DTC agreement between Armenia and Austria

8/2/2019 DTC agreement between Armenia and Austria

1/23

BGBl. III Ausgegeben am 4. Mai 2004 Nr. 29 1 von 23

www.ris.bka.gv.at

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:


2/23


www.ris.bka.gv.at

Article 1

PERSONS COVERED

This Convention shall apply to persons who are residents of one or both of theContracting 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 imposedon total income, on total capital, or on elements of income or of capital, includingtaxes on gains from the alienation of movable or immovable property, taxes on thetotal amounts of wages or salaries paid by enterprises, as well as taxes on capitalappreciation.

(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 taxeswhich are imposed after the date of signature of the Convention in addition to, or inplace of, the existing taxes. The competent authorities of the Contracting Statesshall notify each other within a reasonable period of time of any significant changeswhich have been made in their respective taxation laws.


3/23


www.ris.bka.gv.at

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" meanArmenia 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 bodyof persons;

e) the term "company" means any body corporate or any entity which istreated as a body corporate for tax purposes;

f) the terms "enterprise of a Contracting State" and "enterprise of the otherContracting State" mean respectively an enterprise carried on by aresident of a Contracting State and an enterprise carried on by aresident of the other Contracting State;

g) the term "international traffic" means any transport by a ship or aircraftoperated by an enterprise that has its place of effective management ina Contracting State, except when the ship or aircraft is operated solelybetween 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 authorisedrepresentative;

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 ContractingState, 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 purposesof the taxes to which the Convention applies, any meaning under the applicable taxlaws of that State prevailing over a meaning given to the term under other laws of

that State.


4/23


www.ris.bka.gv.at

Article 4

RESIDENT

(1) For the purposes of this Convention, the term "resident of a ContractingState" means any person who, under the laws of that State, is liable to tax therein byreason of his domicile, residence, place of incorporation, place of management orany other criterion of a similar nature, and also includes that State and any politicalsubdivision or local authority thereof. This term, however, does not include anyperson who is liable to tax in that State in respect only of income from sources inthat State or capital situated therein.

(2) Where by reason of the provisions of paragraph 1 an individual is a residentof 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 apermanent home available to him; if he has a permanent homeavailable to him in both States, he shall be deemed to be a resident onlyof 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 bedetermined, 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 hehas an habitual abode;

c) if he has an habitual abode in both States or in neither of them, he shallbe 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 competentauthorities of the Contracting States shall endeavour to settle thequestion 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 theState 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.


5/23


www.ris.bka.gv.at

(2) The term "permanent establishment" includes especially:

a) a place of management;b) a branch;

c) an office;d) a factory;e) a workshop, andf) 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 permanentestablishment only if it lasts more than nine months.

(4) Notwithstanding the preceding provisions of this Article, the term "permanentestablishment" shall be deemed not to include:

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

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

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

d) the maintenance of a fixed place of business solely for the purpose of purchasinggoods 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 ofactivities mentioned in sub-paragraphs a) to e), provided that the overall activity ofthe fixed place of business resulting from this combination is of a preparatory orauxiliary character.

(5) Notwithstanding the provisions of paragraphs 1 and 2, where a person - otherthan 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 anauthority to conclude contracts in the name of the enterprise, that enterprise shall bedeemed to have a permanent establishment in that State in respect of any activitieswhich that person undertakes for the enterprise, unless the activities of such personare limited to those mentioned in paragraph 4 which, if exercised through a fixedplace of business, would not make this fixed place of business a permanentestablishment under the provisions of that paragraph.

(6) Notwithstanding the preceding provisions of this Article, an insuranceenterprise of a Contracting State shall, except in regard to re-insurance, be deemedto 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 througha person other than agent of an independent status to whom paragraph 7 applies.


6/23


www.ris.bka.gv.at

(7) An enterprise shall not be deemed to have a permanent establishment in aContracting State merely because it carries on business in that State through abroker, 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 whollyon behalf of that enterprise, he will not be considered an agent of an independentstatus within the meaning of this paragraph.

(8) The fact that a company which is a resident of a Contracting State controls oris controlled by a company which is a resident of the other Contracting State, orwhich carries on business in that other State (whether through a permanentestablishment or otherwise), shall not of itself constitute either company apermanent 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 Statemay be taxed in that other State.

(2) The term "immovable property" shall have the meaning which it has under thelaw 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 andequipment used in agriculture and forestry, rights to which the provisions of generallaw respecting landed property apply, usufruct of immovable property and rights tovariable 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 notbe regarded as immovable property.

(3) The provisions of paragraph 1 shall apply to income derived from the directuse, 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 usedfor the performance of independent personal services.


7/23


www.ris.bka.gv.at

Article 7

BUSINESS PROFITS

(1) The profits of an enterprise of a Contracting State shall be taxable only in thatState unless the enterprise carries on business in the other Contracting Statethrough a permanent establishment situated therein. If the enterprise carries onbusiness as aforesaid, the profits of the enterprise may be taxed in the other Statebut only so much of them as is attributable to that permanent establishment.

(2) Subject to the provisions of paragraph 3, where an enterprise of aContracting State carries on business in the other Contracting State through a

permanent establishment situated therein, there shall in each Contracting State beattributed to that permanent establishment the profits which it might be expected tomake if it were a distinct and separate enterprise engaged in the same or similaractivities under the same or similar conditions and dealing wholly independently withthe enterprise of which it is a permanent establishment.

(3) In determining the profits of a permanent establishment, there shall beallowed as deductions expenses which are incurred for the purposes of thepermanent establishment, including executive and general administrative expensesso incurred, whether in the State in which the permanent establishment is situatedor elsewhere. However, no such deduction shall be allowed in respect of amounts, if

any, paid (otherwise than towards reimbursement of actual expenses) by thepermanent establishment to the head office of the enterprise or any of its otheroffices, by way of royalties, fees, or other similar payments in return for the use ofpatents or other rights, or by way of commission, for specific services performed orfor management, or, except in the case of a banking enterprise, by way of intereston moneys lent to the permanent establishment. Likewise, no account shall betaken, in the determination of the profits of a permanent establishment, for amountscharged (otherwise than towards reimbursement of actual expenses) by thepermanent establishment to the head office of the enterprise or any of its otheroffices, by way of royalties, fees, or other similar payments in return for the use ofpatents or other rights, or by way of commission for specific services performed orfor management, or, except in the case of a banking enterprise, by way of intereston 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 theprofits to be attributed to a permanent establishment on the basis of anapportionment of the total profits of the enterprise to its various parts, nothing inparagraph 2 shall preclude that Contracting State from determining the profits to betaxed by such an apportionment as may be customary; the method ofapportionment adopted shall, however, be such that the result shall be inaccordance with the principles contained in this Article.

(5) No profits shall be attributed to a permanent establishment by reason of themere purchase by that permanent establishment of goods or merchandise for theenterprise.


8/23


www.ris.bka.gv.at

(6) For the purposes of the preceding paragraphs, the profits to be attributed tothe permanent establishment shall be determined by the same method year by yearunless there is good and sufficient reason to the contrary.

(7) Where profits include items of income which are dealt with separately in otherArticles of this Convention, then the provisions of those Articles shall not be affectedby the provisions of this Article.

(8) The term "profits" as used in this Article includes the profits derived by anypartner from his participation in a partnership and in any other body of personswhich 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 betaxable only in the Contracting State in which the place of effective management ofthe 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 equipmentpertaining to them.

(3) The provisions of paragraphs 1 and 2 shall also apply to profits from theparticipation 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 inthe management, control or capital of an enterprise of the otherContracting State, or

b) the same persons participate directly or indirectly in the management,control or capital of an enterprise of a Contracting State and anenterprise of the other Contracting State,

and in either case conditions are made or imposed between the two enterprises intheir commercial or financial relations which differ from those which would be madebetween independent enterprises, then any profits which would, but for those


9/23


www.ris.bka.gv.at

conditions, have accrued to one of the enterprises, but, by reason of thoseconditions, have not so accrued, may be included in the profits of that enterpriseand 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 ContractingState has been charged to tax in that other State and the profits so included areprofits which would have accrued to the enterprise of the first-mentioned State if theconditions made between the two enterprises had been those which would havebeen made between independent enterprises, then that other State shall make anappropriate adjustment to the amount of the tax charged therein on those profits. Indetermining such adjustment, due regard shall be had to the other provisions of thisConvention and the competent authorities of the Contracting States shall ifnecessary consult each other.

Article 10

DIVIDENDS

(1) Dividends paid by a company which is a resident of a Contracting State to aresident 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 whichthe 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 chargedshall not exceed:

a) 5 per cent of the gross amount of the dividends if the beneficial owner is acompany (other than a partnership) which holds directly at least 10 per centof 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 agreementsettle the mode of application of these limitations.

This paragraph shall not affect the taxation of the company in respect of the profitsout 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 otherrights, not being debt-claims, participating in profits, as well as income from othercorporate rights which is subjected to the same taxation treatment as income fromshares by the laws of the State of which the company making the distribution is aresident.

(4) The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner ofthe dividends, being a resident of a Contracting State, carries on business in the


10/23


www.ris.bka.gv.at

other Contracting State of which the company paying the dividends is a resident,through a permanent establishment situated therein, or performs in that other Stateindependent personal services from a fixed base situated therein, and the holding inrespect of which the dividends are paid is effectively connected with suchpermanent establishment or fixed base. In such case the provisions of Article 7 orArticle 14, as the case may be, shall apply.

(5) Where a company which is a resident of a Contracting State derives profits orincome from the other Contracting State, that other State may not impose any tax on thedividends paid by the company, except insofar as such dividends are paid to a resident ofthat other State or insofar as the holding in respect of which the dividends are paid iseffectively connected with a permanent establishment or a fixed base situated in that otherState, nor subject the company's undistributed profits to a tax on the company'sundistributed profits, even if the dividends paid or the undistributed profits consist wholly orpartly 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 otherContracting 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 beneficialowner of the interest the tax so charged shall not exceed 10 per cent of the grossamount of the interest. The competent authorities of the Contracting States shall bymutual agreement settle the mode of application of this limitation.

(3) Notwithstanding the provisions of paragraph 2, interest shall be exemptedfrom 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 orscientific equipment or of any capital goods by an enterprise to anotherenterprise;

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 orlocal authorities.

(4) The term "interest" as used in this Article means income from debt claims ofevery kind, whether or not secured by mortgage and whether or not carrying a rightto participate in the debtor's profits, and in particular, income from governmentsecurities and income from bonds or debentures, including premiums and prizes

attaching to such securities, bonds or debentures. Penalty charges for late paymentshall not be regarded as interest for the purpose of this Article.


11/23


www.ris.bka.gv.at

(5) The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner ofthe interest, being a resident of a Contracting State, carries on business in the otherContracting State in which the interest arises, through a permanent establishmentsituated therein, or performs in that other State independent personal services froma fixed base situated therein, and the debt-claim in respect of which the interest ispaid is effectively connected with such permanent establishment or fixed base. Insuch 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 aresident of that State. Where, however, the person paying the interest, whether he isa resident of a Contracting State or not, has in a Contracting State a permanentestablishment or a fixed base in connection with which the indebtedness on whichthe interest is paid was incurred, and such interest is borne by such permanentestablishment or fixed base, then such interest shall be deemed to arise in the Statein which the permanent establishment or fixed base is situated.

(7) Where, by reason of a special relationship between the payer and thebeneficial owner or between both of them and some other person, the amount of theinterest, having regard to the debt-claim for which it is paid, exceeds the amountwhich would have been agreed upon by the payer and the beneficial owner in theabsence of such relationship, the provisions of this Article shall apply only to thelast-mentioned amount. In such case, the excess part of the payments shall remaintaxable according to the laws of each Contracting State, due regard being had to theother provisions of this Convention.

Article 12

ROYALTIES

(1) Royalties arising in a Contracting State and beneficially owned by a residentof the other Contracting State may be taxed in that other State.

(2) However, such royalties may also be taxed in the Contracting State in whichthey 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 grossamount of the royalties. The competent authorities of the Contracting States shall bymutual agreement settle the mode of application of this limitation.

(3) The term "royalties" as used in this Article means payments of any kindreceived as a consideration for the use of, or the right to use, any copyright ofliterary, artistic or scientific work including cinematograph films, or films or tapesused for radio or television broadcasting, any patent, trade mark, design or model,plan, secret formula or process, or for information concerning industrial, commercialor scientific experience.

(4) The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner ofthe royalties, being a resident of a Contracting State, carries on business in theother Contracting State in which the royalties arise, through a permanent


12/23


www.ris.bka.gv.at

establishment situated therein, or performs in that other State independent personalservices from a fixed base situated therein, and the right or property in respect ofwhich the royalties are paid is effectively connected with such permanentestablishment or fixed base. In such case the provisions of Article 7 or Article 14, asthe case may be, shall apply.

(5) Royalties shall be deemed to arise in a Contracting State when the payer is aresident of that State. Where, however, the person paying the royalties, whether heis a resident of a Contracting State or not, has in a Contracting State a permanentestablishment or a fixed base in connection with which the liability to pay theroyalties was incurred, and such royalties are borne by such permanentestablishment or fixed base, then such royalties shall be deemed to arise in theState in which the permanent establishment or fixed base is situated.

(6) Where, by reason of a special relationship between the payer and thebeneficial owner or between both of them and some other person, the amount of theroyalties, 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 thebeneficial owner in the absence of such relationship, the provisions of this Articleshall apply only to the last-mentioned amount. In such case, the excess part of thepayments shall remain taxable according to the laws of each Contracting State, dueregard 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 ofimmovable property referred to in Article 6 and situated in the other ContractingState may be taxed in that other State.

(2) Gains from the alienation of movable property forming part of the businessproperty of a permanent establishment which an enterprise of a Contracting Statehas 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 thepurpose of performing independent personal services including such gains from thealienation of such a permanent establishment (alone or with the whole enterprise) orof 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 betaxable only in the Contracting State in which the place of effective management ofthe 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 ofimmovable property situated in the other Contracting State may be taxed in thatState.


13/23


www.ris.bka.gv.at

(5) Gains from the alienation of any property other than that referred to inparagraphs 1, 2, 3 and 4 shall be taxable only in the Contracting State of which thealienator is a resident.

Article 14

INDEPENDENT PERSONAL SERVICES

(1) Income derived by a resident of a Contracting State in respect of professionalservices or other activities of an independent character shall be taxable only in thatState unless he has a fixed base regularly available to him in the other ContractingState 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 tothat 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 othersimilar remuneration derived by a resident of a Contracting State in respect of anemployment shall be taxable only in that State unless the employment is exercisedin the other Contracting State. If the employment is so exercised, such remunerationas is derived therefrom may be taxed in that other State.

(2) Notwithstanding the provisions of paragraph 1, remuneration derived by aresident of a Contracting State in respect of an employment exercised in the otherContracting 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 notexceeding 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 aresident of the other State, and

c) the remuneration is not borne by a permanent establishment or a fixedbase which the employer has in the other State.

(3) Notwithstanding the preceding provisions of this Article, remuneration derivedin respect of an employment exercised aboard a ship or aircraft operated ininternational traffic, may be taxed in the Contracting State of which the operator is aresident.


14/23


www.ris.bka.gv.at

Article 16

DIRECTORS' FEES

Directors' fees and other similar payments derived by a resident of a ContractingState in his capacity as a member of the board of directors or any other similarorgan of a company which is a resident of the other Contracting State may be taxedin that other State.

Article 17

ARTISTES AND SPORTSMEN

(1) Notwithstanding the provisions of Articles 7, 14 and 15, income derived by aresident 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 personalactivities as such exercised in the other Contracting State, may be taxed in thatother State.

(2) Where income in respect of personal activities exercised by an entertainer ora sportsman in his capacity as such accrues not to the entertainer or sportsman

himself but to another person, that income may, notwithstanding the provisions ofArticles 7, 14 and 15, be taxed in the Contracting State in which the activities of theentertainer or sportsman are exercised.

(3) Notwithstanding the provisions of paragraphs 1 and 2, the income derived byan entertainer or a sportsman from the activities referred to in paragraph 1performed within the framework of cultural or sport exchanges agreed to by theGovernments of the Contracting States and carried out other than for the purpose ofprofit, shall be exempt from tax in the Contracting State in which these activities areexercised.

Article 18

PENSIONS

Subject to the provisions of paragraph 2 of Article 19, pensions and other similarremuneration paid to a resident of a Contracting State in consideration of pastemployment shall be taxable only in that State.


15/23


www.ris.bka.gv.at

Article 19

GOVERNMENT SERVICE

(1) a) Salaries, wages and other similar remuneration, other than a pension, paidby a Contracting State or a political subdivision or a local authority thereofto an individual in respect of services rendered to that State or subdivisionor authority shall be taxable only in that State.

b) However, such salaries, wages and other similar remuneration shall betaxable only in the other Contracting State if the services are rendered inthat 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 ofrendering the services.

(2) a) Any pension paid by, or out of funds created by, a Contracting State or apolitical subdivision or a local authority thereof to an individual in respect ofservices rendered to that State or subdivision or authority shall be taxableonly in that State.

b) However, such pension shall be taxable only in the other Contracting Stateif 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 ofremuneration paid to the Austrian Foreign Trade Commissioner in Armenia and tothe members of the staff of that Austrian Foreign Trade Commissioner and to thestaff 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 othersimilar remuneration, and to pensions, in respect of services rendered in connection with abusiness carried on by a Contracting State or a political subdivision or a local authoritythereof.

Article 20

STUDENTS

Payments which a student or business apprentice who is or was immediatelybefore visiting a Contracting State a resident of the other Contracting State and whois present in the first-mentioned State solely for the purpose of his education ortraining receives for the purpose of his maintenance, education or training shall notbe taxed in that State, provided that such payments arise from sources outside thatState.


16/23


www.ris.bka.gv.at

Article 21

OTHER INCOME

(1) Items of income of a resident of a Contracting State, wherever arising, notdealt 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 incomefrom immovable property as defined in paragraph 2 of Article 6, if the recipient ofsuch income, being a resident of a Contracting State, carries on business in theother Contracting State through a permanent establishment situated therein, orperforms in that other State independent personal services from a fixed basesituated therein, and the right or property in respect of which the income is paid iseffectively 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 aresident of a Contracting State not dealt with in the foregoing Articles of thisConvention and arising in the other Contracting State may also be taxed in thatother State.

(4) Income in the sense of paragraph 1 derived by a resident of a ContractingState from the other Contracting State under a legal claim to maintenance may notbe taxed in the first-mentioned State if such income would be exempt from taxaccording to the laws of the other Contracting State.

Article 22

CAPITAL

(1) Capital represented by immovable property referred to in Article 6, owned bya resident of a Contracting State and situated in the other Contracting State, may betaxed in that other State.

(2) Capital represented by movable property forming part of the businessproperty of a permanent establishment which an enterprise of a Contracting Statehas in the other Contracting State or by movable property pertaining to a fixed baseavailable to a resident of a Contracting State in the other Contracting State for thepurpose of performing independent personal services, may be taxed in that otherState.

(3) Capital represented by ships and aircraft operated in international traffic, andby movable property pertaining to the operation of such ships and aircraft, shall betaxable only in the Contracting State in which the place of effective management ofthe enterprise is situated.

(4) All other elements of capital of a resident of a Contracting State shall betaxable only in that State.


17/23


www.ris.bka.gv.at

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 accordancewith the provisions of this Convention, may be taxed in Austria, Armenia shall allowas a deduction from the tax on the income of that resident an amount equal to theincome tax paid in Austria; and as a deduction from the tax on the capital of thatresident, an amount equal to the capital tax paid in Austria. Such deduction in eithercase 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, inaccordance with the provisions of this Convention, may be taxed inArmenia, 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 4of Article 13 and paragraph 3 of Article 21 may be taxed in Armenia, Austriashall allow as a deduction from the tax on the income of that resident anamount 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 paidby a company which is a resident of Armenia to a company which is aresident of Austria shall be exempt from tax in Austria, subject to therelevant provisions of the domestic law of Austria, however, notwithstandingany deviating minimum participation requirements provided for by that law.

(3) Where in accordance with any provision of the Convention income derived or capitalowned by a resident of a Contracting State is exempt from tax in that State, such State maynevertheless, in calculating the amount of tax on the remaining income or capital of suchresident, take into account the exempted income or capital.


18/23


www.ris.bka.gv.at

Article 24

NON-DISCRIMINATION

(1) Nationals of a Contracting State shall not be subjected in the otherContracting State to any taxation or any requirement connected therewith, which isother or more burdensome than the taxation and connected requirements to whichnationals of that other State in the same circumstances, in particular with respect toresidence, are or may be subjected. This provision shall, notwithstanding theprovisions of Article 1, also apply to persons who are not residents of one or both ofthe Contracting States.

(2) Stateless persons who are residents of a Contracting State shall not besubjected in either Contracting State to any taxation or any requirement connected

therewith, which is other or more burdensome than the taxation and connectedrequirements 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 aContracting State has in the other Contracting State shall not be less favourablylevied in that other State than the taxation levied on enterprises of that other Statecarrying on the same activities. This provision shall not be construed as obliging aContracting State to grant to residents of the other Contracting State any personalallowances, reliefs and reductions for taxation purposes on account of civil status orfamily responsibilities which it grants to its own residents.

(4) Except where the provisions of paragraph 1 of Article 9, paragraph 7 ofArticle 11, or paragraph 6 of Article 12, apply, interest, royalties and otherdisbursements paid by an enterprise of a Contracting State to a resident of the otherContracting State shall, for the purpose of determining the taxable profits of suchenterprise, be deductible under the same conditions as if they had been paid to aresident of the first-mentioned State. Similarly, any debts of an enterprise of aContracting State to a resident of the other Contracting State shall, for the purposeof determining the taxable capital of such enterprise, be deductible under the sameconditions 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 partlyowned or controlled, directly or indirectly, by one or more residents of the otherContracting State, shall not be subjected in the first-mentioned State to any taxationor any requirement connected therewith which is other or more burdensome thanthe taxation and connected requirements to which other similar enterprises of thefirst-mentioned State are or may be subjected.

(6) The provisions of this Article shall, notwithstanding the provisions of Article 2, applyto taxes of every kind and description.

Article 25

MUTUAL AGREEMENT PROCEDURE


19/23


www.ris.bka.gv.at

(1) Where a person considers that the actions of one or both of the ContractingStates 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 lawof those States, present his case to the competent authority of the Contracting Stateof which he is a resident or, if his case comes under paragraph 1 of Article 24, tothat of the Contracting State of which he is a national. The case must be presentedwithin three years from the first notification of the action resulting in taxation not inaccordance 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 thecase by mutual agreement with the competent authority of the other ContractingState, with a view to the avoidance of taxation which is not in accordance with the

Convention. Any agreement reached shall be implemented notwithstanding any timelimits in the domestic law of the Contracting States.

(3) The competent authorities of the Contracting States shall endeavour toresolve by mutual agreement any difficulties or doubts arising as to theinterpretation or application of the Convention. They may also consult together forthe elimination of double taxation in cases not provided for in the Convention.

(4) The competent authorities of the Contracting States may communicate witheach other directly, including through a joint commission consisting of themselves ortheir representatives, for the purpose of reaching an agreement in the sense of thepreceding paragraphs.

(5) If it is not possible for the competent authorities to resolve difficulties ordoubts arising as to the interpretation or application of the Convention in the courseof the mutual agreement procedure according to the preceding paragraphs of thisArticle within a time limit of two years from the date on which the procedure wasinitiated, the case shall be presented, upon application of all taxpayers concerned,to an arbitration court by the competent authority of the Contracting State which hasinitiated the mutual agreement procedure. The arbitration court shall consist of onerepresentative of each competent authority of the Contracting States and of oneindependent person from each Contracting State who shall be appointed from a listof arbitrators in the order of their ranking. The arbitrators shall elect another personas chairman who must possess the qualifications required for the appointment to thehighest judicial offices in his country or be a juriconsult of recognized competence.Each State shall nominate five competent persons for the list of arbitrators. Thetaxpayer shall be heard before the arbitration court at his request. The arbitrationcourt shall deliver its decision not more than six months from the date on which thematter was referred to it. The decision shall be binding with regard to the individualcase on both Contracting States and all taxpayers concerned.

Article 26

EXCHANGE OF INFORMATION


20/23


www.ris.bka.gv.at

(1) The competent authorities of the Contracting States shall exchange such informationas is necessary for carrying out the provisions of this Convention or of the domestic laws ofthe 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 restrictedby Article 1. Any information received by a Contracting State shall be treated as secret inthe same manner as information obtained under the domestic laws of that State and shallbe disclosed only to persons or authorities (including courts and administrative bodies)concerned with the assessment or collection of, the enforcement or prosecution in respectof, or the determination of appeals in relation to, the taxes covered by the Convention. Suchpersons or authorities shall use the information only for such purposes. They may disclosethe information in public court proceedings or in judicial decisions. Even in such cases theconfidentiality of person-related data may be waived only in so far as this is necessary tosafeguard predominant and legitimate interests of another person or predominant publicinterests.

(2) In no case shall the provisions of paragraph 1 be construed so as to imposeon a Contracting State the obligation:

a) to carry out administrative measures at variance with the laws andadministrative practice of that or of the other Contracting State;

b) to supply information which is not obtainable under the laws or in thenormal course of the administration of that or of the other ContractingState;

c) to supply information which would disclose any trade, business,

industrial, commercial or professional secret or trade process, orinformation, the disclosure of which would be contrary to public policy(ordre public) or to the basic rights granted by a State, in particular inthe area of data protection.

(3) Notwithstanding the provisions of paragraph 1 any exchange of information as isnecessary for carrying out the provisions of the domestic laws of the Contracting Statesconcerning taxes covered by this Convention can be carried out only if an administrativearrangement between the competent authorities is concluded which will also settle themode 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 ofdiplomatic missions or consular posts under the general rules of international law orunder the provisions of special agreements.

Article 28

ENTRY INTO FORCE


21/23


www.ris.bka.gv.at

(1) This Convention shall be ratified in accordance with the applicableprocedures of each Contracting State and the instruments of ratification shall beexchanged as soon as possible.

(2) The Convention shall enter into force on the first day of the third month nextfollowing that in which the exchange of instruments of ratification takes place and itsprovisions shall have effect:

a) in respect of taxes withheld at source - on income derived on or after 1January in the calendar year next following the year in which the Conventionenters into force;

b) in respect of other taxes on income, and on capital - for taxes chargeable onor 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 yearsfrom 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 anycalendar 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 1January in the calendar year next following the year in which the Conventionin which the notice is given;

b) in respect of other taxes on income, and on capital - for taxes chargeable forany tax year beginning 1 January in the calendar year next following theyear in which the notice is given.


22/23


www.ris.bka.gv.at

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 theGerman, Armenian and English languages, all texts being equally authentic. In caseof divergence of interpretation, the English text shall prevail.

For the Governmentof the Republic of Austria:

For the Governmentof the Republic of Armenia:

Dr. Grasser

(Minister of Finance)

Vartan Oskanian

(Minister of Foreign Affairs)


23/23


PROTOCOL

At the moment of signing the Convention between the Government of the Republic of Austriaand the Government of the Republic of Armenia for the Avoidance of Double Taxation withrespect 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 thecorresponding provisions of the OECD-Model Convention on Income and on Capitalor the United Nations Model Double Taxation Convention between Developed andDeveloping Countries with respect to Taxes on Income and on Capital shall generallybe expected to have the same meaning as expressed in the OECD or UNCommentary thereon. The understanding in the preceding sentence will not applywith respect to any contrary interpretation agreed to by the competent authoritiesafter the entry into force of the Convention.The Commentaries - as they may be revised from time to time - constitute a means ofinterpretation in the sense of the Vienna Convention of 23rd May 1969 on the Law ofTreaties. In case of any divergence in the interpretation as expressed in the commentaries ofthe OECD and the UN Model, a common interpretation would have to be sought by mutualagreement 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, paragraph2 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 meantin sub-paragraph g) of paragraph 1 of Article 3, paragraph 3 of Article 4, paragraph 1 ofArticle 8, paragraph 3 of Article 13 and in paragraph 3 of Article 22 circumstances whichmay, inter alia, be taken into account are the place where a company is actually managedand controlled, the place that plays a leading part in the management of a company from aneconomic and functional point of view and the place where the accounting books are kept.

IN WITNESS WHEREOF the undersigned, being duly authorised thereto, havesigned 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 ofdivergence 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)

Date post:	06-Apr-2018
Category:	Documents
Upload:	oecd-organisation-for-economic-co-operation-and-development
View:	218 times
Download:	0 times

DTC agreement between Armenia and Austria

Documents