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L.S. 123.185 Ordni dwar Ħelsien minn Taxxa Doppja (Taxxi fuq l-Income) (l-Gvern tar-Repubblika tal-Botswana)

DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) [ S.L. 123.185 SUBSIDIARY LEGISLATION 123.185 DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) ORDER 19th June, 2

paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows: (

  1. a)he shall be deemed to be a resident only of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) [ S.L. 123.185 personal and economic relations are closer (centre of vital interests); (
  2. b)if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident only of the State in which he has an habitual abode; (
  3. c)if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national; (
  4. d)if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. 3. Where by reason of

paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident only of the State in which its place of effective management is situated. If the place of effective management cannot be determined, the competent authorities of the Contracting States shall settle the question by mutual agreement. 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: (

  1. a)a place of management; (
  2. b)a branch; (
  3. c)an office; (
  4. d)a factory; (
  5. e)a workshop; (
  6. f)a mine, an oil or gas well, a quarry or any other place of extraction or exploitation of natural resources; and (
  7. g)an installation or structure used for the exploration of natural resources provided that the installation or structure continues for a period of more than six months within any twelve-month period. 3. The term "permanent establishment" likewise 5 6 [ S.L. 123.185 DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) encompasses: (
  8. a)a building site, a construction, assembly or installation project or any supervisory activity in connection with such site or project, but only where such site, project or activity continues for a period of more than six months within any twelve-month period; (
  9. b)the furnishing of services, including consultancy services, by an enterprise through employees or other personnel engaged by an enterprise for such purpose, but only where activities of that nature continue (for the same or a connected project) within the Contracting State for a period or periods aggregating more than six months within any twelve-month period; and (
  10. c)the performance of professional services or other activities of an independent character by an individual, but only where those services or activities continue within a Contracting State for a period or periods exceeding in the aggregate 183 days in any twelve-month period commencing or ending in the fiscal year concerned. 4. Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall be deemed not to include: (
  11. a)the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise; (
  12. b)the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; (
  13. c)the maintenance of stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery; (
  14. d)the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise; (
  15. 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; and (
  16. f)the maintenance of a fixed place of business solely for any combination of activities mentioned in subparagraphs (
  17. a)to (e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) [ S.L. 123.185 auxiliary character. 5. Notwithstanding

paragraphs 1 and 2, where a person – other than an agent of an independent status to whom paragraph 6 applies – is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under

that paragraph.

  1. An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business.
  2. Notwithstanding the preceding provisions of this Article, an insurance enterprise of a Contracting State shall, except in regard to reinsurance, be deemed to have a permanent establishment in the other Contracting State if it insures risks in the territory of that State and collects premiums in respect of those risks through an employee or through a person other than an agent of an independent status to whom paragraph 6 applies.
  3. 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
  4. 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.
  5. 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

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 7 8 [ S.L. 123.185 DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) resources. Ships and aircraft shall not be regarded as immovable property. 3.

paragraph 1 shall apply to income derived from the direct use, letting or use in any other form of immovable property. 4.

paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise. Article 7 BUSINESS PROFITS

  1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as are attributed to that permanent establishment.
  2. Subject to

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.

  1. In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the business of the permanent establishment including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere. However, no such deduction shall be allowed in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission, for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the permanent establishment. Likewise, no account shall be taken, in the determination of the profits of a permanent establishment, for amounts charged (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for use of patents or other rights, or by way of commission for specific services performed or for management, or except in the case of a banking enterprise by way of interest on moneys lent to the head office of the DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) [ S.L. 123.185 enterprise or any of its other offices.
  2. In so far 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.
  3. 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.
  4. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.
  5. Where profits include items of income which are dealt with separately in other Articles of this Agreement, then

those Articles shall not be affected by

this Article. Article 8 INTERNATIONAL TRANSPORT

  1. Profits of an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State.
  2. For the purposes of this Article, profits from the operation of ships or aircraft in international traffic include profits derived from the rental of ships or aircraft if such ships or aircraft are operated in international traffic or if such rental profits are incidental to the other profits described in paragraph 1 of this Article.
  3. Profits of an enterprise of a Contracting State from the use or rental of containers used for the transport in international traffic of goods or merchandise shall be taxable only in that State. 4.

paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency. 9 10 DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) [ S.L. 123.185 Article 9 ASSOCIATED ENTERPRISES 1. Where: (

  1. 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 (
  2. b)the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. 2. Where a Contracting State includes in the profits of an enterprise of that State – and taxes accordingly – profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Agreement and the competent authorities of the Contracting States shall if necessary consult each other. Article 10 DIVIDENDS 1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. 2. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but (
  3. a)where the dividends are paid by a company which is a resident of Botswana to a resident of Malta who is the beneficial owner thereof, the tax so charged in Botswana shall not exceed: DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) [ S.L. 123.185 (
  4. i)5 per cent of the gross amount of the dividends if the beneficial owner is a company which holds at least 25 per cent of the capital of the company paying dividends; or (
  5. ii)6 per cent of the gross amount of the dividends in all other cases. (
  6. b)where the dividends are paid by a company which is a resident of Malta to a resident of Botswana who is the beneficial owner thereof, Malta tax on the gross amount of the dividends shall not exceed: (
  7. i)the tax chargeable on the profits out of which the dividends are paid; or (
  8. ii)15 per cent on the profits out of which the dividends are paid, if the dividends are paid out of gains or profits earned in any year in respect of which the company is in receipt of any tax benefit under provisions regulating aids to industries in Malta, and the shareholder submits returns and accounts to the taxation authorities of Malta in respect of his income liable to Malta tax for the relative year of assessment. This provision shall apply for a period of ten years from the date of entry into force of this Agreement. The Contracting States may mutually agree that this provision be renewed for a further period. This paragraph shall not affect taxation of the company in respect of the profits out of which the dividends were distributed. 3. The term "dividends" as used in this Article means income from shares, "jouissance" shares or "jouissance" rights, mining shares, founders’ shares or other rights (not being debt-claims) participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the Contracting State of which the company making the distribution is a resident. 4.

paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment. In such case,

Article 7shall 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 11 12 [ S.L. 123.185 DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) company, except in so far 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 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
  2. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
  3. However, such interest may also be taxed in the State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the interest, the tax so charged shall not exceed 8.5 per cent of the gross amount of the interest.
  4. Notwithstanding

paragraph 2, interest mentioned in paragraph 1 shall not be taxable in the Contracting State where the interest arises if: (

  1. a)the recipient thereof is the government of the other Contracting State or a local authority thereof or any agency wholly owned and controlled by that government or authority; and (
  2. b)the interest is paid in respect of a loan granted or guaranteed by a financial institution of a public character with the objective of promoting exports and development, if the credit granted or guaranteed contains an element of subsidy. 4. The term "interest" as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor’s profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purposes of this Article. 5.

paragraphs 1, 2 and 3 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 and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment. In such case,

Article 7shall apply.

DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) [ S.L. 123.185

  1. Interest shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment, then such interest shall be deemed to arise in the State in which the permanent establishment is situated.
  2. 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,

this Article shall apply only to the lastmentioned 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 laws of that State, but if the recipient is the beneficial owner of the royalties, the tax so charged shall not exceed: (

  1. a)5 per cent of the gross amount of the royalties in respect of the use of or the right to use industrial, commercial or scientific equipment; and (
  2. b)7.5 per cent of the gross amount of the royalties in all other cases. 2. 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, tapes or discs for radio or television broadcasting), any patent, trade mark, design or model, plan, secret formula or process, or for the use of or the right to use industrial, commercial, or scientific equipment or for information concerning industrial, commercial or scientific experience. 3.

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 and the right 13 14 [ S.L. 123.185 DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) or property in respect of which the royalties are paid is effectively connected with such permanent establishment. In such case,

Article 7shall apply.

  1. Royalties shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the right or property in respect of which the royalties are paid is effectively connected, and such royalties are borne by such permanent establishment, then such royalties shall be deemed to arise in the State in which the permanent establishment is situated.
  2. 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,

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, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise), may be taxed in that other State.
  3. Gains derived by an enterprise of a Contracting State from the alienation of ships or aircraft operated in international traffic or from movable property pertaining to the operation of such ships or aircraft shall be taxable only in that State.
  4. Gains derived by a resident of a Contracting State from the alienation of shares deriving more than 50 percent of their value directly or indirectly from immovable property situated in the other Contracting State may be taxed in that other State.
  5. Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3 and 4, shall be taxable only in the DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) [ S.L. 123.185 Contracting State of which the alienator is a resident.
  6. Notwithstanding

paragraph 5, gains from the alienation of shares or other corporate rights of a company which is a resident of one of the Contracting States derived by an individual who was a resident of that State and who after acquiring such shares or rights has become a resident of the other Contracting State, may be taxed in the first-mentioned State if the alienation of the shares or other corporate rights occur at any time during the five years next following the date on which the individual has ceased to be a resident of that first-mentioned State. Article 14 INCOME FROM EMPLOYMENT 1. Subject to

Articles 15, 17 and 18, 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

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: (

  1. a)the recipient is present in the other Contracting State for a period or periods not exceeding in the aggregate 183 days in any twelve-month period commencing or ending in the fiscal year concerned; and (
  2. b)the remuneration is paid by or on behalf of an employer who is not a resident of the other State; and (
  3. c)the remuneration is not borne by a permanent establishment 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. 15 16 [ S.L. 123.185 DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) Article 15 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 may be taxed in that other State. Article 16 ENTERTAINERS AND SPORTSPERSONS 1. Notwithstanding

Articles 7 and 14, income derived by a resident of a Contracting State as an entertainer such as a theater, motion picture, radio or television artiste, or a musician, or as a sportsperson, 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 sportsperson in his capacity as such accrues not to the entertainer or sportsperson himself but to another person, that income may, notwithstanding

Articles 7 and 14, be taxed in the Contracting State in which the activities of the entertainer or sportsperson are exercised.

  1. Income derived by a resident of a Contracting State from activities exercised in the other Contracting State as envisaged in paragraphs 1 and 2, shall be exempt from tax in that other State if the visit to that other State is supported wholly or mainly by public funds of the first-mentioned Contracting State, or a local authority thereof, or takes place under a cultural agreement or arrangement between the Governments of the Contracting States. Article 17 PENSIONS AND ANNUITIES
  2. Subject to

paragraph 2 of Article 18, pensions and other similar remuneration in consideration of past employment, and annuities, arising in a Contracting State and paid to a resident of the other Contracting State, may be taxed in the firstmentioned Contracting State

  1. 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.
  2. Notwithstanding

paragraph 1, pensions paid and other similar payments made under a public scheme which is DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) [ S.L. 123.185 part of the social security system of a Contracting State or a local authority thereof shall be taxable only in that State. Article 18 GOVERNMENT SERVICE 1. (

  1. a)Salaries, wages and other similar remuneration paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State. (
  2. b)However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who: (
  3. i)is a national of that State; or (
  4. ii)did not become a resident of that State solely for the purpose of rendering the services. 2. (
  5. a)Notwithstanding

paragraph 1(a), pensions and other similar remuneration paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State. (b) However, such pensions and similar remunerations shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State. 3.

Articles 14, 15, 16 and 17 shall apply to salaries, wages, pensions and other similar remuneration in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof. Article 19 STUDENTS, APPRENTICES AND BUSINESS TRAINEES A student, apprentice or business trainee 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 purposes of his maintenance, education or training. 17 18 [ S.L. 123.185 DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) Article 20 TECHNICAL FEES

  1. Technical fees arising in a Contracting State which are derived by a resident of the other Contracting State may be taxed in that other State.
  2. However, such technical fees may also be taxed in the Contracting State in which they arise, and according to the law of that State; but where such technical fees are derived by a resident of the other Contracting State who is subject to tax in that State in respect thereof, the tax charged in the Contracting State in which the technical fees arise shall not exceed 7.5 percent of the gross amount of such fees.
  3. The term "technical fees" as used in this Article means payments of any kind to any person, other than to an employee of the person making the payments, in consideration for any services of an administrative, technical, managerial or consultancy nature. 4.

paragraphs 1 and 2 of this Article shall not apply if the beneficial owner of the technical fees, being a resident of a Contracting State, carries on business in the other Contracting State in which the technical fees arise, through a permanent establishment situated therein and the technical fees are effectively connected with such permanent establishment. In such case,

Article 7shall apply.

  1. Technical fees shall be deemed to arise in a Contracting State when the payer is that State, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the technical fees, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the obligation to pay the technical fees was incurred, and such technical fees are borne by that permanent establishment, then such technical fees shall be deemed to arise in the State in which the permanent establishment is situated.
  2. 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 technical fees paid exceeds, for whatever reason, the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship,

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 law of each Contracting State, due regard being had to the other provisions of this Agreement. DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) [ S.L. 123.185 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.

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, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment. In such case,

Article 7shall apply.

Article 22 ELIMINATION OF DOUBLE TAXATION Double taxation shall be eliminated as follows: (a) In Botswana, subject to

the laws of Botswana regarding the allowance of a credit against Botswana tax of tax payable under the laws of a country outside Botswana, Malta tax payable under the laws of Malta and in accordance with this Agreement, whether directly or by deduction, on profits or income liable to tax in Malta shall be allowed as a credit against any Botswana tax payable in respect of the same profits or income by reference to which the Malta tax is computed. However, the amount of such credit shall not exceed the amount of the Botswana tax payable on that income in accordance with the laws of Botswana; (b) In the case of Malta, double taxation shall be eliminated as follows: subject to

the law of Malta regarding the allowance of credit against Malta tax in respect of foreign tax, where, in accordance with

this Agreement, there is included in a Malta assessment income from sources within Botswana, the Botswana tax on such income shall be allowed as a credit against the relative Malta tax payable thereon. Article 23 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 19 20 [ S.L. 123.185 DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) 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

Article 1

, also apply to persons who are not residents of one or both of the Contracting States.

  1. 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.
  2. 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 that firstmentioned State are or may be subjected.
  3. Except where

paragraph 1 of Article 9, paragraph 7 of Article 11, paragraph 6 of Article 12 and paragraph 6 of Article 20 apply, interest, royalties, technical fees 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. 5.

this Article shall, notwithstanding

Article 2, apply to taxes of every kind and description.

Article 24 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

this Agreement, he may, irrespective of the remedies provided by the domestic laws 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 23, 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

this Agreement. DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) [ S.L. 123.185

  1. 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.
  2. 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 this Agreement.
  3. 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.
  4. Where, (a) under paragraph 1, a person has presented a case to the competent authority of a Contracting State on the basis that the actions of one or both of the Contracting States have resulted for that person in taxation not in accordance with

this Agreement, and (b) the competent authorities are unable to reach an agreement to resolve that case pursuant to paragraph 2 within three years from the presentation of the case to the competent authority of the other Contracting State, any unresolved issues arising from the case shall be submitted to arbitration if either competent authority so requests. The person who has presented the case shall be notified of the request. These unresolved issues shall not, however, be submitted to arbitration if a decision on these issues has already been rendered by a court or administrative tribunal of either State. The arbitration decision shall be binding on both States and shall be implemented notwithstanding any time limits in the domestic laws of these States unless both competent authorities agree on a different solution within six months after the decision has been communicated to them or unless a person directly affected by the case does not accept the mutual agreement that implements the arbitration decision. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this paragraph. 21 22 [ S.L. 123.185 DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) Article 25 Exchange of Information 1. The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant for carrying out

this Agreement or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their political subdivisions or local authorities, in so far as the taxation thereunder is not contrary to the Agreement. The exchange of information is not restricted by Articles 1 and

  2. Any information received under paragraph 1 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, the determination of appeals in relation to the taxes referred to in paragraph 1, or the oversight of the above. 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. Notwithstanding the foregoing, information received by a Contracting State may be used for other purposes when such information may be used for such other purposes under the laws of both States and the competent authority of the supplying State authorises such use.
  3. In no case shall

paragraphs 1 and 2 be construed so as to impose on a Contracting State the obligation: (

  1. a)to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State; (
  2. 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; (
  3. 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). 4. If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall use its information gathering measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 but in no case shall such limitations be DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) [ S.L. 123.185 construed to permit a Contracting State to decline to supply information solely because it has no domestic interest in such information. 5. In no case shall

paragraph 3 be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person. Article 26 ASSISTANCE IN COLLECTION

  1. The Contracting States shall to the extent permitted by their respective domestic law, lend assistance to each other in order to collect the taxes referred to in Article 2 as well as interest and penalties with regard to such taxes, provided that reasonable steps to recover such taxes have been taken by the Contracting State requesting such assistance.
  2. Claims which are the subject of requests for assistance shall not have priority over taxes owing in the Contracting State rendering assistance and

paragraph 1 of Article 25 shall also apply to any information which, by virtue of this Article is supplied to the competent authority of a Contracting State. 3. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of

this Article. 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

special agreements. Article 28 ENTRY INTO FORCE 1. The Contracting States shall notify each other, through diplomatic channels, that the legal requirements for the entry into force of this Agreement have been complied with. This Agreement shall enter into force on the date of receipt of the latter of these notifications. 2.

the Agreement shall apply: (

  1. a)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 the first day of January immediately 23 24 DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) [ S.L. 123.185 following the date on which the Agreement enters into force. (
  2. b)in Botswana, (
  3. i)in respect of taxes withheld at source, for any amounts paid or credited on or after the thirtieth day following the date upon which the Agreement enters into force; and (
  4. ii)in respect of other taxes, for any year of assessment beginning on or after the first day of July next following the year in which the Agreement enters in force. Article 29 TERMINATION 1. 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 beginning after the expiration of a period of five years from the date of its entry into force. 2. In such event, the Agreement shall cease to have effect: (
  5. a)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 the first day of January immediately following the date on which the notice of termination is given. (
  6. b)in Botswana, (
  7. i)in respect of taxes withheld at source, for any amounts paid or credited on or after the thirtieth day following the date upon which the notice of termination is given; and (
  8. ii)in respect of other taxes, for any year of assessment beginning on or after the first day of July next following the year in which the notice of termination is given. DOUBLE TAXATION RELIEF (TAXES ON INCOME) (THE REPUBLIC OF BOTSWANA) [ S.L. 123.185 IN WITNESS WHEREOF the undersigned, being duly authorized thereto by the respective Governments, have signed this Agreement. Done and signed at ………………..…, this ……… day of …………………… 20....... in duplicate, in the English language only. For the Government of Malta For the Government of the Republic of Botswana The Hon. Carmelo Abela The Hon. Dr. Pelonomi Venson-Moitoi Minister for Foregin Affairs Minister of International Affairs and and Trade Promotion Cooperation 25

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AI explanation based on the official legal text. Indicative, not a substitute for legal advice.