INCOME TAX ACT: INDEX TO SUBSIDIARY LEGISLATION

Agreements for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income were concluded between the Government of the former Union of South Africa and the Government of the former Federation on the 22nd May, 1956, and on the 30th October, 1959, incorporating the terms set out in Schedules I and II respectively.

SCHEDULE I

AGREEMENT BETWEEN THE GOVERNMENT OF THE UNION OF SOUTH AFRICA AND THE GOVERNMENT OF THE FEDERATION OF RHODESIA AND NYASALAND FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

The Government of the Union of South Africa and the Government of the Federation of Rhodesia and Nyasaland desiring to conclude an agreement for the avoidance of double taxation and the prevention of fiscal evasion in respect of taxes on income, have agreed as follows:

ARTICLE I

1. The taxes which are the subject of the present Agreement are:

(a) in the Union of South Africa: the normal tax and supertax (hereinafter referred to as “Union tax”);

(b) in the Federation of Rhodesia and Nyasaland: the Federal income tax and supertax (hereinafter referred to as “Federal tax”).

2. The present Agreement shall also apply to any other taxes of a substantially similar character imposed by either Contracting Government subsequently to the date of signature of the present Agreement.

ARTICLE II

1. In this Agreement, unless the context otherwise requires—

(a) “Union” means the Union of South Africa;

(b) “the Federation” means the Federation of Rhodesia and Nyasaland;

(c) “one of the territories” and “the other territory” mean the Union of South Africa or the Federation of Rhodesia and Nyasaland as the case may be;

(d) “tax” means Union or Federal tax, as the case may be;

(e) “person” includes any body of persons, corporate or not corporate;

(f) “company” includes any body corporate;

(g) “resident of the Union” and “resident of the Federation” mean respectively any person who is ordinarily resident in the Union for the purposes of the Union tax and not ordinarily resident in the Federation for the purposes of the Federal tax and any person who is ordinarily resident in the Federation for the purposes of the Federal tax and not ordinarily resident in the Union for the purposes of the Union tax; and a company shall be regarded as ordinarily resident in the Union if its business is managed and controlled in the Union and ordinarily resident in the Federation if its business is managed and controlled in the Federation;

(h) “company of one of the territories” and “company of the other territory” means a company which is a resident of the Union of a company which is a resident of the Federation, as the case may be;

(i) “Union enterprise” and “Federal enterprise” mean respectively an industrial or commercial enterprise or undertaking carried on by a resident of the Union and an industrial or commercial enterprise or undertaking carried on by a resident of the Federation; and

“enterprise of one of the territories” and “enterprise of the other territory” means a Union enterprise or a Federal enterprise, as the context requires;

(j) “industrial or commercial enterprise or undertaking” includes an enterprise or undertaking engaged in mining, agricultural or pastoral activities or in the business of banking, insurance or dealing in investments, and

“industrial or commercial profits” includes profits from such activities or business but does not include income in the form of dividends, interest, rents, royalties (including rent or royalties of cinematograph films), management charges, remuneration for personal services or profits from the operation of transport services;

(k) “permanent establishment” when used with respect to an enterprise of one of the territories means a branch, depot, management, factory, farm, mine, quarry or other fixed place of business including any place of natural resources subject to exploitation and a place where construction work or the installation of plant or machinery is carried on but does not include any agency unless the agent has, and habitually exercises, a General authority to negotiate and conclude contracts on behalf of the enterprise or has a stock of merchandise from which he regularly fills orders on its behalf. In this connection—

(i) an enterprise of one of the territories shall not be deemed to have a permanent establishment in the other territory merely because it carries on business dealings in that other territory through a bona fide broker or General commission agent acting in the ordinary course of his business as such;

(ii) the fact that an enterprise of one of the territories maintains in the other territory a fixed place of business exclusively for the purchase of goods or merchandise shall not of itself constitute that fixed place of business a permanent establishment of the enterprise;

(iii) the fact that a company which is resident in one of the territories has a subsidiary company which is a resident of the other territory or which is engaged in trade or business in that other territory (whether through a permanent establishment or otherwise) shall not of itself constitute that subsidiary company a permanent establishment of its parent company;

(I) “profits” means “taxable income” as defined under the Laws of the Contracting Governments relating to the taxes which are the subject of this Agreement;

(m) “taxation authorities” means the Commissioner-General for Inland Revenue or his authorised representative in the case of the Union and the Commissioner-General of Taxes or his authorised representative in the case of the Federation.

2. “Union tax” and “Federal tax” do not include any sum payable in respect of any default or omission in relation to the taxes which are the subject to this Agreement or which represents a penalty imposed under the Law of either territory relating to those taxes.

3. In the application of the provisions of the present Agreement by one of the Contracting Governments any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the Laws of that Contracting Government relating to the taxes which are the subject of the present Agreement.

ARTICLE III

1. The industrial and commercial profits of an enterprise in one of the territories shall not be subject to tax in the other territory unless the enterprise is engaged in trade or business in the other territory through a permanent establishment in that other territory. If it is so engaged tax may be imposed on those profits by the other territory but only on so much of them as it is attributable to that permanent establishment.

2. Where an enterprise of one of the territories is engaged in trade or business in the other territory through a permanent establishment situated therein—

(a) there shall be attributed to that permanent establishment the industrial or commercial profits which it might be expected to derive in that other territory if it were an independent enterprise engaged in the same or similar activities under the same or similar conditions and dealing at arm’s Length with the enterprise of which it is a permanent establishment;

(b) subject to the provisions of sub-paragraph (a), no profits derived from sources outside that other territory shall be attributed to that permanent establishment.

3. No portion of any profits arising from the sale of goods or merchandise by an enterprise of one of the territories shall be attributed to a permanent establishment situated in the other territory by reason of the mere purchase of the goods or merchandise within that other territory.

4. This Article shall not apply in any case in which its application would have the result that income, which but for such application would be subject to tax in one of the territories, would not be subject to tax in either territory.

ARTICLE IV

Where—

(a) an enterprise of one of the territories participates directly or indirectly in the management, control or capital of an enterprise of the other territory; or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the territories and an enterprise of the other territory; and

(c) 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 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 profits of that enterprise and taxed accordingly.

ARTICLE V

Profits derived by the Government of or by a resident of one of the territories from operating transport services in the other territory shall be exempt from tax in that other territory.

ARTICLE VI

Any royalty, rent (including rent or royalties of cinematograph films) or other consideration received by or accrued to a resident of one of the territories by virtue of the use in the other territory of, or the grant of permission to use in that other territory any patent, design, trade mark, copyright, secret process, formula or any other property of a similar nature shall be exempt from tax in that first-mentioned territory if such royalty, rent or other consideration is subject to tax in the other territory.

ARTICLE VII

1. Any pension (other than a pension paid by the Government of the Union for services rendered to it in the discharge of governmental functions) and any annuity, derived or deemed to have been derived from sources within the Union by an individual who is a resident of the Federation, shall be exempt from Union tax to the extent that it is included in income for Federal tax purposes.

2. Any pension (other than a pension paid by the Government of the Federation for services rendered to it in the discharge of governmental functions) and any annuity, derived or deemed to have been derived from sources within the Federation by an individual who is a resident of the Union, shall be exempt from Federal tax to the extent that it is included in income for Union tax purposes.

3. 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 consideration of money paid.

ARTICLE VIII

1. Remuneration (other than pensions) paid by one of the Contracting Governments to any individual for services rendered to that Contracting Government in the discharge of governmental functions shall be exempt from tax in the territory of the other Contracting Government if the individual is not ordinarily resident in that territory or is ordinarily resident in that territory solely for the purpose of rendering those services.

2. Any pension paid by one of the Contracting Governments to any individual for services rendered to that Contracting Government in the discharge of governmental functions shall be exempt from tax in the territory of the other Contracting Government, if immediately prior to the cessation of those services the remuneration thereof was exempt from tax in that territory, whether under paragraph 1 of this Article or otherwise, or would have been exempt under that paragraph if the present Agreement had been in force at the time the remuneration was paid.

3. The provisions of this Article shall not apply to payments in respect of services rendered in connection with any trade or business carried on by either of the Contracting Governments for purposes of profit.

4. For the purposes of this Article the term “Contracting Government” where it applies to the Government of the Federation of Rhodesia and Nyasaland includes the Governments of the Territories constituting the Federation.

ARTICLE IX

1. An individual who is a resident of the Union shall be exempt from Federal Tax on profits or remuneration in respect of personal (including professional) services performed within the Federation in any year of assessment if—

(a) he is present within the Federation for a period or periods not exceeding in the aggregate 183 days during that year; and

(b) the services are performed for or on behalf of a person resident in the Union; and

2. An individual who is a resident of the Federation shall be exempt from Union tax on profits or remuneration in respect of personal (including professional) services performed within the Union in any year of assessment if—

(a) he is present within the Union for a period or periods not exceeding in the aggregate 183 days during that year; and

(b) the services are performed for or on behalf of a person resident in the Federation; and

3. The provisions of this Article shall not apply to the profits or remuneration of public entertainers such as stage, motion picture or radio artists, musicians and athletes.

ARTICLE X

The remuneration derived by a professor or teacher who is ordinarily resident in one of the territories, for teaching, during a period of temporary residence not exceeding two years, at a university, college, school or other educational institution in the other territory, shall be exempt from tax in that other territory if such remuneration is subject to tax in such first-mentioned territory.

ARTICLE XI

A student or business apprentice from one of the territories who is receiving full-time education or training in the other territory shall be exempt from tax in that other territory on payments made to him by persons in the first-mentioned territory for the purposes of his maintenance, education or training.

ARTICLE XII

1. Subject to the provisions of the Law in the Federation regarding the allowance of a credit against Federal tax of tax payable in the Union, Union tax payable in respect of profits from sources within the Union shall be allowed as a credit against any Federal tax payable in respect of such profits.

2. Where Federal tax is payable in respect of profits derived from sources within the Federation by a person ordinarily resident in the Union, the Union shall either impose no tax on such profits or, subject to such provisions (which shall not affect the General principle hereof) as may be enacted in the Union, shall allow the Federal tax as a credit against any Union tax payable in respect of such profits.

3. For the purposes of this Article profits or remuneration for personal (including professional) services performed in one of the territories shall be deemed to be profits from sources within that territory, and the services of an individual whose services are wholly or mainly performed in aircraft or other transport vehicles operated by a resident of one of the territories shall be deemed to be performed in that territory.

4. Where interest is derived by any person from a person (hereinafter referred to as the debtor) who is ordinarily resident in one of the territories and the interest would, but for the provisions of this paragraph, be subject to tax in both territories, that interest shall be subject to tax only in the territory in which the debtor is ordinarily resident;

Provided that if the debtor is ordinarily resident in both territories, the interest shall be subject to tax only in the territory in which that interest is allowable as a deduction in the determination of the debtor’s taxable income.

ARTICLE XIII

The taxation authorities of the Contracting Governments shall exchange such information (being information available under the respective taxation Laws of the Contracting Governments) as is necessary for carrying out the provisions of the present Agreement or for the prevention of fraud or the administration of statutory provisions against legal avoidance in relation to the taxes which are the subject of the present Agreement. Any information so exchanged shall be treated as secret and shall not be disclosed to any persons other than those concerned with the assessment and collection of the taxes which are the subject of the present Agreement. No information shall be exchanged which would disclose any trade secret or trade process.

ARTICLE XIV

The present Agreement shall come into force on the date on which the last of all such things shall have been done in both territories as are necessary to give the Agreement the force of Law in each territory and shall thereupon have effect—

(a) in the Union, in respect of assessments for the year of assessment ended on the thirtieth day of June, 1954, and subsequent years;

(b) in the Federation, in respect of assessments for the year of assessment ended on the thirty-first day of March, 1954, and subsequent years.

ARTICLE XV

The present Agreement shall continue in effect indefinitely, but either of the Contracting Governments may, on or before the thirtieth day of September in any calendar year after the year 1956, give notice of termination to the other Contracting Government and, in such event, the present Agreement shall cease to be effective—

(a) in the Union, in respect of any year of assessment beginning on or after the first day of July in the calendar year next following that in which such notice is given;

(b) in the Federation, in respect of any year of assessment beginning on or after the first day of April in the calendar year next following that in which such notice is given.

In witness whereof the undersigned Plenipotentiaries, being authorised thereto by their respective Governments, have signed this Agreement and have affixed thereto their seals.

Done in duplicate in the English and Afrikaans languages, at Cape Town this twenty-second day of May, 1956.

ERIC H. LOUW,

For the Government of the Union of South Africa. A.D. CHATAWAY,

For the Government of the Federation of Rhodesia and Nyasaland.

SCHEDULE II

NOTE FROM THE HIGH COMMISSIONER-GENERAL FOR THE FEDERATION IN THE UNION OF SOUTH AFRICA TO THE SECRETARY FOR EXTERNAL AFFAIRS OF THE UNION OF SOUTH AFRICA.

P4/2

30th October, 1959. Sir,

I have the honour to refer to discussions which have taken place between officials of our two Governments and to propose that the Agreement of the 22nd May, 1956, concluded in the English and Afrikaans languages between the Government of the Union of South Africa and the Government of the Federation of Rhodesia and Nyasaland for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income be amended in respect of the English text by insertion in Article XII, after paragraph 3, of the following paragraph, the existing paragraph 4 thereby becoming paragraph 5:

“4. Any provision in any Law whereby interest is deemed to be derived from a source within one of the territories by virtue of the ordinary residence in that territory of the person from whom the interest is derived shall not be applied in relation to interest which is payable to a person who resides in the other territory, if such interest is subject to tax in that other territory.”

In the event of the above proposal being acceptable to you I have the honour to propose that this note and your confirmatory reply be regarded as constituting an agreement between our two Governments which shall have effect—

(a) in the Union of South Africa, in respect of the year of assessment beginning on or after the first day of July, 1957; and

(b) in the Federation of Rhodesia and Nyasaland, in respect of the year of assessment beginning on or after the first day of April, 1957.

I have the honour to be, Sir,

Your obedient Servant, J.W. MONTAGUE FITT,

High Commissioner-General for the Federation of Rhodesia and Nyasaland. The Secretary for External Affairs of the Union of South Africa, Pretoria.

NOTE FROM THE SECRETARY FOR EXTERNAL AFFAIRS OF THE UNION OF SOUTH AFRICA TO THE HIGH COMMISSIONER-GENERAL FOR THE FEDERATION IN THE UNION OF SOUTH AFRICA.

41/1/37

Pretoria.

30th October, 1959. Sir,

I have the honour to acknowledge receipt of your Note, No. P4/2 of today’s date reading as follows:

“I have the honour to refer to discussions which have taken place between officials of our two Governments and to propose that the Agreement of the 22nd May, 1956, concluded in the English and Afrikaans languages between the Government of the Union of South Africa and the Government of the Federation of Rhodesia and Nyasaland for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income be amended in respect of the English text by insertion in Article XII, after paragraph 3, of the following paragraph, the existing paragraph 4 thereby becoming paragraph 5:

(a) in the Union of South Africa, in respect of the year of assessment beginning on or after the first day of July, 1957; and

(b) in the Federation of Rhodesia and Nyasaland, in respect of the year of assessment beginning on or after the first day of April, 1957.”

In reply thereto, I have the honour to state that the Government of the Union of South Africa are in agreement with the foregoing provisions and that your Note and this confirmatory reply shall be regarded as constituting an agreement between our two Governments.

I have the honour to be, Sir,

Your obedient servant, G.P. JOOSTE,

Secretary for External Affairs. J.W.M. Fitt, Esq., O.B.E.,

High Commissioner-General for the Federation of Rhodesia and Nyasaland,

Pretoria.

CONVENTION FOR THE AVOIDANCE OF DOUBLE TAXATION-FRANCE

GN 370 of 1963,

GN 514 of 1964.

An arrangement has been made with the Government of the United Kingdom of Great Britain and Northern Ireland whereby the Convention between that Government and the Government of the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income has been extended to the former Protectorate by and incorporating the terms of the exchange of notes set out in the Schedule.

SCHEDULE

EXCHANGE OF NOTES BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE GOVERNMENT OF THE FRENCH REPUBLIC EXTENDING TO THE FEDERATION OF RHODESIA AND NYASALAND THE CONVENTION FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME SIGNED AT PARIS ON DECEMBER 14, 1950.

No. 1

Her Majesty’s Ambassador at Paris to the Minister for Foreign Affairs of the French Republic British Embassy, Paris, November 5, 1963. Monsieur le Minister, With reference to the Convention between the United Kingdom of Great Britain and Northern Ireland and France for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, signed at Paris on the 14th of December, 1950, I have the honour to propose on behalf of the Government of the United Kingdom that, in accordance with the provisions of Article XXIII, the above-mentioned Convention should be extended to the Federation of Rhodesia and Nyasaland in the manner, subject to the modifications, and with effect from the dates specified in the Annex to the present Note. By a further Exchange of Notes dates December 31, 1963, it was agreed with the French Ministry of Foreign Affairs that this extension should be regarded as continuing in force in relation to Southern Rhodesia, Northern Rhodesia and Nyasaland individually on the dissolution of the Federation and that references therein to the Federation should be construed accordingly.*

If the foregoing proposal is acceptable to the French Government, I have the honour to suggest that the present Note with its Annex, and Your Excellency’s reply to that effect, should be regarded as constituting the Agreement reached between the two Governments in this matter.

I avail, etc.,

PIERSON DIXON.

ANNEX

I. APPLICATION

(1) The Convention of the 14th December, 1950, as modified by the present Annex shall apply—

(a) as if the Contracting Parties were the Government of France and the Government of the Federation of Rhodesia and Nyasaland;

(b) as if the term “United Kingdom” (except where the context otherwise required) meant the Federation of Rhodesia and Nyasaland; and

(c) as if the taxes concerned in the Federation of Rhodesia and Nyasaland were the Income Tax, Supertax and Undistributed Profits Tax.

(2) When the last of those measures shall have been taken in France and in the Federation of Rhodesia and Nyasaland necessary to give the present extension the force of law in France and in the Federation the present extension shall have effect—(2) By a notification dated December 17, 1963, the French Government informed the United Kingdom Government that these measures had been taken in France.

By a similar notification dated December 31, 1963, the United Kingdom Government informed the French Government that the necessary measures were taken in the Federation of Rhodesia and Nyasaland on December 9, 1963.

(a) in France as respects taxes charged in respect of the year 1962 and subsequent years;

(b) in the Federation of Rhodesia and Nyasaland as respects tax on the profits derived from operating ships or aircraft, for the year of assessment beginning on the 1st April, 1953, and for subsequent year of assessment, and, as respects tax on all other income, for the year of assessment beginning on the 1st April, 1962, and for subsequent years of assessment.*

(3) The French Government shall inform the Government of the United Kingdom in writing when the last of the measures necessary, as indicated in paragraph (2), have been taken in France. The Government of the United Kingdom shall inform the French Government in writing when the last of the measures necessary, as indicated in paragraph (2), have been taken in the Federation of Rhodesia and Nyasaland.

(4) The present extension shall remain in force indefinitely but either of the Contracting Parties may, on or before the 30th June in any calendar year not earlier than the year 1966, give to the other Contracting Party through the diplomatic channel written notice of termination and in such event the present extension shall cease to have effect—

(a) in France as respects taxes charged in respect of any year following the calendar year during which the notice is given;

(b) in the Federation of Rhodesia and Nyasaland as respects tax for any year of assessment beginning on or after the 1st April in the calendar year next following the date of such notice.

II. MODIFICATIONS

The Convention of the 14th December, 1950, shall apply with the modifications that—

(1) the words “shall be exempt from United Kingdom surtax” in Article IX shall be understood as though they read “shall not be Liable to tax in the Federation of Rhodesia and Nyasaland at a rate in excess of the rate applicable to a company”; and

(2) Article XIII shall apply to remuneration, including pensions, paid by or out of funds created by the Government of each of the Territories constituting the Federation, to any individual in respect of services rendered to that Government in the discharge of governmental functions as it applies to similar payments by or out of funds created by the Government of the Federation.

No. 2

The Minister for Foreign Affairs of the French Republic to Her Majesty’s Ambassador at Paris

Paris, le 5 November, 1963.

Monsieur l’Ambassadeur,

Par lettre en date de ce jour accompagnée de son annexe dont la traduction figure ci-apr s, vous avez bien voulu me faire savoir ce qui suit:

“Me référant ˆ la convention entre le Royaume-Uni de Grande-Bretagne et d’Irlande du Nord et la France tendant ˆ éviter la double imposition et ˆ prévenir l’évasion fiscale en matiere d’imp(tm)t sur le revenu, signée ˆ Paris le 14 décembre 1950, j’ai l’honneur, au nom du Gouvernement du Royaume-Uni, de proposer, conformément aux dispositions de son Article XXIII, que les dispositions en soient étendues ˆ la Fédération de Rhodésie et du Nyassaland, conformément é l’Annexe é la prˆsente Lettre et sous réserve des modifications et é compter des dates qui y sont indiquées.

(1) By a notification dated December 17, 1963, the French Government informed the United Kingdom Government that these measures had been taken in France.

Pour Ie cas o- cette proposition agréerait au Gouvernement francais, je suggU re que la présente Lettre accompagnée de son annexe, et la réponse de Votre Excellence soient reputees constituer l’Accord intervenu entre les deux Gouvernements en cette matiˆre.

ANNEXE

I. APPLICATION

(1) La Convention du 14 décembre 1950, telle qu’elle est modifiée par la présente annexe, sera applicable:

(a) comme si les Parties Contractantes étaient le Gouvernement francais et le Gouvernement de la Fédération de Rhodésie et du Nyassaland;

(b) comme si le terme “Royaume-Uni”, ˆ moins que le contexte ne l’exige autrement, désignait la Fédération de Rhodésie et du Nyassaland;

(c) comme si les imp(tm)ts visés dans la Fédération de Rhodésie et du Nyassaland étaient l’imp(tm)t sur le revenu, la supertaxe et l’imp(tm)t sur les bénéfices non distribués.

(2) Lorsque toutes les mesures nécessaires pour donner ˆ la présente extension force de loi en France et dans la Fédération auront été prises en France et dans la Fédération de Rhodésie et du Nyassaland, la présente extension produira ses effets:

(a) en France, pour l’établissement des imp(tm)ts exigibles au titre de l’année 1962 et des années subséquentes, et

(b) dans la Fédération de Rhodésie et du Nyassaland:

-en ce qui concerne l’établissement des imp(tm)ts frappant les bénéfices provenant de l’exploitation de navires ou d’aéronefs, pour l’année d’imposition commencant le ler avril 1953, ainsi que pour les années d’imposition subséquentes.

-en ce qui concerne l’établissement des imp(tm)ts frappant tous les autres revenus, pour l’année d’imposition commencant le ler avril 1962 ainsi que pour les années d’imposition subséquentes.

(3) Le Gouvernement francais informera par écrit le Gouvernement du Royaume-Uni lorsque toutes les mesures nécessaires visées au paragraphe (2) auront été prises en France. Le Gouvernement du Royaume-Uni informera par écrit le Gouvernement francais lorsque toutes les mesures nécessaires visées au paragraphe (2), auront été prises dans la Fédération de Rhodésie et du Nyassaland.

(4) La présente extension demeurera en vigueur sans limitation de durée mais l’une ou l’autre des Parties Contractantes pourra, ˆ partir de 1966, et au plus tard le 30 juin de chaque année civile, notifier par écrit ˆ l’autre Partie Contractante, par la voie diplomatique, qu’elle y met fin. Dans ce cas, la présente extension cessera d’avoir effet:

(a) en France, pour L’établissement des imp(tm)ts afférents aux années postérieures ˆ l’année civile au cours de laquelle la notification sera intervenue;

(b) dans la Fédération de Rhodésie et du Nyassaland, pour l’établissement de l’imp(tm)t afférent aux années d’imposition commencant le ler avril ou aprés le ler avril de l’année civile suivant immédiatement Ia date d’une telle notification.

II. MODIFICATIONS

La Convention du 14 décembre 1950 sopliquera avec les modifications suivantes:

(1) Les termes “sont exempts de la surtaxe du Royaume-Uni” figurant ˆ l’Article IX de la Convention seront interprétés comme significant “ne sont pas passibles de l’imp(tm)t ans la Fédération de Rhodésie et du Nyassaland ˆ un taux supér ur ˆ celui qui st applicable ˆ une société’; et

(2) l’Article XIII sera applicable aux rémunérations y compris les pensions, versées par le Gouvernement de chacun des territories constituant la Fédération on sur des fonds créés par le Gouvernement de chacun desdits territories, ˆ toute personne en contrepartie de services rendus audit Gouvernement dans l’exercise de fonctions officielles, de mˆme qu’il s’applique aux payements similaires effectués par le Gouvernement de la Fédération ou sur des fonds créés par ledit Gouvernement.”

J’ai l’honneur de porter ˆ la connaissance de Votre Excellence que les termes de la Lettre qui précéde et de son annexe recontrent l’agrément du Gouvernement francais. Celle-ci et al présente réponse constituent l’accord recherché par nos deux Gouvernements.

Veuillez agréer, etc.,

FR. LEDUC.

(Translation of No. 2) Paris, November 5, 1963. Monsieur l’Ambassadeur, By a letter of today’s date accompanied by an annex, the translation of which is given below, you have informed me as follows:

(As in No. 1)

I have the honour to inform Your Excellency that the terms of the preceding letter and its Annex are acceptable to the French Government and together with this reply constitute an Agreement between our two Governments.

Please accept, etc.,

FR. LEDUC.

ANNEXURE

CONVENTION BETWEEN HIS MAJESTY IN RESPECT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE PRESIDENT OF THE FRENCH REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME.

His Majesty the King of Great Britain, Ireland and the British Dominions beyond the Seas and the President of the French Republic, Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, Have appointed for that purpose as their Plenipotentiaries:

His Majesty the King of Great Britain, Ireland and the British Dominions beyond the Seas: For the United Kingdom of Great Britain and Northern Ireland:

His Excellency Sir Oliver Charles Harvey, G.C.M.G., G.C.V.O., C.B., His Ambassador Extraordinary and Plenipotentiary in Paris; The President of the French Republic:

His Excellency Monsieur Alexandre Parodi, Ambassador of the French Republic, General Secretary for Foreign Affairs; Who, having exhibited their respective full powers, found in good and due form, have agreed as follows:

ARTICLE I

1. The taxes which are the subject of the present Convention are:

(a) In France:

The tax on the income of individuals (proportional tax and progressive surtax), the tax on the income of companies and the tax on undistributed profits under Article 14 of the Law of 31st January, 1950 (hereinafter referred to as “French tax”);

(b) In the United Kingdom of Great Britain and Northern Ireland:

The income tax (including surtax) and the profits tax (hereinafter referred to as “United Kingdom tax”).

2. The present Convention shall also apply to any other taxes of a substantially similar character imposed in France or the United Kingdom subsequently to the date of signature of the present Convention.

ARTICLE II

1. In the present Convention, unless the context otherwise requires—

(a) The term “United Kingdom” means Great Britain and Northern Ireland, excluding the Channel Islands and the Isle of Man;

(b) The term “France” means metropolitan France, and excludes Algeria, the overseas departments, and other territories of the French Union;

(c) The terms “one of the territories” and “the other territory” mean the United Kingdom or France, as the context requires;

(d) The term “tax” means United Kingdom tax or French tax, as the context requires;

(e) The term “person” means—

(i) any physical person;

(ii) any unincorporated body of physical persons; and

(iii) any body corporate;

(f) The term “company” means any body corporate;

(g) The terms “resident of the United Kingdom” and “resident of France” mean respectively any person who is resident in the United Kingdom for the purposes of United Kingdom tax and who has not his fiscaldomicile for the purposes of French tax in France and any person whose fiscaldomicile for the purposes of French tax is in France and who is not resident in the United Kingdom for the purposes of United Kingdom tax; a company shall be regarded as resident in the United Kingdom if its business is managed and controlled in the United Kingdom and as having its fiscaldomicile in France if its business is managed and controlled in France;

(h) The terms “resident of one of the territories” and “resident of the other territory” mean a person who is a resident of the United Kingdom or a person who is a resident of France as the context requires;

(i) The terms “United Kingdom enterprise” and “French enterprise” mean respectively an industrial or commercial enterprise or undertaking carried on by a resident of the United Kingdom and an industrial or commercial enterprise or undertaking carried on by a resident of France; and the terms “enterprise of one of the territories” and “enterprise of the other territory” mean a United Kingdom enterprise or a French enterprise, as the context requires;

(j) The term “industrial or commercial profits” includes in particular profits arising from the business of insurance companies, banks, and other financial enterprises;

(k) The term “permanent establishment”, when used with respect to an enterprise of one of the territories, means a branch, management, factory, or other fixed place of business in which is exercised, in whole or in part, the activity of the enterprise, but does not include an agency unless the agent has, and habitually exercises, a General authority to negotiate and conclude contracts on behalf of such enterprise or has a stock of merchandise from which he regularly fills orders on its behalf. In this connection—

(i) An enterprise of one of the territories shall not be deemed to have a permanent establishment in the other territory merely because it carries on business dealings in that other territory through a bona fide broker or General commission agent acting in the ordinary course of his business as such;

(ii) The fact that an enterprise of one of the territories maintains in the other territory a fixed place of business exclusively for the purchase of goods or merchandise shall not of itself constitute that fixed place of business a permanent establishment of the enterprise;

(iii) The fact that a company which is a resident of one of the territories has a subsidiary company which is a resident of the other territory or which carries on a trade or business in that other territory (whether through a permanent establishment or otherwise) shall not of itself constitute that subsidiary company a permanent establishment of its parent company;

(l) The term “taxation authorities” means, in the case of the United Kingdom, the Commissioner-Generals of Inland Revenue or their authorised representative; in the case of France, the Director General of Taxes (Directeur GénéraI des Imp(tm)ts) or his authorised representative; and, in the case of any territory to which the present Convention is extended under Article XXIII, the competent authority for the administration in such territory of the taxes to which the present Convention applies.

2. Where the present Convention provides that income from a source in one of the territories shall be exempt from tax in that territory if (with or without other conditions) it is subject to tax in the other territory, and under the Law in force in that other territory the said income is subject to tax by reference to the amount thereof which is remitted to or received in that other territory and not by reference to the full amount thereof, then the exemption to be allowed under this Convention in the first-mentioned territory shall apply only to so much of the income as is remitted to or received in the other territory.

3. In the application of the provisions of the present Convention by one of the High Contracting Parties any term not otherwise defined shall unless the context otherwise requires, have the meaning which it has under the Laws in force in the territory of that Party relating to the taxes which are the subject of the present Convention.

ARTICLE III

1. The industrial or commercial profits of a United Kingdom enterprise shall not be subject to French tax unless the enterprise carries on a trade or business in France through a permanent establishment situated therein. If it carries on a trade or business as aforesaid, tax may be imposed on those profits by France but only on so much of them as is attributable to that permanent establishment: provided that nothing in this paragraph shall affect the provisions of the Law of France, as it stands at the date of signature of this Convention, as respects the taxation of profits of non-residents from the business of insurance.

2. The industrial or commercial profits of a French enterprise shall not be subject to United Kingdom tax unless the enterprise carries on a trade or business in the United Kingdom through a permanent establishment situated therein. If it carries on a trade or business as aforesaid, tax may be imposed on those profits by the United Kingdom, but only on so much of them as is attributable to that permanent establishment.

3. Where an enterprise of one of the territories carries on a trade or business in the other territory through a permanent establishment situated therein, there shall be attributed to that permanent establishment the industrial or commercial profits which it might be expected to derive in that other territory if it were an independent enterprise engaged in the same or similar activities under the same or similar conditions and dealing at arm’s Length with the enterprise of which it is a permanent establishment.

4. Where an enterprise of one of the territories derives profits, under contracts concluded in that territory, from sales of goods or merchandise stocked in a warehouse in the other territory for convenience of delivery and not for purposes of display, those profits shall not be attributed to a permanent establishment of the enterprise in that other territory, notwithstanding that the offers of purchase have been obtained by an agent in that other territory and transmitted by him to the enterprise for acceptance.

5. No portion of any profits arising to an enterprise of one of the territories shall be attributed to a permanent establishment situated in the other territory by reason of the mere purchase of goods or merchandise within that other territory by the enterprise.

ARTICLE IV

A company which is a resident of the United Kingdom and which carries on a trade or business in France through a permanent establishment situated therein and which is Liable to the tax on income from movable capital under Article 39, paragraph 11 of the Decree No. 48-1986, of 9th December, 1948, shall not be charged to that tax on income exceeding the amount of the profits or gains arising in France and chargeable in accordance with Article III.

ARTICLE V

Where—

(a) an enterprise of one of the territories participates directly or indirectly in the management, control or capital of an enterprise of the other territory, or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the territories and an enterprise of the other territory, 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 profits which would but for those conditions have accrued to one of the enterprises but by reason of these conditions have not so accrued may be included in the profits of that enterprise and taxed accordingly.

ARTICLE VI

Where a company which is a resident of the United Kingdom derives industrial and commercial profits from a permanent establishment in France, and these profits are chargeable both to the tax on undistributed profits under Article 14 of the Law of 31st January, 1950, and to the tax on income from movable capital, the incidence of these two taxes shall not result in a total charge greater than 10 per centum on the amount of the profits chargeable to these two taxes in accordance with Article III. In consequence, the rate of the tax on income from movable capital shall be reduced to 10 per centum.

If, hereafter, the tax on undistributed profits is not imposed, or if it is imposed at a rate different from the rate in force at the date of signature of the present Convention, the taxation authorities of the two High Contracting Parties shall consult together in that event with a view to fixing the appropriate rate of the tax on income from movable capital.

ARTICLE VII

Profits distributed by a company which is a resident of France to a company which is a resident of the United Kingdom and which has owned for a year registered shares (actions ou parts d’intérˆt) representing at least 50 per centum of the capital of the former company shall be charged to the tax on income from movable capital at the rate determined in accordance with Article VI.

ARTICLE VIII

Notwithstanding the provisions of Article III, IV V and VI, profits which a resident of one of the territories derives from operating ships or aircraft shall be exempt from tax in the other territory.

ARTICLE IX

Dividends and interest paid by a company which is a resident of the United Kingdom to a resident of France, who is subject to tax in France in respect thereof and does not carry on trade or business in the United Kingdom through a permanent establishment situated therein, shall be exempt from United Kingdom surtax.

ARTICLE X

1. Any royalty derived from sources within one of the territories by a resident of the other territory, who is subject to tax in that other territory in respect thereof and does not carry on a trade or business in the first-mentioned territory through a permanent establishment situated therein, shall be exempt from tax in that first-mentioned territory.

2. In this Article the term “royalty” means any royalty or other amount paid as consideration for the use of, or for the privilege of using, any copyright, patent, design, secret process or formula, trade mark or other like property, and includes rents in respect of cinematograph films, but does not include any royalty or other amount paid in respect of the operation of a mine or quarry or of any other extraction of natural resources.

3. Where any royalty exceeds a fair and reasonable consideration in respect of the rights for which it is paid, the exemption provided by the present Article shall apply only to so much of the royalty as represents such fair and reasonable consideration.

4. Any capital sum derived from sources within one of the territories from the sale of patent rights by a resident of the other territory, who does not carry on a trade or business in the first-mentioned territory through a permanent establishment situated therein, shall be exempt from tax in that first-mentioned territory.

ARTICLE XI

A resident of one of the territories who does not carry on a trade or business in the other territory through a permanent establishment situated therein shall be exempt in that other territory from any tax in respect of gains from the sale, transfer, or exchange of capital assets.

ARTICLE XII

1. Income derived from real property in one of the territories by a resident of the other territory shall be subject to tax in accordance with the Laws of the first-mentioned territory. Where the income is also subject to tax in the other territory, relief from double taxation shall be given in accordance with the provisions of Article XX.

2. In this Article, the term “income from real property” means income of whatever nature derived from real property, and includes royalties or any other amounts paid in respect of the operation of mines or quarries or any other extraction of natural resources.

ARTICLE XIII

1. Remuneration, including pensions, paid by or out of funds created by one of the High Contracting Parties to any individual for services rendered to that Party in the discharge of governmental functions shall be exempt from tax in the territory of the other High Contracting Party, unless the individual is a national of that other Party without being also a national of the first-mentioned Party.

2. The following pensions shall be exempt from United Kingdom tax, regardless of the nationality of the pensioner, so long as they are exempt from French tax:

(a) Pensions granted by virtue of the Law of the 31st March, 1919, to all those persons who since the 2nd August, 1914, have become entitled to military pensions by reason of disabilities resulting whether from hostilities or from ailments or accidents occurring on service;

(b) Pensions granted by virtue of the combined provisions of the Law of the 31st March, 1919, and of Article 1 of the Law of the 22nd June, 1927, to retired soldiers and sailors by reason of wounds received or disabilities or ailments contracted on service before the 2nd August, 1914:

Provided that paragraph 1 of this Article shall apply to such part of the mixed pensions provided for in Article 60-2ø of the Law of the 31st March, 1919, as relates to Length of service and is not exempted from French tax.

3. The following pensions shall be exempt from French tax, regardless of the nationality of the pensioner, so long as they are exempt from United Kingdom tax:

(a) Wounds pensions granted to members of the naval, military or air forces of the Crown;

(b) Retired pay of disabled officers granted on account of medical unfitness attributable to or aggravated by naval, military or air force service;

(c) Disablement or disability pensions granted to members, other than commissioned officers, of the naval, military or air forces of the Crown on account of medical unfitness attributable to or aggravated by naval, military or air force service;

(d) Disablement pensions granted to persons who have been employed in the nursing services of any of the naval, military or air forces of the Crown on account of medical unfitness attributable to or aggravated by naval, military or air force service;

(e) Injury and disablement pensions payable under any scheme made under the Injuries in War (Compensation) Act, 1914, the Injuries in War Compensation Act, 1914 (Session 2), the Injuries in War (Compensation) Act, 1915, the Pensions (Navy, Army, Air Force and Mercantile Marine) Act, 1939, the Personal Injuries (Emergency Provisions) Act, 1939, or under any War Risks Compensation Scheme for the Mercantile Marine:

Provided that paragraph 1 of this Article shall apply to such part of any income from those pensions as is not exempted from United Kingdom tax.

4. The provisions of paragraph 1 of this Article shall not apply to payments in respect of services rendered in connection with any trade or business carried on by either of the High Contracting Parties for purposes of profit.

ARTICLE XIV

1. An individual who is a resident of the United Kingdom shall be exempt from French tax on profits or remuneration in respect of personal (including professional) services performed within France in any year of assessment if—

(a) he is present within France for a period or periods not exceeding in the aggregate 183 days during that year, and

(b) —

(i) in the case of an employment, the services are performed on behalf of a person who is a resident of the United Kingdom;

(ii) in other cases, he has no office or other fixed place of business in France; and

2. An individual who is a resident of France shall be exempt from United Kingdom tax on profits or remuneration in respect of personal (including professional) services performed within the United Kingdom in any year of assessment if—

(a) he is present within the United Kingdom for a period or periods not exceeding in the aggregate 183 days during that year; and

(b) —

(i) in the case of an employment, the services are performed on behalf of a person who is a resident of France;

(ii) in other cases, he has no office or other fixed place of business in the United Kingdom; and

3. The provisions of this Article shall not apply to the profits or remuneration of public entertainers such as stage, motion picture or radio artists, musicians and athletes.

ARTICLE XV

1. Any pension (other than a pension of the kind referred to in paragraph 1 or 2 of Article XIII) and any annuity, derived from sources within France by an individual who is a resident of the United Kingdom and subject to United Kingdom tax in respect thereof, shall be exempt from French tax.

2. Any pension (other than a pension of the kind referred to in paragraph 1 or 3 of Article XIII) and any annuity, derived from sources within the United Kingdom by an individual who is a resident of France and subject to French tax in Respect thereof, shall be exempt from United Kingdom tax.

3. 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.

ARTICLE XVI

Nothing in the present Convention shall affect the provisions of the Code General des Imp(tm)ts regarding the tax payable by individuals who have not their fiscal domicile in France, but have a residence in France. Subject to these provisions, a resident of the United Kingdom shall not be chargeable to French progressive surtax in respect of income from sources in France.

ARTICLE XVII

A professor or teacher from one of the territories who receives remuneration for teaching, during a period of temporary residence not exceeding two years, at a university, college, school or other educational institution in the other territory, shall be exempt from tax in that other territory in respect of that remuneration.

ARTICLE XVIII

A student or business apprentice from one of the territories who is receiving full-time education or training in the other territory shall be exempt from tax in that other territory on payments made to him by persons resident in the first-mentioned territory for the purposes of his maintenance, education or training.

ARTICLE XIX

In the application of paragraph 4 of Article XXII, the High Contracting Parties have agreed as follows:

(1) Individuals who are residents of France shall be entitled to the same personal allowances, reliefs and reductions for the purposes of United Kingdom income tax as British subjects not resident in the United Kingdom.

(2) Individuals who are residents of the United Kingdom shall be entitled for the purposes of French tax to the same reductions of taxes or charges, basic abatements, and allowances on account of family responsibilities as French nationals.

ARTICLE XX

1. The Laws of the High Contracting Parties shall continue to govern the taxation of income arising in either of the territories, except where express provision to the contrary is made in the present Convention. Where income is subject to tax in both territories, relief from double taxation shall be given in accordance with the following paragraphs:

2. Subject to the provisions of the Law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom, French tax payable, whether directly or by deduction, in respect of income from sources within France shall be allowed as a credit against any United Kingdom tax payable in respect of that income. Where such income is a dividend paid by a company resident in France to a company resident in the United Kingdom which controls, directly or indirectly, not less than one-half of the voting power in the former company, the credit shall take into account (in addition to any French tax appropriate to the dividend) the French tax payable by the company in respect of its profits.

3. —

(a) Subject to the provisions of sub-paragraph (b) of this paragraph, income derived by a person who is a resident of France (whether or not that person is resident in the United Kingdom for the purposes of United Kingdom tax) from sources in the United Kingdom which, under the Laws of the United Kingdom and in accordance with this Convention, is subject to tax in the United Kingdom either directly or by deduction, shall be exempt from the French proportional tax on the income of individuals, or, as the case may be, from French tax on companies.

(b) Where the income consists of dividends or interest derived from a company which is a resident of the United Kingdom by a person who is a resident of France (whether or not that person is resident in the United Kingdom for the purposes of United Kingdom tax) and the income is subject to United Kingdom tax, either directly or by deduction, it shall be exempt from the French tax on income from movable capital, United Kingdom tax being regarded as wholly covering that tax in view of its rate.

(c) In the cases referred to in sub-paragraph (a) of this paragraph, the income shall be exempt from French progressive surtax but, where the person receiving this income is a resident of France, the income may be taken into account in determining the effective rate of progressive surtax chargeable on his income other than the income referred to.

4. For the purposes of this Article, profits or remuneration for personal (including professional) services performed in one of the territories shall be deemed to be income from sources within that territory, and the services of an individual whose services are wholly or mainly performed in ships or aircraft operated by a resident of one of the territories shall be deemed to be performed in that territory.

ARTICLE XXI

The taxation authorities of the High Contracting Parties shall exchange such information (being information which is at their disposal under their respective taxation Laws in the normal course of administration) as is necessary for carrying out the provisions of the present Convention or for the prevention of fraud or for the administration of statutory provisions against legal avoidance in relation to the taxes which are the subject of the present Convention. Any information so exchanged shall be treated as secret and shall not be disclosed to any persons other than those concerned with the assessment and collection of the taxes which are the subject of the present Convention. No information as aforesaid shall be exchanged which would disclose any trade, business, industrial or professional secret or trade process.

ARTICLE XXII

1. The nationals of one of the High Contracting Parties shall not be subjected in the territory of the other High Contracting Party to any taxation or any requirement connected therewith which is other, higher or more burdensome than the taxation and connected requirements to which the nationals of the latter Party are or may be subjected.

2. The enterprises of one of the territories shall not be subjected in the other territory, in respect of profits or capital attributable to their permanent establishments in that other territory, to any taxation which is other, higher or more burdensome than the taxation to which the enterprises of that other territory are or may be subjected in respect of the like profits or capital.

3. The income, profits and capital of an enterprise of one of the territories, the capital of which is wholly or partly owned or controlled, directly or indirectly, by a resident or residents of the other territory shall not be subjected in the first-mentioned territory to any taxation which is other, higher or more burdensome than the taxation to which other enterprises of that first-mentioned territory are or may be subjected in respect of the like income, profits and capital.

4. Nothing in paragraph 1 or 2 of this Article shall be construed as obliging either High Contracting Party to grant to nationals of the other High Contracting Party, who are not resident in the territory of the former High Contracting Party, any personal allowances, reliefs or reductions for tax purposes. Each of the High Contracting Parties shall adhere to its own legislation in this respect, subject to any special agreements which may be made between them determining the arrangements to be applied.

5. In this Article the term “nationals” means—

(a) in relation to France all French subjects and French protected persons residing in France or in any French territory to which the present Convention applies by reason of extension made under Article XXIII and all legal persons, partnerships and associations deriving their status as such from the Law in force in any French territory to which the present Convention applies;

(b) in relation to the United Kingdom, all British subjects and British protected persons residing in the United Kingdom or in any British territory to which the present Convention applies by reason of extension made under Article XXIII and all legal persons, partnerships and associations deriving their status as such from the Law in force in any British territory to which the present Convention applies.

6. In this Article the term “taxation” means taxes of every kind and description levied on behalf of any authority whatsoever.

ARTICLE XXIII

1. The present Convention may be extended, either in its entirety or with modifications, to any territory of one of the High Contracting Parties to which this Article applies and which imposes taxes substantially similar in character to those which are the subject of the present Convention, and any such extensions shall take effect from such date and subject to such modifications and conditions (including conditions as to termination) as may be specified and agreed between the High Contracting Parties in notes to be exchanged for this purpose.

2. The termination in respect of France or the United Kingdom of the present Convention under Article XXVI shall, unless otherwise expressly agreed by both High Contracting Parties, terminate the application of the present Convention to any territory to which the Convention has been extended under this Article.

3. The territories to which this Article applies are—

(a) in relation to His Majesty the King of Great Britain, Ireland and the British Dominions beyond the Seas:

Any territory other than the United Kingdom for whose international relations the United Kingdom is responsible;

(b) in relation to the President of the French Republic:

Any department, protectorate or other overseas territory, for whose international relations France is responsible.

ARTICLE XXIV

On the entry into force of the present Convention the following agreements between the High Contracting Parties shall be terminated in respect of the territories to which the Convention applies:

(1) The agreement constituted by Exchange of Notes dated the 1st October, 1932, for the exemption from taxation of profits accruing from the business of shipping;

(2) The Agreement dated the 9th April, 1935, for the reciprocal exemption from income tax of profits arising from the business of air transport;

(3) The Agreement dated the 19th October, 1945, for relief from double taxation in certain circumstances, exclusive of the Protocol of Signature to that Agreement;

and the provisions of those Agreements (other than the Protocol of Signature to the last-mentioned Agreement) shall cease to have effect:

(a) In the United Kingdom, as respects income tax for the year of assessment beginning on the 6th April, 1950, and subsequent years, and as respects surtax for the year of assessment beginning on the 6th April, 1949, and subsequent years;

(b) In France, as respects taxes charged in respect of the year 1950 and subsequent years.

ARTICLE XXV

1. The present Convention shall be ratified and the instruments of ratification shall be exchanged at London as soon as possible.

2. The present Convention shall enter into force upon exchange of ratifications and the foregoing provisions thereof shall have effect:

(a) In the United Kingdom: 1950;

as respects income tax for any year of assessment beginning on or after the 6th April, and as respects surtax for any year of assessment beginning on or after the 6th April, 1949;

as respects profits tax in respect of the following profits:

(i) profits arising in any chargeable accounting period beginning on or after the 1st April, 1950;

(ii) profits attributable to so much of any chargeable accounting period falling partly before and partly after that date as falls after that date;

(iii) profits not so arising or attributable by reference to which income tax is, or but for the present Convention would be, chargeable for any year of assessment beginning on or after the 6th April, 1950;

(b) In France:

as respects taxes charged in respect of the year 1950 and subsequent years, and as respects the undistributed profits tax. Nevertheless, so far as income other than that referred to in Article X of the present Convention is concerned, no repayment shall be made of tax on income from movable capital, which has been deducted in France at the time of payment of the said income and before the date of exchange of ratifications of the present Convention.

ARTICLE XXVI

The present Convention shall continue in force indefinitely but either of the High Contracting Parties may, on or before the 30th June in any calendar year not earlier than the year 1954, give to the other High Contracting Party, through diplomatic channels, written notice of termination and, in such event, the present Convention shall cease to be effective:

(a) In the United Kingdom:

as respects income tax for any year of assessment beginning on or after the 6th April in the calendar year next following that in which the notice is given;

as respects surtax for any year of assessment beginning on or after the 6th April in the calendar year in which the notice is given; and

as respects profits tax in respect of the following profits:

(i) profits arising in any chargeable accounting period beginning on or after the 1st April in the calendar year next following that in which the notice is given;

(ii) profits attributable to so much of any chargeable accounting period falling partly before and partly after that date as falls after that date;

(iii) profits not so arising or attributable by reference to which income tax is chargeable for any year of assessment beginning on or after the 6th April in the next following calendar year;

(b) In France:

as respects taxes charged in respect of the year following the calendar year during which the said notice is given.

CONVENTION FOR THE AVOIDANCE OF DOUBLE TAXATION – SWITZERLAND

[Order by the President]

GN 462 of 1964.

An arrangement has been made with the Government of the United Kingdom of Great Britain and Northern Ireland whereby the Convention between that Government and the Swiss Federal Council for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income has been extended to the former Protectorate by and incorporating the terms of the Despatch and reply thereto set out in the Schedule.

SCHEDULE

BRITISH EMBASSY, BERNE

13th December, 1963.

1170/63

Monsieur Ie Conseiller Federal,

I have the honour, upon instructions from Her Majesty’s Principal Secretary of State for Foreign Affairs, to refer to the Exchange of Notes between the Government of the United Kingdom of Great Britain and Northern Ireland and the Swiss Federal Council dated the 30th May, 1961, extending to the Federation of Rhodesia and Nyasaland on the basis therein specified, the provisions of the Convention between the United Kingdom and Switzerland for the Avoidance of Double Taxation with respect to Taxes on Income, signed at London on the 30th September, 1954.

I have the honour to inform you that on dissolution of the Federation of Rhodesia and Nyasaland the extension provided for in the above-mentioned exchange of notes will continue in force in relation to Southern Rhodesia, Northern Rhodesia and Nyasaland individually, and that references therein to the Federation should be construed accordingly, since the three territories will individually assume the responsibilities under the agreement which are now held by the Federation.

I avail myself of this opportunity to renew to you, Monsieur Ie Conseiller Federal, the assurances of my highest consideration.

PAUL GREY.

MONSIEUR LE CONSEILLER FEDERAL FRIEDRICH WAHLEN,

FEDERAL POLITICAL DEPARTMENT, BERNE.

DEPARTMENT POLITIQUE FEDERAL, BERNE,

Ie 18 décembre 1963. s.B.34.12.GB.5.4.(U’Ch) Monsieur I’Ambassadeur, J’ai eu I’honneur de recevoir Ia note du 13 décembre 1963 par IaqueIIe Votre Excellence, se fondant sur I’échange de notes du 30 mai 1961 entre Ia Suisse et Ie Royaume-Uni de Grande- Bretagne et d’IrIande du Nord concernant Ia convention envue d’éviter Ies doubles impositions en martiU re d’imp”ts sur Ie revenu du 30 septembre 1954, a bien voulu me faire savoir qu’aprŠs dissolution de Ia Fédération de Rhodésie et Nyassaland, Ia Rhodésie du Sud, Ia Rhodésie du Nord et Ie Nyassaland continueront ˆ appliquer ˆ titre individuel Ies dispositions prévues par I’échange de notes precite. Je remercie Votre Excellence de cette obligeante communication, dont j’ai pris bonne note.

Je saisis cette occasion pour vous renouveIer, Monsieur I’Ambassadeur, I’assurance de ma haute considération.

FRIEDRICH WAHLEN.

SON EXCELLENCE SIR PAUL GREY,

AMBASSADEUR EXTRAORDINAIRE ET PLENIPOTENTIAIRE DE SA MAJESTE BRITANNIQUE, BERNE.

ANNEXURE

CONVENTION BETWEEN THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE SWISS CONFEDERATION FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME.

The Government of the United Kingdom of Great Britain and Northern Ireland and the Swiss Federal Council,

Desiring to conclude a Convention for the avoidance of double taxation with respect to taxes on income,

Have appointed for that purpose as their respective Plenipotentiaries:

The Government of the United Kingdom of Great Britain and Northern Ireland:

Alfred Douglas Dodds-Parker, Esquire, Parliamentary Under-Secretary of State for Foreign Affairs;

The Swiss Federal Council:

Monsieur Erwin Bernath, Swiss Charg‚ d’Affaires ad interim in London;

Who, having communicated to one another their full powers, found in good and due form, have agreed as follows:

ARTICLE I

1. The taxes which are the subject of the present Convention are—

(a) In the United Kingdom:

The income tax (including surtax), the profits tax and the excess profits levy (hereinafter referred to as “United Kingdom tax”);

(b) In Switzerland:

The federal, cantonal and communal taxes on income (total income, earned income, income from capital, industrial and commercial profits, etc.), but not including the Federal coupon tax except where expressly mentioned (hereinafter referred to as “Swiss tax”).

2. The present Convention shall also apply to any other taxes of a substantially similar character imposed in the United Kingdom or Switzerland subsequently to the date of signature of the present Convention.

ARTICLE II

1. In the present Convention, unless the context otherwise requires—

(a) The term “United Kingdom” means Great Britain and Northern Ireland, excluding the Channels lands and the Isle of Man;

(b) The term “Switzerland” means the Swiss Confederation;

(c) The terms “one of the territories” and “the other territory” mean the United Kingdom or Switzerland, as the context requires;

(d) The term “tax” means United Kingdom tax or Swiss tax, as the context requires;

(e) The term “person” includes any individual, company, unincorporated body of persons, and any other entity with or without juridical personality;

(f) The term “company” means in relation to the United Kingdom any body corporate, and in relation to Switzerland any entity with juridical personality;

(g) The term “resident of the United Kingdom” means:

(i) any company or partnership whose business is managed and controlled in the United Kingdom;

(ii) any other person who is resident in the United Kingdom for the purposes of United Kingdom tax and not resident (by reason of domicile or sojourn) in Switzerland for the purposes of Swiss tax;

(h) The term “resident of Switzerland” means:

(i) any company or partnership (“société simple”, “société en nom collectif” or “société en commandite”) created or organised under Swiss Law, if its business is not managed and controlled in the United Kingdom;

(ii) any other person who is resident (by reason of domicile or sojourn) in Switzerland for the purposes of Swiss tax and not resident in the United Kingdom for the purposes of United Kingdom tax;

(i) The terms “resident of one of the territories” and “resident of the other territory” mean a resident of the United Kingdom or a resident of Switzerland, as the context requires;

(j) The terms “United Kingdom enterprise” and “Swiss enterprise” mean respectively an industrial or commercial enterprise or undertaking carried on by a resident of the United Kingdom and an industrial or commercial enterprise or undertaking carried on by a resident of Switzerland, and the terms “enterprise of one of the territories” and “enterprise of the other territory” mean a United Kingdom enterprise or a Swiss enterprise, as the context requires;

(k) The term “permanent establishment” means a branch, management, office, factory, workshop or other fixed place of business, and a farm, mine, quarry or other place of natural resources subject to exploitation. It also includes a place where building construction is carried on by contract for a period of at least one year, but does not include an agency unless the agent has and habitually exercises a General authority to negotiate and conclude contracts on behalf of an enterprise of one of the territories. In this connection—

(i) An enterprise of one of the territories shall not be deemed to have a permanent establishment in the other territory merely because it carries on business dealings in that other territory through a bona fide broker, General commission agent or other independent agent acting in the ordinary course of his business as such;

(iii) The fact that an enterprise of one of the territories has a subsidiary company which is a resident of the other territory or which is engaged in trade or business in that other territory (whether through a permanent establishment or otherwise) shall not of itself constitute that subsidiary company a permanent establishment of the enterprise of the former territory;

(I) The term “industrial or commercial profits” includes manufacturing, mercantile, mining, farming, financial and insurance profits, and rents and royalties in respect of cinematograph films, but does not include income in the form of dividends, interest or royalties (other than cinematograph royalties) except any such income which, under the Laws of one of the territories and in accordance with Article III of the present Convention, is attributable to a permanent establishment situated therein;

(m) The term “competent authority” means, in the case of the United Kingdom, the Commissioner-Generals of Inland Revenue or their authorised representative; in the case of Switzerland, the Director of the Federal Tax Administration or his authorised representative; and in the case of any territory to which the present Convention is extended under Article XXI, the competent authority for the administration in such territory of the taxes to which the Convention applies.

2. Where the present Convention provides that income from a source within Switzerland shall be exempt from, or entitled to a reduced rate of, tax in Switzerland if (with or without other conditions) it is subject to tax in the United Kingdom, and under the Law in force in the United Kingdom the said income is subject to tax by reference to the amount thereof which is remitted to or received in the United Kingdom and not by reference to the full amount thereof, then the exemption or reduction in rate to be allowed under the Convention in Switzerland shall apply only to so much of the income as is remitted to or received in the United Kingdom.

3. Where under any provision of the present Convention a partnership is entitled to exemption from United Kingdom tax as a resident of Switzerland on any income, such a provision shall not be construed as restricting the right of the United Kingdom to charge any member of the partnership, being a person who is resident in the United Kingdom for the purposes of United Kingdom tax (whether or not he is also resident in Switzerland for the purposes of Swiss tax), to tax on his share of the income of the partnership; but any such income shall be deemed for the purposes of Article XV to be income from sources within Switzerland.

4. Where under any provision of the present Convention an estate of a deceased person is entitled to exemption from United Kingdom tax as a resident of Switzerland on any income, such a provision shall not be construed as requiring the United Kingdom to grant exemption from United Kingdom tax in respect of such part of such income as goes to any heir of such estate who is not resident in Switzerland for the purposes of Swiss tax and whose share of such income is not subject to Swiss tax either in his hands or in the hands of the estate.

5. In the application of the provisions of the present Convention by either Contracting Party any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the Laws in force in the territory of that Party relating to the taxes which are the subject of the Convention.

ARTICLE III

1. The industrial or commercial profits of a United Kingdom enterprise shall not be subject to Swiss tax unless the enterprise is engaged in trade or business in Switzerland through a permanent establishment situated therein. If it is so engaged, tax may be imposed on those profits by Switzerland, but only on so much of them as is attributable to that permanent establishment.

2. The industrial or commercial profits of a Swiss enterprise shall not be subject to United Kingdom tax unless the enterprise is engaged in trade or business in the United Kingdom through a permanent establishment situated therein. If it is so engaged, tax may be imposed on those profits by the United Kingdom, but only on so much of them as is attributable to that permanent establishment.

3. Where an enterprise of one of the territories is engaged in trade or business in the other territory through a permanent establishment situated therein, there shall be attributed to that permanent establishment the industrial or commercial profits which it might be expected to derive if it were an independent enterprise engaged in the same or similar activities under the same or similar conditions and dealing at arm’s Length with the enterprise of which it is a permanent establishment.

4. Where an enterprise of one of the territories, from sales of goods or merchandise stocked in a warehouse in the other territory, those profits shall not be attributed to a permanent establishment of the enterprise in that other territory, notwithstanding that the offers of purchase have been obtained by an agent in that other territory and transmitted by him to the enterprise for acceptance.

6. In the determination of the industrial or commercial profits of a permanent establishment there shall be allowed as deductions all expenses which are reasonably applicable to the permanent establishment, including executive and General administrative expenses so applicable, whether incurred in the territory in which the permanent establishment is situated or elsewhere.

ARTICLE IV

Where—

(a) an enterprise of one of the territories participates directly or indirectly in the management, control or capital of an enterprise of the other territory; or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the territories and an enterprise of the other territory;

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 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 profits of that enterprise and taxed accordingly.

ARTICLE V

Notwithstanding the provisions of Articles III and IV, profits which a resident of one of the territories derives from operating ships or aircraft, including profits of that resident from the sale of tickets for passages by such ships or aircraft, shall be exempt from tax in the other territory.

ARTICLE VI

1. Dividends (other than dividends which, under the Laws of the United Kingdom and in accordance with Article III of this Convention, are attributable to a permanent establishment situated in the United Kingdom) paid by a company which is a resident of the United Kingdom to a resident of Switzerland who is subject to Swiss tax in respect thereof shall be exempt from United Kingdom surtax.

2. The industrial and commercial profits of a Swiss enterprise engaged in trade or business through a permanent establishment in the United Kingdom shall, so long as undistributed profits of United Kingdom enterprises are effectively charged to United Kingdom profits tax at a lower rate than distributed profits of such enterprises, be charged to United Kingdom profits tax only at that lower rate.

3. Where not less than 50 per centum of the entire voting power of a company which is a resident of the United Kingdom is controlled, directly or indirectly, by a company which is a resident of Switzerland, the distributions by the former company to the latter company, and to any other company which is a resident of Switzerland and which beneficially owns not less than 10 per centum of the entire share capital of the company paying the dividends, shall be left out of account in computing United Kingdom profits tax effectively chargeable on that company at the rate appropriate to distributed profits.

4. —

(a) The Swiss anticipatory tax may be charged in respect of dividends paid by any company created under Swiss Law to a resident of the United Kingdom, but, in the case of any such resident who is subject to United Kingdom tax in respect thereof, the rate of anticipatory tax shall be reduced in accordance with the following provisions of this paragraph (unless the dividends are, under the Laws of Switzerland and in accordance with Article III of this Convention, attributable to a permanent establishment situated in Switzerland).

(b) If that resident is an individual whose effective rate of United Kingdom tax does not exceed 5 per centum the anticipatory tax shall not be charged.

(c) If that resident is an individual whose effective rate of United Kingdom tax exceeds 5 per centum, the anticipatory tax shall be charged only at the rate which, when added to the rate of Federal coupon tax, equals that effective rate.

(d) If that resident is a company which controls, directly or indirectly, not less than 95 per centum of the entire voting power of the company paying the dividends, the anticipatory tax shall be reduced by an amount equal to 20 per centum of the dividend.

(e) If that resident is a company which controls, directly or indirectly, less than 95 per centum but not less than 50 per centum of the entire voting power of the company paying the dividends, the anticipatory tax shall be reduced by an amount equal to 10 per centum of the dividend.

(f) If that resident is a company which beneficially owns not less than 10 per centum of the entire share capital of the company paying the dividends, and the provisions of either sub-paragraph (d) or sub-paragraph (e) of this paragraph apply to some part of the dividends paid by the latter company, the anticipatory tax shall be reduced by an amount equal to 10 per centum of the dividend.

5. If at any time distributed profits of companies become chargeable to United Kingdom profits tax at a rate other than 20 per centum above the rate at which undistributed profits are effectively chargeable to that tax, the competent authorities of the two Contracting Parties may consult together in order to determine whether it is necessary for this reason to amend sub-paragraphs (d), (e) and (f) of the preceding paragraph. After such consultation has taken place either of the Contracting Parties may give to the other Contracting Party through the diplomatic Channel written notice of termination of the provisions of paragraph 3 and of sub-paragraphs (d), (e) and (f) of paragraph 4 of this Article, and, in such event, those provisions shall cease to be effective from the date on which the relevant change in the rates of United Kingdom profits tax took effect.

6. Subject to the provisions of sub-paragraph (a) of paragraph 4 of this Article, where a company which is resident of one of the territories derives profits or income from sources within the other territory, there shall not be imposed in that other territory any form of taxation on dividends paid by the company to persons not resident in that other territory, or any tax in the nature of an undistributed profits tax on undistributed profits of the company, whether or not those dividends or undistributed profits represent, in whole or in part, profits or income so derived.

ARTICLE VII

1. Any interest or royalty derived from sources within one of the territories by a resident of the other territory, who is subject to tax in that other territory in respect thereof, shall be exempt from tax in that first territory.

2. In this Article—

(a) The term “interest” means interest on bonds, securities, notes, debentures or on any other form of indebtedness (including mortgages or bonds secured on real property);

(b) The term “royalty” means any royalty or other amount paid as consideration for the right to use any copyright, artistic or scientific work, patent, model, design, secret process or formula, trade mark, or other like property or right (including rentals and like payments for the use of industrial or commercial machinery or plant or scientific apparatus), but does not include any royalty or other amount paid in respect of the operation of mines, quarries or other natural resources.

3. Any capital sum derived from sources within one of the territories from the sale of property or rights mentioned in sub-paragraph (b) of paragraph 2 of this Article by a resident of the other territory shall be exempt from tax in the first territory.

4. Where there is a special relationship between debtor and creditor or both debtor and creditor have a special relationship with a third person or persons, and in consequence the amount paid is greater than would have been agreed upon if debtor and creditor had been at arm’s Length, the exemption provided by this Article shall not apply to the excess.

5. Any interest or royalty exempted from United Kingdom tax by this Article shall be allowed as a deduction for profits tax and excess profits levy purposes from the profits or income of the person paying the interest or royalty, whatever the relationship between that person and the person receiving the interest or royalty may be.

6. The exemptions from tax in one of the territories provided for in this Article shall not apply to interest, royalties or capital sums which, under the Laws of that territory and in accordance with Article III of this Convention, are attributable to a permanent establishment situated therein.

ARTICLE VIII

1. A resident of one of the territories shall be exempt in the other territory from any tax on gains from the sale, transfer or exchange of capital assets (other than gains which, under the Laws of that other territory and in accordance with Article III of this Convention, are attributable to a permanent establishment situated therein).

2. In this Article, the term “capital assets” means any movable property, whether corporeal or incorporeal.

ARTICLE IX

1. Income derived from real property situated in one of the territories by a resident of the other territory shall be subject to tax in accordance with the Laws of the first-mentioned territory. Where the income is also subject to tax in the other territory, relief from double taxation shall be given in accordance with the provisions of Article XV.

2. In this Article, the term “income from real property” means income of whatever nature derived from real property, including gains derived from the sale or exchange of such property, and it also includes royalties in respect of the operation of mines, quarries or other natural resources. It does not however include interest from mortgages or bonds secured on such property.

ARTICLE X

1. Remuneration, including pensions, paid by, or out of funds created by, the Government of the United Kingdom to an individual in respect of services rendered to that Government in the discharge of governmental functions shall be exempt from Swiss tax: provided that the exemption shall not apply to remuneration, other than a pension, paid to a Swiss citizen who is not also a British subject.

2. Remuneration, including pensions, paid by, or out of funds created by, the Swiss Confederation or by any Swiss canton to an individual in respect of services rendered to Switzerland in the discharge of governmental functions shall be exempt from United Kingdom tax: provided that the exemption shall not apply to remuneration, other than a pension, paid to a British subject who is not also a Swiss citizen.

3. The provisions of paragraphs 1 and 2 of this Article shall not apply to payments in respect of services rendered in connection with any trade or business carried on by either Contracting Party or by any Swiss canton for purposes of profit.

4. The provisions of this Convention shall not be construed as denying or affecting in any manner the right of diplomatic and consular officers to other or additional exemptions now enjoyed or which may hereafter be granted to them.

ARTICLE XI

1. An individual who is a resident of the United Kingdom shall be exempt from Swiss tax on profits or remuneration in respect of personal (including professional) services performed within Switzerland in any year of assessment if—

(a) he is present within Switzerland for a period or periods not exceeding in the aggregate 183 days during that year, and

(b)—

(i) in the case of a directorship or employment, the services are performed for or on behalf of a resident of the United Kingdom;

(ii) in other cases, he has no office or other fixed place of business in Switzerland, and

2. An individual who is a resident of Switzerland shall be exempt from United Kingdom tax on profits or remuneration in respect of personal (including professional) services performed within the United Kingdom in any year of assessment if—

(a) he is present within the United Kingdom for a period or periods not exceeding in the aggregate 183 days during that year; and

(b)—

(i) in the case of a directorship or employment, the services are performed for or on behalf of a resident of Switzerland;

(ii) in other cases, he has no office or other fixed place of business in the United Kingdom, and

3. The provisions of this Article shall not apply to the profits or remuneration of public entertainers such as stage, motion picture, radio or television artists, musicians and athletes.

ARTICLE XII

1. Any pension (other than a pension of the kind referred to in Article X) and any annuity, derived from sources within one of the territories by an individual who is a resident of the other territory and subject to tax in that other territory in respect thereof, shall be exempt from tax in the first territory.

2. In this Article—

(a) The term “pension” means periodic payments made in consideration of past services or by way of compensation for injuries received;

(b) 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.

ARTICLE XIII

1. A professor or teacher from one of the territories, who receives remuneration for teaching, during a period of temporary residence not exceeding two years, at a university, college, school or other educational institution in the other territory, shall be exempt from tax in that other territory in respect of that remuneration.

2. A student or business apprentice from one of the territories, who is receiving full-time education or training in the other territory, shall be exempt from tax in that other territory on payments made to him by persons outside that other territory for the purposes of his maintenance, education or training.

ARTICLE XIV

1. Individuals who are residents of Switzerland shall be entitled to the same personal allowances, reliefs and reductions for the purposes of United Kingdom tax as British subjects not resident in the United Kingdom.

2. Individuals who are residents of the United Kingdom shall be entitled to the same personal allowances, reliefs and reductions for the purposes of Swiss tax as Swiss nationals resident in the United Kingdom.

ARTICLE XV

1. The Laws of the Contracting Parties shall continue to govern the taxation of income arising in either of the territories, except where express provision to the contrary is made in the present Convention. Where income is subject to tax in both territories, relief from double taxation shall be given in accordance with the following paragraphs of this Article.

2. Subject to the provisions of the Law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom, Swiss tax payable, whether directly or by deduction, in respect of income from sources within Switzerland shall be allowed as a credit against the United Kingdom tax payable in respect of that income. Where such income is a dividend paid by a company which is a resident of Switzerland to a company which controls, directly or indirectly, not less than 50 per centum of the entire voting power of the former company, the credit shall take into account (in addition to any Swiss tax appropriate to the dividend) the Swiss tax payable by the former company in respect of its profits. For the purpose of this paragraph, the term “Swiss tax” shall include the Federal coupon tax, but shall not include the communal taxes.

3. Income (other than dividends) from sources within the United Kingdom which under the Laws of the United Kingdom and in accordance with this Convention is subject to tax in the United Kingdom either directly or by deduction shall be exempt from Swiss tax.

4. In the case of a person (other than a company or partnership) who is resident in the United Kingdom for the purposes of United Kingdom tax and is also resident (by reason of domicile or sojourn) in Switzerland for the purposes of Swiss tax, the provisions of paragraph 2 of this Article shall apply in relation to income which that person derives from sources within Switzerland, and the provisions of paragraph 3 of this Article shall apply in relation to income which that person derives from sources within the United Kingdom. If such person derives income from sources outside both the United Kingdom and Switzerland, tax may be imposed on that income in both the territories (subject to the Laws in force in the territories and to any Convention which may exist between either of the Contracting Parties and the territory from which the income is derived) but the Swiss tax on so much of that income as is subjected to tax in both the territories shall be limited to one-half of the tax on such income, and the United Kingdom tax on that income shall be reduced by a credit, in accordance with paragraph 2 of this Article, for the Swiss tax so computed.

5. For the purposes of this Article, profits or remuneration for personal (including professional) services performed in one of the territories shall be deemed to be income from sources within that territory, except that the remuneration of a director of a company shall be deemed to be income from sources within the territory in which the company is resident, and the services of an individual whose services are wholly or mainly performed in ships or aircraft operated by a resident of one of the territories shall be deemed to be performed in that territory.

ARTICLE XVI

1. Where it is provided in this Convention that relief from tax in respect of any kind of income shall be allowed in the territory from which such income is derived, that provision shall not be construed as requiring that income to be paid without deduction of tax at source at the full rate. Where tax has been deducted at source from such income the taxation authorities of the territory in which relief from tax is required to be given shall, when the tax-payer in receipt of the income shows to their satisfaction and within the time limits prescribed in that territory that he is entitled to the relief, arrange for the appropriate repayment of tax.

2. Where any income is exempted from tax by any provision of this Convention, it may nevertheless be taken into account in computing the tax on other income or in determining the rate of such tax.

3. For the purpose of calculating the reliefs due under Articles VI and XIV, the income of a partnership shall be regarded as that of its individual members.

ARTICLE XVII

1. The provisions of the present Convention shall not be construed as restricting in any manner any exemption, deduction, credit or other allowance now or hereafter accorded by the Laws in force in the territory of one of the Contracting Parties in the determination of the tax imposed in such territory.

2. The provisions of the present Convention shall not be construed as derogating from any right or privilege conferred upon taxpayers by the Agreement of the 17th October, 1931, between the Government of the United Kingdom and the Swiss Federal Council for reciprocal exemption from taxation on profits or gains arising through an agency.

ARTICLE XVIII

1. The nationals of one Contracting Party shall not be subjected in the territory of the other Contracting Party to any taxation or any requirement connected therewith which is other, higher or more burdensome than the taxation and connected requirements to which the nationals of the latter Party are or may be subjected in similar circumstances.

2. The enterprises of one of the territories, whether carried on by a company, a body of persons or by individuals alone or in partnership, shall not be subjected in the other territory, in respect of income, profits or capital attributable to their permanent establishments in that other territory to any taxation which is other, higher or more burdensome than the taxation to which the enterprises of that other territory, similarly carried on are or may be subjected in respect of the like income, profits or capital.

3. The income, profits and capital of an enterprise of one of the territories, the capital of which is wholly or partly owned or controlled, directly or indirectly, by a resident or residents of the other territory, shall not be subjected in the first territory to any taxation which is other, higher or more burdensome than the taxation to which other like enterprises of that first territory are or may be subjected in similar circumstances in respect of the like income, profits and capital.

4. Nothing in paragraph 1 or paragraph 2 of this Article shall be construed as obliging one Contracting Party to grant to nationals of the other Contracting Party who are not resident in the territory of the former Party the same personal allowances, reliefs and reductions for tax purposes as are granted to its own nationals.

5. In this Article the term “nationals” means—

(a) in relation to Switzerland, all Swiss citizens wherever residing and all entities with or without juridical personality created under Swiss Law;

(b) in relation to the United Kingdom, all British subjects and British protected persons—

(i) residing in the United Kingdom or any territory to which the present Convention is extended under Article XXI; or

(ii) deriving their status as such from connection with the United Kingdom or any territory to which the present Convention is extended under Article XXI, and all legal persons, partnerships, associations and other entities deriving their status as such from the Law in force in the United Kingdom or any territory to which the Convention is extended under Article XXI.

6. In this Article the term “taxation” means taxes of every kind and description levied on behalf of any authority whatsoever.

ARTICLE XIX

1. Where a taxpayer shows to the satisfaction of the competent authority of the Contracting Party of which he is a national or in whose territory he is a resident that he has not received the treatment in the other territory to which he is entitled under any provision of this Convention, that competent authority shall consult with the competent authority of the other Party with a view to the avoidance of the double taxation in question.

2. The competent authorities of the two Contracting Parties may communicate with each other directly for the purpose of giving effect to the provisions of this Convention (and in particular the provisions of Articles III and IV) and for resolving any difficulty or doubt as to the application or interpretation of the Convention.

ARTICLE XX

1. The competent authorities of the Contracting Parties shall exchange such information (being information which is at their disposal under their respective taxation Laws in the normal course of administration) as is necessary for carrying out the provisions of the present Convention in relation to the taxes which are the subject of the Convention. Any information so exchanged shall be treated as secret and shall not be disclosed to any persons other than those concerned with the assessment and collection of the taxes which are the subject of the Convention. No information as aforesaid shall be exchanged which would disclose any trade, business, industrial or professional secret or trade process.

2. In no case shall the provisions of this Article be construed as imposing upon either of the Contracting Parties the obligation to carry out administrative measures at variance with the regulations and practice of either Contracting Party or which would be contrary to its sovereignty, security or public policy or to supply particulars which are not procurable under its own legislation or that of the Party making application.

ARTICLE XXI

1. The present Convention may be extended, either in its entirety or with modifications, to any territory for whose international relations the United Kingdom is responsible and which imposes taxes substantially similar in character to those which are the subject of the Convention, and any such extension shall take effect from such date and subject to such modifications and conditions (including conditions as to termination) as may be specified and agreed between the Contracting Parties in notes to be exchanged for this purpose.

2. The termination in respect of the United Kingdom or Switzerland of the present Convention under Article XXIV shall, unless otherwise expressly agreed by the Contracting Parties, terminate the application of the Convention to any territory to which it has been extended under this Article.

ARTICLE XXII

1. The present Convention shall be ratified and the instruments of ratification shall be exchanged at Berne as soon as possible.

2. The present Convention shall enter into force upon the exchange of ratifications.

ARTICLE XXIII

1. Upon the entry into force of the present Convention in accordance with Article XXII, the provisions of the Convention shall have effect—

(a) In the United Kingdom:

as respects income tax (including surtax) for any year of assessment beginning on or after the 6th April, 1953;

as respects profits tax and excess profits levy in respect of the following profits—

(i) profits by reference to which income tax is, or but for the present Convention would be, chargeable for any year of assessment beginning on or after the 6th April, 1953;

(ii) other profits being profits by reference to which income tax is not chargeable, but which arise in any chargeable accounting period beginning on or after 1st April, 1953, or are attributable to so much of any chargeable accounting period falling partly before and partly after that date as falls after that date;

(b) In Switzerland:

for any taxable year beginning on or after the 1st January, 1953.

2. The exemption from tax provided in Article V shall have effect for any year of assessment beginning on or after the 6th April, 1946.

ARTICLE XXIV

The present Convention shall continue in effect indefinitely but either Contracting Party may, on or before the 30th June in any calendar year not earlier than the year 1957, give to the other Contracting Party, through the diplomatic channel, written notice of termination and, in such event, the Convention shall cease to be effective—

(a) In the United Kingdom:

as respects income tax (including surtax) for any year of assessment beginning on or after the 6th April in the calendar year next following that in which the notice is given;

as respects profits tax in respect of the following profits—

(i) profits by reference to which income tax is chargeable for any year of assessment beginning on or after the 6th April in the calendar year next following that in which the notice is given;

(ii) other profits being profits by reference to which income tax is not chargeable, but which arise in any chargeable accounting period beginning on or after the 1st April in the calendar year next following that in which the notice is given or are attributable to so much of any chargeable accounting period falling partly before and partly after the date as falls after that date;

(b) In Switzerland:

for any taxable year beginning on or after the 1st January of the calendar year next following that in which the notice is given.

SCHEDULE

EXCHANGE OF NOTES BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE SWISS FEDERAL COUNCIL EXTENDING THE CONVENTION FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME OF 30TH SEPTEMBER 1954 TO THE FEDERATION OF RHODESIA AND NYASALAND.

Berne, 30th May, 1961

No. 1

Her Britannic Majesty’s Embassy’s Note with Annex to the Swiss Federal Political Department.

BRITISH EMBASSY, BERNE.

30th May, 1961. Your Excellency,

I am instructed by Her Majesty’s Principal Secretary of State for Foreign Affairs to refer to the Convention between the Government of the United Kingdom of Great Britain and Northern Ireland and the Swiss Federal Council for the Avoidance of Double Taxation with respect to Taxes on Income, signed at London on the 30th September, 1954.

I have the honour to propose on behalf of the Government of the United Kingdom that, in accordance with the provisions of Article XXI, the above-mentioned Convention should be extended to the Federation of Rhodesia and Nyasaland in the manner, subject to the modifications, and with effect from the dates specified in the Annex to the present Note.

If the foregoing proposal is acceptable to the Swiss Government, I have the honour to suggest that the present Note with its Annex and Your Excellency’s reply to that effect should be regarded as constituting the Agreement reached between the two Governments in this matter.

I have the honour to be,

With the highest consideration, Your Excellency’s obedient Servant, PAUL GREY.

SON EXCELLENCE MONSIEUR LE CONSEILLER FEDERAL MAX EDOUARD PETITPIERRE,

DEPARTMENT POLITIQUE FEDERAL, BERNE.

ANNEX

PART I
APPLICATION

(1) The said Convention as modified by the present Annex shall apply—

(a) as if the Contracting Parties were the Swiss Federal Council and the Government of the Federation of Rhodesia and Nyasaland;

(b) as if the taxes concerned in the Federation of Rhodesia and Nyasaland were the income tax, supertax and undistributed profits tax; and

(c) as if references to “the date of signature of the present Convention” were references to the date of the Exchange of Notes to which the present Annex is appended.

(2) When the last of those measures shall have been taken in Switzerland and in the Federation of Rhodesia and Nyasaland necessary to give the present extension the force of Law in Switzerland and in the Federation respectively, the present extension shall have effect—

(a) in Switzerland: for any taxable year beginning on or after the first day of January, 1959; and

(b) in the Federation of Rhodesia and Nyasaland: as respects taxes charged for the year of assessment beginning on the first day of April, 1959, and for subsequent years of assessment.

(3) The Swiss Federal Council shall inform the Government of the United Kingdom in writing through the diplomatic Channel when the last of the measures necessary, as indicated in paragraph (2), have been taken in Switzerland. The Government of the United Kingdom shall inform the Swiss Federal Council in writing through the diplomatic Channel when the last of the measures necessary, as indicated in paragraph (2), have been taken in the Federation of Rhodesia and Nyasaland.

(4) The present extension shall continue in effect indefinitely but either the Government of the United Kingdom or the Swiss Federal Council may, on or before the thirtieth day of June in any calendar year not earlier than the year 1962, give to the other through the diplomatic Channel written notice of termination and in such event the present extension shall cease to have effect—

(a) in Switzerland: for any taxable year beginning on or after the first day of January of the calendar year next following that in which the notice is given; and

(b) in the Federation of Rhodesia and Nyasaland: as respects taxes charged for any year of assessment beginning on or after the first day of April in the calendar year next following that in which the notice is given.

PART II
MODIFICATIONS

The said Convention shall, for the purposes of the extension to the Federation of Rhodesia and Nyasaland, apply with the following modifications:

(a) Article VI shall be replaced by the following provision:

Where a company which is a resident of one of the territories derives profits or income from sources within the other territory, there shall not be imposed in that other territory any form of taxation on dividends paid by the company to persons not resident in that other territory, or any tax in the nature of an undistributed profits tax on undistributed profits of the company, whether or not those dividends or undistributed profits represent, in whole or in part, profits or income so derived: provided, however, that the Swiss coupon tax and the Swiss anticipatory tax may be charged in respect of dividends paid by any company created or organised under Swiss Law.

(b) Article X shall apply to remuneration including pensions paid by, or out of funds created by, the Government of each of the Territories constituting the Federation of Rhodesia and Nyasaland to any individual in respect of services rendered to that Government in the discharge of governmental functions as it applies to similar payments by, or out of funds created by, the Government of the Federation.

(c) References to the Laws of the United Kingdom shall be understood to mean “the Laws of the Federation of Rhodesia and Nyasaland”.

No. 2

The President of the Swiss Confederation to Her Britannic Majesty’s Ambassador in Berne.

Berne,

30th May, 1961. Monsieur I’Ambassadeur,

I have had the honour to receive your Note of today’s date by which your Excellency made known to me the following:

“I am instructed by Her Majesty’s Principal Secretary of State for Foreign Affairs to refer to the Convention between the Government of the United Kingdom of Great Britain and Northern Ireland and the Swiss Federal Council for the Avoidance of Double Taxation with respect to Taxes on Income, signed at London on the 30th September, 1954.

I confirm to your Excellency, that with reference to Article XXI of the preceding Convention, the Swiss Federal Council has approved the contents of your Note. In consequence, your Note and the present reply together with their annexes constitute an Agreement in this matter between our two Governments.

I take this opportunity to renew to you, Monsieur I’Ambassadeur, the assurance of my highest consideration.

CONVENTION FOR THE AVOIDANCE OF DOUBLE TAXATION – HOLLAND

[Order by the President]

GN 463 of 1964.

An arrangement has been made with the Government of the United Kingdom of Great Britain and Northern Ireland whereby the Convention between the Government and the Government of Holland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income has been extended to the former Protectorate by and incorporating the terms of the Despatch and reply thereto set out in the Schedule.

SCHEDULE

223

BRITISH EMBASSY,

THE HAGUE.

December 7, 1963.

Your Excellency,

I have the honour, upon instructions from Her Majesty’s Principal Secretary of State for Foreign Affairs, to refer to the Exchange of Notes between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Netherlands dated the 20th December and 27th December 1962 extending to the Federation of Rhodesia and Nyasaland, on the basis therein specified, the provisions of the Convention between the United Kingdom and the Netherlands for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income, signed at London on the 15th October, 1948.

The Governments of Southern Rhodesia, Northern Rhodesia and Nyasaland have requested the United Kingdom Government to address the Netherlands Government regarding the arrangements to obtain immediately after dissolution of the Federation, the target date of which, as agreed at the Victoria Falls Conference, is the 31st December, 1963.

As it is particularly undesirable to have any hiatus in double taxation agreements I have the honour to propose on behalf of the Government of the United Kingdom that on dissolution of the Federation of Rhodesia and Nyasaland the extension provided for in the above-mentioned Exchange of Notes should be regarded as continuing in force in relation to Southern Rhodesia, Northern Rhodesia and Nyasaland individually and that references therein to the Federation should be construed accordingly.

I should be grateful if Your Excellency would let me know, if possible before the 31st December, whether the Netherlands Government sees any objection to this proposal.

I avail myself of this opportunity to renew to Your Excellency the assurances of my highest consideration.

A. N. NOBLE.

Dr. J. M. A. H. Luns,

Minister for Foreign Affairs.

MINISTRY OF FOREIGN AFFAIRS, THE HAGUE.

The Hague, December 23, 1963.

Treaty Department

DVE/VB-184938

Sir,

I have the honour to acknowledge receipt of Your Excellency’s letter number 223 of 7th December, 1963, regarding the Exchange of Notes between the Government of the Kingdom of the Netherlands and the Government of the United Kingdom of Great Britain and Northern Ireland dated the 20th December and the 27th December, 1962, extending to the Federation of Rhodesia and Nyasaland, on the basis therein specified, the provisions of the Convention between the Netherlands and the United Kingdom for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income, signed at London on 15th October, 1948.

In reply to your letter I would inform Your Excellency that the Government of the Kingdom of the Netherlands sees no objection to the proposal contained therein and that therefore, on the dissolution of the Federation of Rhodesia and Nyasaland, the extension provided for in the above-mentioned Exchange of Notes will be regarded as continuing in force in relation to the Kingdom, on the one hand, and the countries of Southern Rhodesia, Northern Rhodesia and Nyasaland individually, on the other.

I avail myself of this opportunity to renew to Your Excellency the assurances of my highest consideration.

For the Minister of Foreign Affairs

(Signed)

BARON S. J. VAN TUYLL VAN SEROOSKERKEN,

Secretary-General.

His Excellency,

Sir Andrew Noble,

Ambassador Extraordinary and Plenipotentiary of Her Britannic Majesty,

THE HAGUE.

ANNEXURE

CONVENTION BETWEEN HIS MAJESTY IN RESPECT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND HER MAJESTY THE QUEEN OF THE NETHERLANDS FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME.

His Majesty the King of Great Britain, Ireland and the British Dominions beyond the Seas and Her Majesty the Queen of the Netherlands, Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, Have appointed for that purpose as their Plenipotentiaries:

His Majesty the King of Great Britain, Ireland and the British Dominions beyond the Seas: For the United Kingdom of Great Britain and Northern Ireland:

The Right Honourable Ernest Bevin, M.P., His Principal Secretary of State for Foreign Affairs; Her Majesty the Queen of the Netherlands:

For the Kingdom of the Netherlands:

His Excellency Jonkheer E. Michiels van Verduynen, Her Ambassador Extraordinary and Plenipotentiary in London;

Who, having exhibited their respective full powers, found in good and due form, have agreed as follows:

ARTICLE I

1. The taxes which are the subject of the present Convention are—

(a) In the Netherlands:

The income tax, the wages tax, the company tax, the dividends tax and the tax on fees of directors and managers of companies (hereinafter referred to as “Netherlands tax”);

(b) In the United Kingdom of Great Britain and Northern Ireland:

The income tax (including surtax) and the profits tax (hereinafter referred to as “United Kingdom tax”).

2. The present Convention shall also apply to any other taxes of a substantially similar character imposed in the Netherlands or the United Kingdom subsequently to the date of signature of the present Convention.

ARTICLE II

1. In the present Convention, unless the context otherwise requires—

(a) The term “United Kingdom” means Great Britain and Northern Ireland, excluding the Channel Islands and the Isle of Man;

(b) The term “Netherlands” means the Kingdom of the Netherlands in Europe;

(c) The terms “one of the territories” and “the other territory” mean the United Kingdom or the Netherlands, as the context requires;

(d) The term “tax” means United Kingdom tax or Netherlands tax as the context requires;

(e) The term “person” includes any body of persons, corporate or not corporate;

(f) The term “company” means any body corporate, and any partnership the capital of which is wholly or partly represented by shares;

(g) The terms “resident of the United Kingdom” and “resident of the Netherlands” mean respectively any person who is resident in the United Kingdom for the purposes of United Kingdom tax and not resident in the Netherlands for the purposes of Netherlands tax, and any person who is resident in the Netherlands for the purposes of Netherlands tax and not resident in the United Kingdom for the purposes of United Kingdom tax; a company shall be regarded as resident in the United Kingdom if its business is managed and controlled in the United Kingdom and as resident in the Netherlands if its business is managed and controlled in the Netherlands;

(h) The terms “resident of one of the territories” and “resident of the other territory” mean a person who is a resident of the United Kingdom or a person who is a resident of the Netherlands, as the context requires;

(i) The terms “United Kingdom enterprise” and “Netherlands enterprise” mean respectively an industrial or commercial enterprise carried on by a resident of the United Kingdom and an industrial or commercial enterprise carried on by a resident of the Netherlands, and the terms “enterprise of one of the territories” and “enterprise of the other territory” mean a United Kingdom enterprise or a Netherlands enterprise, as the context requires;

(j) The term “industrial or commercial profits” includes rents or royalties in respect of cinematograph films;

(k) The term “permanent establishment” when used with respect to an enterprise of one of the territories, means a branch, management, factory, or other fixed place of business, but does not include an agency unless the agent has, and habitually exercises, a General authority to negotiate and conclude contracts on behalf of such enterprise or has a stock of merchandise from which he regularly fills orders on its behalf. In this connection—

2. In the application of the provisions of the present Convention by one of the High Contracting Parties any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the Laws in force in the territory of that Party relating to the taxes which are the subject of the present Convention.

ARTICLE III

1. The industrial or commercial profits of a United Kingdom enterprise shall not be subject to Netherlands tax unless the enterprise carries on a trade or business in the Netherlands through a permanent establishment situated therein. If it carries on a trade or business as aforesaid, tax may be imposed on those profits by the Netherlands, but only on so much of them as is attributable to that permanent establishment.

2. The industrial or commercial profits of a Netherlands enterprise shall not be subject to United Kingdom tax unless the enterprise carries on a trade or business in the United Kingdom through a permanent establishment situated therein. If it carries on a trade or business as aforesaid, tax may be imposed on those profits by the United Kingdom, but only on so much of them as is attributable to that permanent establishment.

ARTICLE IV

Where—

(a) an enterprise of one of the territories participates directly or indirectly in the management, control or capital of an enterprise of the other territory, or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the territories and an enterprise of the other territory, 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 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 profits of that enterprise and taxed accordingly.

ARTICLE V

Notwithstanding the provisions of Articles III and IV, profits which a resident of one of the territories derives from operating ships or aircraft shall be exempt from tax in the other territory.

ARTICLE VI

1. Dividends paid by a company resident in one of the territories to a resident of the other territory, who is subject to tax in that other territory in respect thereof and does not carry on a trade or business in the first-mentioned territory through a permanent establishment situated therein, shall be exempt from any tax in that first-mentioned territory which is chargeable on dividends in addition to the tax chargeable in respect of the profits or income of the company.

2. Where a company which is a resident of one of the territories derives profits or income from sources within the other territory, there shall not be imposed in that other territory any form of taxation on dividends paid by the company to persons not resident in that other territory, or any tax in the nature of an undistributed profits tax on undistributed profits of the company, whether or not those dividends or undistributed profits represent, in whole or in part, profits or income so derived.

ARTICLE VII

1. Any interest or royalty derived from sources within one of the territories by a resident of the other territory, who is subject to tax in that other territory in respect thereof and does not carry on a trade or business in the first-mentioned territory through a permanent establishment situated therein, shall be exempt from tax in that first-mentioned territory.

2. In this Article—

(a) The term “interest” includes interest on a debenture or on any other form of indebtedness, except in so far as such other indebtedness is secured by way of mortgage of immovable property;

(b) The term “royalty” means any royalty or other amount paid as consideration for the use of, or for the privilege of using, any copyright, patent, design, secret process or formula, trade mark or other like property, but does not include any royalty or other amount paid in respect of the operation of a mine or quarry or of any other extraction of natural resources.

3. Where any interest or royalty exceeds a fair and reasonable consideration in respect of the indebtedness or rights for which it is paid, the exemption provided by the present Article shall apply only to so much of the interest or royalty as represents such fair and reasonable consideration.

ARTICLE VIII

Income from immovable property interest (other than debenture interest) from any mortgage of such property, and royalties in respect of the operation of a mine or quarry or of any other extraction of a natural resource, shall be subject to tax in accordance with the Law in force in the territory in which such immovable property, mine, quarry or natural resource is situated.

ARTICLE IX

1. Remuneration, including pensions, paid by, or out of funds created by, one of the High Contracting Parties to any individual in respect of services rendered to that Party in the discharge of governmental functions shall be exempt from tax in the territory of the other High Contracting Party, unless the individual is a national of that other Party without being also a national of the first-mentioned Party.

2. The provisions of this Article shall not apply to payments in respect of services rendered in connection with any trade or business carried on by either of the High Contracting Parties for purposes of profit.

ARTICLE X

1. An individual who is a resident of the United Kingdom shall be exempt from Netherlands tax on profits or remuneration in respect of personal (including professional) services performed within the Netherlands in any year of assessment, if—

(a) he is present within the Netherlands for a period or periods not exceeding in the aggregate 183 days during that year, and

(b) the services are performed for or on behalf of a resident of the United Kingdom, and

2. An individual who is a resident of the Netherlands shall be exempt from United Kingdom tax on profits or remuneration in respect of personal (including professional) services performed within the United Kingdom in any year of assessment, if—

(a) he is present within the United Kingdom for a period or periods not exceeding in the aggregate 183 days during that year, and

(b) the services are performed for or on behalf of a resident of the Netherlands, and

3. The provisions of this Article shall not apply to the profits or remuneration of public entertainers such as theatre, motion picture or radio artists, musicians and athletes.

ARTICLE XI

1. Any pension (other than a pension of the kind referred to in paragraph 1 of Article IX) and any annuity, derived from sources within the Netherlands by an individual who is a resident of the United Kingdom and subject to United Kingdom tax in respect thereof, shall be exempt from Netherlands tax.

2. Any pension (other than a pension of the kind referred to in paragraph 1 of Article IX) and any annuity, derived from sources within the United Kingdom by an individual who is a resident of the Netherlands and subject to Netherlands tax in respect thereof, shall be exempt from United Kingdom tax.

ARTICLE XII

A professor or teacher from one of the territories, who receives remuneration for teaching, during a period of temporary residence not exceeding two years, at a university, college, school or other educational institution in the other territory, shall be exempt from tax in that other territory in respect of that remuneration.

ARTICLE XIII

A student, student-trainee or business apprentice from one of the territories who is receiving full-time education or training in the other territory shall be exempt from tax in that other territory on payments made to him by persons in the first-mentioned territory for the purposes of his maintenance, education or training.

ARTICLE XIV

1. Individuals who are residents of the Netherlands shall be entitled to the same personal allowances, reliefs and reductions for the purposes of United Kingdom income tax as British subjects not resident in the United Kingdom.

2. Individuals who are residents of the United Kingdom shall be entitled to the same personal allowances and reliefs for the purposes of Netherlands tax as Netherlands nationals not resident in the Netherlands.

ARTICLE XV

1. Subject to the provisions of the Law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom, Netherlands tax payable, whether directly or by deduction, in respect of income from sources within the Netherlands shall be allowed as a credit against any United Kingdom tax payable in respect of that income. Where such income is a dividend paid by a company resident in the Netherlands to a company resident in the United Kingdom which controls, directly or indirectly, not less than one-half of the voting power in the former company, the credit shall take into account, in addition to any Netherlands tax payable in respect of the dividend, the Netherlands tax payable by the former company in respect of its profits.

2. As far as may be in accordance with the provisions of Netherlands Law, United Kingdom tax payable, whether directly or by deduction, in respect of income from sources within the United Kingdom shall be allowed as a credit against any Netherlands tax payable in respect of that income: provided that for the purposes of this paragraph and of the aforesaid provision of Netherlands Law, the Netherlands tax payable in respect of such income (before allowance of any credit) shall be deemed to be an amount which bears the same proportion to the total Netherlands tax payable (before allowance of any credit) by the person entitled to such income as such income bears to that person, total income subject to Netherlands tax, and the credit shall not exceed the amount so determined.

3. For the purposes of this Article, profits or remuneration for personal (including professional) services performed in one of the territories shall be deemed to be income from sources within that territory, and the services of an individual whose services are wholly or mainly performed in ships or aircraft operated by a resident of one of the territories shall be deemed to be performed in that territory.

ARTICLE XVI

1. The taxation authorities of the High Contracting Parties shall exchange such information (being information which is at their disposal under their respective taxation Laws in the normal course of administration) as is necessary for carrying out the provisions of the present Convention or for the prevention of fraud or for the administration of statutory provisions against legal avoidance in relation to the taxes which are the subject of the present Convention. Any information so exchanged shall be treated as secret and shall not be disclosed to any persons other than those concerned with the assessment and collection of the taxes which are the subject of the present Convention. No information as aforesaid shall be exchanged which would disclose any trade, business, industrial or professional secret or trade process.

2. As used in this Article, the term “taxation authorities” means, in the case of the United Kingdom, the Commissioner-Generals of Inland Revenue or their authorised representatives; in the case of the Netherlands, the “Directeur-Generaal der Belastingen” or his authorised representative; and, in the case of any territory to which the present Convention is extended under Article XIX, the competent authority for the administration in such territory of the taxes to which the present Convention applies.

ARTICLE XVII

The following agreements between the United Kingdom and the Kingdom of the Netherlands shall not have effect for any year or period for which the present Convention has effect, that is to say:

(a) the agreement dated 20th May, 1926, for the reciprocal exemption from income tax in certain cases of profits accruing from the business of shipping;

(b) the convention dated 6th June, 1935, for reciprocal exemption from taxes in certain cases; and

(c) the agreement constituted by exchange of notes dated 27th August, 1936, for reciprocal exemptions from certain taxation in respect of the business of air transport.

ARTICLE XVIII

2. The enterprises of one of the territories shall not be subjected in the other territory, in respect of profits attributable to their permanent establishments in that other territory, to any taxation which is other, higher or more burdensome that the taxation to which the enterprises of that other territory are or may be subjected in respect of the like profits.

3. Nothing in paragraph 1 or paragraph 2 of this Article shall be construed as obliging one of the High Contracting Parties to grant to nationals of the other High Contracting Party who are not resident in the territory of the former Party the same personal allowances, reliefs and reductions for tax purposes as are granted to His own nationals.

4. In this Article the term “nationals” means—

(a) in relation to the Netherlands:

(i) all Netherlands nationals;

(ii) all Netherlands subjects residing in the Netherlands;

(iii) as regards any Netherlands territory to which the present Convention applies by reason of extension made under Article XIX, all Netherlands subjects who reside in such territory or who derive their status as Netherlands subjects from birth in, or origin from, such territory;

(iv) all legal persons, partnerships and associations deriving their status as such from the Law in force in any Netherlands territory to which the present Convention applies;

(b) in relation to the United Kingdom, all British subjects and British protected persons residing in or belonging to the United Kingdom or any British territory to which the present Convention applies by reason of extension made under Article XIX, and all legal persons, partnerships and associations deriving their status as such from the Law in force in any British territory to which the present Convention applies.

5. In this Article the term “taxation” means taxes of every kind and description levied on behalf of any authority whatsoever.

ARTICLE XIX

1. The present Convention may be extended, either in its entirety or with modifications, to any territory of one of the High Contracting Parties to which this Article applies and which imposes taxes substantially similar in character to those which are the subject of the present Convention, and any such extension shall take effect from such date and subject to such modifications and conditions (including conditions as to termination) as may be specified and agreed between the High Contracting Parties in notes to be exchanged for this purpose.

2. The termination in respect of the Netherlands or the United Kingdom of the present Convention under Article XXI shall, unless otherwise expressly agreed by both High Contracting Parties, terminate the application of the present Convention to any territory to which the Convention has been extended under this Article.

3. The territories to which this Article applies are—

(a) in relation to His Majesty the King of Great Britain, Ireland and the British Dominions beyond the Seas:

Any territory other than the United Kingdom for whose foreign relations the United Kingdom is responsible;

(b) in relation to Her Majesty the Queen of the Netherlands:

Any territory other than the Netherlands for whose foreign relations the Netherlands is responsible.

ARTICLE XX

1. The present Convention shall be ratified and the instruments of ratification shall be exchanged at London as soon as possible.

2. Upon exchange of ratifications the present Convention shall have effect:

(a) In the United Kingdom: 1948;

as respects income tax for any year of assessment beginning on or after the 6th April, and

as respects surtax for any year of assessment beginning on or after the 6th April, 1947;

as respects profits tax (not being profits tax apportionable to so much of any chargeable accounting period as falls before the 1st January, 1947), in respect of the following profits:

(i) profits arising in any chargeable accounting period beginning on or after the 1stApril, 1948;

(ii) profits attributable to so much of any chargeable accounting period falling partly before and partly after that date as falls after that date;

(iii) profits not so arising or attributable by reference to which income tax is, or but for the present Agreement would be, chargeable for any year of assessment beginning on or after the 6th April, 1948;

(b) In the Netherlands: 1947;

as respects income tax for any year of assessment beginning after the 31st December,

as respects the company tax for any chargeable accounting period beginning after the 31st December, 1947; and for the unexpired portion of any chargeable accounting period current at that date; and as respects any other taxes for the calendar year 1948 and subsequent years.

ARTICLE XXI

The present Convention shall continue in effect indefinitely but either of the High Contracting Parties may, on or before the 30th June in any calendar year not earlier than the year 1952, give to the other High Contracting Party through diplomatic channels, written notice of termination and, in such event, the present Convention shall cease to be effective:

(a) In the United Kingdom:

as respects income tax for any year of assessment beginning on or after the 6th April in the calendar year next following that in which the notice is given;

as respects surtax for any year of assessment beginning on or after the 6th April in the calendar year in which the notice is given; and

as respects profits tax in respect of the following profits:

(i) profits arising in any chargeable accounting period beginning on or after the 1stApril in the calendar year next following that in which the notice is given;

(ii) profits attributable to so much of any chargeable accounting period falling partly before and partly after that date as falls after that date;

(iii) profits not so arising or attributable by reference to which income tax is chargeable for any year of assessment beginning on or after the 6th April in the next following calendar year;

(b) In the Netherlands:

as respects income tax for any year of assessment beginning after the end of the calendar year in which the notice is given;

as respects the company tax for any chargeable accounting period beginning after the end of the calendar year in which the notice is given, and for the unexpired portion of any chargeable accounting period current at the end of that year; and

given.

as respects any other taxes for any calendar year following that in which the notice is In witness whereof the above-mentioned Plenipotentiaries have signed the present Convention and have affixed thereto their seals.

SCHEDULE

EXCHANGE OF NOTES BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE KINGDOM OF THE NETHERLANDS EXTENDING THE CONVENTION FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME OF THE 15TH OCTOBER, 1948, TO THE FEDERATION OF RHODESIA AND NYASALAND.

The Hague, December 20th, 1962

No. 1

Her Britannic Majesty’s Embassy’s Note with Annex to the Minister of Foreign Affairs of Her Majesty the Queen of the Netherlands.

BRITISH EMBASSY, THE HAGUE.

20th December, 1962. Your Excellency,

I have the honour, upon instructions from Her Majesty’s Principal Secretary of State for Foreign Affairs, to refer to the Convention between the United Kingdom of Great Britain and Northern Ireland and the Kingdom of the Netherlands for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, signed at London on the 15th October, 1948.

I have the honour to propose on behalf of the Government of the United Kingdom that, in accordance with the provisions of Article XIX, the above-mentioned Convention should be extended to the Federation of Rhodesia and Nyasaland in the manner, subject to the modifications, and with effect from the dates specified in the Annex to the present Note.

If the foregoing proposal is acceptable to the Government of the Kingdom of the Netherlands, I have the honour to suggest that the present Note with its Annex, and Your Excellency’s reply to that effect should be regarded as constituting an Exchange of Notes as provided for in the first paragraph of Article XIX of the above-mentioned Convention and as placing on record the agreement reached between the two Governments in this matter.

I avail myself of this opportunity to renew to Your Excellency the assurance of my highest consideration.

A. N. NOBLE.

His Excellency, Dr. J. M. A. H. Luns, Minister of Foreign Affairs, The Hague.

ANNEX

PART I
APPLICATION

(a) The said Convention as modified by the present Annex shall apply—

(1) as if the contracting parties were the Government of the Kingdom of the Netherlands and the Government of the Federation of Rhodesia and Nyasaland;

(2) as if the term “United Kingdom” (except where the context otherwise required) meant the Federation of Rhodesia and Nyasaland;

(3) as if the taxes concerned in the Federation of Rhodesia and Nyasaland were the income tax, supertax and undistributed profits tax: provided that for the purposes only of the application of paragraph 2 of Article XV of the Convention, the taxes concerned shall include the territorial surcharges charged in Northern Rhodesia, Nyasaland and Southern Rhodesia; and

(4) as if references to “the date of signature of the present Convention” were references to the date of the Exchange of Notes to which the present Annex is appended.

(b) When the last of these measures shall have been taken in the Federation of Rhodesia and Nyasaland necessary to give the present extension the force of Law in the Federation, the present extension shall have effect-

(1) In the Netherlands:

as respects income tax for any year of assessment beginning after 31st December, 1954;

as respects the company tax for any chargeable accounting period beginning after 31st December, 1954, and for the unexpired portion of any chargeable accounting period current at that date; and

as respects any other taxes for the calendar year 1955 and for subsequent years;

(2) In the Federation of Rhodesia and Nyasaland as respects tax for the year of assessment beginning on 1st April, 1955, and for subsequent years of assessment.

(c) The Government of the United Kingdom shall inform the Government of the Kingdom of the Netherlands in writing when the last of the measures necessary, as indicated in paragraph (b), have been taken in the Federation of Rhodesia and Nyasaland.

(d) Except as specified in Part II modification (a) below, the present extension shall remain in force indefinitely and shall continue to remain in force notwithstanding that the Convention may have been terminated by either of the High Contracting Parties in accordance with Article XXI thereof. Either High Contracting Party may, however, on or before the 30th June in any calendar year not earlier than the year 1964 give to the other Contracting Party through the diplomatic Channel written notice of termination and in such event the present extension shall cease to have effect—

(1) In the Netherlands: as respects income tax for any year of assessment beginning after the end of the calendar year in which the notice is given;

as respects the company tax for any chargeable accounting period beginning after the end of the calendar year in which such notice is given and for the unexpired portion of any chargeable accounting period current at the end of that year; and as respects any other taxes for any calendar year following that in which the notice is given;

(2) In the Federation of Rhodesia and Nyasaland as respects tax for any year of assessment beginning on or after the 1st April in the calendar year next following the date of such notice.

PART II
MODIFICATIONS

The said Convention shall apply with the modifications that—

(a) Article VI shall cease to be applicable on the 1st January, 1963; and

(b) Article IX shall be amended by the addition of the following new paragraph:

“3. For the purposes of this Article any reference to the Government of the Federation of Rhodesia and Nyasaland shall include a reference to the Governments of its constituent territories.”

No. 2

Note to Her Britannic Majesty’s Ambassador at The Hague from the Minister of Foreign Affairs of Her Majesty the Queen of the Netherlands.

Ministry of Foreign Affairs,

The Hague.

Treaty Department

THE HAGUE,

27th December, 1962. Sir,

I have the honour to acknowledge receipt of Your Excellency’s Note of the 20th December, 1962, with Annex, which reads as follows:

“I have the honour, upon instructions from Her Majesty’s Principal Secretary of State for Foreign Affairs, to refer to the Convention between the United Kingdom of Great Britain and Northern Ireland and the Kingdom of the Netherlands for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, signed at London on the 15th October, 1948.

In reply I have the honour to inform you that the Government of the Kingdom of the Netherlands accept the foregoing proposal and agree to regard your Note, together with the present reply, as constituting an Exchange of Notes as provided for in the first paragraph of Article XIX of the above-mentioned Convention, and as placing on record the agreement reached between the two Governments in this matter.

I avail myself of this opportunity to renew to Your Excellency the assurance of my highest consideration.

DR. J. M. A. H. LUNS.

His Excellency, Sir Andrew Noble, British Ambassador at The Hague.

Ministry of Foreign Affairs.

The Hague.

ANNEX

PART I
APPLICATION

(a) The said Convention as modified by the present Annex shall apply—

(1) as if the contracting parties were the Government of the Kingdom of the Netherlands and the Government of the Federation of Rhodesia and Nyasaland;

(2) as if the term “United Kingdom” (except where the context otherwise required) meant the Federation of Rhodesia and Nyasaland;

(4) as if references to “the date of signature of the present Convention” were references to the date of the Exchange of Notes to which the present Annex is appended.

CONVENTION FOR THE AVOIDANCE OF DOUBLE TAXATION – SWEDEN

[Order by the President]

GN 465 of 1964.

An arrangement has been made with the Government of the United Kingdom of Great Britain and Northern Ireland whereby the Convention between that Government and the Government of Sweden for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income has been extended to the former Protectorate by and incorporating the terms of the Despatch and reply thereto set out in the Schedule.

SCHEDULE

BRITISH EMBASSY, STOCKHOLM,

21st December, 1963. YOUR EXCELLENCY,

1. I have the honour, upon instructions from Her Majesty’s Principal Secretary of State for Foreign Affairs, to refer to the Exchange of Notes between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Sweden dated the 28th May, 1958, extending to the Federation of Rhodesia and Nyasaland on the basis therein specified the provisions of the Convention between the United Kingdom and Sweden for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income, signed at London on the 30th March, 1949.

2. I have the honour to propose on behalf of the Government of the United Kingdom that on dissolution of the Federation of Rhodesia and Nyasaland the extension provided for in the above-mentioned Exchange of Notes should be regarded as continuing in force in relation to Southern Rhodesia, Northern Rhodesia and Nyasaland individually and that references therein to the Federation should be construed accordingly.

3. If the foregoing proposal is acceptable to the Government of Sweden, I have the honour to suggest that the present Note, and your reply to that effect, should be regarded as constituting an Agreement reached between the two Governments in this matter.

I avail myself of this opportunity to renew to Your Excellency the assurances of my highest consideration.

P. M. CROSTHWAITE,

Her Majesty’s Ambassador. HIS EXCELLENCY

MR. TORSTEN NILSSON,

THE MINISTER FOR FOREIGN AFFAIRS OF SWEDEN.

STOCKHOLM, December 21, 1963. Your Excellency,

I have the honour to acknowledge receipt of Your Excellency’s Note of December 21, 1963, which reads as follows:

In reply, I have the honour to state that the Government of Sweden considers that Your Excellency’s Note and the present reply constitute an Agreement between the two Governments.

ANNEXURE

CONVENTION BETWEEN HIS MAJESTY IN RESPECT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND HIS MAJESTY THE KING OF SWEDEN FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME.

London, 30th March, 1949

His Majesty The King of Great Britain, Ireland and the British Dominions beyond the Seas and His Majesty the King of Sweden, Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, Have appointed for that purpose as their Plenipotentiaries:

His Majesty The King of Great Britain, Ireland and the British Dominions beyond the Seas: For the United Kingdom of Great Britain and Northern Ireland:

Sir William Strang, K.C.B., K.C.M.G., M.B.E., Permanent Under-Secretary of State for Foreign Affairs;

His Majesty the King of Sweden:

His Excellency Monsieur Bo Gunnar Richardsson Hagglof, His Majesty’s Ambassador Extraordinary and Plenipotentiary in London;

Who, having exhibited their respective full powers, found in good and due form, have agreed as follows:

ARTICLE I

1. The taxes which are the subject of the present Convention are—

(a) In Sweden:

The State income tax (including coupon tax) and the tax on the undistributed profits of companies (Erstatningsskatt), and for the purposes of Articles XXII, paragraph 3, and XXIII to XXV inclusive, the State capital tax (hereinafter referred to as “Swedish tax”);

(b) In the United Kingdom of Great Britain and Northern Ireland:

The income tax (including surtax) and the profits tax (hereinafter referred to as “United Kingdom tax”).

2. The present Convention shall also any other taxes of a substantially similar character imposed in the United Kingdom or Sweden subsequently to the date of signature of the present Convention.

ARTICLE II

1. In the present Convention, unless the context otherwise requires—

(a) The term “United Kingdom” means Great Britain and Northern Ireland, excluding the Channels lands and the Isle of Man;

(b) The terms “one of the territories” and “the other territory” mean the United Kingdom or Sweden, as the context requires;

(d) The term “person” includes any body of persons, corporate or not corporate;

(e) The term “company” means any body corporate;

(f) The terms “resident of the United Kingdom” and “resident of Sweden” mean respectively any person who is resident in the United Kingdom for the purposes of United Kingdom tax and not resident in Sweden for the purposes of Swedish tax, and any person who is resident in Sweden for the purposes of Swedish tax and hot resident in the United Kingdom for the purposes of United Kingdom tax; a company shall be regarded as resident in the United Kingdom if its business is managed and controlled in the United Kingdom and as resident in Sweden if it is incorporated under the Laws of Sweden and its business is not managed and controlled in the United Kingdom, or if it is not so incorporated but its business is managed and controlled in Sweden;

(g) The terms “resident of one of the territories” and “resident of the other territory” mean a person who is a resident of the United Kingdom or a person who is a resident of Sweden, as the context requires;

(h) The terms “United Kingdom enterprise” and “Swedish enterprise” mean respectively an industrial or commercial enterprise or undertaking carried on by a resident of the United Kingdom and an industrial or commercial enterprise or undertaking carried on by a resident of Sweden, and the terms “enterprise of one of the territories” and “enterprise of the other territory” mean a United Kingdom enterprise or a Swedish enterprise, as the context requires;

(i) The term “industrial or commercial profits” includes rents or royalties in respect of cinematograph films;

(j) The term “permanent establishment” when used with respect to an enterprise of one of the territories, means a branch, management, factory, or other fixed place of business, a mine, quarry or any other place of natural resources subject to exploitation. It also includes a place where building construction is carried on by contract for a period of at least one year, but does not include an agency unless the agent has, and habitually exercises, a General authority to negotiate and conclude contracts on behalf of the enterprise or has a stock of merchandise from which he regularly fills orders on its behalf. In this connection—

2. Where under this Convention any income is exempt from tax in one of the territories if (with or without other conditions) it is subject to tax in the other territory, and that income is subject to tax in that other territory by reference to the amount thereof which is remitted to or received in that other territory, the exemption to be allowed under this Convention in the first-mentioned territory shall apply only to the amount so remitted or received.

3. In the application of the provisions of the present Convention by one of the High Contracting Parties any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the Laws in force in the territory of that Party relating to the taxes which are the subject of the present Convention.

ARTICLE III

1. The industrial or commercial profits of a United Kingdom enterprise shall not be subject to Swedish tax unless the enterprise carries on a trade or business in Sweden through a permanent establishment situated therein. If it carries on a trade or business as aforesaid, tax may be imposed on those profits by Sweden, but only on so much of them as is attributable to that permanent establishment.

2. The industrial or commercial profits of a Swedish enterprise shall not be subject to United Kingdom tax unless the enterprise carries on a trade or business in the United Kingdom through a permanent establishment situated therein. If it carries on a trade or business as aforesaid, tax may be imposed on those profits by the United Kingdom, but only on so much of them as is attributable to that permanent establishment.

ARTICLE IV

Where—

(a) an enterprise of one of the territories participates directly or indirectly in the management, control or capital of an enterprise of the other territory; or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the territories and an enterprise of the other territory;

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 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 profits of that enterprise and taxed accordingly.

ARTICLE V

1. The industrial and commercial profits of a Swedish enterprise shall, so long as undistributed profits of United Kingdom enterprises are effectively charged to United Kingdom profits tax at a lower rate than distributed profits of such enterprises, be charged to United Kingdom profits tax only at that lower rate.

2. Where a company which is a resident of Sweden controls, directly or indirectly, not less than 50 per centum of the entire voting power of a company which is a resident of the United Kingdom, distributions by the latter company to the former company shall be left out of account in computing United Kingdom profits tax effectively chargeable on the latter company at the rate appropriate to distributed profits.

ARTICLE VI

Notwithstanding the provisions of Articles III, IV and V, profits which a resident of one of the territories derives from operating ships or aircraft shall be exempt from tax in the other territory.

ARTICLE VII

1.—

(a) Dividends paid by a company which is a resident of the United Kingdom to a resident of Sweden, who is subject to tax in Sweden in respect thereof and does not carry on a trade or business in the United Kingdom through a permanent establishment situated therein, shall be exempt from United Kingdom surtax.

(b) The Swedish coupon tax on dividends paid by a company which is a resident of Sweden to a resident of the United Kingdom, who is subject to tax in the United Kingdom in respect thereof and does not carry on a trade or business in Sweden through a permanent establishment situated therein, shall not exceed 5 per centum:

Provided that where the resident of the United Kingdom is a company which controls, directly or indirectly, not less than 50 per centum of the entire voting power of the company paying the dividends, the dividends shall be exempt from coupon tax.

2. Where a company which is a resident of one of the territories derives profits or income from sources within the other territory, there shall not be imposed in that other territory any form of taxation on dividends paid by the company to persons not resident in that other territory, or any tax in the nature of undistributed profits tax on undistributed profits of the company, whether or not those dividends or undistributed profits represent, in whole or in part, profits or income so derived.

ARTICLE VIII

1. Any interest derived from sources within one of the territories by a resident of the other territory who is subject to tax in that other territory in respect thereof and does not carry on a trade or business in the first-mentioned territory through a permanent establishment situated therein, shall be exempt from tax in that first-mentioned territory.

2. In this Article, the term “interest” includes interests on bonds, securities, notes, debentures or any other form of indebtedness.

3. Where any interest exceeds a fair and reasonable consideration in respect of the indebtedness for which it is paid, the exemption provided by the present Article shall apply only to so much of the interest as represents such fair and reasonable consideration.

ARTICLE IX

2. In this Article, the term “royalty” means any royalty or other amount paid as consideration for the use of, or for the privilege of using, any copyright, patent, design, secret process or formula, trade mark, or other like property, but does not include any royalty or other amount paid in respect of the operation of a mine or quarry or of any other extraction of natural resources.

4. Any capital sum derived from sources within one of the territories from the sale of patent rights by a resident of the other territory who does not carry on a trade or business in the first-mentioned territory through a permanent establishment situated therein, shall be exempt from tax in that first-mentioned territory.

ARTICLE X

1. Income of whatever nature derived from real property within the territory of the United Kingdom (other than income from mortgages or bonds secured by the real property) by a resident of Sweden who is subject to tax in the United Kingdom in respect thereof shall be exempt from tax in Sweden.

2. Any royalty or other amount paid in respect of the operation of a mine or quarry or of any other extraction of natural resources within the territory of the United Kingdom to a resident of Sweden who is subject to tax in the United Kingdom in respect thereof, shall be exempt from tax in Sweden.

3. Swedish tax payable in respect of income of the kind referred to in the preceding paragraphs, derived from sources within Sweden by a resident of the United Kingdom who is Liable to tax in the United Kingdom in respect thereof, shall in accordance with Article XIX be allowed as a credit against the United Kingdom tax payable in respect of that income.

ARTICLE XI

1. Where under the provisions of this Convention a resident of the United Kingdom is exempt or entitled to relief from Swedish tax, similar exemption or relief shall be applied to the undivided estates of deceased persons in so far as one or more of the beneficiaries is a resident of the United Kingdom.

2. Swedish tax on the undivided estate of a deceased person shall, in so far as the income accrues to a beneficiary who is resident in the United Kingdom, be allowed as a credit under Article XIX.

ARTICLE XII

A resident of one of the territories who does not carry on a trade or business in the other territory through a permanent establishment situated therein shall be exempt in that other territory from any tax on gains from the sale, transfer, or exchange of capital assets.

ARTICLE XIII

1. Remuneration or pensions paid by, or out of funds created by, one of the High Contracting Parties to any individual in respect of services rendered to that Party in the discharge of governmental functions shall be exempt from tax in the territory of the other High Contracting Party, unless the individual is a national of that other Party without being also a national of the first-mentioned Party.

ARTICLE XIV

1. An individual who is a resident of the United Kingdom shall be exempt from Swedish tax on profits or remuneration in respect of personal (including professional) services performed within Sweden in any year of assessment if—

(a) he is present within Sweden for a period or periods not exceeding in the aggregate 183 days during that year, and

(b) the services are performed for or on behalf of a resident of the United Kingdom, and

2. An individual who is a resident of Sweden shall be exempt from United Kingdom tax on profits or remuneration in respect of personal (including professional) services performed within the United Kingdom in any year of assessment, if—

(a) he is present within the United Kingdom for a period or periods not exceeding in the aggregate 183 days during that year, and

(b) the services are performed for or on behalf of a resident of Sweden, and

3. The provisions of this Article shall not apply to the profits or remuneration of public entertainers such as theatre, motion picture or radio artists, musicians and athletes.

ARTICLE XV

1. Any pension (other than a pension of the kind referred to in paragraph 1 of Article XIII) and any annuity, derived from sources within Sweden by an individual who is a resident of the United Kingdom and subject to United Kingdom tax in respect thereof, shall be exempt from Swedish tax.

2. Any pension (other than a pension of the kind referred to in paragraph 1 of Article XIII) and any annuity, derived from sources within the United Kingdom by an individual who is a resident of Sweden and subject to Swedish tax in respect thereof, shall be exempt from United Kingdom tax.

3. 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 payments in return for adequate and full consideration in money or money’s worth.

ARTICLE XVI

A professor or teacher from one of the territories, who receives remuneration for teaching, during a period of temporary residence not exceeding two years, at a university, college or other establishment for further education in the other territory, shall be exempt from tax in that other territory in respect of that remuneration.

ARTICLE XVII

A student or business apprentice from one of the territories, who is receiving full-time education or training in the other territory, shall be exempt from tax in that other territory on payments made to him by persons in the first-mentioned territory for the purposes of his maintenance, education or training.

ARTICLE XVIII

1. Individuals who are residents of Sweden shall be entitled to the same personal allowances, reliefs and reductions for the purposes of United Kingdom tax as British subjects not resident in the United Kingdom.

2. Individuals who are residents of the United Kingdom shall be entitled to the same personal allowances, reliefs and reductions for the purposes of Swedish tax as those to which Swedish nationals not resident in Sweden may be entitled.

ARTICLE XIX

1. Subject to the provisions of the Law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom, Swedish tax payable under the Laws of Sweden and in accordance with this Convention, whether directly or by deduction, in respect of income from sources within Sweden shall be allowed as a credit against any United Kingdom tax payable in respect of that income. Where such income is an ordinary dividend paid by a company which is a resident of Sweden the credit shall take into account (in addition to any Swedish tax appropriate to the dividend) the Swedish tax payable by the company in respect of its profits and where it is a dividend paid on participating preference shares and representing both a dividend at the fixed rate to which the shares are entitled and an additional participation in profits, the Swedish tax so payable by the company shall likewise be taken into account in so far as the dividend exceeds that fixed rate.

2. Income from sources within the United Kingdom which under the Laws of the United Kingdom and in accordance with this Convention is subject to tax in the United Kingdom either directly or by deduction shall be exempt from Swedish tax:

Provided that where such income is a dividend paid by a company being a resident of the United Kingdom to a person resident in Sweden, not being a company, whether or not he is also resident in the United Kingdom, Swedish tax may be charged on the amount of the dividend after deduction of United Kingdom income tax, but the amount of Swedish tax chargeable shall be reduced by a sum equal to 20 per centum of the amount of the dividend so charged.

3. Where income is derived from sources outside both the United Kingdom and Sweden by a person who is resident in the United Kingdom for the purposes of United Kingdom tax and also resident in Sweden for the purposes of Swedish tax, the income may be taxed in both countries (subject to any Convention which may exist between either of the High Contracting Parties and the territory or territories from which the income is derived), but the Swedish tax on that income shall be limited to tax on the proportion of such income represented by the proportion which such person’s income from sources in Sweden bears to the sum of his income from sources in Sweden and of his income from sources in the United Kingdom, and the United Kingdom tax on that income shall be reduced by a credit, in accordance with paragraph 1 of this Article, for the Swedish tax on the proportion of that income so computed.

4. The special tax payable in Sweden by public entertainers such as theatre and radio artists, musicians and athletes (bevillningsavgift f”r vissa offentliga f”restallningar) shall be regarded, for the purposes of this Article, as Swedish tax.

5. For the purposes of this Article, profits or remuneration for personal (including professional) services performed in one of the territories shall be deemed to be income from sources within that territory, and the services of an individual whose services are wholly or mainly performed in ships or aircraft operated by a resident of one of the territories shall be deemed to be performed in that territory.

6. The graduated rate of Swedish tax to be imposed on residents of Sweden may be calculated as though income exempted under this Convention were included in the amount of the total income.

ARTICLE XX

2. As used in this Article the term “taxation authorities” means, in the case of the United Kingdom, the Commissioner-Generals of Inland Revenue, in the case of Sweden, the Finance Ministry, and, in the case of any territory to which the present Convention is extended under Article XXIII, the competent authority for the administration in such territory of the taxes to which the present Convention applies.

ARTICLE XXI

The following agreements between the United Kingdom and Sweden shall not have effect for any period for which the present Convention has effect, that is to say—

(a) the agreement dated 19th December, 1924, for the reciprocal exemption from income tax in certain cases of profits accruing from the business of shipping;

(b) the agreement dated 6th July, 1931, for the reciprocal exemption from taxes in certain cases of profits arising through agencies.

ARTICLE XXII

2. The enterprises of one of the territories shall not be subjected in the other territory, in respect of profits attributable to their permanent establishments in that other territory, to any taxation which is other, higher or more burdensome than the taxation to which the enterprise of that other territory are or may be subjected in respect of the like profits.

3. An individual or company being a resident of one of the territories shall not be subject to any tax on capital in the other territory which is other, higher or more burdensome than the tax on capital to which an individual or, as the case may be, a company, being a resident of that other territory is or may be subjected.

4. Nothing in paragraph 1 or paragraph 2 of this Article shall be construed as obliging one of the High Contracting Parties to grant to nationals of the other High Contracting Party who are not resident in the territory of the former Party the same personal allowances, reliefs and reductions for tax purposes as are granted to His own nationals.

5. In this Article the term “nationals” means—

(a) in relation to Sweden, all Swedish subjects and all legal persons, partnerships and associations deriving their status as such from the Law in force in Sweden;

(b) in relation to the United Kingdom, all British subjects and British protected persons residing in the United Kingdom or any British territory to which the present Convention applies by reason of extension made under Article XXIII and all legal persons, partnerships and associations deriving their status as such from the Law in force in any British territory to which the present Convention applies.

6. In this Article the term “taxation” means taxes of every kind and description levied on behalf of any authority whatsoever.

ARTICLE XXIII

1. The present Convention may be extended, either in its entirety or with modifications, to any territory for whose foreign relations the United Kingdom is responsible and which imposes taxes substantially similar in character to those which are the subject of the present Convention, and any such extension shall take effect from such date and subject to such modifications and conditions (including conditions as to termination) as may be specified and agreed between the High Contracting Parties in notes to be exchanged for this purpose.

2. The termination in respect of Sweden or the United Kingdom of the present Convention under Article XXV shall, unless otherwise expressly agreed by both High Contracting Parties, terminate the application of the present Convention to any territory to which the Convention has been extended under this Article.

ARTICLE XXIV

1. The present Convention shall be ratified by the High Contracting Parties. Ratification by His Majesty the King of Sweden shall be subject to the consent of the Riksdag.

2. The instruments of ratification shall be exchanged at Stockholm as soon as possible.

3. Upon exchange of ratifications the present Convention shall have effect—

(a) In Sweden:

as respects tax on income which is assessed in or after the calendar year beginning on 1st January, 1950, being income for which preliminary tax is payable during the period 1st March, 1949, to 28th February, 1950; or any succeeding period;

as respects coupon tax payable on or after 1st January, 1949;

as respects capital tax which is assessed in or after the calendar year beginning on 1st January, 1950;

(b) In the United Kingdom:

as respects income tax for any year of assessment beginning on or after 6th April, 1949; as respects surtax for any year of assessment beginning on or after 6th April, 1948; and as respects profits tax in respect of the following profits: 1949;

(i) profits arising in any chargeable accounting period beginning on or after 1st April,

(ii) profits attributable to so much of any chargeable accounting period falling partly before and partly after that date as falls after that date;

ARTICLE XXV

The present Convention shall continue in effect indefinitely but either of the High Contracting Parties may, on or before 30th June in any calendar year not earlier than the year 1953, give to the other High Contracting Party, through diplomatic channels, written notice of termination and, in such event, the present Convention shall cease to be effective—

(a) In Sweden:

as respects tax on income for which preliminary tax is payable after the last day of February in the calendar year next following that in which the notice is given;

as respects coupon tax payable on or after 1st January in the calendar year next following that in which the notice is given;

as respects capital tax assessed in or after the second calendar year following that in which the notice is given;

(b) In the United Kingdom:

as respects income tax for any year of assessment beginning on or after 6th April in the calendar year next following that in which the notice is given;

as respects surtax for any year of assessment beginning on or after 6th April in the calendar year in which the notice is given; and

as respects profits tax in respect of the following profits:

(i) profits arising in any chargeable accounting period beginning on or after 1st April in the calendar year next following that in which the notice is given;

(ii) profits attributable to so much of any chargeable accounting period falling partly before and partly after that date as falls after that date;

(iii) profits not so arising or attributable by reference to which income tax is chargeable for any year of assessment beginning on or after 6th April in the next following calendar year.

In witness whereof the above-mentioned Plenipotentiaries have signed the present Convention and have affixed thereto their seals.

Done at London, in duplicate, in the English and Swedish languages, both texts being equally authentic, on the thirtieth day of March, one thousand nine hundred and forty-nine.

(L.S.) GUNNAR HAGGLOF……………………………………………. GUNNAR HAGGLOF…………………………………………….

(L.S.) WILLIAM STRANG…………………………………………………… WILLIAM STRANG. “A”

BRITISH EMBASSY,

STOCKHOLM.

May 28, 1958.

Your Excellency,

I am instructed by Her Majesty’s Principal Secretary of State for Foreign Affairs to refer to the Convention between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Sweden for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, signed at London on the 30th March, 1949.

I have the honour to propose on behalf of the Government of the United Kingdom that, in accordance with the provisions of Article XXIII, the above-mentioned Convention should be extended to the territories named in the Annex to the present Note in the manner, subject to the modifications, and with effect from the dates, specified therein.

If the foregoing proposal is acceptable to the Swedish Government, I have the honour to suggest that the present Note with its Annex, and Your Excellency’s reply to that effect, should be regarded as constituting the agreement reached between the two Governments in this matter.

ANNEX

I – TABLE OF TERRITORIES TO WHICH THE CONVENTION OF THE 30TH MARCH, 1949, FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME IS TO BE EXTENDED IN ACCORDANCE WITH ARTICLE XXIII OF THE SAID CONVENTION SUBJECT TO THE CONDITIONS SET OUT IN PARAGRAPHS II AND III OF THIS ANNEX.

Column (1)	Column (2)	Column (3)
Kenya	The Income Tax (including Surtax) and the Personal Tax.	1st January 1955
Rhodesia and Nyasaland	The Income Tax, Supertax and Undistributed Profits Tax.	1st April, 1955
Federation of Tanganyika	The Income Tax (including Surtax) and the Non-Native Poll Tax or Personal Tax.	1st January, 1955
Uganda	The Income Tax (including Surtax) and the non-African Poll Tax.	1st January, 1955
Zanzibar	The Income Tax 1st January, 1955 (including Surtax).	1st January, 1955

II – APPLICATION

(a) The said Convention as modified by the present Annex shall apply in the case of each territory mentioned in Column (1) of the above Table,

(1) as if the Contracting Parties were the Government of Sweden and the Government of that territory;

(2) as if the taxes concerned in the case of each territory were those mentioned opposite the name of that territory in Column (2) of the above Table;

(3) as if references to “the date of signature of the present Convention” were references to the date of the Exchange of Notes to which the present Annex is appended.

(b) When the last of those measures shall have been taken in Sweden and in any territory named in the above Table necessary to give the present extension the force of Law in Sweden and in such territory, respectively, the present extension shall have effect—

(1) in Sweden: 1956;

as respects tax on income for which preliminary tax is payable after the 29th February,

as respects coupon tax payable on or after the 1st January, 1956;

as respects capital tax assessed in or after the calendar year 1957;

(2) in such territory: as respects tax for the year, year of assessment or year of income beginning on the date specified opposite its name in Column (3) of the above Table and for subsequent years, years of assessment or years of income.

(c) The Government of Sweden shall inform the Government of the United Kingdom in writing when the last of the measures necessary, as indicated in paragraph (b), have been taken in Sweden. The Government of the United Kingdom shall inform the Government of Sweden in writing when the last of the measures necessary, as indicated in paragraph (b), have been taken in all or any of the territories named in the above Table.

(d) The present extension shall continue in effect indefinitely but either of the Contracting Parties may, or before the 30th June in any calendar year not earlier than the year 1960, give to the other Contracting Party through the diplomatic Channel written notice of termination which may apply to any or all of the territories named in the above Table and in such event the present extension shall cease to have effect—

(1) in Sweden:

as respects tax on income for which preliminary tax is payable after the last day of February in the calendar year next following that in which the notice is given;

as respects coupon tax payable on or after the 1st January in the calendar year next following that in which the notice is given;

as respects capital tax assessed in or after the second calendar year next following that in which the notice is given;

(2) in such of the territories named in the above Table as are concerned: as respects tax for any year, year of assessment or year of income beginning on or after the 1st January in the calendar year in which the notice is given.

III – MODIFICATIONS

The said Convention as modified by the present Annex shall apply—

(a) for the purposes of the extension to Kenya, Tanganyika, Uganda and Zanzibar, with the following exceptions:

(1) The following words shall be inserted at the end of sub-paragraph (c) of paragraph 1 of Article II:

“but shall not include any tax which is payable in respect of any default or commission in relation to the taxes to which this Convention as extended applies or which represents a penalty imposed under the Law of the territory concerned relating to those Taxes”;

(2) The following sub-paragraph shall be substituted for sub-paragraph (i) of paragraph 1 of Article II:

“(i) The term ‘industrial or commercial profits’ does not include income in the form of dividends, interest, rents or royalties (other than rents or royalties in respect of cinematograph films), management charges or remuneration for personal services”;

(3) Sub-paragraph (j) of paragraph 1 of Article II shall be amended by deleting—

(i) the full-stop after the word “exploitation”, and

(ii) the words “It also includes a place where building construction is carried on by contract for a period of at least one year”;

(4) Nothing in paragraph 2 of Article III shall affect any provisions of the Law of those territories regarding the taxation of income from the business of insurance;

(5) The following words shall be inserted at the end of paragraph 3 of Article III:

“and the profits so attributed shall be deemed to be income derived from sources in that other territory”;

(6) Paragraph 4 of Article III shall be deleted;

(7) The following Article shall be substituted for Article V:

ARTICLE V

If the industrial and commercial profits of a company which is a resident of Sweden become chargeable to a form of [United Kingdom] tax under which, in the case of companies which are residents of [the United Kingdom], the undistributed or undistributable income is charged to tax at a lower rate than the distributed or distributable income of such companies, these industrial and commercial profits shall be charged to [United Kingdom] tax only at the lower rate”;

(8) Articles VIII, XVI and XVIII shall be deleted;

(9) Article XX shall be amended as follows:

(i) by deleting the words “or for the prevention of fraud or for the administration of statutory provisions against legal avoidance”;

(ii) by inserting after “assessment and collection of” the words “or the hearing of appeals in relation to”;

(b) for the purposes of the extension to the Federation of Rhodesia and Nyasaland, with the following exceptions:

(1) In Article VII 1 (a), for the words “shall be exempt from United Kingdom surtax” there shall be substituted “shall be exempt from Federal supertax”;

(2) Article XIII shall apply to remuneration including pensions paid by, or out of funds created by, the Government of each of the Territories constituting the Federation to any individual in respect of services rendered to that Government in the discharge of governmental functions as it applies to similar payments by, or out of funds created by, the Government of the Federation;

(3) In the proviso to Article XIX 2, for the words “after deduction of United Kingdom income tax” there shall be substituted “after deduction of Federal income tax and of the Territorial Surcharge charged in Northern Rhodesia, Nyasaland and Southern Rhodesia”.

“B” STOCKHOLM,

May 28th, 1958.

Act 1 encl.

ROYAL MINISTRY FOR

FOREIGN AFFAIRS

Your Excellency,

I have the honour to acknowledge receipt of Your Excellency’s Note of May 28, 1958, which reads as follows:

“I am instructed by Her Majesty’s Principal Secretary of State for Foreign Affairs to refer to the Convention between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Sweden for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, signed at London on the 30th March, 1949.

I reply, I have the honour to state that the Government of Sweden considers that Your Excellency’s Note with its Annex and the present reply to which a copy of the Annex is attached constitute an agreement between the two Governments.

ANNEX

I – TABLE OF TERRITORIES TO WHICH THE CONVENTION OF THE 30TH MARCH, 1949, FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME IS TO BE EXTENDED IN ACCORDANCE WITH ARTICLE XXIII OF THE SAID CONVENTION SUBJECT TO THE CONDITIONS SET OUT IN PARAGRAPHS II AND III OF THIS ANNEX

Column (1)	Column (2)	Column (3)
Kenya	The Income Tax (including Surtax) and the Personal Tax.	1st January, 1955
Rhodesia and Nyasaland,	The Income Tax, Supertax and Undistributed Profits Tax	1st April, 1955
Federation of Tanganyika	The Income Tax (including Surtax) and the Non-Native Poll Tax or Personal Tax.	1st January, 1955
Uganda	The Income Tax (including Surtax) and the non-African Poll Tax.	1st January, 1955
Zanzibar	The Income Tax 1st January, 1955 (including Surtax).	1st January, 1955

II – APPLICATION

(a) The said Convention as modified by the present Annex shall apply in the case of each territory mentioned in Column (1) of the above Table,

(1) as if the Contracting Parties were the Government of Sweden and the Government of that territory;

(2) as if the taxes concerned in the case of each territory were those mentioned opposite the name of that territory in Column (2) of the above Table;

(3) as if references to “the date of signature of the present Convention” were references to the date of the Exchange of Notes to which the present Annex is appended.

(1) in Sweden:

February, 1956;

as respects tax on income for which preliminary tax is payable after the 29th

as respects coupon tax payable on or after the 1st January, 1956;

as respects capital tax assessed in or after the calendar year 1957;

(d) The present extension shall continue in effect indefinitely but either of the Contracting Parties may, on or before the 30th June in any calendar year not earlier than the year 1960, give to the other Contracting Party through the diplomatic Channel written notice of termination which may apply to any or all of the territories named in the above Table and in such event the present extension shall cease to have effect—

(1) in Sweden:

as respects tax on income for which preliminary tax is payable after the last day of February in the calendar year next following that in which the notice is given;

as respects coupon tax payable on or after the 1st January in the calendar year next following that in which the notice is given;

as respects capital tax assessed in or after the second calendar year next following that in which the notice is given;

III – MODIFICATIONS

The said Convention as modified by the present Annex shall apply—

(a) for the purposes of the extension to Kenya, Tanganyika, Uganda and Zanzibar, with the following exceptions:

(1) The following words shall be inserted at the end of sub-paragraph (c) of paragraph 1 of Article II:

“but shall not include any tax which is payable in respect of any default or omission in relation to the taxes to which this Convention as extended applies or which represents a penalty imposed under the Law of the territory concerned relating to those Taxes”;

(2) The following sub-paragraph shall be substituted for sub-paragraph (i) of paragraph 1 of Article II:

(3) Sub-paragraph (j) of paragraph 1 of Article II shall be amended by deleting—

(i) the full-stop after the word “exploitation”, and

(ii) the words “It also includes a place where building construction is carried on by contract for a period of at least one year”;

(4) Nothing in paragraph 2 of Article III shall affect any provisions of the Law of those territories regarding the taxation of income from the business of insurance;

(5) The following words shall be inserted at the end of paragraph 3 of Article III: “and the profits so attributed shall be deemed to be income derived from sources in that other territory”;

(6) Paragraph 4 of Article III shall be deleted;

(7) The following Article shall be substituted for Article V:

ARTICLE V

“If the industrial and commercial profits of a company which is a resident of Sweden become chargeable to a form of [United Kingdom] tax under which, in the case of companies which are residents of [the United Kingdom], the undistributed or undistributable income charged to tax at a lower rate than the distributed or distributable income of such companies, these industrial and commercial profits shall be charged to [United Kingdom] tax only at the lower rate”;

(8) Articles VIII, XVI and XVIII shall be deleted;

(9) Article XX shall be amended as follows

(i) by deleting the words “or for the prevention of fraud or for the administration of statutory provisions against legal avoidance”;

(ii) by inserting after “assessment and collection of” the words “or the hearing of appeals in relation to”;

(b) for the purposes of the extension to the Federation of Rhodesia and Nyasaland, with the following exceptions:

(1) In Article VII 1 (a), for the words “shall be exempt from United Kingdom surtax” there shall be substituted “shall be exempt from Federal supertax”;

CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF ZAMBIA AND THE GOVERNMENT OF THE REPUBLIC OF KENYA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

The Government of the Republic of Zambia and the Government of the Republic of Kenya,

Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income,

Have agreed as follows:

SI 67 of 1970.

ARTICLE I

1. The taxes which are the subject of the present Convention are-

(a) in Zambia (and hereinafter referred to as “Zambian tax”)—

(i) the income tax;

(ii) supertax;

(iii) the undistributed profits tax; and

(iv) the personal levy;

(b) in Kenya (and hereinafter referred to as “Kenyan tax”)—

(i) the income tax;

(ii) corporation tax;

(iii) the undistributed income tax; and

(iv) the graduated personal tax.

2. The present Convention shall also apply to any other taxes of a substantially similar character imposed in Zambia or Kenya subsequently to the date of signature of the present Convention. At the end of each year the taxation authorities of the Contracting States shall notify to each other any changes which have been made in their respective taxation Laws.

ARTICLE II

1. In the present Convention, unless the context otherwise requires—

(a) the term “Zambia” mean the Republic of Zambia;

(b) the term “Kenya” means the Republic of Kenya;

(c) the terms “one of the Contracting States” and “the other Contracting State” mean Zambia or Kenya, as the context requires;

(d) the term “tax” means Zambian tax or Kenyan tax, as the context requires;

(e) the term “company” means any body corporate, or any entity which is treated as a body corporate for tax purposes;

(f) the term “person” includes any body of persons corporate or not corporate;

(g) the term “resident of Zambia” means any person who is resident in Zambia for the purposes of Zambian tax and not resident in Kenya for the purposes of Kenyan tax; the term “resident of Kenya” means any person who is resident in Kenya for the purposes of Kenyan tax and not resident in Zambia for the purposes of Zambian tax, and a company shall be regarded as resident in Zambia if its business is managed and controlled in Zambia and resident in Kenya if its business is managed and controlled in Kenya;

(h) the terms “resident of one of the Contracting States” and “resident of the other Contracting State” mean a resident of Zambia or a resident of Kenya, as the context requires;

(i) the terms “Zambian enterprise” and “Kenyan enterprise” mean, respectively, an industrial, mining, commercial, plantation, agricultural or pastoral enterprise or undertaking carried on by a resident of Zambia, and an industrial, mining, commercial, plantation, agricultural or pastoral enterprise or undertaking carried on by a resident of Kenya;

(j) the terms “enterprise of one of the Contracting States” and “enterprise of the other Contracting State” mean a Zambian enterprise or a Kenyan enterprise, as the context requires.

2. In the application of the provisions of the present Convention by the Government of one of the Contracting States, any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the Laws of that Contracting State relating to the taxes which are the subject of the present Convention.

ARTICLE III

1. For the purposes of this Convention the term “permanent establishment” means a fixed place of business in which the business of the enterprise is wholly or partly carried on.

2. The term “permanent establishment” shall include especially—

(a) a place of management;

(b) a branch;

(d) a factory;

(e) a workshop;

(f) a mine, oil well, quarry or other place of extraction of natural resources;

(g) a farm or plantation;

(h) a building site or construction or assembly project which exists for more than six months.

3. The term “permanent establishment” shall not be deemed to include—

(a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise;

(e) the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or for similar activities which have a preparatory or auxiliary character, for the enterprise.

4. An enterprise of one of the Contracting States shall be deemed to have a permanent establishment in the other Contracting State if—

(a) it carries on supervisory activities in that other Contracting State for more than six months in connection with a construction, installation or assembly project which is being undertaken in that other Contracting State;

(b) it carries on a business which consists of providing the services of public entertainers referred to in Article XIV, in that other Contracting State.

5. A person acting in one of the Contracting States on behalf of an enterprise of the other Contracting State-other than an agent of independent status to whom paragraph 6 applies-shall be deemed to be a permanent establishment in the former Contracting State if—

(a) he has, and habitually exercise in that former Contracting State, an authority to conclude contracts in the name of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise; or

(b) he maintains in that former Contracting State a stock of goods or merchandise belonging to the enterprise from which he regularly fills orders on behalf of the enterprise.

6. An enterprise of one of the Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other Contracting State through a broker, General commission agent or any other agent of independent status, where such persons are acting in the ordinary course of their business.

7. The fact that a company which is a resident of one of the Contracting States controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other Contracting State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

ARTICLE IV

1. The industrial and commercial 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 therein. If the enterprise carries on business as aforesaid, tax may be imposed in that other Contracting State, but only on so much of them as is attributable to the permanent establishment.

2. Where an enterprise of one of the Contracting States carries on business in the other Contracting State through a permanent establishment situated therein—

(a) there shall in each Contracting State be attributed to that permanent establishment the 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;

(b) subject to the provisions of sub-paragraph (a) no industrial or commercial profits derived from sources outside that other Contracting State shall be attributed to that permanent establishment.

3. No part of the profits arising from the sale of goods or merchandise by an enterprise in one of the Contracting States shall be attributed to a permanent establishment situated in the other Contracting State by reason of the mere purchase of the goods or merchandise within that other Contracting State.

4. In determining the industrial or commercial profits of a permanent establishment, there shall be allowed as deductions all expenses, including administrative and executive expenses, which would be deductible if the permanent establishment were an independent enterprise in so far as they are reasonably allocatable to the permanent establishment, whether incurred in the Contracting State in which the permanent establishment is situated or elsewhere.

5. Nothing in this Article shall preclude either Contracting State from determining the profits to be attributed to a permanent establishment in that State on the basis of an apportionment of the total profits of the enterprise to its various parts as may be customary. The method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles laid down in this Article.

6. Save where expressly provided elsewhere in this Convention, this Article shall not apply, if by reason of its application industrial and commercial profits which would normally be subject to tax in one of the Contracting States, would not be subject to tax in either of the Contracting States.

7. Where industrial and commercial 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. Where—

(a) an enterprise of one of the Contracting States 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 one of the Contracting States 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 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 profits of that enterprise and taxed accordingly.

ARTICLE V

1. Income or profits derived by the Government, a local authority or statutory corporation of one of the Contracting States from the operation of ships aircraft or railways, shall be exempt from tax in the other Contracting State.

2. Income or profits derived by a resident of one of the Contracting States from the operation of ships and aircraft shall be exempt from tax in the other Contracting State unless the ship or aircraft is operated wholly or mainly between places within that other Contracting State.

3. —

(a) A resident of Zambia who derives profits from the operation of overland transport services in Kenya, may be subject to tax in Kenya, on such proportion of those profits that derive from traffic originating in Kenya, but the tax so charged shall be allowed as a credit against any Zambian tax charged in respect of that same income.

(b) A resident of Kenya who derives profits from the operation of overland transport services in Zambia, may be subject to tax in Zambia on such proportion of those profits that derive from traffic originating in Zambia, but the tax so charged shall be allowed as a credit against any Kenya tax charged in respect of that same income.

ARTICLE VI

1. Dividends paid by a company resident in Kenya to a resident of Zambia who is subject to Zambian tax in respect thereof shall be exempt from any tax in Kenya which is chargeable on dividends in addition to the tax chargeable on the profits or income of the company.

2. Dividends paid by a company resident in Zambia to a resident of Kenya who is subject to Kenyan tax in respect thereof shall be exempt from any tax in Zambia which is chargeable on dividends in addition to the tax chargeable on the profits or income of the company.

3. Where a company which is a resident of one of the Contracting States derives profits or income from sources within the other Contracting State, there shall not be imposed in that other Contracting State any form of taxation on dividends paid by the company to persons not resident in that other Contracting State, or any tax in the nature of an undistributed profits tax on undistributed profits of the company, whether or not those dividends or undistributed profits represent, in whole or part, profits or income so derived.

4. The provisions of paragraphs 1 and 2 shall not apply if the recipient of the dividends, being a resident of a Contracting State, has in the other Contracting State, of which the company paying the dividends is a resident, a permanent establishment, with which the holding by virtue of which the dividends are paid is effectively connected. In such a case Article IV concerning the allocation of profits to permanent establishment shall apply.

5. If the system of taxation applicable in either of the Contracting States to the profits and distributions of companies is altered the taxation authorities may consult each other in order to determine whether it is necessary for this reason to amend the provisions of paragraphs 1 and 2 of this Article.

ARTICLE VII

1. Any royalty or rent, including royalty or rent in respect of cinematograph or television films or tapes, or any sound recording or advertising matter connected with such films, or any other consideration received by or accrued to a resident of one of the Contracting States by virtue of the use in the other Contracting State, of or the grant of permission to use in that other Contracting State any patent, design, model, plan, trade mark, copyright, secret process, formula or other property of a similar nature, including any amount received or accrued for the imparting of or the undertaking to impart any knowledge directly or indirectly connected with the use of any such films, sound recording, advertising matter, patent design, model, plan, trade mark, copyright, secret process, formula or other property of a similar nature, shall be exempt from tax in the first-mentioned Contracting State if such royalty or rent is subject to tax in the other Contracting State.

2. The term “royalty” as used in this Article includes, inter alia, a payment of any kind received as consideration for the use of or the right to use industrial, commercial or scientific experience, but does not include any amount paid in respect of the operation of a mine, oil well or quarry or of any other place of extraction of natural resources.

ARTICLE VIII

1. Interest from a source in one of the Contracting States derived by a resident in the other Contracting State shall be exempt from tax in that other Contracting State, unless it is not subject to tax in the first-mentioned Contracting State.

2. The term “interest” as used in this Article means income from Government securities, bonds or debentures, whether or not secured by mortgage and whether or not carrying a right to participate in profits, and debt claims of every kind as well as all other income assimilated to income from money lent by the taxation Law of the Contracting State in which the income arises.

3. Where, owing to a special relationship between the payer and the recipient, or between both of them and some other person the amount of interest paid, 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 recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case the excess part of the payments shall remain taxable according to the taxation Law of each Contracting State, due regard being had to the other provisions of this Convention.

ARTICLE IX

1. Remuneration, other than pensions, paid by the Government of Zambia to any individual for services rendered to that Government in the discharge of governmental functions shall be exempt from Kenyan tax if the individual is not ordinarily resident in Kenya, or is ordinarily resident in Kenya solely for the purpose of rendering those services.

2. Remuneration, other than pensions, paid by the Government of Kenya to any individual for services rendered to that Government in the discharge of governmental functions shall be exempt from Zambian tax if the individual is not ordinarily resident in Zambia or is ordinarily resident in Zambia solely for the purpose of rendering those services.

3. The provisions of this Article shall not apply to payments in respect of services rendered in connection with any business carried on by either of the Contracting States for the purposes of profit.

4. For the purposes of this Article the word “Government” shall include any local authority or statutory corporation of either of the Contracting States.

ARTICLE X

1. Any pension or annuity paid by the Government of Zambia to any individual for services rendered to the Government of Zambia in the discharge of governmental functions, or paid by the Central African Pension Fund, which is deemed for the purposes of Zambian tax to be derived from a source in Zambia, shall be exempt from Kenyan tax.

2. Any pension or annuity paid by or out of funds created by the Government of Kenya to any individual for services rendered to the Government of Kenya in the discharge of governmental functions which is deemed for the purposes of Kenyan tax to be derived from a source in Kenya shall be exempt from Zambian tax.

3. For the purposes of this Article the word “Government” shall include any political or local authority or statutory corporation of either of the Contracting States.

4. Any pension of annuity, other than a pension referred to in paragraphs 1 and 2 derived from sources within Zambia by an individual who is a resident of Kenya, and subject to Kenyan tax in respect thereof, shall be exempt from Zambian tax.

5. The term “royalty” as used in this Article includes, inter alia, a payment of any kind received as consideration for the use of or the right to use industrial, commercial or scientific experience, but does not include any amount paid in respect of the operation of a mine, oil well or quarry or of any other place of extraction of natural resources.

ARTICLE XI

1. An individual who is resident in Zambia shall be exempt from Kenyan tax on his profits or remuneration in respect of personal, including professional, services unless the services are performed, or the employment is exercised in Kenya. To such extent as the services are performed or the employment is exercised in Kenya his profits or remuneration may be taxed in Kenya, but if—

(a) he is present within Kenya for a period or periods not exceeding in the aggregate 183 days during any year of assessment; and

(b) the services are performed for or on behalf of a person who is a resident of Zambia; and

(d) the remuneration or profits are not directly deductible from the income for Kenyan tax purposes of a permanent establishment in Kenya of that person; such profits or remuneration shall be exempt from Kenyan tax.

2. An individual who is resident in Kenya shall be exempt from Zambian tax on his profits or remuneration in respect of personal, including professional, services unless the services are performed, or the employment is exercised in Zambia. To such extent as the services are performed or the employment is exercised in Zambia his profits or remuneration may be taxed in Zambia, but if—

(a) he is present within Zambia for a period or periods not exceeding in the aggregate 183 days during any year of assessment; and

(b) the services are performed for or on behalf of a person who is resident in Kenya; and

(d) the remuneration or profits are not directly deductible from the income for Zambian tax purposes of a permanent establishment in Zambia of that person; such profits or remuneration shall be exempt from Zambian tax.

3. Notwithstanding the preceding provisions of this Article, directors’ fees and similar payments derived by a resident of one of the Contracting States in his capacity as a member of the board of directors of a company resident in the other Contracting State, may be taxed in that other Contracting State.

4. Those profits or remuneration for personal services which are dealt with separately in other Articles of this Convention, shall not be affected by the provisions of this Article.

ARTICLE XII

The remuneration derived by a professor or teacher from one of the Contracting States for teaching, during a period of temporary residence not exceeding two years, at a university, college, school or other recognised educational institution in the other Contracting State, shall be exempt from tax in that other Contracting State if such remuneration is subject to tax in the first-mentioned Contracting State.

ARTICLE XIII

1. A student or business apprentice from one of the Contracting States who is receiving full-time education or training in the other Contracting State, and is temporarily resident there solely for the purpose of such education and training, shall be exempt from tax in that other Contracting State on all payments made to him by persons in the first-mentioned Contracting State for his maintenance, education or training.

2. Any individual from one of the Contracting States who is temporarily present for a period not exceeding two years in the other Contracting State for the purpose of study, research or training, and who is in receipt of a grant, allowance or award, from a scientific, educational religious or charitable organisation, or under a technical assistance programme of the Government of either Contracting State, shall be exempt from tax in that other Contracting State in respect of that grant, allowance or award, and in respect of any remuneration for personal services undertaken in connection with such study, research or training and incidental thereto.

ARTICLE XIV

Income derived by public entertainers, such as theatre, motion picture, radio and television artistes and musicians, and by athletes from their personal activities as such, may be taxed in the Contracting State in which these activities are exercised, provided such income is not derived from a visit sponsored officially by the other Contracting State, the cost of which is borne wholly or mainly out of the public funds of that other Contracting State.

ARTICLE XV

For the purposes of the present Convention:

1. Dividends paid by a company which is a resident of one of the Contracting States shall be treated as income from a source within that Contracting State.

2. Interest paid by one of the Contracting States, including any local authority or statutory corporation thereof, or by an enterprise of one of the Contracting States shall be treated as income from sources within that Contracting State; except that—

(a) interest paid by an enterprise of one of the Contracting States with a permanent establishment outside that Contracting State on indebtedness incurred for the use of such permanent establishment in the conduct of its trade and business, and borne by that permanent establishment shall be treated as income from sources within the State in which the permanent establishment is situated; and

(b) in the case of an enterprise of one of the Contracting States engaged in the business of banking, interest paid on deposits made with a permanent establishment of that business outside the Contracting State, shall be treated as income from sources within the State where the permanent establishment is situated.

3. Royalties as defined in paragraph 2 of Article VII of this Convention shall be treated as income from sources within the Contracting State in which the property referred to in that paragraph is used.

4. Income from immovable property (including income derived from the alienation of such property) and royalties paid in respect of the operation of a mine, oil well, quarry or of any other place of extraction of natural resources, shall be treated as derived from sources within the Contracting State in which such immovable property, mine, oil well, quarry or place of extraction of natural resources is situated.

ARTICLE XVI

1. Where a resident of Zambia derives income from sources within Kenya which, in accordance with the provisions of this Convention is exempt from Zambian tax but may be taxed in Kenya, then Zambia may, in calculating tax on the remaining income of that person, apply the rate of tax which would have been applicable if the income derived from sources within Kenya had not been so exempted.

2. Where a resident of Kenya derives income from sources within Zambia which, in accordance with the provisions of this Convention is exempt from Kenyan tax but may be taxed in Zambia, then Kenya may, in calculating tax on the remaining income of that person, apply the rate of tax which would have been applicable if the income derived from sources within Zambia had not been so exempted.

3. Where a resident of one of the Contracting States derives income from sources within the other Contracting State, which apart from the provisions of this Article may be taxed in both Contracting States, then the first-mentioned Contracting State shall allow as a deduction from the tax on the income of that person an amount equal to the tax paid in that other Contracting State. Such deduction, however, shall not exceed that part of the tax, as computed before the deduction is given, which is appropriate to the income derived from that other Contracting State.

4. For the purposes of paragraph 3 of this Article the term “tax paid” shall be deemed to include any amount which would have been payable either as Zambian tax but for an exemption or reduction of tax granted under the Pioneer Industries (Relief from Income Tax) Act, 1965, or as Kenyan tax but for an exemption or reduction of tax under any equivalent Law, or any similar Law in either of the Contracting States of like purpose and effect.

ARTICLE XVII

1. Residents of one of the Contracting States shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which residents of that other Contracting State in the same circumstances are or may be subjected.

2. The taxation on a permanent establishment which an enterprise of one of the Contracting States has in the other Contracting State shall not be less favourably levied in that other Contracting State than the taxation levied on enterprises of that other Contracting State carrying on the same activities.

3. Enterprises of one of the Contracting States, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned Contracting State are or may be subjected.

4. This Article shall not be construed as obliging either one of the Contracting States to grant to residents of the other Contracting State any personal allowances, abatements, reliefs and reductions for tax purposes which by Law are only available to its own residents.

5. In this Article the term “taxation” means taxes of every kind and description.

ARTICLE XVIII

The taxation authorities of the Contracting States shall exchange such information, being information which is available under their respective taxation Laws, as is necessary for the carrying out of the provisions of the present Convention or for the prevention of fraud or the administration of statutory provisions against legal avoidance in relation to the taxes which are the subject of this Convention. Any information so exchanged shall be treated as secret and shall not be disclosed to any persons other than those concerned with the assessment and collection of the taxes which are the subject of this Convention, or with the determination of appeals in relation thereto. No information shall be exchanged which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy.

ARTICLE XIX

1. Where it appears to the taxation authorities of one of the Contracting States that a taxpayer resident in that Contracting State has not received the treatment to which he is entitled under the provisions of this Convention, so that his income or any part of his income is subjected to double taxation, those taxation authorities shall, on due request by the taxpayer, consult with the taxation authorities of the other Contracting State with a view to the avoidance of the double taxation in question.

2. The taxation authorities of the Contracting States may communicate with each other directly for the purpose of giving effect to the provisions of the present Convention and for resolving any difficulty or doubt as to its application or interpretation.

ARTICLE XX

The present Convention shall come into force on the Ratified on 29th July, 1969.*date when the last of all such things shall have been done in Zambia and Kenya as are necessary to give the Convention the force of Law in Zambia and Kenya respectively, and shall thereupon have effect—

(a) in Zambia, in respect of tax for any period of assessment or charge beginning after 1st April, 1964;

(b) in Kenya, in respect of tax for any period of assessment beginning after 1st January, 1964.

ARTICLE XXI

1. The present Convention shall continue in effect indefinitely but either of the Contracting States may on or before the last day of March in any calendar year not earlier than 1969 give notice of termination to the other Contracting State and, in such event, the Convention shall cease to be effective—

(a) in Zambia, in respect of tax for any period of assessment or charge beginning on or after the first day of April in the calendar year next following that in which such notice is given;

(b) in Kenya, in respect of tax for any period of assessment beginning on or after the first day of January in the calendar year next following that in which such notice is given.

2. The termination of the present Convention shall not have the effect of reviving any convention, agreement or arrangement abrogated by the present Convention.

CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF ZAMBIA AND THE GOVERNMENT OF THE UNITED REPUBLIC OF TANZANIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

The Government of the Republic of Zambia and the Government of the United Republic of Tanzania,

Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, Have agreed as follows:

ARTICLE I

1. The taxes which are the subject of the present Convention are—

(a) in Zambia (and hereinafter referred to as “Zambian tax”)—

(i) the income tax;

(ii) supertax;

(iii) the undistributed profits tax; and

(iv) the personal levy.

(b) in Tanzania (and hereinafter referred to as “Tanzanian tax”)—

(i) the income tax;

(ii) corporation tax;

(iii) the undistributed income tax; and

(iv) the personal tax.

2. The present Convention shall also apply to any other taxes of a substantially similar character imposed in Zambia or Tanzania subsequently to the date of signature of the present Convention. At the end of each year the taxation authorities of the Contracting States shall notify to each other any changes which have been made in their respective taxation Laws.

ARTICLE II

1. In the present Convention, unless the context otherwise requires—

(a) the term “Zambia” means the Republic of Zambia;

(b) the term “Tanzania” means the United Republic of Tanzania;

(c) the terms “one of the Contracting States” and “the other Contracting State” mean Zambia or Tanzania, as the context requires;

(d) the term “tax” means Zambian tax or Tanzanian tax, as the context requires;

(e) the term “company” means any body corporate, or any entity which is treated as a body corporate for tax purposes;

(f) the term “person” includes any body of persons corporate or not corporate;

(g) the term “resident of Zambia” means any person who is resident in Zambia for the purposes of Zambian tax and not resident in Tanzania for the purposes of Tanzanian tax; the term “resident of Tanzania” means any person who is resident in Tanzania for the purposes of Tanzanian tax and not resident in Zambia for the purposes of Zambian tax, and a company shall be regarded as resident in Zambia if its business is managed and controlled in Zambia and resident in Tanzania if its business is managed and controlled in Tanzania;

(h) the terms “resident of one of the Contracting States” and “resident of the other Contracting State” mean a resident of Zambia or a resident of Tanzania, as the context requires;

(i) the terms “Zambian enterprise” and “Tanzanian enterprise” mean, respectively, an industrial, mining, commercial, plantation, agricultural or pastoral enterprise or undertaking carried on by a resident of Zambia, and an industrial, mining, commercial, plantation, agricultural or pastoral enterprise or undertaking carried on by a resident of Tanzania;

(j) the terms “enterprise of one of the Contracting States” and “enterprise of the other Contracting State” mean a Zambian enterprise or a Tanzanian enterprise, as the context requires.

ARTICLE III

1. For the purposes of this Convention the term “permanent establishment” means a fixed place of business in which the business of the enterprise is wholly or partly carried on.

2. The term “permanent establishment” shall include especially—

(a) a place of management;

(b) a branch;

(d) a factory;

(e) a workshop;

(f) a mine, oil well, quarry or other place of extraction of natural resources;

(g) a farm or plantation;

(h) a building site or construction or assembly project which exists for more than six months.

3. The term “permanent establishment” shall not be deemed to include—

(a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise;

4. An enterprise of one of the Contracting States shall be deemed to have a permanent establishment in the other Contracting State if—

(b) it carries on a business which consists of providing the services of public entertainers referred to in Article XIV, in that other Contracting State.

(a) he has, and habitually exercises in that former Contracting State, an authority to conclude contracts in the name of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise; or

(b) he maintains in that former Contracting State a stock of goods or merchandise belonging to the enterprise from which he regularly fills orders on behalf of the enterprise.

6. An enterprise of one of the Contracting States shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other Contracting State through a broker, General commission agent or any other agent of independent status, where such persons are acting in the ordinary course of their business.

ARTICLE IV

1. The industrial and commercial 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 therein. If the enterprise carries on business as aforesaid tax may be imposed in that other Contracting State, but only on so much of them as is attributable to the permanent establishment.

2. Where an enterprise of one of the Contracting States carries on business in the other Contracting State through a permanent establishment situated therein—

(b) subject to the provisions of sub-paragraph (a) no industrial or commercial profits derived from sources outside that other Contracting State shall be attributed to that permanent establishment.

8. Where—

(a) an enterprise of one of the Contracting States 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 one of the Contracting States 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 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 profits of that enterprise and taxed accordingly.

ARTICLE V

1. Income or profits derived by the Government, a local authority or statutory corporation of one of the Contracting States from the operation of ships, aircraft or railways, shall be exempt from tax in the other Contracting State.

3. —

(a) A resident of Zambia who derives profits from the operation of overland transport services in Tanzania, may be subject to tax in Tanzania on such proportion of those profits that derive from traffic originating in Tanzania but the tax so charged shall be allowed as a credit against any Zambian tax charged in respect of that same income.

(b) A resident of Tanzania who derives profits from the operation of overland transport services in Zambia, may be subject to tax in Zambia on such proportion of those profits that derive from traffic originating in Zambia but the tax so charged shall be allowed as a credit against any Tanzanian tax charged in respect of that same income.

ARTICLE VI

1. Dividends paid by a company resident in Tanzania to a resident of Zambia who is subject to Zambian tax in respect thereof shall be exempt from any tax in Tanzania which is chargeable on dividends in addition to the tax chargeable on the profits or income of the company.

2. Dividends paid by a company resident in Zambia to a resident of Tanzania who is subject to Tanzanian tax in respect thereof shall be exempt from any tax in Zambia which is chargeable on dividends in addition to the tax chargeable on the profits or income of the company.

ARTICLE VII

1. Any royalty or rent, including royalty or rent in respect of cinematograph or television films or tapes, or any sound recording or advertising matter connected with such films, or any other consideration received by or accrued to a resident of one of the Contracting States by virtue of the use in the other Contracting State of or the grant of permission to use in that other Contracting State any patent, design, model, plan, trade mark, copyright, secret process, formula or other property of a similar nature, including any amount received or accrued for the imparting of or the undertaking to impart any knowledge directly or indirectly connected with the use of any such films, sound recording, advertising matter, patent, design, model, plan, trade mark, copyright, secret process, formula or other property of a similar nature, shall be exempt from tax in the first-mentioned Contracting State if such royalty or rent is subject to tax in the other Contracting State.

2. The term “royalty” as used in this Article includes, inter alia, a payment of any kind received as consideration for the use of or the right to use industrial, commercial or scientific experience, but does not include any amount paid in respect of the operation of a mine, oil well or quarry or of any other place of extraction of natural resources.

ARTICLE VIII

2. The term “interest” as used in this Article means income from Government securities, bonds or debentures, whether or not secured by mortgage and whether or not carrying a right to participate in profits, and debt claims of every kind as well as all other income assimilated to income from money lent by the taxation Law of the Contracting State in which the income arises.

ARTICLE IX

1. Remuneration, other than pensions, paid by the Government of Zambia to any individual for services rendered to that Government in the discharge of governmental functions shall be exempt from Tanzanian tax if the individual is not ordinarily resident in Tanzania, or is ordinarily resident in Tanzania solely for the purpose of rendering those services.

2. Remuneration, other than pensions, paid by the Government of Tanzania to any individual for services rendered to that Government in the discharge of governmental functions shall be exempt from Zambian tax if the individual is not ordinarily resident in Zambia or is ordinarily resident in Zambia solely for the purpose of rendering those services.

4. For the purposes of this Article the word “Government” shall include any local authority or statutory corporation of either of the Contracting States.

ARTICLE X

2. Any pension or annuity paid by or out of funds created by the Government of Tanzania to any individual for services rendered to the Government of Tanzania in the discharge of governmental functions which is deemed for the purposes of Tanzanian tax to be derived from a source in Tanzania, shall be exempt from Zambian tax.

3. For the purposes of this Article the word “Government” shall include any political or local authority or statutory corporation of either of the Contracting States.

4. Any pension or annuity, other than a pension referred to in paragraphs 1 and 2 derived from sources within Zambia by an individual who is a resident of Tanzania, and subject to Tanzanian tax in respect thereof, shall be exempt from Zambian tax.

5. Any pension or annuity, other than a pension referred to in paragraphs 1 and 2 derived from sources within Tanzania by an individual who is a resident of Zambia, and subject to Zambian tax in respect thereof shall be exempt from Tanzanian tax.

ARTICLE XI

1. An individual who is resident in Zambia shall be exempt from Tanzania tax on his profits or remuneration in respect of personal, including professional, services unless the services are performed, or the employment is exercised in Tanzania. To such extent as the services are performed or the employment is exercised in Tanzania his profits or remuneration may be taxed in Tanzania, but if—

(a) he is present within Tanzania for a period or periods not exceeding in the aggregate 183 days during any year of assessment; and

(b) the services are performed for or on behalf of a person who is a resident of Zambia; and

(d) the remuneration or profits are not directly deductible from the income for Tanzanian tax purposes of a permanent establishment in Tanzania of that person;

such profits or remuneration shall be exempt from Tanzanian tax.

2. An individual who is resident in Tanzania shall be exempt from Zambian tax on his profits or remuneration in respect of personal, including professional, services unless the services are performed, or the employment is exercised in Zambia. To such extent as the services are performed or the employment is exercised in Zambia his profits or remuneration may be taxed in Zambia, but if—

(a) he is present within Zambia for a period or periods not exceeding in the aggregate 183 days during any year of assessment; and

(b) the services are performed for or on behalf of a person who is resident in Tanzania; and

(d) the remuneration or profits are not directly deductible from the income for Zambian tax purposes of a permanent establishment in Zambia of that person;

such profits or remuneration shall be exempt from Zambian tax.

4. Those profits or remuneration for personal services which are dealt with separately in other Articles of this Convention, shall not be affected by the provisions of this Article.

ARTICLE XII

ARTICLE XIII

1. A student or business apprentice from one of the Contracting States who is receiving full time education or training in the other Contracting State, and is temporarily resident there solely for the purpose of such education and training, shall be exempt from tax in that other Contracting State on all payments made to him by persons in the first-mentioned Contracting State for his maintenance, education or training.

2. Any individual from one of the Contracting States, who is temporarily present for a period not exceeding two years in the other Contracting State for the purpose of study, research or training, and who is in receipt of a grant, allowance or award, from a scientific, educational, religious or charitable organisation, or under a technical assistance programme of the Government of either Contracting State, shall be exempt from tax in that other Contracting State in respect of that grant, allowance or award, and in respect of any remuneration for personal services undertaken in connection with such study, research or training and incidental thereto.

ARTICLE XIV

ARTICLE XV

For the purposes of the present Convention—

1. Dividends paid by a company which is a resident of one of the Contracting States shall be treated as income from a source within that Contracting State.

ARTICLE XVI

1. Where a resident of Zambia derives income from sources within Tanzania which, in accordance with the provisions of this Convention is exempt from Zambian tax but may be taxed in Tanzania, then Zambia may, in calculating tax on the remaining income of that person, apply the rate of tax which would have been applicable if the income derived from sources within Tanzania had not been so exempted.

2. Where a resident of Tanzania derives income from sources within Zambia which, in accordance with the provisions of this Convention is exempt from Tanzanian tax but may be taxed in Zambia, then Tanzania may, in calculating tax on the remaining income of that person, apply the rate of tax which would have been applicable if the income derived from sources within Zambia had not been so exempted.

4. For the purposes of paragraph 3 of this Article the term “tax paid” shall be deemed to include any amount which would have been payable either as Zambian tax but for an exemption or reduction of tax granted under the Pioneer Industries (Relief from Income Tax) Act, 1965, or as Tanzanian tax but for an exemption or reduction of tax under any equivalent Law, or any similar Law in either of the Contracting States of like purpose and effect.

ARTICLE XVII

5. In this Article the term “taxation” means taxes of every kind and description.

ARTICLE XVIII

The taxation authorities of the Contracting States shall exchange such information, being information which is available under their respective taxation Laws, as is necessary for the carrying out of the provisions of the present Convention or for the prevention of fraud or the administration of statutory provisions against legal avoidance in relation to the taxes which are the subject of this Convention. Any information so exchanged shall be treated as secret and shall not be disclosed to any persons other than those concerned with the assessment and collection of taxes which are the subject of this Convention, or with the determination of appeals in relation thereto. No information shall be exchanged which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy.

ARTICLE XIX

ARTICLE XX

The present Convention shall come into force on the dateRatified on 29th JuIy, 1969.* when the last of all such things shall have been done in Zambia and Tanzania as are necessary to give the Convention the force of Law in Zambia and Tanzania respectively, and shall thereupon have effect—

(a) in Zambia, in respect of tax for any period of assessment or charge beginning after 1st April, 1964;

(b) in Tanzania, in respect of tax for any period of assessment beginning after 1st January, 1964.

ARTICLE XXI

1. The present Convention shall continue in effect indefinitely but either of the Contracting States may on or before the last day of March in any calendar year not earlier than 1969 give notice of termination to the other Contracting State, and, in such event, the Convention shall cease to be effective—

(a) in Zambia, in respect of tax for any period of assessment or charge beginning on or after the first day of April, in the calendar year next following that in which such notice is given;

(b) in Tanzania, in respect of tax for any period of assessment beginning on or after the first day of January in the calendar year next following that in which such notice is given.

2. The termination of the present Convention shall not have the effect of reviving any convention, agreement or arrangement abrogated by the present Convention.

CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF ZAMBIA AND THE GOVERNMENT OF THE REPUBLIC OF UGANDA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

The Government of the Republic of Zambia and the Government of the Republic of Uganda, Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, Have agreed as follows:

ARTICLE I

1. The taxes which are the subject of the present Convention are—

(a) in Zambia (and hereinafter referred to as “Zambian tax”)—

(i) the income tax;

(ii) supertax;

(iii) the undistributed profits tax; and

(iv) the personal levy;

(b) in Uganda (and hereinafter referred to as “Ugandan tax”)—

(i) the income tax;

(ii) corporation tax;

(iii) the undistributed income tax; and

(iv) the personal graduated tax.

2. The present Convention shall also apply to any other taxes of a substantially similar character imposed in Zambia or Uganda subsequently to the date of signature of the present Convention. At the end of each year the taxation authorities of the Contracting States shall notify to each other any changes which have been made in their respective taxation Laws.

ARTICLE II

1. In the present Convention, unless the context otherwise requires—

(a) the term “Zambia” means the Republic of Zambia;

(b) the term “Uganda” means the Republic of Uganda;

(c) the terms “one of the Contracting States” and “the other Contracting State” mean Zambia or Uganda, as the context requires;

(d) the term “tax” means Zambian tax or Ugandan tax, as the context requires;

(e) the term “company” means any body corporate, or any entity which is treated as a body corporate for tax purposes;

(f) the term “person” includes any body of persons corporate or not corporate;

(g) the term “resident of Zambia” means any person who is resident in Zambia for the purposes of Zambian tax and not resident in Uganda for the purposes of Ugandan tax; the term “resident of Uganda” means any person who is resident in Uganda for the purposes of Ugandan tax and not resident in Zambia for the purposes of Zambian tax, and a company shall be regarded as resident in Zambia if its business is managed and controlled in Zambia and resident in Uganda if its business is managed and controlled in Uganda;

(h) the terms “resident of one of the Contracting States” and “resident of the other Contracting State” mean a resident of Zambia or a resident of Uganda, as the context requires;

(i) the terms “Zambian enterprise” and “Ugandan enterprise” mean, respectively, an industrial, mining, commercial, plantation, agricultural or pastoral enterprise or undertaking carried on by a resident of Zambia, and an industrial, mining, commercial, plantation, agricultural or pastoral enterprise or undertaking carried on by a resident of Uganda;

(j) the terms “enterprise of one of the Contracting States” and “enterprise of the other Contracting State” mean a Zambian enterprise or a Ugandan enterprise, as the context requires.