CONVENTION
BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF AUSTRIA
AND
THE GOVERNMENT OF THE REPUBLIC OF ARMENIA
FOR THE AVOIDANCE OF DOUBLE TAXATION
WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL
The
Government of the Republic of Austria and the Government of the Republic of
Armenia, desiring to conclude a Convention for the avoidance of double taxation
with respect to taxes on income and on capital,
Have agreed as
follows:
Article 1
PERSONS COVERED
This Convention
shall apply to persons who are residents of one or both of the Contracting
States.
Article 2
TAXES COVERED
(1) This Convention shall apply to taxes on
income and on capital imposed on behalf of a Contracting State or of its
political subdivisions or local authorities, irrespective of the manner in
which they are levied.
(2) There shall be regarded as taxes on
income and on capital all taxes imposed on total income, on total capital, or
on elements of income or of capital, including taxes on gains from the
alienation of movable or immovable property, taxes on the total amounts of
wages or salaries paid by enterprises, as well as taxes on capital
appreciation.
(3) The existing taxes to which the
Convention shall apply are in particular:
a) in Armenia:
i) the
profit tax;
ii) the
income tax;
ii) the
property tax;
iv) the
land tax;
(hereinafter referred to as "Armenian
tax");
b)
in Austria:
i) the
income tax;
ii) the
corporation tax;
iii) the land
tax;
iv) the tax on agricultural and forestry enterprises;
v) the tax on the value of vacant plots;
(hereinafter referred to as "Austrian
tax").
(4) The Convention shall apply also to any
identical or substantially similar taxes which are imposed after the date of
signature of the Convention in addition to, or in place of, the existing taxes.
The competent authorities of the Contracting States shall notify each other
within a reasonable period of time of any significant changes which have been
made in their respective taxation laws.
Article 3
GENERAL DEFINITIONS
(1) For the purposes of this Convention, unless the context
otherwise requires:
a)
the terms "a Contracting State" and "the other Contracting
State" mean Armenia or Austria, as the context requires;
b)
the term "Armenia" means the Republic of Armenia;
c)
the term "Austria" means the Republic of Austria;
d)
the term "person" includes an individual, a company and any other
body of persons;
e)
the term "company" means any body corporate or any entity which is
treated as a body corporate for tax purposes;
f)
the terms "enterprise of a Contracting State" and "enterprise of
the other Contracting State" mean respectively an enterprise carried on by
a resident of a Contracting State and an enterprise carried on by a resident of
the other Contracting State;
g)
the term "international traffic" means any transport by a ship or
aircraft operated by an enterprise that has its place of effective management
in a Contracting State, except when the ship or aircraft is operated solely
between places in the other Contracting State;
h)
the term "competent authority" means:
i) in Armenia: the Minister of
Finance and Economy and the Minister of State Revenues or their authorised
representatives;
ii) in Austria: the Federal Minister of Finance or his
authorised
representative;
i)
the term "national" means:
i) any individual possessing the
nationality of a Contracting State;
ii) any legal person, partnership or
association deriving its status as such from the laws in force in a Contracting
State.
(2) As regards the application of the
Convention at any time by a Contracting State, any term not defined
therein shall, unless the context otherwise requires, have the meaning that it
has at that time under the law of that State for the purposes of the taxes to
which the Convention applies, any meaning under the applicable tax laws of that
State prevailing over a meaning given to the term under other laws of that
State.
Article 4
RESIDENT
(1) For the purposes of this Convention, the term "resident
of a Contracting State" means any person who, under the laws of that
State, is liable to tax therein by reason
of his domicile, residence, place of incorporation, place of management
or any other criterion of a similar nature, and also includes that State and
any political subdivision or local authority thereof. This term, however, does
not include any person who is liable to tax in that State in respect only of
income from sources in that State or capital situated therein.
(2) Where by reason of the provisions of
paragraph 1 an individual is a resident of both Contracting States, then his
status shall be determined as follows:
a)
he shall be deemed to be a resident only of the State in which he has a
permanent home available to him; if he has a permanent home available to him in
both States, he shall be deemed to be a resident only of the State with which
his personal and economic relations are closer (centre of vital interests);
b)
if the State in which he has his centre of vital interests cannot be
determined, or if he has not a permanent home available to him in either State,
he shall be deemed to be a resident only of the State in which he has an
habitual abode;
c)
if he has an habitual abode in both States or in neither of them, he shall be
deemed to be a resident only of the State of which he is a national;
d)
if he is a national of both States or of neither of them, the competent
authorities of the Contracting States shall endeavour to settle the question by
mutual agreement.
(3) Where
by reason of the provisions of paragraph 1 a person other than an individual is
a resident of both Contracting States, then it shall be deemed to be a resident
only of the State in which its place of effective management is situated.
Article 5
PERMANENT
ESTABLISHMENT
(1) For the purposes of this Convention, the
term "permanent establishment" means a fixed place of business
through which the business of an enterprise is wholly or partly carried on.
(2) The term "permanent establishment" includes
especially:
a) a place of management;
b) a branch;
c) an office;
d) a factory;
e) a workshop,
and
f) a mine, an oil or gas well, a
quarry or any other place of extraction of natural resources.
(3 A building site or
construction or installation project constitutes a permanent establishment only
if it lasts more than nine months.
(4) Notwithstanding the preceding provisions
of this Article, the term
"permanent establishment" shall be deemed not 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 of
collecting information, for the enterprise;
e) the maintenance of a fixed place of
business solely for the purpose of carrying on, for the enterprise, any other
activity of a preparatory or auxiliary character;
f) the maintenance of a fixed place of
business solely for any combination of activities mentioned in sub‑paragraphs
a) to e), provided that the overall activity of the fixed place of business
resulting from this combination is of a preparatory or auxiliary character.
(5) Notwithstanding the provisions of
paragraphs 1 and 2, where a person ‑ other than an agent of an independent
status to whom paragraph 7 applies ‑ is acting on behalf of an enterprise
and has, and habitually exercises, in a Contracting State an authority to
conclude contracts in the name of the enterprise, that enterprise shall be
deemed to have a permanent establishment in that State in respect of any
activities which that person undertakes for the enterprise, unless the
activities of such person are limited to those mentioned in paragraph 4 which,
if exercised through a fixed place of business, would not make this fixed place
of business a permanent establishment under the provisions of that paragraph.
(6) Notwithstanding the preceding provisions
of this Article, an insurance enterprise of a Contracting State shall, except
in regard to re-insurance, be deemed to have a permanent establishment in the
other Contracting State if it collects premiums in the territory of that other
State or insures risks situated therein through a person other than agent of an
independent status to whom paragraph 7 applies.
(7) An enterprise shall not be deemed to have
a permanent establishment in a Contracting State merely because it carries on
business in that State through a broker, general commission agent or any other
agent of an independent status, provided that such persons are acting in the ordinary
course of their business. However, when the activities of such an agent are
devoted wholly or almost wholly on behalf of that enterprise, he will not be
considered an agent of an independent status within the meaning of this
paragraph.
(8) The fact that a company which is a
resident of a Contracting State controls or is controlled by a company which is
a resident of the other Contracting State, or which carries on business in that
other State (whether through a permanent establishment or otherwise), shall not
of itself constitute either company a permanent establishment of the other.
Article 6
INCOME FROM IMMOVABLE
PROPERTY
(1) Income derived by a resident of a Contracting State from
immovable property (including
income from agriculture or forestry) situated in the other Contracting State
may be taxed in that other State.
(2) The term "immovable property" shall have the meaning
which it has under the law of the Contracting State in which the property in
question is situated. The term shall in any case include property accessory to
immovable property, livestock and equipment used in agriculture and forestry,
rights to which the provisions of general law respecting landed property apply,
usufruct of immovable property and rights to variable or fixed payments as
consideration for the working of, or the right to work, mineral deposits,
sources and other natural resources; ships and aircraft shall not be regarded
as immovable property.
(3) The provisions of paragraph 1 shall apply
to income derived from the direct use, letting, or use in any other form of
immovable property.
(4) The provisions of paragraphs 1 and 3
shall also apply to the income from immovable property of an enterprise and to
income from immovable property used for the performance of independent personal
services.
Article 7
BUSINESS PROFITS
(1) The 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, the profits of the enterprise
may be taxed in the other State but only so much of them as is attributable to
that permanent establishment.
(2) Subject to the provisions of paragraph 3,
where an enterprise of a Contracting State carries on business in the other
Contracting State through a permanent establishment situated therein, there
shall in each Contracting State be attributed to that permanent establishment
the profits which it might be expected to make if it were a distinct and
separate enterprise engaged in the same or similar activities under the same or
similar conditions and dealing wholly independently with the enterprise of
which it is a permanent establishment.
(3) In determining the profits of a permanent
establishment, there shall be allowed as deductions expenses which are incurred
for the purposes of the permanent establishment, including executive and
general administrative expenses so incurred, whether in the State in which the
permanent establishment is situated or elsewhere. However, no such deduction
shall be allowed in respect of amounts, if any, paid (otherwise than towards
reimbursement of actual expenses) by the permanent establishment to the head
office of the enterprise or any of its other offices, by way of royalties,
fees, or other similar payments in return for the use of patents or other
rights, or by way of commission, for specific services performed or for
management, or, except in the case of a banking enterprise, by way of interest
on moneys lent to the permanent establishment. Likewise, no account shall be
taken, in the determination of the profits of a permanent establishment, for
amounts charged (otherwise than towards reimbursement of actual expenses) by
the permanent establishment to the head office of the enterprise or any of its
other offices, by way of royalties, fees, or other similar payments in return
for the use of patents or other rights, or by way of commission for specific
services performed or for management, or, except in the case of a banking
enterprise, by way of interest on moneys lent to the head of the enterprise or
any of its other offices.
(4) Insofar as it has been customary in a
Contracting State to determine the profits to be attributed to a permanent
establishment on the basis of an apportionment of the total profits of the
enterprise to its various parts, nothing in paragraph 2 shall preclude that
Contracting State from determining the profits to be taxed by such an
apportionment as may be customary; the method of apportionment adopted shall,
however, be such that the result shall be in accordance with the principles
contained in this Article.
(5) No profits shall be attributed to a
permanent establishment by reason of the mere purchase by that permanent
establishment of goods or merchandise for the enterprise.
(6) For the purposes of the preceding
paragraphs, the profits to be attributed to the permanent establishment shall
be determined by the same method year by year unless there is good and
sufficient reason to the contrary.
(7) Where 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) The term "profits" as used in
this Article includes the profits derived by any partner from his participation
in a partnership and in any other body of persons which is treated in the same
way for tax purposes.
Article 8
INTERNATIONAL
TRAFFIC
(1) Profits
from the operation of ships or aircraft in international traffic shall be
taxable only in the Contracting State in which the place of effective
management of the enterprise is situated.
(2) The
provisions of paragraph 1 shall also apply to profits derived from the direct
use, the letting or any other way of exploitation of containers and equipment
pertaining to them.
(3) The
provisions of paragraphs 1 and 2 shall also apply to profits from the
participation in a pool, a joint business or an international operating agency.
Article 9
ASSOCIATED ENTERPRISES
(1) Where
a) an enterprise of a
Contracting State participates directly or indirectly in the management,
control or capital of an enterprise of the other Contracting State, or
b) the same persons participate
directly or indirectly in the management, control or capital of an enterprise
of a Contracting State and an enterprise of the other Contracting State,
and in either
case conditions are made or imposed between the two enterprises in their
commercial or financial relations which differ from those which would be made
between independent enterprises, then any 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.
(2) Where a Contracting State includes in the
profits of an enterprise of that State ‑ and taxes accordingly ‑ profits on
which an enterprise of the other Contracting State has been charged to tax in
that other State and the profits so included are profits which would have
accrued to the enterprise of the first‑mentioned State if the conditions made
between the two enterprises had been those which would have been made between
independent enterprises, then that other State shall make an appropriate
adjustment to the amount of the tax charged therein on those profits. In
determining such adjustment, due regard shall be had to the other provisions of
this Convention and the competent authorities of the Contracting States shall
if necessary consult each other.
Article 10
DIVIDENDS
(1) Dividends paid by a company which is a
resident of a Contracting State to a resident of the other Contracting State
may be taxed in that other State.
(2) However,
such dividends may also be taxed in the Contracting State of which the company
paying the dividends is a resident and according to the laws of that State, but
if the recipient is the beneficial owner of the dividends the tax so charged
shall not exceed:
a) 5 per cent of the gross
amount of the dividends if the beneficial owner is a company (other than a partnership)
which holds directly at least 10 per cent of the capital of the company paying
the dividends;
b) 15 per cent of the gross
amount of the dividends in all other cases.
The competent
authorities of the Contracting States shall by mutual agreement settle the mode
of application of these limitations.
This paragraph
shall not affect the taxation of the company in respect of the profits out of
which the dividends are paid.
(3) The term "dividends" as used in
this Article means income from shares, "jouissance" shares or
"jouissance" rights, mining shares, founders' shares or other rights,
not being debt‑claims, participating in profits, as well as income from other
corporate rights which is subjected to the same taxation treatment as income
from shares by the laws of the State of which the company making the
distribution is a resident.
(4) The provisions of paragraphs 1 and 2
shall not apply if the beneficial owner of the dividends, being a resident of a
Contracting State, carries on business in the other Contracting State of which
the company paying the dividends is a resident, through a permanent
establishment situated therein, or performs in that other State independent
personal services from a fixed base situated therein, and the holding in
respect of which the dividends are paid is effectively connected with such
permanent establishment or fixed base. In such case the provisions of Article 7
or Article 14, as the case may be, shall apply.
(5) Where
a company which is a resident of a Contracting State derives profits or income
from the other Contracting State, that other State may not impose any tax on
the dividends paid by the company, except insofar as such dividends are paid to
a resident of that other State or insofar as the holding in respect of which
the dividends are paid is effectively connected with a permanent establishment
or a fixed base situated in that other State, nor subject the company's
undistributed profits to a tax on the company's undistributed profits, even if
the dividends paid or the undistributed profits consist wholly or partly of
profits or income arising in such other State.
Article 11
INTEREST
(1) Interest
arising in a Contracting State and paid to a resident of the other Contracting
State may be taxed in that other State.
(2) However,
such interest may also be taxed in the Contracting State in which it arises and
according to the laws of that State, but if the recipient is the beneficial
owner of the interest the tax so charged shall not exceed 10 per cent of the
gross amount of the interest. The competent authorities of the Contracting
States shall by mutual agreement settle the mode of application of this
limitation.
(3) Notwithstanding the provisions of
paragraph 2, interest shall be exempted from tax in the Contracting State in
which it arises if it is:
a) interest in connection
with the sale on credit of any industrial, commercial or scientific equipment
or of any capital goods by an enterprise to another enterprise;
b) interest on a loan of
any nature – not represented by bearer instruments – granted by a banking
enterprise;
c) interest paid to the
other Contracting State or to its political subdivisions or local authorities.
(4) The term "interest" as used in
this Article means income from debt claims of every kind, whether or not
secured by mortgage and whether or not carrying a right to participate in the
debtor's profits, and in particular, income from government securities and
income from bonds or debentures, including premiums and prizes attaching to
such securities, bonds or debentures. Penalty charges for late payment shall
not be regarded as interest for the purpose of this Article.
(5) The provisions of paragraphs 1 and 2
shall not apply if the beneficial owner of the interest, being a resident of a
Contracting State, carries on business in the other Contracting State in which
the interest arises, through a permanent establishment situated therein, or
performs in that other State independent personal services from a fixed base
situated therein, and the debt-claim in respect of which the interest is paid
is effectively connected with such permanent establishment or fixed base. In
such case the provisions of Article 7 or Article 14, as the case may be, shall
apply.
(6) Interest
shall be deemed to arise in a Contracting State when the payer is a resident of
that State. Where, however, the person paying the interest, whether he is a
resident of a Contracting State or not, has in a Contracting State a permanent
establishment or a fixed base in connection with which the indebtedness on
which the interest is paid was incurred, and such interest is borne by such
permanent establishment or fixed base, then such interest shall be deemed to
arise in the State in which the permanent establishment or fixed base is
situated.
(7) Where, by reason of a special
relationship between the payer and the beneficial owner or between both of them
and some other person, the amount of the interest, having regard to the
debt-claim for which it is paid, exceeds the amount which would have been agreed
upon by the payer and the beneficial owner in the absence of such relationship,
the provisions of this Article shall apply only to the last‑mentioned amount.
In such case, the excess part of the payments shall remain taxable according to
the laws of each Contracting State, due regard being had to the other
provisions of this Convention.
Article 12
ROYALTIES
(1) Royalties arising in a Contracting State
and beneficially owned by a resident of the other Contracting State may be
taxed in that other State.
(2) However,
such royalties may also be taxed in the Contracting State in which they arise
and according to the laws of that State, but if the recipient is the beneficial
owner of the royalties the tax so charged shall not exceed 5 per cent of the gross
amount of the royalties. The competent authorities of the Contracting States
shall by mutual agreement settle the mode of application of this limitation.
(3) The term "royalties" as used in
this Article means payments of any kind received as a consideration for the use
of, or the right to use, any copyright of literary, artistic or scientific work
including cinematograph films, or films or tapes used for radio or television
broadcasting, any patent, trade mark, design or model, plan, secret formula or
process, or for information concerning industrial, commercial or scientific
experience.
(4) The provisions of paragraphs 1 and 2
shall not apply if the beneficial owner of the royalties, being a resident of a
Contracting State, carries on business in the other Contracting State in which
the royalties arise, through a permanent establishment situated therein, or
performs in that other State independent personal services from a fixed base
situated therein, and the right or property in respect of which the royalties
are paid is effectively connected with such permanent establishment or fixed
base. In such case the provisions of Article 7 or Article 14, as the case may
be, shall apply.
(5) Royalties
shall be deemed to arise in a Contracting State when the payer is a resident of
that State. Where, however, the person paying the royalties, whether he is a
resident of a Contracting State or not, has in a Contracting State a permanent
establishment or a fixed base in connection with which the liability to pay the
royalties was incurred, and such royalties are borne by such permanent
establishment or fixed base, then such royalties shall be deemed to arise in
the State in which the permanent establishment or fixed base is situated.
(6) Where, by reason of a special
relationship between the payer and the beneficial owner or between both of them
and some other person, the amount of the royalties, having regard to the use,
right or information for which they are paid, exceeds the amount which would
have been agreed upon by the payer and the beneficial owner in the absence of
such relationship, the provisions of this Article shall apply only to the last‑mentioned
amount. In such case, the excess part of the payments shall remain taxable
according to the laws of each Contracting State, due regard being had to the
other provisions of this Convention.
Article 13
CAPITAL GAINS
(1) Gains derived by a resident of a Contracting State from the
alienation of immovable property referred to in Article 6 and situated in the
other Contracting State may be taxed in that other State.
(2) Gains from the alienation of movable
property forming part of the business property of a permanent establishment
which an enterprise of a Contracting State has in the other Contracting State
or of movable property pertaining to a fixed base available to a resident of a
Contracting State in the other Contracting State for the purpose of performing
independent personal services including such gains from the alienation of such
a permanent establishment (alone or with the whole enterprise) or of such fixed
base, may be taxed in that other State.
(3) Gains
from the alienation of ships or aircraft operated in international traffic, or
movable property pertaining to the operation of such ships or aircraft shall be
taxable only in the Contracting State in which the place of effective
management of the enterprise is situated.
(4) Gains
derived by a resident of a Contracting State from the alienation of shares or
other corporate rights in a company the assets of which consist mainly of
immovable property situated in the other Contracting State may be taxed in that
State.
(5) Gains from the alienation of any property
other than that referred to in paragraphs 1, 2, 3 and 4 shall be taxable only
in the Contracting State of which the alienator is a resident.
Article 14
INDEPENDENT PERSONAL
SERVICES
(1) Income derived by a resident of a Contracting State in respect
of professional services or other activities of an independent character shall
be taxable only in that State unless he has a fixed base regularly available to
him in the other Contracting State for the purpose of performing his
activities. If he has such a fixed base, the income may be taxed in the other
State but only so much of it as is attributable to that fixed base.
(2) The
term "professional services" includes especially independent scientific,
literary, artistic, educational or teaching activities as well as the
independent activities of physicians, lawyers, engineers, architects, dentists
and accountants.
Article 15
DEPENDENT PERSONAL
SERVICES
(1) Subject to the provisions of Articles 16,
18 and 19, salaries, wages and other similar remuneration derived by a resident
of a Contracting State in respect of an employment shall be taxable only in
that State unless the employment is exercised in the other Contracting State.
If the employment is so exercised, such remuneration as is derived therefrom
may be taxed in that other State.
(2) Notwithstanding the provisions of
paragraph 1, remuneration derived by a resident of a Contracting State in
respect of an employment exercised in the other Contracting State shall be
taxable only in the first‑mentioned State if:
a) the recipient is present in the other State for
a period or periods not exceeding in the aggregate 183 days in the fiscal year
concerned, and
b) the remuneration is paid by,
or on behalf of, an employer who is not a resident of the other State, and
c) the remuneration is not borne
by a permanent establishment or a fixed base which the employer has in the
other State.
(3) Notwithstanding
the preceding provisions of this Article, remuneration derived in respect of an
employment exercised aboard a ship or aircraft operated in international
traffic, may be taxed in the Contracting State of which the operator is a resident.
Article 16
DIRECTORS' FEES
Directors' fees and other
similar payments derived by a resident of a Contracting State in his capacity
as a member of the board of directors or any other similar organ of a company
which is a resident of the other Contracting State may be taxed in that other
State.
Article 17
ARTISTES AND SPORTSMEN
(1) Notwithstanding the provisions of Articles 7, 14 and 15,
income derived by a resident of a Contracting State as an entertainer, such as
a theatre, motion picture, radio or television artiste, or a musician, or as a
sportsman, from his personal activities as such exercised in the other
Contracting State, may be taxed in that other State.
(2) Where income in respect of personal
activities exercised by an entertainer or a sportsman in his capacity as such
accrues not to the entertainer or sportsman himself but to another person, that
income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed
in the Contracting State in which the activities of the entertainer or sportsman
are exercised.
(3) Notwithstanding
the provisions of paragraphs 1 and 2, the income derived by an entertainer or a
sportsman from the activities referred to in paragraph 1 performed within the
framework of cultural or sport exchanges agreed to by the Governments of the
Contracting States and carried out other than for the purpose of profit, shall
be exempt from tax in the Contracting State in which these activities are
exercised.
Article 18
PENSIONS
Subject to the
provisions of paragraph 2 of Article 19, pensions and other similar
remuneration paid to a resident of a Contracting State in consideration of past
employment shall be taxable only in that State.
Article 19
GOVERNMENT SERVICE
(1) a) Salaries, wages and other similar
remuneration, other than a pension, paid by a Contracting State or a political
subdivision or a local authority thereof to an individual in respect of
services rendered to that State or subdivision or authority shall be taxable
only in that State.
b)
However, such salaries, wages and other similar remuneration shall be taxable
only in the other Contracting State if the services are rendered in that State
and the individual is a resident of that State who:
i) is a national of that State; or
ii) did not become a resident of that State solely for the purpose
of rendering the services.
(2) a) Any pension paid by, or out of funds created by, a
Contracting State or a political subdivision or a local authority thereof to an
individual in respect of services rendered to that State or subdivision or
authority shall be taxable only in that State.
b) However, such pension shall
be taxable only in the other Contracting State if the individual is a resident
of, and a national of, that State.
(3) The provisions of paragraph 1 of this
Article shall likewise apply in respect of remuneration paid to the Austrian
Foreign Trade Commissioner in Armenia and to the members of the staff of that
Austrian Foreign Trade Commissioner and to the staff of an Armenian organisation
of a similar nature established in Austria.
(4) The
provisions of Articles 15, 16, 17, and 18 shall apply to salaries, wages and
other similar remuneration, and to pensions, in respect of services rendered in
connection with a business carried on by a Contracting State or a political
subdivision or a local authority thereof.
Article 20
STUDENTS
Payments which a student or
business apprentice who is or was immediately before visiting a Contracting
State a resident of the other Contracting State and who is present in the first‑mentioned
State solely for the purpose of his education or training receives for the
purpose of his maintenance, education or training shall not be taxed in that
State, provided that such payments arise from sources outside that State.
Article 21
OTHER INCOME
(1) Items of income of a resident of a Contracting State, wherever
arising, not dealt with in the foregoing Articles of this Convention shall be
taxable in that State.
(2) The provisions of paragraph 1 shall not
apply to income, other than income from immovable property as defined in
paragraph 2 of Article 6, if the recipient of such income, being a resident of
a Contracting State, carries on business in the other Contracting State through
a permanent establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein, and the right
or property in respect of which the income is paid is effectively connected
with such permanent establishment or fixed base. In such case the provisions of
Article 7 or Article 14, as the case may be, shall apply.
(3) Notwithstanding
the provisions of paragraphs 1 and 2, items of income of a resident of a
Contracting State not dealt with in the foregoing Articles of this Convention
and arising in the other Contracting State may also be taxed in that other
State.
(4) Income in the sense of paragraph 1
derived by a resident of a Contracting State from the other Contracting State
under a legal claim to maintenance may not be taxed in the first-mentioned
State if such income would be exempt from tax according to the laws of the
other Contracting State.
Article 22
CAPITAL
(1) Capital represented by immovable property
referred to in Article 6, owned by a resident of a Contracting State and
situated in the other Contracting State, may be taxed in that other State.
(2) Capital represented by movable property
forming part of the business property of a permanent establishment which an
enterprise of a Contracting State has in the other Contracting State or by
movable property pertaining to a fixed base available to a resident of a
Contracting State in the other Contracting State for the purpose of performing
independent personal services, may be taxed in that other State.
(3) Capital
represented by ships and aircraft operated in international traffic, and by
movable property pertaining to the operation of such ships and aircraft, shall
be taxable only in the Contracting State in which the place of effective
management of the enterprise is situated.
(4) All other elements of capital of a
resident of a Contracting State shall be taxable only in that State.
Article 23
ELIMINATION OF DOUBLE
TAXATION
(1) In Armenia double taxation shall be eliminated as follows:
Where
a resident of Armenia derives income or owns capital which, in accordance with
the provisions of this Convention, may be taxed in Austria, Armenia shall allow
as a deduction from the tax on the income of that resident an amount equal to
the income tax paid in Austria; and as a deduction from the tax on the capital
of that resident, an amount equal to the capital tax paid in Austria. Such
deduction in either case shall not, however, exceed that part of the income tax
or capital tax, as computed before the deduction is given, which is
attributable, as the case may be, to the income or the capital which may be
taxed in Austria.
(2) In Austria double taxation shall be
eliminated as follows:
a) Where a resident of Austria
derives income or owns capital which, in accordance with the provisions of this
Convention, may be taxed in Armenia, Austria shall, subject to the provisions
of sub-paragraphs b) and c) and paragraph 3, exempt such income or
capital from tax.
b) Where a resident of Austria
derives items of income which, in accordance with the provisions of paragraphs
2 of Articles 10, 11 and 12, paragraphs 4 of Article 13 and paragraph 3 of
Article 21 may be taxed in Armenia, Austria shall allow as a deduction from the
tax on the income of that resident an amount equal to the tax paid in Armenia.
Such deduction shall not, however, exceed that part of the tax, as computed
before the deduction is given, which is attributable to such items of income
derived from Armenia.
c) Dividends in the sense of sub-paragraph a) of paragraph 2 of
Article 10 paid by a company which is a resident of Armenia to a company which
is a resident of Austria shall be exempt from tax in Austria, subject to the
relevant provisions of the domestic law of Austria, however, notwithstanding
any deviating minimum participation requirements provided for by that law.
(3) Where
in accordance with any provision of the Convention income derived or capital
owned by a resident of a Contracting State is exempt from tax in that State,
such State may nevertheless, in calculating the amount of tax on the remaining
income or capital of such resident, take into account the exempted income or
capital.
Article 24
NON‑DISCRIMINATION
(1) Nationals of a Contracting State 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 nationals of that other State in the same circumstances, in particular
with respect to residence, are or may be subjected. This provision shall,
notwithstanding the provisions of Article 1, also apply to persons who are not
residents of one or both of the Contracting States.
(2) Stateless persons who are residents of a
Contracting State shall not be subjected in either Contracting State to any
taxation or any requirement connected therewith, which is other or more
burdensome than the taxation and connected requirements to which nationals of
the State concerned in the same circumstances, in particular with respect to
residence, are or may be subjected.
(3) The taxation on a permanent establishment
which an enterprise of a Contracting State has in the other Contracting State
shall not be less favourably levied in that other State than the taxation
levied on enterprises of that other State carrying on the same activities. This
provision shall not be construed as obliging a Contracting State to grant to
residents of the other Contracting State any personal allowances, reliefs and
reductions for taxation purposes on account of civil status or family
responsibilities which it grants to its own residents.
(4) Except where the provisions of paragraph
1 of Article 9, paragraph 7 of Article 11, or paragraph 6 of Article 12, apply,
interest, royalties and other disbursements paid by an enterprise of a
Contracting State to a resident of the other Contracting State shall, for the
purpose of determining the taxable profits of such enterprise, be deductible
under the same conditions as if they had been paid to a resident of the first‑mentioned
State. Similarly, any debts of an enterprise of a Contracting State to a
resident of the other Contracting State shall, for the purpose of determining
the taxable capital of such enterprise, be deductible under the same conditions
as if they had been contracted to a resident of the first‑mentioned State.
(5) Enterprises of a Contracting State, 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 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 the first‑mentioned
State are or may be subjected.
(6) The
provisions of this Article shall, notwithstanding the provisions of Article 2,
apply to taxes of every kind and description.
Article 25
MUTUAL AGREEMENT
PROCEDURE
(1) Where a person considers that the actions
of one or both of the Contracting States result or will result for him in
taxation not in accordance with the provisions of this Convention, he may,
irrespective of the remedies provided by the domestic law of those States,
present his case to the competent authority of the Contracting State of which he
is a resident or, if his case comes under paragraph 1 of Article 24, to that of
the Contracting State of which he is a national. The case must be presented
within three years from the first notification of the action resulting in
taxation not in accordance with the provisions of the Convention.
(2) The competent authority shall endeavour,
if the objection appears to it to be justified and if it is not itself able to
arrive at a satisfactory solution, to resolve the case by mutual agreement with
the competent authority of the other Contracting State, with a view to the
avoidance of taxation which is not in accordance with the Convention. Any
agreement reached shall be implemented notwithstanding any time limits in the
domestic law of the Contracting States.
(3) The competent authorities of the
Contracting States shall endeavour to resolve by mutual agreement any
difficulties or doubts arising as to the interpretation or application of the
Convention. They may also consult together for the elimination of double
taxation in cases not provided for in the Convention.
(4) The competent authorities of the
Contracting States may communicate with each other directly, including through
a joint commission consisting of themselves or their representatives, for the
purpose of reaching an agreement in the sense of the preceding paragraphs.
(5) If it is not possible for the competent
authorities to resolve difficulties or doubts arising as to the interpretation
or application of the Convention in the course of the mutual agreement
procedure according to the preceding paragraphs of this Article within a time
limit of two years from the date on which the procedure was initiated, the case
shall be presented, upon application of all taxpayers concerned, to an
arbitration court by the competent authority of the Contracting State which has
initiated the mutual agreement procedure. The arbitration court shall consist
of one representative of each competent authority of the Contracting States and
of one independent person from each Contracting State who shall be appointed
from a list of arbitrators in the order of their ranking. The arbitrators shall
elect another person as chairman who must possess the qualifications required
for the appointment to the highest judicial offices in his country or be a
juriconsult of recognized competence. Each State shall nominate five competent
persons for the list of arbitrators. The taxpayer shall be heard before the
arbitration court at his request. The arbitration court shall deliver its decision
not more than six months from the date on which the matter was referred to it.
The decision shall be binding with regard to the individual case on both
Contracting States and all taxpayers concerned.
Article 26
EXCHANGE OF
INFORMATION
(1) The
competent authorities of the Contracting States shall exchange such information
as is necessary for carrying out the provisions of this Convention or of the
domestic laws of the Contracting States concerning taxes covered by the
Convention, insofar as the taxation thereunder is not contrary to the
Convention. The exchange of information is not restricted by Article 1. Any
information received by a Contracting State shall be treated as secret in the
same manner as information obtained under the domestic laws of that State and
shall be disclosed only to persons or authorities (including courts and
administrative bodies) concerned with the assessment or collection of, the
enforcement or prosecution in respect of, or the determination of appeals in
relation to, the taxes covered by the Convention. Such persons or authorities
shall use the information only for such purposes. They may disclose the
information in public court proceedings or in judicial decisions. Even in such
cases the confidentiality of person-related data may be waived only in so far
as this is necessary to safeguard predominant and legitimate interests of
another person or predominant public interests.
(2) In no case shall the provisions of
paragraph 1 be construed so as to impose on a Contracting State the obligation:
a) to carry out administrative
measures at variance with the laws and administrative practice of that or of
the other Contracting State;
b) to supply information which
is not obtainable under the laws or in the normal course of the administration
of that or of the other Contracting State;
c)
to supply information which would disclose any trade, business, industrial,
commercial or professional secret or trade process, or information, the
disclosure of which would be contrary to public policy (ordre public) or to the
basic rights granted by a State, in particular in the area of data protection.
(3) Notwithstanding
the provisions of paragraph 1 any exchange of information as is necessary for
carrying out the provisions of the domestic laws of the Contracting States
concerning taxes covered by this Convention can be carried out only if an
administrative arrangement between the competent authorities is concluded which
will also settle the mode of application of such exchange of information.
Article 27
MEMBERS OF DIPLOMATIC
MISSIONS AND CONSULAR POSTS
Nothing in this Convention
shall affect the fiscal privileges of members of diplomatic missions or
consular posts under the general rules of international law or under the
provisions of special agreements.
Article 28
ENTRY INTO FORCE
(1) This Convention shall be ratified in
accordance with the applicable procedures of each Contracting State and the
instruments of ratification shall be exchanged as soon as possible.
(2) The Convention shall enter into force on the first day of the
third month next following that in which the exchange of instruments of
ratification takes place and its provisions shall have effect:
a) in respect of taxes withheld at source - on
income derived on or after 1 January in the calendar year next following the
year in which the Convention enters into force;
b) in respect of other taxes on income, and on capital - for taxes
chargeable on or after 1 January in the calendar year next following the year
in which the Convention enters into force.
Article 29
TERMINATION
This Convention shall remain in force until terminated
by a Contracting State. Either Contracting State may terminate the Convention
at any time after 5 years from the date on which the Convention enters into
force, by giving notice of termination, through diplomatic channels, at least
six months before the end of any calendar year. In such event, the Convention
shall cease to have effect:
a) in respect of taxes withheld at source - on income derived on or
after 1 January in the calendar year next following the year in which the
Convention in which the notice is given;
b) in respect of other taxes on income, and on capital - for taxes
chargeable for any tax year beginning 1 January in the calendar year next
following the year in which the notice is given.
IN
WITNESS WHEREOF the undersigned, being duly authorised thereto, have signed
this Convention.
DONE
in duplicate in Vienna on the 27th day of February 2002 , in the German,
Armenian and English languages, all texts being equally authentic. In case of
divergence of interpretation, the English text shall prevail.
For the
Government of the
Republic of Austria: |
For the
Government of the
Republic of Armenia: |
Dr. Grasser (Minister of
Finance) |
Vartan
Oskanian (Minister of
Foreign Affairs) |
PROTOCOL
At the moment of signing the Convention between the
Government of the Republic of Austria and the Government of the Republic of
Armenia for the Avoidance of Double Taxation with respect to Taxes on Income
and on Capital the undersigned have agreed that the following provisions shall
form an integral part of the Convention.
I.
Interpretation of the Convention
It is
understood that provisions of the Convention which are drafted according to the
corresponding provisions of the OECD-Model Convention on Income and on Capital
or the United Nations Model Double Taxation Convention between Developed and
Developing Countries with respect to Taxes on Income and on Capital shall
generally be expected to have the same meaning as expressed in the OECD or UN
Commentary thereon. The understanding in the preceding sentence will not apply
with respect to any contrary interpretation agreed to by the competent
authorities after the entry into force of the Convention.
The
Commentaries - as they may be revised from time to time - constitute a means of
interpretation in the sense of the Vienna Convention of 23rd May 1969 on the
Law of Treaties. In case of any divergence in the interpretation as expressed
in the commentaries of the OECD and the UN Model, a common interpretation would
have to be sought by mutual agreement according to Article 25, if necessary.
II. It is understood that the term "competent
authority" means in Armenia:
a)
The Minister of State Revenues or his authorised
representative for the application of paragraph 2 of Article 10, paragraph 2 of
Article 11, paragraph 2 of Article 12 and Article 26; and
b)
The Minister of Finance and Economy or his authorised
representative in all other cases.
III. It
is understood that when establishing the "place of effective
management" as meant in sub-paragraph g) of paragraph 1 of Article 3,
paragraph 3 of Article 4, paragraph 1 of Article 8, paragraph 3 of Article 13
and in paragraph 3 of Article 22 circumstances which may, inter alia, be taken
into account are the place where a company is actually managed and controlled,
the place that plays a leading part in the management of a company from an
economic and functional point of view and the place where the accounting books
are kept.
IN WITNESS
WHEREOF the undersigned, being duly authorised thereto, have signed this
Protocol.
DONE in
duplicate in Vienna on the 27th day of February 2002, in the German, Armenian
and English languages, all texts being equally authentic. In case of divergence
of interpretation, the English text shall prevail.
For
the Government of
the Republic of Austria: |
For
the Government of
the Republic of Armenia: |
Dr. Grasser Vartan Oskanian
(Minister of Finance) (Minister
of Foreign Affairs)