China - Laos Tax Treaty

AGREEMENT BETWEEN

THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA AND

THE GOVERNMENT OF THE LAO PEOPLE’S DEMOCRATIC REPUBLIC

FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT

TO TAXES ON INCOME

The Government of the People’s Republic of China and The Government of the Lao People’s Democratic Republic;

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 PERSONAL SCOPE

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 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, as well as taxes on capital appreciation.
The existing taxes to which the Agreement shall apply are in particular:

(a) in the Lao People’s Democratic Republic:

(i) the tax on profits (income) of enterprises; and

(ii) the tax on income of individuals; (hereinafter referred to as “Lao tax”);

(b) in the People’s Republic of China:

(i) the individual income tax; and

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

(hereinafter referred to as “Chinese tax” ) .

This Agreement shall apply also to any identical or
substantially similar taxes which are imposed after the date of signature of this Agreement in addition to, or in place of, the existing taxes referred to in paragraph 3. The competent authorities of the Contracting States shall notify each other of any substantial changes which have been made in their respective taxation laws within a reasonable period of time after such changes.

ARTICLE 3 GENERAL DEFINITIONS

For the purposes of this Agreement, unless the context otherwise requires:

(a) the term “Laos” means the Lao People’s Democratic Republic; when used in a geographical sense, means all its national territory, including
its territorial water and any area beyond its territorial water within which the Lao PDR, by the Lao People’s Democratic Republic legislation and in accordance with international law, has sovereign rights of exploration for and exploitation of natural resources of waterbed and its sub-soil and superjacent water resources;

(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;

(d) the term “tax” means Lao tax or Chinese tax as the context requires;

(e) the term “person” includes an individual, a company and any other body of persons;

(f) the term “company” means any body corporate or any entity
which is treated as a body corporate for tax purposes;

(g) 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;

(h) the term “nationals” means:

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

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

(i) the term “international traffic” means any transport by a ship,
aircraft or road vehicle operated by an enterprise which has its head office in
a Contracting State, except when the ship, aircraft or road
vehicle is operated solely between places in the other Contracting State;

(j) the term “competent authority” means, in the case of Laos, the Ministry of Finance or its authorized representative,and in the case of China, the State Administration of Taxation or its authorized representative.

As regards the application of this Agreement by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State concerning the taxes to which this Agreement applies.

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 head office or any other
criterion of a similar nature.
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 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 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 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 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 of the State in which its 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;

(f) a farm or plantation; and

(g) 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 building site, a construction, assembly or installation project or
supervisory activities in connection therewith, but only where such site, project
or activities continue for a period of more than twelve 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 subparagraphs (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, has and habitually exercises an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent
establishment in the firstmentioned 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. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, he will not be considered an agent of an independent status within the meaning of this paragraph.
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, aircraft and road vehicle 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
business of the permanent establishment, including executive and general administrative expenses so incurred, whether in the Contracting 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 INTERNATIONAL TRAFFIC

Profits from the operation of ships, aircraft or road vehicle in international traffic shall be taxable only in the Contracting State in which the place of head office of the enterprise is situated.
If the place of head office of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship is situated, or if there is no such home harbour, in the Contracting State of which the operator of the ship is a resident.
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

Where:

(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 recipient is the beneficial owner of the dividends 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 this limitation.

The provisions of 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 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.

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 recipient is the beneficial owner of the interest the tax so charged shall not exceed:

(a) in the case of Laos:

-5 per cent of the gross amount of the interest;

(b) in the case of China:

-10 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 the above limitations.

Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State and paid to the Government of the other Contracting State, shall be exempt from tax in the first-mentioned State.

For the purposes of this paragraph, the term “Government”

(a) in the case of Laos, means the Government of the Lao
People’s Democratic Republic and shall include:

(i) the Bank of Laos;

(ii) the Bank for Foreign Trade of Laos;

(iii) the local authorities; and

(iv) such financial institutions, the capital of which is wholly owned by the Government of the Lao People’s Democratic Republic or any local authority as may be agreed from time to time between the competent authorities of both of the Contracting States;

(b) in the case of China, means the Government of the People’s Republic of China and shall include:

(i) the People’s Bank of China;

(ii) the State Development Bank of China;

(iii) he Export-Import Bank of China;

(iv) the Agricultural Development Bank of China;

(v) the local authorities; and

(vi) such financial institutions, the capital of which is wholly owned by the Government of the People’s Republic of China or any local authority as may be agreed from time to time between the competent authorities of both of the Contracting States.

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 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 the Government of that State, 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:

(a) in the case of Laos:

-5 per cent of the gross amount of the royalties;

(b) in the case of China:

-10 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 the above 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 or films or tapes
for radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial, or scientific equipment, or for information concerning industrial, commercial
or scientific experience.
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 the Government of that Contracting State, a local authority thereof or 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.

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,   aircraft   or   road

vehicle operated in international traffic and movable property pertaining to the operation of
such ships, aircraft or road vehicle shall be taxable only in the Contracting
State in which the place of head office of the enterprise is situated.

 Gains  from  the  alienation  of  shares  of  the  capital  stock  of

a company the property of which consists directly or indirectly principally of
immovable property situated in a Contracting State may be taxed in that State.

 Gains from the alienation of shares other than those mentioned  in

paragraph 4 representing a participation of at least 25 per cent in a company which is a resident of a Contracting State may be taxed in that State.

  Gains  from  the  alienation  of  any  property  other  than  that

referred to in paragraphs 1to 5, 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 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
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;

(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,
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 the calendar 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, aircraft or road vehicle operated in international traffic,shall be taxable only in the Contracting State in which the place of head office of the enterprise is situated.

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 SPORTSPERSON

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 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 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 Contracting 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, 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)    remuneration,   other   than   a   pension,   paid   by   the

Government of a Contracting State or a local authority thereof to an individual in respect of services rendered to the Government of that State or a local authority thereof, in the discharge of functions of a governmental nature, shall be taxable only in that State;

(b) however, such remuneration shall be taxable only in the other
Contracting State if the services are rendered in that other State and the individual is a resident of that other State who:

(i) is a national of that other State; or

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

 (a)        any pension  paid  by,  or  out of  funds  created  by the

Government of a Contracting State or a local authority thereof to an individual in respect of services rendered to the Government of that State or a local authority thereof 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 other State.

The provisions of Articles 15, 16, 17 and 18 shall apply to
remuneration and pensions in respect of services rendered in connection with a business carried on by the Government of a Contracting State 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 three 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 AND TRAINEES

Payments 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 maintenance,
education or training shall not be taxed in that State, provided that such
payments arise from sources outside that State.
In respect of grants, scholarships and remuneration from employment not covered by paragraph 1, a student, business apprentice or trainee described
in paragraph 1 shall, in addition, be entitled during such education or training to the same exemptions, reliefs 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 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.

ARTICLE 23

METHODS FOR ELIMINATION OF DOUBLE TAXATION

In Laos, double taxation shall be eliminated as follows:

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

In China, double taxation shall be eliminated as follows:

Where a resident of China derives income from Laos the amount of tax on that income payable in Laos 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.

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 Contracting State in the same circumstances are or may be
subjected. This provisions shall, notwithstanding the provisions of this 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 favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provisions 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.

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 this 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 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 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 endeavour to resolve by mutual agreement any difficulties or doubts arising as to the
interpretation or application of the Agreement. They may also consult together for
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. When it seems advisable for reaching 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 necessary for carrying out the provisions of this Agreement or of the domestic laws of the Contracting States concerning taxes covered
by the Agreement insofar as the taxation thereunder is not contrary to the Agreement, in particular for the prevention of evasion of such taxes. The exchange of information is not restricted by Article 1. Any information received by a Contracting State shall be treated as secret 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 Agreement. 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 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 27

DIPLOMATIC AGENTS AND CONSULAR OFFICERS

Nothing in this Agreement shall affect the fiscal privileges of diplomatic agents or consular officers under the general rules of international
law or under the provisions of special agreements.

ARTICLE 28 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 as respects 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 29 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 as pespects 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.

In witness whereof, the undersigned duly authorized thereto, have signed this Agreement.

DONE at Beijing on the 25th day of January 1999, in duplicate in the Chinese, Lao and English languages, all three texts being equally authentic, in
case of any divergence of interpretations the English text shall prevail.

For the Government of For the Government of

the People’s Republic of China the Lao People’s Democratic Republic

China - Laos Tax Treaty

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