DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF FINLAND [ S.L.123.11 SUBSIDIARY LEGISLATION 123.11 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF FINLAND ORDER 30th Dece

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

1. 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 o n t h e c o m p a n y ' s u n d i s t r i b u t e d p r o f i t s , e v e n i f t h e d i v i d e n d s pa i d o r t h e undistributed profits consist wholly or partly of profits or income arising in such other State. Article 11 Interest
2. Interest arising in a Contracting State shall be taxable only in the other Contracting State if the beneficial owner of the interest is a resident of that other 10 [ S.L.123.11 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF FINLAND State.
3. The term ''interest'' as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article.
4. 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.

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

1. 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
2. Royalties arising in a Contracting State shall be taxable only in the other Contracting State if the beneficial owner of the royalties is a resident of that other State.
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, and films or tapes for television or radio broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience.
4. The provisions of paragraph 1 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.

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

4. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF FINLAND [ S.L.123.11 11 Article 13 Capital gains 1. Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in paragraph 2 of Article 6 and situated in the other Contracting State may be taxed in that other State. 2. Gains derived by a resident of a Contracting State from the alienation of shares or other corporate rights in a company deriving their value or the greater part of their value directly or indirectly from immovable property which forms part of the assets of the company and which is situated in the other Contracting State may be taxed in that other State. In this paragraph the term ''shares'' does not include shares quoted or listed on a recognised stock exchange. 3. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such fixed base, may be taxed in that other State. 4. Gains derived by an enterprise of a Contracting State from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that State. 5. Gains derived by an enterprise of a Contracting State from the alienation of containers (including trailers, barges and related equipment for the transport of containers) used for the transport of goods or merchandise shall be taxable only in that State, except where such containers are used for the transport of goods or merchandise solely between places within the other Contracting State. 6. Gains from the alienation of any property other than that referred to in the preceding paragraphs of this Article, 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 except in the following circumstances, when such income may also be taxed in the other Contracting State: (

1. a)if he has a fixed base regularly available to him in that other State for the purpose of performing his activities; in that case, only so much of the income as is attributable to that fixed base may be taxed in that other State; or (
2. b)if his stay in that other State is for a period or periods amounting to or exceeding in the aggregate 183 days within any twelve-month period commencing or ending in the calendar year concerned; in that case, only so much of the income as is derived from his activities performed in that other State during such period or periods may be taxed in that other State. 2. The term ''professional services'' includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants. 12 [ S.L.123.11 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF FINLAND 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: (
3. a)the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days within any twelve-month period commencing or ending in the calendar year concerned, and (
4. b)the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and (
5. c)the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. 3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State may be taxed in that State. Article 16 Directors' fees Directors' fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors or any other similar organ of a company which is a resident of the other Contracting State may be taxed in that other State. Article 17 Artistes and sportsmen 1. Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsman, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State. 2. Where income in respect of personal activities exercised by an entertainer or a sportsman in his capacity as such accrues not to the entertainer or sportsman himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or sportsman are exercised. Article 18 Pensions, annuities and similar payments 1. Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State. 2. Notwithstanding the provisions of paragraph 1, and subject to the provisions of paragraph 2 of Article 19, pensions paid and other benefits, whether periodic or DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF FINLAND [ S.L.123.11 13 lump-sum compensation, awarded under the social security legislation of a Contracting State or under any public scheme organised by a Contracting State for social welfare purposes, or any annuity arising in a Contracting State, shall be taxable only in that State. 3. The term ''annuity'' as used in this Article 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 (other than services rendered). Article 19 Government service 1. (
6. a)Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting State or a statutory body or a local authority thereof to an individual in respect of services rendered to that State or body or authority shall be taxable only in that State. (
7. b)However, such salaries, wages and other similar remuneration shall be taxable only in the Contracting State of which the individual is a resident if the services are rendered in that State and the individual (
8. i)is a national of that State; or (
9. ii)did not become a resident of that State solely for the purpose of rendering the services. 2. (
10. a)Any pension paid by, or out of funds created by, a Contracting State or a statutory body or a local authority thereof to an individual in respect of services rendered to that State or body or authority shall be taxable only in that State. (
11. b)However, such pension shall be taxable only in the Contracting State of which the individual is a resident if he is a national of that State. 3. The provisions of Articles 15, 16, 17 and 18 shall apply to salaries, wages and other similar remuneration, and to pensions, in respect of services rendered in connection with a business carried on by a Contracting State or a statutory body or a local authority thereof. Article 20 Students and trainees A student, trainee or apprentice who is present in a Contracting State solely for the purpose of his education or training and who is, or immediately before being so present was, a resident of the other Contracting State shall be exempt from tax in the first-mentioned State on payments received from outside that first-mentioned State for the purpose of his maintenance, education or training. 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 14 [ S.L.123.11 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF FINLAND the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base.

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

Article 22 Elimination of double taxation 1. Subject to the provisions of Finnish law regarding the elimination of international double taxation (which shall not affect the general principle hereof), double taxation shall be eliminated in Finland as follows: (

1. a)Where a resident of Finland derives income which, in accordance with the provisions of this Agreement, may be taxed in Malta, Finland shall, subject to the provisions of sub-paragraph b), allow as a deduction from the Finnish tax of that person, an amount equal to the Malta tax paid under Maltese law and in accordance with the Agreement, as computed by reference to the same income by reference to which the Finnish tax is computed. (
2. b)Dividends paid by a company being a resident of Malta to a company which is a resident of Finland and which controls directly at least 10 per cent of the voting power in the company paying the dividends shall be exempt from Finnish tax. (
3. c)Where in accordance with any provision of the Agreement income derived by a resident of Finland is exempt from tax in Finland, Finland may nevertheless, in calculating the amount of tax on the remaining income of such person, take into account the exempted income. 2. In Malta double taxation shall be eliminated as follows: Subject to the provisions of the law of Malta regarding the allowance of a credit against Malta tax in respect of foreign tax, where, in accordance with the provisions of this Agreement, there is included in a Malta assessment income from sources within Finland, the Finnish tax on such income shall be allowed as a credit against the relative Malta tax payable thereon. Article 23 Limitation of relief The provisions of Articles 6 to 21 shall not apply to persons entitled to any special tax benefit under: (
4. a)a law of a Contracting State which has been identified in an Exchange of Notes between the Governments of the Contracting States; or (
5. b)any substantially similar law subsequently enacted. Article 24 Non-discrimination 1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States. DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF FINLAND [ S.L.123.11 15 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. Except where the provisions of paragraph 1 of Article 9, paragraph 4 of Article 11, or paragraph 4 of Article 12 apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State. 4. 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 firstmentioned State are or may be subjected. 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 or, if his case comes under paragraph 1 of Article 24, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Agreement. 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 r e s o l v e b y m u t u a l a g r e e m e n t a n y d i ff i c u l t i e s o r d o u b t s a r i s i n g a s t o t h e interpretation or application of the 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, including through a joint commission consisting of themselves or their representatives, for the purpose of reaching an agreement in the sense of the preceding paragraphs. 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 or of the domestic laws of the Contracting States concerning taxes covered by the Agreement insofar as the taxation thereunder is not contrary to the Agreement. The 16 [ S.L.123.11 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF FINLAND exchange of information is not restricted by Article 1. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the 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: (
6. a)to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State; (
7. 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; (
8. 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 Members of diplomatic missions and consular posts Nothing in this Agreement shall affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements. Article 28 Entry into force 1. The Governments of the Contracting States shall notify each other that the legal requirements for the entry into force of this Agreement have been complied with. 2. The Agreement shall enter into force thirty days after the date of the later of the notifications referred to in paragraph 1 and its provisions shall have effect: (
9. a)in Finland: (
10. i)in respect of taxes withheld at source, on income derived on or after 1 January in the calendar year next following the year in which the Agreement enters into force; (
11. ii)in respect of other taxes on income, for taxes chargeable for any tax year beginning on or after 1 January in the calendar year next following the year in which the Agreement enters into force; (
12. b)in Malta: in respect of taxes on income derived during any calendar year or accounting period, as the case may be, beginning on or after 1 January immediately following the date on which the Agreement enters into force. 3. The Agreement between Malta and Finland for the avoidance of double taxation with respect to taxes on income and on capital, signed at Helsinki on 24 March 1975, (hereinafter referred to as ''the 1975 Agreement''), shall cease to have effect with respect to taxes to which this Agreement applies in accordance with the DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF FINLAND [ S.L.123.11 17 provisions of paragraph 2. The 1975 Agreement shall terminate on the last date on which it has effect in accordance with the foregoing provision of this paragraph. Article 29 Termination This Agreement shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Agreement, through diplomatic channels, by giving notice of termination at least six months before the end of any calendar year following after the period of five years from the date on which the Agreement enters into force. In such event, the Agreement shall cease to have effect: (
13. a)in Finland: (
14. i)in respect of taxes withheld at source, on income derived on or after 1 January in the calendar year next following the year in which the notice is given; (
15. ii)in respect of other taxes on income, for taxes chargeable for any tax year beginning on or after 1 January in the calendar year next following the year in which the notice is given; (
16. b)in Malta: in respect of taxes on income derived during any calendar year or accounting period, as the case may be, beginning on or after 1 January immediately following the date on which the notice is given. In witness whereof the undersigned, duly authorised thereto, have signed this Agreement. Done in duplicate at Rome this 30th day of October 2000, in the English language. Joseph Cassar For the Government of Malta Dieter Vitzthum For the Government of the Republic of Finland [ S.L.123.11 18 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF FINLAND Mr Joseph Cassar Ambassador of the Republic of Malta Rome Your Excellency, I have the honour to refer to the Agreement between the Republic of Finland and Malta for the avoidance of double taxation with respect to taxes on income (hereinafter referred to as ''the Agreement'') which has been signed today and to propose on behalf of the Government of the Republic of Finland the following: With reference to Article 23 The provisions of Articles 6 to 21 of the Agreement shall not apply to persons who are entitled to: (
17. a)a special tax benefit under the Malta Financial Services Centre Act (Cap. 330), except for those persons who opt under section 41 of the said Act to be subject to the normal provisions of the Income Tax Act (Cap. 123) and of the Income Tax Management Act, 1994; or (
18. b)exemption or any other special tax benefit under the provisions of the Merchant Shipping Act, 1973, as amended; this does not, however, apply to income that is subject to the normal Malta income tax; or (
19. c)any special tax benefit in respect of distributions by a trust subject to the provisions of the Trusts Act given that a trust as laid down in that Act is not vested with legal personality and therefore cannot benefit under the Agreement in its own right, or (
20. d)any special tax benefit under any substantially similar law subsequently enacted and which is agreed by the competent authorities of the Contracting States as included within the terms of Article 23. If the foregoing proposals are acceptable to the Government of Malta, I have the honour to suggest that the present Note and Your Excellency’s reply to that effect should be regarded as constituting an agreement between the two Governments in this matter, which shall enter into force at the same time as the entry into force of the Agreement. I avail myself of this opportunity to extend to you, Your Excellency, the assurance of my highest consideration. Rome, 30 October 2000 Dieter Vitzthum Ambassador of Finland DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF FINLAND [ S.L.123.11 19 Mr Dieter Vitzhum Ambassador of Finland Rome Your Excellency, I have the honour to acknowledge receipt of your Excellency’s Note of today’s date which reads as follows: ''I have the honour to refer to the Agreement between the Republic of Finland and Malta for the avoidance of double taxation with respect to taxes on income (hereinafter referred to as ''the Agreement'') which has been signed today and to propose on behalf of the Government of the Republic of Finland the following: With reference to Article 23 The provisions of Articles 6 to 21 of the Agreement shall not apply to persons who are entitled to: (
21. a)a special tax benefit under the Malta Financial Services Centre Act (Cap. 330), except for those persons who opt under section 41 of the said Act to be subject to the normal provisions of the Income Tax Act (Cap. 123) and of the Income Tax Management Act, 1994; or (
22. b)exemption or any other special tax benefit under the provisions of the Merchant Shipping Act, 1973, as amended; this does not, however, apply to income that is subject to the normal Malta income tax; or (
23. c)any special tax benefit in respect of distributions by a trust subject to the provisions of the Trusts Act given that a trust as laid down in that Act is not vested with legal personality and therefore cannot benefit under the Agreement in its own right, or (
24. d)any special tax benefit under any substantially similar law subsequently enacted and which is agreed by the competent authorities of the Contracting States as included within the terms of Article 23. If the foregoing proposals are acceptable to the Government of Malta, I have the honour to suggest that the present Note and Your Excellency’s reply to that effect should be regarded as constituting an agreement between the two Governments in this matter, which shall enter into force at the same time as the entry into force of the Agreement.'' The foregoing proposals being also acceptable to the Government of Malta, I have the honour to confirm that Your Excellency’s Note and this reply shall be regarded as constituting an agreement between the two Governments in this matter, which shall enter into force at the same time as the entry into force of the Agreement. I take this opportunity to renew to you, Your Excellency, the assurance of my highest consideration. Rome, 30 October 2000 Joseph Cassar Ambassador of Malta 20 [ S.L.123.11 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF FINLAND