
DEPENDENT PERSONAL SERVICES

1.         Subject to the provisions of Articles 16,18,19,20 and 21 salaries, wages  and  other  similar  remuneration,  other  than a pension, derived by a resident  of  a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State.  If  the  employment  is  so exercised, such remuneration as is derived therefrom may be taxed in that other State.

 

2.         Notwithstanding the provisions of paragraph 1, remuneration derived by  a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if :

            a)         the  recipient  is  present in the other State for a period or

                         periods not exceeding in the aggregate 183 days within any

                         twelve-month period, 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 establishment

                         or a fixed base which the employer has in the other State.

 

3.          Notwithstanding   the  preceding  provisions  of  this  Article, remuneration  derived  in  respect of an employment exercised aboard a ship or aircraft  operated  in international traffic by an enterprise of a Contracting State shall be taxable only in that State. Where a resident of Sweden derives remuneration in respect of an employment exercised aboard an aircraft operated in international traffic by the air transport consortium Scandinavian Articles System (SAS), such remuneration shall be taxable only in Sweden.

 

 

Last updated: 08.12.2011