DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH ROMANIA [ S.L.123.42 SUBSIDIARY LEGISLATION 123.42 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH ROMANIA ORDER 16th August, 1996 LEGAL NOTICE 65 of 1997

Article 7or Article 15, 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 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. DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH ROMANIA [ S.L.123.42 9 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 Contracting State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the interest, the tax so charged shall not exceed 5 per cent of the gross amount of the interest.
4. Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempt from tax in that State if it is derived and beneficially owned by the Government of the other Contracting State, or a territorial-administrative unit thereof or any agency or bank unit or institution of that Government, or a territorial administrative unit or if the debt-claims of a resident of the other Contracting State are warranted, insured, or directly or indirectly financed by a financial institution wholly owned by the Government of the other Contracting State.
5. 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.
6. The provisions of paragraph 1 and 2 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base.

Article 7or Article 15, as the case may be, shall apply.

6. Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a territorial-administrative unit or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 7. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest paid, 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. 10 [ S.L.123.42 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH ROMANIA ARTICLE 12 Commission 1. Commission 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 commission may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the commission, the tax so charged shall not exceed 10 per cent of the gross amount of the commission. 3. The term "commission" as used in this Article means a payment made to a broker, a general commission agent or to any other person assimilated to a broker or agent by the taxation law of the Contracting State in which such commission arises. 4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the commission, being a resident of a Contracting State, has, in the other Contracting State in which the commission arises, a permanent establishment or a fixed base with which the activity giving rise to the commission is effectively connected. In such case, the provisions of Article 7 or Article 15, as the case may be, shall apply. 5. Commission shall be deemed to arise in a Contracting State when the payer is that State itself, a territorial-administrative unit or a resident of that State. Where, however, the person paying the commission, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the activities for which the payment is made was incurred, and such commission is borne by such permanent establishment, then such commission shall be deemed to arise in the Contracting State in which the permanent establishment is situated. 6. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the commission, having regard to the activities 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 that 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 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 5 per cent of the gross amount of the royalties. 3. The term "royalties" as used in this Article means payments or credits, whether periodical or not, and however described or computed, to the extent to which they are made as consideration for: (

1. a)the use of, or the right to use, any copyright, patent, design or model, plan, secret formula or process, trademark or other like property or DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH ROMANIA [ S.L.123.42 11 right; (
2. b)the supply of scientific, technical, industrial or commercial knowledge or information; (
3. c)the supply of any assistance that is ancillary and subsidiary to, and is furnished as a means of enabling the application or enjoyment of, any such property or right as is mentioned in sub-paragraph (a), or any such knowledge or information as is mentioned in sub-paragraph (b); (
4. d)the use of, or the right to use: (
5. i)motion picture films; (
6. ii)films or video tapes for use in connection with television; or (iii) tapes for use in connection with radio broadcasting; or (
7. e)total or partial forbearance in respect of the use or supply of any property or right referred to in this paragraph. 4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 15, as the case may be, shall apply. 5. Royalties shall be deemed to arise in a Contracting State when the payer is that State itself, a territorial-administrative unit or a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment or fixed base, then such royalties shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 6. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. ARTICLE 14 Income from the Alienation of Property 1. Income or gains from the alienation of immovable property, as defined in paragraph 2 of Article 6, may be taxed in the Contracting State in which such property is situated. 2. Income or 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 income or gains from the alienation of such a permanent establishment (alone or together with 12 [ S.L.123.42 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH ROMANIA the whole enterprise) or of such fixed base, may be taxed in the other State. 3. Income or gains from the alienation of ships, boats, aircraft, railway and road vehicles operated in international traffic or movable property pertaining to the operation of such means of transportation shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. 4. Income or gains from the alienation of shares in a company, the assets of which consist wholly or principally of immovable property, may be taxed in the Contracting State in which the assets or the principal assets of the company are situated. 5. Income or gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3 and 4 shall be taxable only in the Contracting State of which the alienator is a resident. ARTICLE 15 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. However, such income may be taxed in the other Contracting State in the following circumstances: (
8. a)if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities (in which case, only so much of the income as is attributable to that fixed base may be taxed in that other Contracting State); or (
9. b)if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the aggregate 183 days in any twelve month period commencing or ending in the fiscal year concerned. 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 16 Dependent Personal Services 1. Subject to the provisions of Articles 17, 19, 20, 21 and 22, salaries 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: (
10. a)the recipient is present in the other 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 (
11. b)the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and (
12. c)the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH ROMANIA [ S.L.123.42 13 3. Notwithstanding the preceding provisions of this Article, remuneration derived by a resident of a Contracting State in respect of an employment exercised aboard a ship, boat, aircraft, railway or road vehicle operated in international traffic may be taxed in the Contracting State in which the place of effective management of the enterprise is situated. ARTICLE 17 Directors’ Fees Directors’ fees and other similar payments derived by a resident of one of the Contracting States 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 18 Entertainers and Sportsmen 1. Notwithstanding the provisions of Articles 15 and 16, 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, 15 and 16, be taxed in the Contracting State in which the activities of the entertainer or sportsman are exercised. 3. Income derived from the activities performed within the framework of exchanges established under cultural or sports agreements concluded between the two Contracting States shall be exempt from tax. ARTICLE 19 Pensions 1. Subject to the provisions of paragraph 2 of Article 20, 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 of which he is a resident. 2. Notwithstanding the provisions of paragraph 1, pensions paid and other payments made under the social security legislation of a Contracting State shall be taxable only in that State. ARTICLE 20 Government Service 1. (
13. a)Remuneration, other than a pension, paid by a Contracting State or a territorial-administrative unit thereof to an individual in respect of services rendered to that State or unit shall be taxable only in that State. (
14. b)However, such 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: 14 [ S.L.123.42 (
15. i)DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH ROMANIA is a national of that State; or (
16. ii)did not become a resident of that State solely for the purpose of rendering the services. 2. (
17. a)Any pension paid by, or out of funds created by, a Contracting State or a territorial-administrative unit thereof to an individual in respect of services rendered to that State or unit shall be taxable only in that State. (
18. b)However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State. 3. The provisions of Articles 16, 17 and 19 shall apply to remuneration and pensions in respect of services rendered in connection with any business carried on by a Contracting State or a territorial-administrative unit thereof. ARTICLE 21 Professors, Teachers and Researchers 1. A professor, a teacher or a researcher who makes a temporary visit to a Contracting State for a period not exceeding two years for the purpose of teaching or conducting research at a university, college, school or other educational institution, and who is, or immediately before such visit was, a resident of the other Contracting State shall be exempt from tax in the first-mentioned Contracting State in respect of remuneration for such teaching or research. 2. This Article shall not apply to income from research if such research is undertaken primarily for the private benefit of a specific person or persons. ARTICLE 22 Students and Trainees Payments which a student or a trainee who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned Contracting State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State. ARTICLE 23 Other Income 1. Items of income of a resident of a Contracting State which are not expressly mentioned in the foregoing Articles of this Agreement in respect of which he is subject to tax in that State shall be taxable only in that State. 2. The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base.

Article 7or Article 15, as the case may be, shall apply.

DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH ROMANIA [ S.L.123.42 15 ARTICLE 24 Elimination of Double Taxation Double taxation shall be eliminated as follows: 1 In the case of Romania, where a resident of Romania derives income or items of income referred to in Articles 10, 11, 12 and 13, or profits, or gains or income from the alienation of property which under the law of Malta and in accordance with this Agreement may be taxed in Malta, Romania shall allow as a credit against its tax on the income, items of income, profits, gains or on income from the alienation of property an amount equal to the tax paid in Malta. The amount of credit, however, shall not exceed the amount of Romanian tax on that income, items of income, profits or gains, or on income from the alienation of property computed in accordance with the taxation laws and regulations of Romania.

1. In the case of Malta, 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 Romania, the Romanian tax on such income shall be allowed as a credit against the relative Malta tax payable thereon.
2. For the purposes of allowance as a credit, the tax payable in Romania or Malta, as the context requires, shall be deemed to include the tax which is otherwise payable in a Contracting State but has been reduced or waived by that State under its legal provisions for tax incentives. ARTICLE 25 Non-Discrimination
3. The nationals of a Contracting State, whether or not residents of the mentioned Contracting State, shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected.
4. 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.
5. Except where the provisions of paragraph 1 of Article 9, paragraph 7 of Article 11, paragraph 6 of Article 12, or paragraph 6 of Article 13 apply, interest, commission, 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.
6. 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.
7. Nothing in this Article shall be construed as obliging a Contracting State to grant to individuals who are residents of the other Contracting State any personal allowances, reliefs and reductions for tax purposes on account of civil status, family 16 [ S.L.123.42 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH ROMANIA responsibilities or any other personal circumstances which it grants to its own residents. ARTICLE 26 Mutual Agreement Procedure
8. 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 25, 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.
9. The competent authority shall endeavour, 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.
10. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. They may also consult together for the elimination of double taxation in cases not provided for in the Agreement.
11. The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States. ARTICLE 27 Exchange of Information
12. 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 exchange of information is not restricted by Article
13. 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 authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals or the prevention of fiscal evasion in relation to, the taxes covered by the Agreement. Such authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions.
14. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation: (a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State; (b) to supply information which is not obtainable under the laws or in the DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH ROMANIA [ S.L.123.42 17 normal course of the administration of that or of the other Contracting State; (c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (ordre public). ARTICLE 28 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 29 Entry into Force
15. The Contracting States shall notify each other that the constitutional requirements for the entry into force of this Agreement have been complied with.
16. This 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 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 Agreement enters into force. ARTICLE 30 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 beginning after the expiration of a period of five years from the date of its entry into force. In such event, the Agreement shall cease to have effect 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 is given. IN WITNESS WHEREOF the undersigned, being duly authorised by their respective Governments, have signed this Agreement. DONE at Bucharest on the 30th November, 1995, in two original copies in the Romanian and English languages, both texts being equally authentic. In case there is any divergence of interpretation of the provisions of this Agreement, the English text shall prevail. JOHN DALLI FOR THE GOVERNMENT OF MALTA FLORIN GEORGESCU FOR THE GOVERNMENT OF ROMANIA 18 [ S.L.123.42 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH ROMANIA PROTOCOL At the moment of signing the Agreement between the Government of Romania and the Government of Malta for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, the two parties have agreed upon the following provisions, which will form an integral part of the Agreement: With reference to Article 2, article 76 of the Income Tax Act in Malta provides that no double taxation agreement concluded by Malta shall apply to tax paid or payable in Malta in accordance with the provisions of sub-article