China - Georgia Tax Treaty

AGREEMENT

BETWEEN

THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA AND THE GOVERNMENT OF GEORGIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVEN¬TION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL

The Government of the People’s Republic of China and the Government of Georgia,

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

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 and on capital imposed on

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

There shall be regarded as taxes on income and on capital all
taxes imposed on total income, on total capital, or on elements of income
or of capital, including taxes on gains from the alienation of movable or immovable property, as well as taxes on capital appreciation.
The existing taxes to which this Agreement shall apply are in particular:

(a) in Georgia:

i) the tax on profit of enterprises;

ii) the tax on property of enterprises;

iii) the tax on income of individuals; and

iv) the tax on property of individuals; (hereinafter referred to as "Georgian Tax”);

(b) in China:

i) the individual income tax;

ii) the income tax for enterprises with foreign investment and foreign enterprises;

(hereinafter referred to as " Chinese tax").

This  Agreement shall also apply to any identical or substantially

similar taxes that are imposed after the date of signature of this 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 that have been made in their respective taxation laws.

Article 3 GENERAL DEFINITIONS

For  the   purposes  of  this  Agreement,   unless   the  context

otherwise requires:

(a) the term "Georgia" means the territory recognised by the international community within the state borders of Georgia, including land territory, internal waters and territorial sea, the air space above them, in respect of which Georgia exercises its sovereignty, as well as the exclusive economic zone and continental shelf adjacent to its territorial sea, in respect of which Georgia may exercise its sovereign rights in accordance with the international law;

(b) the term “People’s Republic of China” means the People’s Republic of China; when used in geographical sense, means 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 the sea-bed and its sub-soil and superjacent water resources in accordance with international law;

(d) the term "company" means any body corporate or any entity which 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:

i) in the case of Georgia, the Ministry of Finance or its authorised representative;

ii) in the case of China, the State Administration of Taxation or
its authorized representative;

(h) the term "national" means:

i) any individual possessing the nationality or citizenship of
a Contracting State ;

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

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

State, any term not defined therein shall, unless the context
otherwise requires, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which this 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 management, place of head office or any other criterion of a similar nature.

Where  by  reason  of  the  provisions  of  paragraph  1  of  this

Article 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 Contracting 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 of this Article 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 management or place of head office 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;

(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.

A   building   site   or   construction   or   installation   project

constitutes a permanent establishment only if it lasts more than six months.

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;

(f) the maintenance of a fixed place of business solely for any combination of activities mentioned in sub paragraphs a) to e) of this paragraph, 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 of this Article, where a person -other than an agent of an independent status to whom paragraph 6 of this Article applies- is acting on behalf of an enterprise and
has, and habitually exercises, in a Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to
have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 of this Article 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 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 of this Article 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 of this Article 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 of this Article, 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 business of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere.
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 of this Article 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 INTERNATIONAL TRAFFIC

Profits of an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State.
The provisions of paragraph 1 of this Article 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:

(a) 0 per cent of the gross amounts of the dividends if the beneficial owner is a company which holds directly or indirectly at least 50 per cent of the capital of the company paying the dividends and has invested

more than 2 million Euro in the capital of the company paying the dividends;

(b) 5 per cent of the gross amount of the dividends if the beneficial owner is a company which holds directly or indirectly at least 10 per cent of the capital of the company paying the dividends and has invested more than 100,000 Euro in the capital of the company paying the dividends;

The competent authorities of the Contracting State 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,

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 of this Article 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 of this Agreement 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.

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 10 per cent of the gross amount of the interest. The competent authorities of the Contacting State shall by mutual agreement settle the mode of application of this limitation.
Notwithstanding the provisions of paragraph 2 of this Article,
interest arising in a Contracting State and derived by the Government of the
other Contracting State, political subdivision, a local authority, and the Central Bank thereof or any financial institution wholly owned by that Government 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, 2 and 3 of this Article 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 the 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. In such case the provisions of Article
7 or Article 14 of this Agreement shall apply.
Interest shall be deemed to arise in a Contracting State when the payer is the Government of the state, political subdivision or a local authority thereof 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.

Where,  by reason  of  a special  relationship between  the  payer  and

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

Article 12 ROYALTIES

Royalties arising in a Contracting State and paid to 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 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.

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

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,
any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience.
The provisions of paragraphs 1 and 2 of this Article 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 of this Agreement shall apply.
Royalties shall be deemed to arise in a Contracting State when the payer is the Government of that Contracting State, political subdivision or
a local authority thereof or a resident of the 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.

Article 13 CAPITAL GAINS

Gains derived by a resident of a Contracting State from the alienation of

immovable property referred to in Article 6 of this Agreement 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 of an enterprise of a Contracting State from the alienation of

ships or aircraft operated in international traffic, or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that State.

Gains  from the  alienation of  any  property other  than  that referred

to in paragraphs 1, 2 and 3 of this Article, shall be taxable only in the Contracting State of which the alienator is a resident.

Article 14 INDEPENDANT 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 one of 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 Contacting 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;

(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 the calendar 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 DEPENDENT PERSONAL SERVICES

Subject  to  the  provisions  of  Articles  16,  18,  19,  20  and  21

of this Agreement, 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    of

this Article, 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 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 SPORTSMEN

Notwithstanding the provisions of Articles 14 and 15 of this  Agreement,

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 of this Agreement, be taxed in the Contracting State in which the activities of the
entertainer or sportsman are exercised.

Notwithstanding the preceding provisions of this Article, income derived by entertainers or sportsmen who are residents of a Contracting State from the activities exercised in the other Contacting State under a plan of
cultural exchange between the Governments of both Contracting States shall be exempt from tax in that other State.

Article 18 PENSIONS

Subject to the provisions of paragraph 2 of Article 19 of this Agreement, 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.

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, in the discharge of functions of a governmental nature, 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)Any pension paid by, or out of funds created by, a Contracting State

or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State, political subdivision or local authority shall be taxable only in that State.

(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.

The provisions of Articles 15, 16, 17 and 18 of this Agreement 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

TEACHERS AND RESEARCHERS

Remuneration which an individual 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 for the primary purpose of
teaching, giving lectures or conducting research at a university, college,
school or educational institution or scientific research institution recognized by the Government of the first-mentioned State derives for the purpose of
such teaching, lectures or research shall not be taxed in the first-mentioned State, for a period of two years from the date of his first arrival in the first-mentioned State.

The  provisions  of  paragraph  1  of  this  Article  shall  not  apply

to income from research if such research is undertaken not in the public
interest but primarily for the private benefit of a specific person or persons.

Article 21 STUDENTS

Payment which a student, business apprentice or 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 State solely for the purpose of his education or training receives for the purpose of his education or training shall not be taxed in that State, provided that such payment arise from sources outside that State.
In respect of grants, scholarships and remuneration from employment not covered by paragraph 1 of this Article, a student, business
apprentice or trainee described in paragraph 1 of this Article shall, in addition, be entitled during such education or training to the same exemptions,
relieves or reductions in respect of taxes available to residents of the State which he is visiting.

Article 22 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 of this Article shall not apply
to income, other than income from immovable property as defined in paragraph 2
of Article 6 of this Agreement, 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 of this Agreement shall apply.

Article 23 CAPITAL

Capital represented by immovable property referred to in Article 6 of this Agreement, owned by a resident of a Contracting State and situated
in the other Contracting State, may be taxed in that other State.
Capital represented by 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 may be taxed in that other State.
Capital represented by ships and aircraft operated in international traffic by an enterprise of a Contracting State and by movable property pertaining to the operation of such ships and aircraft, shall be taxable only in that Contracting State.
All other elements of capital of a resident of a Contracting State shall be taxable only in that State.

Article 24

METHOD FOR THE ELIMINATION OF DOUBLE TAXATION

In Georgia, double taxation shall be eliminated as follows:

(a) Where a resident of Georgia derives income or owns capital which, in accordance with the provision of this Agreement may be taxed in China, Georgia shall allow:

i) as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in China;

ii) as a deduction from the tax on the capital of that resident, an amount equal to the capital tax paid in China.

Such deduction in either case shall not, however, exceed that part of the income tax or capital tax, as computed before the deduction is given, which is attributable, as the case may be, to the income or the capital which may be taxed in China.

(b) Where in accordance with any provision of this Agreement income derived or capital owned by a resident of Georgia is exempt from tax in Georgia, Georgia may nevertheless, in calculating the amount of tax on the remaining income or capital of such resident, take into account the exempted income or capital.

In China, double taxation shall be eliminated as follows:

Where a resident of China derives income from Georgia, the amount of tax on that income payable in Georgia in accordance with the provision 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.

Article 25

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 of this Agreement, also apply to persons who are not residents of one or both of the Contracting States.
Stateless persons who are residents of a Contracting State shall not be subjected in either 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 the State concerned in the same circumstances, in particular with respect to residence, are or
may be subjected.
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, relieves 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.
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.

Article 26

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 of this Agreement, 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 this Agreement.

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 this 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
endeavour to resolve by mutual agreement any difficulties or doubts arising as to
the interpretation or application of this Agreement. They may also consult together for the elimination of double taxation in cases not provided for in this Agreement.
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 3 of this Article. When it seems advisable representatives of the competent authorities of the Contracting States may meet together for an oral exchange of opinions.

Article 27 EXCHANGE OF INFORMATION

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 concerning taxes covered by this Agreement insofar as the taxation thereunder is not contrary to this Agreement, in particular, for the prevention of evasion of such taxes. The exchange of information is
not restricted by Article 1 of this Agreement. Any information received
by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to

persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to the taxes referred to in the first sentence. 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 paragraph 1 of this Article 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 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

This Agreement shall enter into force on the thirtieth day after the date on which diplomatic notes indicating the completion of internal legal procedures necessary in each country for the entry into force of this Agreement have been exchanged. This Agreement shall have effect:

(a) in respect of taxes withheld at source, to income derived on or after 1 January in the calendar year next following that in which
the Agreement enters into force;

(b) in respect of other taxes, to taxes chargeable for any taxable
year beginning on or after 1 January in the calendar year next following that in which the Agreement enters into force.

Article 30 TERMINATION

This Agreement shall continue in effect indefinitely but either of the Contracting States may, on or before the thirtieth day of June in any calendar year beginning 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 the diplomatic channels. In such event this Agreement shall cease to have effect:

(a) in respect of taxes withheld at source, to income derived on or after 1 January in the calendar year next following that in which the notice of termination is given;

(b) in respect of other taxes, to taxes chargeable for any taxable
year beginning on or after 1 January in the calendar year next following that in which the notice of termination is given.

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

Done at Beijing on the 22nd day of June, 2005, in duplicate in the Chinese, Georgian and English languages, all texts being equally authentic. In case of any divergence in interpretations, the English text shall prevail.

For the Government of For the Government of the People’s Republic of China
Georgia

China - Georgia Tax Treaty

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