China - Turkmenistan Tax Treaty

AGREEMENT

BETWEEN

THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND

THE GOVERNMENT OF TURKMENISTAN 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 Turkmenistan, desiring to conclude an Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and to promote economic cooperation between the two countries,

Have agreed to the following:

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 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, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.

    The existing taxes to which the Agreement shall apply are in

particular:

a) in Turkmenistan:

(i) the tax on profits (income) of juridical persons;

(ii) the tax on income of individuals; (hereinafter referred to as "Turkmen tax" );

b) in China:

(i) the individual income tax;

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

    The Agreement shall apply also to any identical or substantially

similar taxes which are imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall
notify each other of any 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 "Turkmenistan" means the territory of Turkmenistan on which Turkmenistan exercises its sovereign rights and jurisdiction, in accordance with national legislation and international law;

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 natural resources in accordance with international law and its internal law;

c) the terms "a Contracting State" and "the other Contracting State" mean Turkmenistan or China , as the context requires;

d) the term "tax" means Turkmen 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 "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;

i) the term "international traffic" means any transport by a ship, aircraft or a road vehicle operated by an enterprise of 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:

(i) in the case of Turkmenistan, the Ministry of Finance and the Main State Tax Service or their authorized representative; and

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

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

Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning 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 the laws of that State.

Article 4 RESIDENT

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

Contracting State" means any person who, under the laws of that State, is liable to tax therein
by reason of his domicile, residence, place of incorporation, place of effective management or
any other criterion of a similar nature, and also includes that State or local authorities 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.

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

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

a) he shall be deemed to be a resident only of the State in which he has a
permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his personal and economic relations are closer (centre of vital interests);

b) if the State in which he has his centre of vital interests cannot be determined,

or if he has not a permanent home available to him in either
State, he shall be deemed to be a resident only of the State in which he has an habitual abode;

c) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national;

d) if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

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

an individual is a resident of both Contracting States, its residential status shall be determined by mutual agreement.

Article 5 PERMANENT ESTABLISHMENT

      For the purposes of this Agreement, the term "permanent

establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

    The term "permanent establishment" includes especially:

a) a place of management;

b) a branch;

c) an office;

d) a factory;

e) a workshop; and

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

   The term "permanent establishment" also includes:

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

b) the furnishing of services, including consultancy services, by an enterprise through employees or other personnel engaged by the enterprise for such purpose, but only if activities of that nature continue (for the same or a connected project) within the country for a period or periods aggregating 183 days or more 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 sub-paragraphs a) to e), provided that the overall
activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.

      Notwithstanding the provisions of paragraphs 1 and 2, where a

person -- other than an agent of an independent status to whom paragraph 6 applies -- is acting 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 shall not be deemed to have a permanent establishment

in a 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. 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 vehicles shall not be regarded as immovable property.

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

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

   The  provisions  of  paragraphs  1  and  3  shall  also  apply  to

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

Article 7 BUSINESS PROFITS

   The profits of an enterprise of a Contracting State shall be taxable

only in that State unless the enterprise carries on business in the other Contracting
State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is
attributable to that permanent establishment.

   Subject to the provisions of paragraph 3, where an enterprise of a

Contracting State carries on business in the other Contracting State through a permanent establishment situated therein,

there shall in each Contracting State be attributed to that permanent
establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.

      In  determining  the  profits  of  a  permanent  establishment,

there shall be allowed as deductions expenses which are incurred for the purposes of the
permanent establishment, including executive and general administrative expenses so incurred, whether in the 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 derived by an enterprise of a Contracting State from the

operation of ships, aircraft or road vehicles in international traffic shall be taxable only in that State.

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

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

Article 9 ASSOCIATED ENTERPRISES

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  Where:
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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) 5 per cent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 25 per cent of the capital of the company paying the dividends;

b) 10 per cent of the gross amount of the dividends in all other cases.

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

   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 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 Contracting States shall by mutual agreement settle the mode of application of this limitation.

     Notwithstanding the provisions of paragraph 2, interest arising in

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

   For the purposes of paragraph 3, the term "Government":

a) in Turkmenistan means the Government of Turkmenistan and shall include:

(i) the Central Bank of Turkmenistan; and

(ii) any institution wholly owned by the Government of Turkmenistan as may be agreed upon from time to time between the competent authorities of the Contracting States.

b) in China means the Government of China and shall include:

(i) the People’s Bank of China;

(ii) the China Development Bank;

(iii) the Agricultural Development Bank of China;

(iv) the Export-Import Bank of China;

(v) the National Council for Social Security Fund;

(vi) the China Export & Credit Insurance Corporation; and

(vii) any institution wholly owned by the Government of China as
may be agreed upon from time to time between the competent authorities 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 and 2 shall not apply if the

beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated
therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.

   Interest shall be deemed to arise in a Contracting State when the

payer is the Government of that State, a local authority thereof or a resident of that Contracting 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 interest 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 beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed 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 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 cinematograph films, or films or tapes used 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 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 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 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 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, aircraft or road vehicles operated

in international traffic

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

    Gains derived by a resident of a Contracting State from the

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

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

in paragraphs 1, 2, 3 and 4, shall be taxable only in the Contracting State of which the alienator is a resident.

Article 14 INDEPENDENT PERSONAL SERVICES

   Income derived by a resident of a Contracting State in respect of

professional services or other activities of an independent character shall be taxable only in that State except in the following circumstances, when such income may also be taxed in the other Contracting State:

a) if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; in that case, only so much of the income as is attributable to that fixed base may be taxed in that other State; or

b) if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the aggregate 183 days in any twelve month period; 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 any twelve month period; 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 a road vehicle operated by an enterprise of a Contracting State in international traffic, shall be taxable only in that Contracting State.

Article 16 DIRECTORS' FEES

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

Article 17 ARTISTES AND SPORTSMEN

    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 local authority, 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 State and the individual is a resident of that 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  to  which

contributions are made 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 pensions shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.

   The provisions of Articles 15, 16, 17 and 18 shall apply to

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 solely 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 provision 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

   Payments which a student who is or was immediately before visiting a

Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for

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

     In  respect  of  grants, scholarships  and  remuneration  from

employment not covered by paragraph 1, a student described in paragraph 1 shall, in addition,
be entitled during such education 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 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 Turkmenistan, double taxation shall be eliminated as follows:

a) Where a resident of Turkmenistan derives income, which in
accordance with the provisions of this Agreement, may be taxed in China, Turkmenistan
shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in China. Such deduction shall not,
however, exceed that part of the tax, as computed before the deduction is given, which is attributable to such items of income derived from China.

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

   In China, double taxation shall be eliminated as follows:

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

tax on that income computed in accordance with the taxation laws and regulations of China.

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

Article 24

NON-DISCRIMINATION

   Nationals of a Contracting State shall not be subjected in the other

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

   The taxation on a permanent establishment which an enterprise of a

Contracting State has in the other Contracting State shall not be less favorably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging a Contracting State to grant to
residents of the other Contracting State any personal allowances, reliefs and reductions for
taxation purposes on account of civil status or family responsibilities which it grants to its own residents.

     Except where the provisions of paragraph 1 of Article 9, paragraph

8 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 this 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 Contracting State, with a
view to the avoidance of taxation which is not in accordance with the Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States.

   The competent authorities of the Contracting States shall 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 the elimination of double taxation in cases not provided for in the Agreement.

     The competent authorities of the Contracting States may communicate

with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. 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 foreseeably relevant for carrying out the provisions of this Agreement or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States or local authorities, insofar as the taxation thereunder is not contrary to the Agreement. The exchange of information is not restricted by Articles 1 and 2.

      Any information received under paragraph 1 by a Contracting State

shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, the determination of appeals in relation to the taxes referred to in paragraph 1, or the oversight of the above. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions.

      In no case shall the provisions of paragraphs 1 and 2 be construed

so as to impose on a Contracting State the obligation:

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

b) to supply information which is not obtainable under the
laws or in the normal course of the administration of that or of the other Contracting State;

c) to supply information which would disclose any trade,
business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (order public).

Article 27

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 28 ENTRY INTO FORCE

The Contracting State shall notify each other in writing indicating
the completion of internal legal procedures necessary for entry into force of this Agreement. This Agreement shall enter into force on the thirtieth day after the date of the later notification and its provisions shall have effect:

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

Article 29 TERMINATION

This Agreement shall remain in force until terminated by a
Contracting State. Either Contracting State may terminate this Agreement, through diplomatic channels, by giving written notice of termination at least six months before the end of any calendar year after the period of five years from the date on which the Agreement enters into force. In such event, the 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 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 year in which the notice is given.

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

DONE at ....................................., on the ...............day of
, in two original copies

in the Chinese, Turkmen, Russian and English languages, all texts being
equally authentic. In case of divergence of interpretation between the texts, the English text shall prevail.

For the Government of the People’s Republic of China

For the Government of Turkmenistan

China - Turkmenistan Tax Treaty

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