A G R E E M E N T
BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF AUSTRIA
AND
THE GOVERNMENT OF THE STATE OF KUWAIT
FOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME AND
CAPITAL
AND FOR THE FOSTERING OF ECONOMIC
RELATIONS.
The Government of the Republic
of Austria and the Government of the State of Kuwait;
DESIRING to promote their
mutual economic relations by removing fiscal obstacles,
HAVE AGREED AS FOLLOWS:
Article 1
Personal
Scope
This
Agreement shall apply to persons who are residents of one or both of the
Contracting States.
Article 2
Taxes Covered
1. This Agreement shall
apply to taxes on income and on capital imposed on behalf of a Contracting
State, a political subdivision or local authority thereof, 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, as well as taxes on
capital appreciation.
3. The existing taxes
to which this Agreement shall apply are in particular:
a) in
Austria :
(1) the
income tax (die Einkommensteuer);
(2) the
corporation tax (die Koerperschaftsteuer);
(3) the
land tax (die Grundsteuer);
(4) the
tax on agricultural and forestry enterprises (die Abgabe von land-
und forstwirtschaftlichen Betrieben); and
(5) the tax on the value of vacant
plots (die Abgabe vom Bodenwert bei unbebauten Grundstuecken);
(hereinafter
referred to as "Austrian tax");
b) in
Kuwait:
(1) the corporate income tax;
(2) the contribution from the net profits of
shareholding companies payable to
the Kuwait Foundation for Advancement of Science (KFAS);
(3) the Zakat; and
(4) the tax subjected according to the supporting
of national employee law;
(hereinafter
referred to as "Kuwaiti tax").
4. The Agreement shall
apply also to any identical or substantially similar taxes which are imposed
after the date of signature of this Agreement in addition to, or in place of,
the existing taxes. The competent
authorities of the Contracting States shall notify each other of any
substantial changes which have been made in their respective taxation laws.
Article 3
General Definitions
1. For the purposes of
this Agreement, unless the context otherwise requires:
a) The term "Kuwait" means
the State of Kuwait and includes any area beyond the territorial sea which in
accordance with international law has been or may be designated under the laws
of Kuwait as an area in which Kuwait may exercise sovereign rights or
jurisdiction;
b) the term "Austria"
means the Republic of Austria;
c) the terms "a Contracting
State" and "the other Contracting State" mean Austria or Kuwait,
as the context requires;
d) the term "person"
includes an individual and 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 "national"
means:
(1) in
respect of Austria all individuals possessing the nationality of Austria and
any legal person, partnership and association deriving its status as such from
the laws in force in Austria;
(2) in
respect of Kuwait any individual possessing the nationality of Kuwait and any legal
person, partnership and association deriving its status as such from the law in
force in Kuwait;
h) the term "international
traffic" means any transport by a ship or aircraft operated by an
enterprise which 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;
i) the term "competent
authority" means:
(1) in
the case of Austria the Federal Minister of Finance or his authorised representative;
(2) in
the case of Kuwait the Minister of Finance or his authorised representative.
2. As regards the
application of the Agreement by a Contracting State any term not defined
therein shall, unless the context otherwise requires, have the meaning which it
has under the law of that State concerning the taxes to which the Agreement
applies.
Article 4
Resident
1. For the purpose of
this Agreement, the term "resident of a Contracting State" means:
a) in the case of Austria, any person
who, under the tax laws of Austria is
liable to taxation therein by reason of his domicile, habitual abode,
place of management or any other criterion of a similar nature;
b) in the case of Kuwait, an
individual who has his domicile in Kuwait and a company which is incorporated
in Kuwait.
2. For the purposes of
paragraph 1 above:
a) The Republic of Austria and its
political subdivisions shall be deemed to be a resident of Austria;
b) The State of Kuwait shall be deemed
to be a resident of Kuwait;
c)
government
institutions shall be deemed, according to affiliation, to be a resident of
Austria or of Kuwait. Any
institution shall be deemed to be a government institution which has been
created by the government of public functions and which is recognized as such
by mutual agreement of the competent authorities of the Contracting States.
3. Where by reason of
the provisions of paragraph 1 of this Article 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;
b)
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);
c) 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;
d) 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.
4. Where by reason of
the provisions of paragraph 1 of this Article 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 Contracting State in which its place of effective
management is situated.
Article 5
Permanent
Establishment
1. For the purposes of
this Agreement, 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, construction, installation, erection or assembly 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 carrying on, for the enterprise, any other
activity of a preparatory or auxiliary character;
e) the maintenance of a fixed place of
business solely for any combination of activities mentioned in sub-paragraphs
a) to d), provided that the overall activity of the fixed place of business
resulting from this combination is of a preparatory or auxiliary character.
5. A person acting in
one of the Contracting States for or on behalf of an enterprise of the other
Contracting State - other than an agent of an independent status to whom
paragraph 6 applies - shall be deemed to be a permanent establishment in the
first-mentioned State, if
a) he has, and habitually
exercises, in the first-mentioned State a general authority to negotiate and
conclude contracts for or on behalf of such enterprise, or
b) he has no such authority, but
habitually maintains in the first-mentioned State a stock of goods or
merchandise belonging to such enterprise from which such person regularly
delivers goods or merchandise for or on behalf of such enterprise.
6. An enterprise of a
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 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.
7. 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, boats, 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
industrial or 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, the profits of the enterprise may be taxed in the
other Contracting 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,
notwithstanding any limitation domestic law, provided that the expenses are
deducted in accordance with international practice.
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 purpose 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 Agreement, then the provisions of those Articles shall not be affected by
the provisions of this Article.
Article 8
Shipping and Air Transport
1. Profits
derived 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. If the place of
effective management of a shipping enterprise is aboard a ship, then it shall
be deemed to be situated in the Contracting State in which the home harbour of
the ship is situated, or, if there is no such home harbour, in the Contracting
State of which the operator of the ship is a resident.
3. The provisions of
paragraph 1 shall also apply to profits derived 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 not so accrued, may be included in the profits of that
enterprise and taxed accordingly.
2. Where one of the
Contracting States includes in the profits of an enterprise of that State - and
taxes accordingly - profits on which an enterprise of the other 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 the Agreement
and the competent authorities of the 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 shall be taxable only in that other State.
2. The term
"dividends" as used in this Article means:
a) dividends on
shares including income from shares, "jouissance" shares or
"jouissance" rights, mining shares, founders' shares or other shares
rights, not being debt-claims, participating in profits, and
b) other income
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.
3. The provisions of
paragraph 1 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.
4. 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. Any interest arising
in a Contracting State and paid to a resident of the other Contracting State
shall be taxable only in that other State if such resident is the beneficial
owner of the interest.
2. 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 premium
and prizes attaching to such securities, bonds or debentures.
3. The provisions of
paragraph 1 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.
4. Interest shall be
deemed to arise in a Contracting State when the payer is that State itself, a
political subdivision, a local authority or a resident of that State. Where, however, the person paying the
interest, whether he is a resident of a Contracting State or not, has in a
Contracting State a permanent establishment or a fixed base in connection with
which the indebtedness on which the interest is paid was incurred, and such
interest is borne by such permanent establishment or fixed base, then such
interest shall be deemed to arise in the State in which the permanent
establishment or fixed base is situated.
5. 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
Agreement.
Article 12
Royalties
1. Royalties
arising in a Contracting State and paid to a resident of the other Contracting
State may be taxed in that other State.
2. However,
such royalties may also be taxed in the Contracting State in which they arise,
and according to the law of that State, but if the recipient is the beneficial
owner of the royalties the tax so charged shall not exceed 10 per cent of the
gross amount of such royalties.
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, any
patent, trade mark, design or model, plan, secret formula or process.
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 that State
itself, a political subdivision, a local authority or a resident of that
State. Where, however, the person
paying the royalties, whether he is a resident of a Contracting State or not,
has in a Contracting State a permanent establishment or a fixed base in
connection with which the liability to pay the royalties was incurred, and such
royalties are borne by such permanent establishment or fixed base, then such
royalties shall be deemed to arise in the Contracting 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 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 Agreement.
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 the 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 from the
alienation of any property other than that referred to in paragraphs 1, 2 and
3, 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,
accountants and similar activities.
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 shall be taxable only in the Contracting State in which the place of
effective management of the enterprise is situated.
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 of a company which is a resident of the
other Contracting State shall be taxed only in the first-mentioned State.
Article 17
Artistes and
Athletes
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 an athlete, 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 an athlete in his
capacity as such accrues not to the entertainer or athlete 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 athlete are exercised.
3. The provisions of
paragraphs 1 and 2 shall not apply if the visit of entertainers or athletes to
a Contracting State is supported wholly or substantially from public funds of
the other Contracting State, a political subdivision or a local authority
thereof.
Article 18
Pensions and Annuities
1. Subject
to the provisions of paragraph 1 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.
2. Annuities
shall only be taxed in the Contracting State in which the beneficiary is a
resident.
3. As used in this
Article:
a) the term "pensions and other
similar remuneration" means periodic payments made after retirement in
consideration of past employment or by way of compensation for injuries
received in connection with past employment including payments from social
security funds of a Contracting State;
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 19
Government
Service
1. Remuneration
including pensions paid by a Contracting State, a political subdivision, a
local authority or a corporation of public law thereof to an individual in
respect of services rendered to that State, subdivision, authority or public
law corporation shall be taxable only in that State. However, such remuneration shall be taxable only in the
other Contracting State, if the services are rendered in that State, if the individual
is a resident of that State, a national of that State and not a national of the
first-mentioned State.
2. The provisions of
Articles 15, 16 and 18 shall apply to remuneration and pensions paid in respect
of services rendered in connection with a business carried on by a Contracting
State, a political subdivision, a local authority or a corporation of public
law thereof.
3. The provisions of
paragraph 1 shall likewise apply in respect of remuneration paid, under a
development assistance programme of a Contracting State, a political subdivision
or a local authority, out of funds exclusively supplied by that State,
political subdivision or local authority, to a specialist or volunteer seconded
to the other Contracting State with the consent of that other State.
Article 20
Teachers, Students and Trainees
1. An
individual who visits a Contracting State at the invitation of that State or of
a university, college, school, museum or other cultural institution of that
State or under an official programme of cultural exchange for a period not exceeding
two years solely for the purpose of teaching, giving lectures or carrying out
research at such institution and who is, or was immediately before that visit,
a resident of the other Contracting State shall be exempt from tax in the
first-mentioned State on his remuneration for such activity, provided that such
remuneration is derived by him from outside that State.
2. An individual who is
present in a Contracting State solely
a) as a student at a university,
college or school in that Contracting State,
b) as a business apprentice,
c) as the recipient of a grant,
allowance or award for the primary purpose of study or research from a
religious, charitable, scientific or educational organisation, or
d) as a member of a technical
cooperation programme entered into by the Government of that Contracting State,
and who is, or was
immediately before visiting that State, a resident of the other Contracting
State, shall be exempt from tax in the first-mentioned Contracting State in
respect of remittances from abroad for the purposes of his maintenance,
education or training.
3. Remuneration
which a student or business apprentice who is or was formerly a resident of a
Contracting State derives from an employment which he exercises in the other
Contracting State for a period or periods not exceeding in the aggregate 183
days in the fiscal year concerned shall not be taxed in that other State if the
employment is directly related to his studies or apprenticeship.
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 Agreement shall be taxable only 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.
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 or 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. The laws in force in
either of the Contracting States shall continue to govern the taxation in the
respective Contracting States except where provisions to the contrary are made
in this Agreement.
2.
It is agreed
that double taxation shall be avoided in accordance with the following
paragraphs of this Article.
3. In
the case of Austria, double taxation shall be avoided as follows:
a) Where
a resident of Austria derives income or owns capital which, in accordance with
the provisions of this Agreement, may be taxed in Kuwait, Austria shall,
subject to the provisions of sub-paragraphs b) and c), exempt such income or
capital from tax.
b) Where a resident
of Austria derives items of income which, in accordance with the provision of
paragraph 2 of Article 12 may be taxed in Kuwait, Austria shall allow as a
deduction from the tax on the income of that resident an amount equal to the
tax paid in Kuwait. 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 Kuwait.
c) Where in
accordance with any provision of this Agreement income derived or capital owned
by a resident of Austria is exempt from tax in Austria, Austria 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.
d) For the purposes of sub-paragraph
b), the Kuwaiti tax Zakat mentioned in paragraph 3 of Article 2 shall be
considered an income tax.
4. In the case of
Kuwait double taxation shall be avoided as follows:
If a resident of Kuwait owns
items of income and capital which are taxable in Austria, Kuwait may tax these
items of income and may give relief for the Austrian taxes suffered in
accordance with the provisions of its domestic law.
In such a case, Kuwait may
deduct from the taxes so calculated the income tax paid in Austria but in an
amount not exceeding that proportion of the aforesaid Kuwaiti tax which such
items of income bear to the entire income.
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 are or may be subjected.
2. 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.
3. 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.
4. Notwithstanding
the provisions of paragraphs 1, 2 and 3, nothing in this Article shall affect
the right of either Contracting State to grant an exemption or reduction of
taxation in accordance with its domestic laws, regulations or administrative
practices to its own nationals who are residents of that Contracting State. Such exemption or reduction, however,
shall not apply in respect of such proportion of the capital of companies owned
by persons who are nationals of the other Contracting State.
5. Nothing
in this Article shall be construed as imposing a legal obligation on a
Contracting State to extend to the residents of the other Contracting State,
the benefit of any treatment, preference or privilege which may be accorded to
any other Contracting State or its residents by virtue of the formation of a
customs union, economic union, special agreements, a free trade area or by
virtue of any regional or sub-regional arrangement relating wholly or mainly to
movement of capital and/or taxation to which the first-mentioned Contracting
State may be a party.
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
Agreement, 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.
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 Agreement. 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 this Agreement.
They may also consult together for the elimination of double taxation in
cases not provided for in the Agreement.
4. The competent
authorities of the Contracting States may communicate with each other directly
for the purpose of reaching an agreement in the sense of the preceding
paragraphs.
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 Agreement. 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) involved in
the assessment or collection of, the enforcement or prosecution in respect of,
or the determination of appeals in relation to, the taxes covered by this
Agreement. 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.
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 practices 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).
Article 27
Diplomatic and Consular Privileges
1. Nothing
in this Agreement shall affect the fiscal privileges of members of a diplomatic
mission, a consular post or an international organization under the general
rules of international law or under the provisions of special agreements.
2. Notwithstanding
the provisions of Article 4 an individual who is a member of a diplomatic mission or a consular post of a
Contracting State which is situated in the other Contracting State or in a
third state shall be deemed for the purposes of this Agreement to be a resident
of the sending State if:
a) in accordance with international
law he is not liable to tax in the receiving State in respect of income from
sources outside that State, and
b) he is liable in the sending State
to the same obligations in relation to tax on his world income as are residents
of that State.
Article 28
Miscellaneous
1. The competent
authorities of the Contracting States shall mutually agree on arrangements
concerning the manner in which the limitations and exemptions contained in the
foregoing Articles are to be implemented.
2. This Agreement shall
not affect the right of the residents of a Contracting State to benefit from
tax and investment incentives, exemptions and allowances provided for by the
other Contracting State in accordance with its domestic laws, regulations and
administrative practices.
Article 29
Regulations
The
competent authorities of each Contracting State, in accordance with the
practices of that State, may prescribe regulations necessary to carry out the
provisions of this Agreement.
Article 30
Entry into
Force
1. This Agreement shall
be subject to ratification in accordance with the constitutional requirements
of the two Contracting States and the instruments of ratification shall be
exchanged at Kuwait.
2. This Agreement shall
enter into force on the first day of the third month next following that in
which the exchange of the instruments of ratification takes place and shall
have effect:
a) in respect of taxes
withheld at source, for amounts paid on or after the first day of January of
the year next following that in which the Agreement enters into force ;
b) in respect of other taxes for
taxable periods, beginning on or after the first day of January of the year
next following that in which the Agreement enters into force.
Article 31
Duration
This
Agreement shall remain in force for a period of five years and shall continue
in force thereafter for a similar period or periods unless either Contracting
State notifies the other in writing, six months before the expiry of the
initial or any subsequent period, of its intention to terminate the
Agreement. In such event, the
Agreement shall cease to have effect:
a) in respect of taxes withheld at
source, to amounts payable after 31st of December of the year in which the
notice is given;
b) in respect of other taxes for
taxable periods, beginning after 31st of December of the year in which the
notice is given.
In
WITNESS WHEREOF the undersigned, duly authorised thereto, have signed this
Agreement.
Done
at Vienna in two originals, 13th day of June 2002, corresponding to
this day of 2nd Rabi II 1423 H, in the German, Arabic and English
languages, all texts being equally authentic. In case of divergency, the
English text shall prevail.
For the Government of the Republic of Austria |
For the Government of the State of Kuwait |
Benita Ferrero-Waldner Youssef
Hamad Al-Ibrahim
P R O T O C O L
The Government of the
Republic of Austria and the Government of the State of Kuwait on signing at
Vienna on 13th day of June 2002, corresponding to 2nd day
of Rabi II 1423 H, the Agreement for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with respect to Taxes on Income and Capital and
for the Fostering of Economic Relations have agreed upon the following
provisions which shall form an integral part of the said Agreement.
1. With
reference to Article 4:
It is agreed that government
institutions of Kuwait within the meaning of sub-paragraph c) of paragraph 2 of
this Article are the following corporate entities created under public law
which are wholly owned and controlled by the State of Kuwait:
-
the Central Bank of Kuwait,
-
public corporations,
-
authorities,
-
government agencies,
-
foundations,
-
development funds.
Subject to the provisions of
sub-paragraph c) of paragraph 2 of this Article further institutions can be
recognized as government institutions.
2. With
respect to Article 5:
a)
It is
understood that, with reference to paragraph 5 of this Article an independent
agent is a person who does business and signs contracts in his own name and
does not act on behalf of an enterprise in whatsoever manner; and an authority
to conclude contracts in the name of an enterprise is also exercised where
different persons are acting under an authority for the enterprise.
b) A person in the meaning of paragraph 6 must be
both legally and economically independent of the enterprise and must act in the
ordinary course of his business when acting on behalf of the enterprise.
3. With reference to
Articles 5, 7 and 9
Only those profits may be
attributed to a building site, construction, installation, erection or
assembly project in the
Contracting State in which the building site, construction, installation,
erection or assembly project is located which result from the activity of the
building site, construction, installation, erection or assembly project itself. This means that in particula
a)
profits which arise from a delivery of goods made. whether in connection with
this activity or independently of it, by the principal permanent establishment
or another permanent establishment of the enterprise or a third party shall not
be attributed to the building site, construction, installation, erection or
assembly project;
b)
profits arising from planning, project work, design or research as well as
technical services which a resident of one Contracting State performs for the
building site, construction,
installation, erection or assembly
project located in the other Contracting State shall, so far as these
activities are performed outside the other Contracting State, not be attributed
to that building site, construction, installation erection or assembly project.
4. With
respect to Article 7:
In
respect of paragraph 1 of this Article, payments of any kind received as a
consideration for the use of, or the right to use, industrial, commercial or
scientific equipment, or for information concerning industrial, commercial or
scientific experience, shall be deemed to be profits of an enterprise to which
the provisions of Article 7 apply.
5. With
respect to Article 8:
Profits
from the operation of vessels engaged in fishing, dredging or hauling
activities shall be treated as income falling under paragraph 1
of this Article.
6. With
respect to Article 9:
Article
9 is applicable irrespective of the provisions of the internal laws, provided
that acceptable substantial evidence is given and the determining of the
profits is in accordance with international practice.
7. With
respect to Article 15 and 19:
Employees of Kuwait Airways and government
owned ships who are nationals of Kuwait shall be exempt from Austrian tax
levied on their remuneration earned in Austria; employees of Austrian
enterprises engaged in international air transport shall be exempt from Kuwaiti
tax levied on their remuneration earned in Kuwait, provided they are Austrian
nationals.
In
WITNESS WHEREOF the undersigned, duly authorised thereto, have signed this
Protocol.
Done
at Vienna in two originals, 13th day of June 2002, corresponding to
this 2nd day of Rabi II 1423 H, in the German, Arabic and English
languages, all texts being equally authentic. In case of divergency, the
English text shall prevail.
For the Government of the Republic of Austria |
For the Government of the State of Kuwait |
Benita Ferrero-Waldner Youssef
Hamad Al-Ibrahim