DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF TUNISIA [ S.L.123.64 SUBSIDIARY LEGISLATION 123.64 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF TUNISIA ORDER 6th Augus

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 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 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 12 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 by the Government of the other Contracting State or a local authority thereof.
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 paragraphs 1 and 2 shall not apply if the beneficial owner DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF TUNISIA [ S.L.123.64 9 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. Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.
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, 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 Convention. Article 12 ROYALTIES
3. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
4. 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 12 percent of the gross amount of the royalties.
5. 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 radio 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, agricultural, or scientific equipment, or for information concerning industrial, commercial or scientific experience or for technical or economic studies or for technical assistance.
6. 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.

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

5. Royalties shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a 10 [ S.L.123.64 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF TUNISIA Contracting State or not, has in a Contracting State a permanent establishment or fixed base in connection with which the obligation 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 law of each Contracting State, due regard being had to the other provisions of this Convention. Article 13 ALIENATION OF PROPERTY 1. Income or 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. Income or gains from the alienation of shares or comparable interests 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 are situated. 3. 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 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. Income or gains derived by an enterprise from the alienation of ships, aircraft or road vehicles operated in international traffic or movable property pertaining to the operation of such ships, aircraft or road vehicles shall be taxable only in that Contracting State in which the place of effective management is situated. 5. Income or gains from the alienation of any property or assets, other than those 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 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 the other Contracting 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 Contracting State; or (
2. 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 twelvemonth period; in that case, only so much of the income as is derived DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF TUNISIA [ S.L.123.64 11 from the activity exercised in the other Contracting State may be taxed in that other State; or (
3. c)if the remuneration for his services in the other Contracting State is derived from residents of that State and exceeds 50000 United States Dollars or its equivalent during the calendar year, notwithstanding that his stay in that State is for a period or periods amounting in the aggregate to less than 183 days during that year. 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 and accountants. 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: (
4. 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, and (
5. b)the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and (
6. 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, aircraft 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 16 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, or other comparable body however described, 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 Contracting 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 12 [ S.L.123.64 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF TUNISIA entertainer or sportsman are exercised. Article 18 PENSIONS 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, pensions paid and other payments made under a public scheme which is part of the social security system of a Contracting State shall taxable in that State. However the tax so charged shall not exceed 10 per cent of the gross amount of the pensions or other payments. Article 19 GOVERNMENT SERVICE 1. (
7. a)Salaries, wages and other similar remuneration, other than a pension, 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 subdivisdion or authority shall be taxable only in that State. (
8. 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: (
9. i)(
10. ii)2. is a national of that State; or did not become a resident of that State solely for the purposes of rendering the services. (
11. a)Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable in that State. However the tax so charged shall not exceed 10 per cent of the gross amount of the pensions. (
12. 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 15, 16 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 political subdivision or a local authority thereof. Article 20 STUDENTS AND BUSINESS APPRENTICES A student or business 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 purposes 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 Convention shall be taxable only in that State. DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF TUNISIA [ S.L.123.64 13 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 14, as the case may be, shall apply.

CHAPTER IV ELIMINATION OF DOUBLE TAXATION Article 22 ELIMINATION OF DOUBLE TAXATION

1. Where a resident of a Contracting State derives income which, in accordance with the provisions of this Convention, may be taxed in the other Contracting State, the first-mentioned State shall allow as a credit against the relative tax on the income of that resident an amount equal to the income tax paid in that other Contracting State. However such credit shall not exceed that part of the tax which is attributable to this income.
2. For the purpose of allowance as a credit under paragraph 1, the tax payable in a Contracting State shall be deemed to include the tax which is otherwise payable in that Contracting State but has been reduced or waived by that State under its domestic law. For the purpose of this paragraph, interest and royalties shall be deemed to have been charged at the rates laid down in paragraph 2 of Article 11 and paragraph 2 of Article 12 respectively.
3. Where a company which is a resident of a Contracting State pays a dividend to a person resident in the other Contracting State, the credit in that other Contracting State shall take into account (in addition to any tax for which credit may be allowed under paragraph 1 of this Article) the tax paid or that which would be payable by the first-mentioned company, in respect of which such dividend is paid, but which has been reduced or waived by that State under its domestic law. However such credit shall not exceed that part of the tax which is attributable to these dividends. No tax shall be paid by shareholders on such dividends when these are redistributed.
4. Where the Convention provides that income arising in a Contracting State shall be relieved from tax in that State, either in full or in part, and, under the law in force in the other Contracting State, such income is subject to tax by reference to the amount thereof which is remitted to or received in that other State and not by reference to the full amount thereof, then the relief to be allowed in the firstmentioned State shall apply only to so much of the income as is remitted to or received in the other State. CHAPTER V SPECIAL PROVISIONS Article 23 NON-DISCRIMINATION
5. 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 14 [ S.L.123.64 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF TUNISIA residence, are or may be subjected.
6. 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 reduction for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.
7. Except where the provisions of paragraph 1 of Article 9, paragraph 7 of Article 11, or paragraph 6 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.
8. 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.
9. The provisions of this Article shall, notwithstanding the provisions of Article 2, apply to taxes of every kind and description which are the subject of this Convention. Article 24 MUTUAL AGREEMENT PROCEDURE
10. 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 Convention, 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 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 the provisions of the Convention.
11. 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 Convention. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States.
12. 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 Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention.
13. 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. DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF TUNISIA [ S.L.123.64 15 Article 25 EXCHANGE OF INFORMATION
14. The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the Convention. 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.
15. 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 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 26 MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS Nothing in this Convention 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 27 ENTRY INTO FORCE The Contracting States shall notify each other of the completion of the procedures required by their law for the entry into force of this Convention. This Convention shall enter into force thirty days after the date of the later of these notifications. These provisions shall have effect: (i) (ii) in respect of taxes withheld at source, on income paid or credited on or after the first day of January of the calendar year next following that in which the Convention enters into force; and in respect of other 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 this Convention enters into force. Article 28 TERMINATION This Convention shall remain in force indefinitely but either of the Contracting States may, on or before the thirtieth day of June in any calendar year 16 [ S.L.123.64 DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE REPUBLIC OF TUNISIA from the fifth year following that in which the Convention enters into force, give to the other Contracting State, through diplomatic channels, written notice of termination. In such event, the Convention shall cease to have effect: (i) (ii) in respect of taxes withheld at source, on income paid or credited on or after the first day of January in the calendar year next following that in which the notice is given; and in respect of other 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, duly authorised thereto by their respective Governments, have signed this Convention. DONE in duplicate at Valletta, this 31st day of May of the year two thousand in the Arabic, French and English languages and, in case there is any divergence of interpretation, the English and French texts shall prevail. Dr. Joe Borg Minister of Foreign Affairs Mr Habib Ben Yahia Minister of Foreign Affairs For the Government of Malta For the Government of the Republic of Tunisia PROTOCOL At the moment of the signature of the Convention between the Government of the Republic of Tunisia and the Government of Malta for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, both parties have agreed upon the following provisions, which form an integral part of the Convention:
16. With reference to Article 7, each Contracting State shall tax the profit from the business of insurance in accordance with the provisions of its own law.
17. With reference to Article 22, it is understood that the provisions of paragraph 3 thereof shall also apply to distributions of the profits of a company of a Contracting State attributable to a permanent establishment in the other Contracting State. IN WITNESS whereof, the undersigned, being duly authorised therein by their respective Governments, have signed this Protocol. DONE in duplicate at Valletta, this 31st day of May of the year two thousand in the Arabic, French and English languages and, in case there is any divergence of interpretation, the English and French texts shall prevail. Dr. Joe Borg Minister of Foreign Affairs Mr Habib Ben Yahia Minister of Foreign Affairs For the Government of Malta For the Government of the Republic of Tunisia