China - Saudi Arabia Tax Treaty

AGREEMENT

BETWEEN

THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE KINGDOM OF SAUDI ARABIA

FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF TAX EVASION

WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL

The Government of the People’s Republic of China and the Government of the Kingdom of Saudi Arabia,

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

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 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, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.
The existing taxes to which this Agreement shall apply are in particular:

a) in the case of the People’s Republic of China:

(i) the individual income tax;

(ii) the income tax on enterprises with foreign investment and foreign enterprises; (hereinafter referred to as “ Chinese tax”).

b) in the case of the Kingdom of Saudi Arabia:

(i) the Zakat;

(ii) the income tax including the natural gas investment tax; (hereinafter referred to as “Saudi 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. The competent authorities of the Contracting States shall notify each other of any significant changes which 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 “ 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 seabed and
its subsoil and superjacent water resources in accordance with international law;

b) the term “Kingdom of Saudi Arabia” means the territory of the Kingdom of Saudi Arabia which also includes the area outside the territorial waters, where the Kingdom of Saudi Arabia exercises its sovereign and jurisdictional rights in
their waters, seabed, subsoil and natural resources by virtue of its law and the international law;

c) the terms “a Contracting State” and “the other Contracting State” mean the Kingdom of Saudi Arabia or China as the context requires;

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

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

f) 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;

g) the term “national” means:

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

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

h) the term “international traffic” means any transport by a ship or aircraft operated by an enterprise that has its place of effective management or head office in a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;

i) the term “competent authority” means:

(i) in the case of the People’s Republic of China, the State Administration of Taxation , or its authorised representative;

(ii) in the case of the Kingdom of Saudi Arabia, the Ministry of Finance represented by the Minister of Finance or his authorised representative.

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 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 Contracting State, is liable
to tax therein by reason of his domicile, residence, place of management or head
office, 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 Contracting 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 Contracting 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 herein, 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 or 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;

c) an office;

d) a factory;

e) a workshop, and

f) a mine, a quarry or any other place of extraction of natural resources.

The term “permanent establishment” likewise encompasses:

a) 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 six months;

b) the furnishing of services, including consultancy services, by an
enterprise through employees or other personnel engaged by an enterprise for such purpose, but only where activities of that nature continue (for the same or a connected
project) within the Contracting State for a period or periods aggregating more than six months 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;

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 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 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 Contracting 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 Contracting 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 Contracting State.
The term “immovable property” shall have the meaning which it has under the laws 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 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 Contracting 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 the determination of 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. However, no such deduction shall be allowed in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission, for specific services
performed or for management, or, except in the case of a banking enterprise, by way of
income from debt-claims with regard to moneys lent to the permanent establishment.
Likewise, no account shall be taken, in the determination of the profits of a permanent establishment, for amounts charged (otherwise than towards reimbursement of actual expenses), by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission for specific services
performed or for management, or, except in the case of a banking enterprise, by way of
income from debt-claims with regard to moneys lent to the head office of the enterprise or any of its other offices.
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 the 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 shall be taxable only in the Contracting State in which the place of effective management or head office of the enterprise is situated.
If the place of effective management or 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 Contracting State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned
Contracting 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 percent 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.
Notwithstanding the provisions of paragraphs 1 and 2, dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State shall be taxable only in that other Contracting State if the beneficial owner of the dividend is the Government of that other Contracting State or any of its institutions or other entity wholly owned directly or indirectly by the Government of that other Contracting State.
The term “dividends” as used in this Article means income from shares, mining shares, founder’s 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, 2 and 3 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 Income from Debt-claims

Income from debt-claims arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
However, such income 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 income from debt-claims, the tax so charged shall not exceed 10 percent of the gross amount of the income from debt-claims. 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, income from debt-claims arising in a Contracting State and derived by the Government of the other Contracting State, a local authority and the Central Bank thereof or any financial institution wholly owned by the Government of that other State, or by any other resident of that other State with respect to debt-claims indirectly financed by the Government of that other State, a local authority, and the Central Bank thereof or any financial institution wholly owned by the Government of that State, shall be exempt from tax in the first-mentioned Contracting State.
The term “income from debt-claims” 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 income from debt-claims for the purpose of this Article.
The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the income from debt-claims, being a resident of a Contracting State, carries on business in the other Contracting State in which the income from debt-claims 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-claims in
respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such cases the provisions of Article 7 or Article 14, as the case may be, shall apply.
Income from debt-claims 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 such income from debt-claims, 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 income from debt-claims is paid was incurred, and such income from debt-claims is borne by such permanent establishment or fixed base, then such income shall be deemed to arise in the Contracting 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 income from debt- claims, having regard to the debt-claims 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 10 percent 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, 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 cases 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 State, a local authority thereof or a resident of that State. Where, however, the person paying the royalties, whether that person 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 fixed base, may be taxed in that other State.
Gains 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 the Contracting State in which the place of effective management or 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 Contracting State.
Gains from the alienation of shares other than those mentioned in paragraph 4 representing a participation of 25 per cent in a company which is a resident of a Contracting State may be taxed in that Contracting State.
Gains derived from the alienation of any property other than that referred to in the preceding paragraphs 1 to 5 of this Article, 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 Contracting 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 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; or

c) if the remuneration for his activities in the other Contracting State is paid by a resident of that other Contracting State or is borne by a permanent establishment or a fixed base

situated in that other Contracting State and exceeds in the fiscal year 30000 USD or its equivalent in Chinese or Saudi Currency.

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, 17, 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 Contracting 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 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, may be taxed in the Contracting State in which the place of effective management or 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 that person’s 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 Sportspersons

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 sportsperson, 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 sportsperson in his capacity as such accrues not to the entertainer or sportsperson 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 sportsperson are exercised.
Notwithstanding the proceeding provisions of this Article, income
derived by entertainers or sportspersons who are residents of a Contracting State from 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 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 thereof 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
other State and the individual is a resident of that other State who:

(i) is a national of that other Contracting 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, 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 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 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 three years from the date of his first arrival in the first-mentioned State.

Article 21 Students

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 Capital

Capital represented by immovable property referred to in Article
6, owned by a resident of a Contracting State and situated in the other Contracting State may be taxed in that other Contracting 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 or by 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, may be taxed in that other Contracting State.
Capital represented by ships and aircraft operated in international traffic and by movable property pertaining to the operation of such ships and aircraft, shall be taxable only in the Contracting State in which the place of effective management or head office of the enterprise is situated.
All other elements of capital of a resident of a Contracting State shall be taxable only in that State.

Article 24

Methods for Elimination of Double Taxation

Double taxation shall be eliminated as follows:

a) in the case of China:

where a resident of China derives income from the Kingdom of Saudi Arabia, the amount of tax on that income payable in Kingdom of Saudi Arabia 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) in the case of the Kingdom of Saudi Arabia:

where a resident of the Kingdom of Saudi Arabia derives income or owns capital which, in accordance with the provisions of this Agreement, may be taxed in China, the Kingdom of Saudi Arabia shall deduct the amount paid in China, as a tax specified in Article 2 of this Agreement, against the tax levied in the Kingdom of Saudi Arabia. The amount of such deduction, however, shall not exceed the amount of the tax on that income or capital computed in accordance with the taxation laws and regulations of the Kingdom of Saudi Arabia.

The tax which was exempted or reduced under the legal provisions for encouragement of investment in either Contracting State shall be deemed to have been paid for application of this Article. The provisions of this paragraph shall be effective for 10 years starting from the year of the entry into force of this Agreement.

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, that person may, irrespective of the remedies provided by the
domestic law of those Contracting States, present his case to the competent authority of the Contracting State of which he is a resident. 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 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 both 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 the preceding paragraphs.

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 this Agreement insofar as the taxation thereunder is not contrary to this Agreement. The exchange of information is not restricted by Article 1. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and
administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to the taxes covered by this 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.

Article 27

Diplomatic and Consular Officers

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 28 Entry into Force

Each Contracting State shall notify the other Contracting State
through diplomatic channels of the completion of the legal procedures required for entry into
force of this Agreement. The Agreement shall enter into force as of the first day of
the next month following that month in which the last notice was given.
The provisions of this Agreement shall apply:

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

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

Article 29 Termination

This Agreement shall remain in force indefinitely but either of the Contracting States may terminate this Agreement through diplomatic channels, by giving to the other Contracting State written notice of termination not later than 30 June of any calendar year starting five years after the year in which this Agreement entered into force.
In such event, this Agreement shall cease to have effect:

a) In respect of taxes withheld at source to amount paid on or after the first day of January of the calendar year next following that in which the notice is given;

b) in respect of other taxes for any taxable year beginning on or
after the first day of January of the calendar year next following that in which the notice is given.

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

DONE in Beijing on the 23ʳᵈ day of January, 2006 in duplicate, each in the Chinese, Arabic and English languages, all texts being equally authentic. In case of divergence of interpretation, the English text shall prevail.

For the Government of For the Government of The People’s Republic of China The Kingdom of Saudi Arabia

Mr. Xie Xuren Mr. Ibrahim Bin Abdulaziz Al-Assaf Commissioner
Minister of Finance

of the State Administration of Taxation

PROTOCOL

At the moment of signing the Agreement for the Avoidance of Double Taxation and the Prevention of Tax Evasion with respect to Taxes on Income and on
Capital, this day concluded between the Government of the People’s Republic of
China and the Government of the Kingdom of Saudi Arabia, the undersigned have
agreed that the following provisions shall form an integral part of the Agreement.

I. Ad Article 7

a) The term “business profits” includes, but is not limited to,
income derived from manufacturing, mercantile, banking, insurance and the furnishing of services. However, income derived from independent personal services will be dealt with
according to the provisions of Article 14.

b) Each Contracting State shall apply its domestic law with regard to insurance activities.

II. Ad Article 24

In the case of the Kingdom of Saudi Arabia, the methods for
elimination of double taxation will not prejudice the provisions of the Zakat collection
regime as regards the Saudi nationals.

IN WITNESS WHEREOF the undersigned, duly authorised thereto, have
signed this Protocol.

For the Government of For the Government of The People’s Republic of China The Kingdom of Saudi Arabia

Mr. Xie Xuren Mr. Ibrahim Bin Abdulaziz Al-Assaf Commissioner
Minister of Finance

of the State Administration of Taxation

Disclaimer

Although we use our best efforts to keep the information of this site accurate and up-to-date, we make no representations or warranties with respect to the accuracy, applicability, fitness, or completeness of the contents of this website. We disclaim any warranties expressed or implied, merchantability, or fitness for any particular purpose. We shall in no event be held liable for any loss or other damages, including but not limited to special, incidental, consequential, or other damages. The contents of this website are just for illustrative purposes and are NOT to be considered as a legal opinion or tax advice and should not be relied upon as such. Far Horizon Capital Inc., and any associated company, is not engaged in the practice of law or tax. If you wish to receive a legal opinion or tax advice on the matter(s) in this website please contact our offices and we will refer you to an appropriate legal practitioner. Use of our websites FlagTheory.com, Incorporations.io, Residencies.io, Passports.io, is subject to our terms and conditions.