China - Botswana Tax Treaty

AGREEMENT

BETWEEN

THE GOVERNMENT OF THE REPUBLIC OF BOTSWANA

AND THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA

FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION

OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

The Government of the Republic of Botswana and the Government of the People's Republic of China:

Desiring to conclude an Agreement for the avoidance of double
taxation and the prevention of fiscal evasion with respect to taxes on income,

Have agreed as follows:

Article 1 PERSONS COVERED

This Agreement shall apply to persons who are residents of one or
both of the Contracting States.

Article 2 TAXES COVERED

 This Agreement shall apply to taxes on income imposed on behalf of a

Contracting State or of its political subdivision or local authorities,
irrespective of the manner in which they are levied.

 There shall be regarded as taxes on income all taxes imposed on total

income, or on elements of income, including taxes on gains from the alienation of
movable or immovable property and taxes on the total amounts of wages or
salaries paid by enterprises.

 The existing taxes to which the Agreement shall apply are in

particular:

a) in Botswana: the income tax including taxation of capital gains (hereinafter referred to as “Botswana tax”); and

b) in China:

(i) the individual income tax;

(ii) the enterprise income tax; (hereinafter referred to as "Chinese tax").

 The Agreement shall apply also to any identical or substantially

similar taxes that are imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States
shall notify each other of any significant changes which have been made in their taxation laws.

Article 3 GENERAL DEFINITIONS

 For the purposes of this Agreement, unless the context otherwise

requires:

a) the term “Botswana” means the Republic of Botswana”;

b) the term "China" means the People's Republic of China; when
used in geographical sense, means all the territory of the People's Republic
of China, including its territorial sea, in which the Chinese laws relating to
taxation apply, and any area beyond its territorial sea, within which the People's Republic of China has sovereign rights of exploration for and exploitation of resources of the sea-bed and its sub-soil and superjacent water resources in accordance with
international law and its internal law;

c) the term "person" includes an individual, a company and any
other body of persons;

d) the term "company" means any body corporate or any entity that is treated as a body corporate for tax purposes;

e) the terms "enterprise of a Contracting State" and "enterprise of
the other Contracting State" mean, respectively, an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;

f) the term "international traffic" means any transport by a ship
or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;

g) the term "competent authority" means, in the case of Botswana, the Minister of Finance and Development Planning, represented by the Commissioner General of the Botswana Unified Revenue Service or his authorized representative and in the case of China, the State Administration of Taxation or its authorized representative;

h) the term "national", in relation to a Contracting State, means:

(i) any individual possessing the nationality of a Contracting State; and

(ii) any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State.

 As regards the application of the Agreement at any time by a

Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has at that time under the law of that State for the purposes of the taxes to which the Agreement applies, any meaning under the applicable tax laws of
that State prevailing over a meaning given to the term under other laws of that State.

Article 4 RESIDENT

 For  the  purposes  of  this  Agreement,  the  term  "resident  of  a

Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of incorporation, place of effective
management or any other criterion of a similar nature, and also includes that State
and any political subdivision or local authority thereof. This term, however, does not include any person who is liable to tax in that State in respect only of income from sources in that State or capital situated therein.

 Where by reason of the provisions of paragraph 1 an individual is a

resident of both Contracting States, then his status shall be determined as follows:

a) he shall be deemed to be a resident only of the State in
which he has 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 personal and economic relations are closer (centre of vital interests);

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;

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;

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.

 Where by reason of the provisions of paragraph 1 a person other than an

individual is a resident of both Contracting States, then it shall be deemed to be a resident only of the State in which its place of effective management is situated.

Article 5 PERMANENT ESTABLISHMENT

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.
The term "permanent establishment" includes especially:

a) a place of management;

b) a branch;

c) an office;

d) a factory;

e) a workshop; and

f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources.

The term "permanent establishment" likewise encompasses:

(a) A building site, or construction, assembly or installation project or supervisory activities in connection therewith, but only if such site, project or activities last more than twelve months;

(b) The furnishing of services, including consultancy services, by an
enterprise through employees or other personnel engaged for such purpose, but
only if activities of that nature continue (for the same or a connected
project) within a Contracting State for a period or periods aggregating more than 183 days within any twelve-month period.

Notwithstanding the preceding provisions of this Article, the term
"permanent establishment" shall be deemed not to include:

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

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

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

d) the maintenance of a fixed place of business solely for the
purpose of purchasing goods or merchandise or of collecting information, for the enterprise;

e) the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character; and

f) the maintenance of a fixed place of business solely for any
combination of activities mentioned in sub-paragraphs a) to e), provided that the overall activity of the fixed place of business resulting from this combination is of a
preparatory or auxiliary character.

 Notwithstanding the provisions of paragraphs 1 and 2, where a person –

other than an agent of an independent status to whom paragraph 6 applies – is
acting in a Contracting State on behalf of an enterprise of the other Contracting State, and has , and habitually exercises, in that 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 Contracting 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 the provisions of that paragraph.

 An  enterprise  of  a  Contracting  State  shall  not  be  deemed  to

have a permanent establishment in the other Contracting State merely because it carries on business in that other 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.

 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

 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.

 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 the provisions of 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 resources; ships and aircraft shall
not be regarded as immovable property.

 The provisions of paragraph 1 shall apply to income derived from the

direct use, letting, or use in any other form of immovable property.

 The  provisions  of  paragraphs  1  and  3  shall  also  apply  to  the

income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.

Article 7 BUSINESS PROFITS

 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 is attributable to that permanent establishment.

 Subject to the provisions of 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.

 In determining the profits of a permanent establishment, there shall be

allowed as deductions expenses which are incurred for the purposes 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.

 Insofar 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.

 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.

 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.

 Where  profits  include  items  of  income  which  are  dealt  with

separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article.

Article 8

SHIPPING AND AIR TRANSPORT

 Profits  from  the  operation  of  ships  or  aircraft  in

international traffic by an enterprise of a Contracting State shall be taxable only in that Contracting State.

 The provisions of paragraph 1 shall also apply to profits from the

participation in a pool, a joint business or an international operating agency.

Article 9 ASSOCIATED ENTERPRISES

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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

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.

 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

 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.

 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 if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed 5% per cent of the gross amount of the dividends.

The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of these limitations.

This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

 The  term  "dividends"  as  used  in  this  Article  means  income

from shares, mining 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 State of which the company making the distribution is a resident.

 The provisions of 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, or performs in that other
State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent
establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the
case may be, shall apply.

 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.

 The provision of this Article shall not apply if it was the main

purpose or one of the main purposes of any person concerned with the creation or assignment of the shares or other rights in respect of which the dividend is paid to take advantage of this Article by means of that creation or assignment.

Article 11 INTEREST

 Interest arising in a Contracting State and paid to a resident of the

other Contracting State may be taxed in that other State.

 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 beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 7.5 per cent of the gross amount of the interest. The competent authorities of the
Contracting States shall by mutual agreement settle the mode of application of this limitation.

 Notwithstanding  the  provisions  of  paragraph  2,  interest  arising

in a Contracting State and paid to, or on loans guaranteed or insured by, the
Government, a political subdivision or a local authority, the Central Bank or any financial
institution wholly owned by the Government of the other Contracting State shall be exempt from tax in the first-mentioned State.

 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.

The provisions of paragraphs 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. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.

 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 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.

 Where,  by  reason  of  a  special  relationship  between  the  payer

and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to
the laws of each Contracting State, due regard being had to the other provisions of this Agreement.

 The provision of this Article shall not apply if it was the main

purpose or one of the main purposes of any person concerned with the creation or assignment of the debt-claim in respect of which the interest is paid to take advantage of this Article by means of that creation or assignment.

Article 12 ROYALTIES

 Royalties arising in a Contracting State and beneficially owned by a

resident of the other Contracting State may be taxed in that other State.

 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 beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed 7.5 per cent of the gross amount of the royalties. The competent authorities of
the Contracting States shall by mutual agreement settle the mode of application of this limitation.

 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 cinematography films, or films or tapes or
discs for radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience, or for technical and consultancy services.

 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 14, as the case may be, shall apply.

 Royalties  shall  be  deemed  to  arise  in  a  Contracting  State

when the payer is a resident of that Contracting 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.

 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.

 The provision of this Article shall not apply if it was the main

purpose or one of the main purposes of any person concerned with the creation or assignment of the rights in respect of which the royalties are paid to take advantage of this Article by means of that creation or assignment.

Article 13 CAPITAL GAINS

 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.

 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 a fixed base, may be taxed in that other State.

 Gains from the alienation of ships or aircraft operated in

international traffic by an enterprise of a Contracting State, or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that Contracting State.

 Gains  derived  by  a  resident  of  a  Contracting  State  from  the

alienation of shares deriving more than 50 per cent of their value directly or indirectly from immovable property situated in the other Contracting State may be taxed in that other State.

 Gains from the alienation of any property, other than that referred to

in paragraphs 1 to 4, shall be taxable only in the Contracting State of which the alienator is a resident.

Article 14 INDEPENDENT PERSONAL SERVICES

 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:

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 State; or

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; in that case, only so much of the income as is derived from his activities performed in that other State may be taxed in that other State.

 The   term   "professional   services"   includes   especially

independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.

Article 15

INCOME FROM EMPLOYMENT

 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.

 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:

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

b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and

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

 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 Contracting State.

Article 16 DIRECTORS' FEES

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

Article 17

ARTISTES AND SPORTS PERSONS

 Notwithstanding  the  provisions  of  Articles  7,  14  and  15,

income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsman, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State.

 Where  income  in  respect  of  personal  activities  exercised  by  an

entertainer or a sportsman in his capacity as such accrues not to the entertainer or sportsman himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of
the entertainer or sportsman are exercised.

 Notwithstanding the provisions of paragraphs 1 and 2, income derived

from such activities as are referred to in paragraph 1 performed under a
cultural agreement or arrangement between the Contracting States shall be exempt from tax in the Contracting State in which the activities are exercised if the visit to that
State is wholly or substantially supported by public or government funds of either Contracting State.

Article 18 PENSIONS

 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.

 Notwithstanding  the  provisions  of  paragraph  1,  pensions  paid

and other similar payments made by the Government of a Contracting State or a local
authority thereof under a public welfare scheme of the social security system of that State shall be taxable only in that State.

Article 19 GOVERNMENT SERVICE

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
subdivision or authority, shall be taxable only in that State.

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:

(i) is a national of that State; or

(ii) did not become a resident of that State solely for the purpose of rendering the services.

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 the Government of that
State or subdivision or authority shall be taxable only in that State.

b) However, such pensions and other similar remuneration shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.

The provisions of Articles 15, 16, 17, and 18 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 20 STUDENTS

Payments which a student 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 State solely for the purpose of his education receives for the purpose of his maintenance or education shall not be taxed in that State, provided that such
payments arise from sources outside that State.

Article 21 OTHER INCOME

 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.

 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. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.

 The provision of this Article shall not apply if it was the main

purpose or one of the main purposes of any person concerned with the creation or assignment of the rights in respect of which the income is paid to take advantage of this Article by means of that creation or assignment.

Article 22

METHODS FOR ELIMINATION OF DOUBLE TAXATION

 In  Botswana,  subject  to  the  provisions  of  the  laws  of

Botswana regarding the allowance of a credit against Botswana tax of tax payable under the laws of a country outside Botswana, China tax payable under the laws of China and in accordance with this

Agreement, whether directly or by deduction, on profits or income liable to tax in China shall be allowed as a credit against any Botswana tax payable in
respect of the same profits or income by reference to which the China 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.

 In China, in accordance with the provisions of the law of China, double

taxation shall be eliminated as follows:

a) Where a resident of China derives income from Botswana, the amount of tax on that income payable in Botswana in accordance with the provisions of
this Agreement may be credited against the Chinese tax imposed on that resident. The amount of the credit, however, shall not exceed the amount of the Chinese tax on that income computed in accordance with the taxation laws and
regulations of China.

b) Where the income derived from Botswana is dividend paid by a
company which is a resident of Botswana to a company which is a resident
of China and which owns not less than 20 per cent of the shares of the company
paying the dividend, the credit shall take into account the tax paid to
Botswana by the company paying the dividend in respect of its income.

Article 23 MISCELLANEOUS RULE

Nothing in this Agreement shall prejudice the right of each
Contracting State to apply its domestic laws and measures concerning the prevention of tax avoidance, whether or not described as such, insofar as they do not give rise to taxation contrary to this Agreement.

Article 24

NON-DISCRIMINATION

 Nationals  of  a  Contracting  State  shall  not  be  subjected  in

the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which
nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States.

 The  taxation  on  a  permanent  establishment  which  an  enterprise

of a Contracting State has in the other Contracting State shall not be less favorably 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.

 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. Similarly, any debts of an enterprise of a Contracting State to a
resident of the other Contracting State shall, for the purpose of determining the taxable
capital of such enterprise, be deductible under the same conditions as if they had been contracted to a resident of the first-mentioned State.

 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 first-mentioned State are or may be subjected.

 The  provisions  of  the  Article  shall,  notwithstanding  the

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

Article 25

MUTUAL AGREEMENT PROCEDURE

 Where a person considers that the actions of one or both of the

Contracting States result or will result for him in taxation not in accordance with
the provisions of this Agreement, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 of Article 24, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Agreement.

 The competent authority shall endeavor, 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.

 The  competent  authorities  of  the  Contracting  States  shall

endeavor 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.

 The competent authorities of the Contracting States may communicate

with each other directly for the purpose of reaching an agreement in the sense of paragraphs 2 and

When   it   seems   advisable   for   reaching   an   agreement,

representatives of the competent authorities of the Contracting States may meet together for an oral exchange of opinions.

Article 26 EXCHANGE OF INFORMATION

 The   competent   authorities   of   the   Contracting   States   shall

exchange such information as is foreseeably relevant for carrying out the provisions of 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, insofar 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.

 In no case shall the provisions of paragraphs 1 and 2 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).

 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 construed to permit a Contracting State to decline to supply information solely because it
has no domestic interest in such information.

 In no case shall the provisions of 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 27

ASSISTANCE IN THE COLLECTION OF TAXES

 The  Contracting  States  shall  endeavor  to  lend  assistance  to

each other in the collection of revenue claims. The competent authorities of the Contracting States may by mutual agreement settle the mode of application of this Article.

 In  no  case  shall  the  provision  of  this  Article  be  construed

so as to impose on a Contracting State the obligations:

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

b) to carry out measures 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

 Both  Contracting  States  shall  notify each  other  through

diplomatic channels that they have completed the internal legal procedures necessary for the entry into force of this Agreement. This Agreement shall enter into force on date of receipt of the latter notification.

 The provisions of the Agreement shall apply:

(a) In Botswana:

(i) with regard to taxes withheld at source, with respect to amounts credited on or after the thirtieth day following the date upon which the Agreement enters into force; and

(ii) with regard to other taxes, on taxable income derived on or after the first day of July of the year next following that of the entry into force of this Agreement.

(b) In China, in respect of income derived during the taxable years beginning on or after the first day of January next following that in which this Agreement enters into force.

Article 30 TERMINATION

This Agreement shall continue in effect indefinitely but either
of the Contracting States may, after the expiration of a period of five years from the date of its entry into force, give written notice of termination to the other
Contracting State through diplomatic channels.
In such event, this Agreement shall cease to have effect:

(a) In Botswana;

(i) with regard to taxes withheld at source, with respect to amounts credited on or after the thirtieth day following the date on which the notice of termination is given; and

(ii) with regard to other taxes, on taxable income derived on or after the first day of July of the year next following that in which the notice of termination is given.

(b) In China, in respect of income derived during the taxable years beginning on or after the first day of January in the calendar year next following that in which the notice of termination is given; and

IN WITNESS whereof the undersigned, duly authorized thereto, have
signed this Agreement.

Done at GABORONE on the 11ᵗʰ day of APRIL, 2012 in duplicate in the English and Chinese languages, both texts being equally authentic.

Hon. O.K. Matambo Hon. Xiao Jie

For the Government of the For the Government of the People’s

Republic of Botswana Republic of China

China - Botswana Tax Treaty

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