Czech Republic - Bermuda Tax Treaty

AGREEMENTBETWEEN THE GOVERNMENT OF THE CZECH REPUBLIC AND THE GOVERNMENT OF BERMUDA ON EXCHANGE OF INFORMATION ON TAX MATTERS

Whereas the Government of the Czech Republic and the Government of Bermuda (as authorised by the Government of the United Kingdom of Great Britain and Northern lreland) ("the Contracting Parties") recognise that present legislation already provides for cooperation and the exchange of information in criminal tax matters; Whereas the Contracting Parties have long been active in international efforts in the fight against financial and other crimes, including the targeting of financing terrorism; Whereas Bermuda on 15 May 2000 entered into a formal written commitment to the OECD's principles of transparency and exchange of information and subsequently have participated actively in the OECD Global Forum on Taxation; Whereas the Contracting Parties wish to enhance and facilitate the terms and conditions governing the exchange of information relating to taxes; Whereas in entering into this Agreement, the intention of each Contracting Party is not to propose the application ofprejudicial or restrictive measures based on harmful tax practices to residents or citizens of the other Contracting Party so long as the Agreement is in force and the Contracting Parties are meeting their obligations under the Agreement; Now, therefore, the Contracting Parties, desiring to facilitate the exchange of information on tax matters have agreed as fol1ows:

Article 1 Object and Scope of the Agreement The competent authorities of the Contracting Parties shall provide assistance through exchange of infonnation that is relevant to the administration and enforcement of the domestic laws of the Contracting Parties concerning taxes covered by this Agreement. Such information shall include information that is relevant to the detennination, assessment and col1ection of such taxes, the recovery and enforcement of tax claims, or the investigation or prosecution of tax matters. lnformation shall be exchanged in accordance with the provisions ofthis Agreement and shall be treated as confidential in the manner provided in Article 8. The rights and safeguards secured to persons by the laws ar administrative practice of the requested Party remain applicable to the extent that they do not unduly prevent ar delay effective exchange of information.

Article 2 .Iurtsdictíon A requested Party is not obligated to provide information which is neither held by its authorities nor in the possession ar control of persons who are within its territorial jurisdiction.

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Ar'tiele 3 Taxes Covered

1. The taxes whieh are the subjeet ofthis (a)

Agreement

are:

in the ease ofthe Czeeh Republic: (i) the tax on income of individuals; (ii) the tax on income of legal persons; (iii) the tax on immovable property; (iv) the value added tax; (v) the excise tax;

b) in Bermuda direet taxes of every kind and description.

2. This Agreement shall also apply to any identical taxes imposed after the date of signature of the Agreement in addition to or in place of the existing taxes. This Agreement shall also apply to any substantially similar taxes imposed after the date of signature of the Agreement in addition.to or in place of the existing taxes if the competent authorities of the Contracting Parties so agree. Furthermore, the taxes covered may be expanded or modified by mutual agreemen! .01' the Contracting Parties in the form of an exchange of letters. The competent authorities of the Contracting Parties shall notify each other of any substantial exchanges to the taxation and related information gathering measures covered by the Agreement.

Article 4 Generál

1. For the purposes of this Agreement,

Defirritions

unless otherwise

a) "Contraeting Party" means the Czech Republie b) "competent authority" means

defined the term:

or Bermuda

as the context requires;

i)

in the case ofthe Czech Republic the Minister ofFinance or an authorised representative ofthe Minister; ii) in the case of Bermuda the Minister of Finance or an authorised representative of the Minister; e) "person" includes an individual, a company and any other body ofpersons; d) "company" means any body corporate or any entity that is treated as a body corporate for tax purposes; e) "publicly traded company" means any company whose principal class of shares is listed on a recognized stock exchange provided its listed shares can be readily purehased ar sald by the public. Shares can be purchased or sold "by the public" if the purchase ar sale of shares is not implicitly or explicitly restricted to a limited group of investors; f) "prineipal class of shares" means the class Ol' classes of shares representing a majority of the voting power and value ofthe company;

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g) "recognized stock exchang.e" mea~s aI~y sto~k exchange agreed upon by the competent authorities of the Contracting Parties, including the stock exchanges of the Contracting Parties; h) "col1ective investment fund or scheme" means any pooled investment instrument, irrespective of legal formo The term "public collective investment fund or scheme" means any collectivé investment fund or scheme provided the units, shares or other interests in the fund or scheme can be readily purchased, sold or redeemed by the public. Units, shares or other interests in the fund or scheme can be readily purchased, sold or redeemed "by the public" if the purchase, sale or redemption is not implicitly or explicitly restricted to a limited group of investors; i) "tax" means any tax to which the Agreement applies; j) "requesting Party" means the Contracting Party requesting information; k) "requested Party" means the Contracting Party requested to provide information;

1. "information gathering measures" means laws and administrative or judicial procedures that enable aContracting Party to obtain and provide the requested information; m) "information" means any fact, statement or record in any form whatever; n) "criminal tax matters" means tax matters involving intentional conduct which is liable to prosecution under the criminallaws ofthe requesting Party; o) "criminal laws" means al1 criminal laws designated as such under domestic law irrespective'of whether contained in the tax laws, the criminal code Ol' other statutes.

2. The term "relevant" wherever used in the Agreement with respect to information, shall be interpreted ina manner that ensures that information will be considered relevant notwithstandingthat a definite assessment of the pertinence of the infonnation to an on-going investigation could only be made following the receipt ofthe information.
3. As regards the application of this Agreement at aI1Ytime by a Contracting Party, 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 Party for the purposes of taxes to which the Agreement applies, any meaning under the applicable tax law of that Party prevailing over a meaning given to the term under other laws ofthat Party.

Article 5 Exchange of Information up on Request

1. The competent authority of the requested Party shall pro vide upon request information for the purposes referred to in Article 1. Such information shal1 be exchanged without regard to whether the conduct being investigated would constitute a crime under the laws of the requested Party if such conduct occurred in the requested Party.
2. If the information in the possession of the competent authority of the requested Party is not sufficient to enable it to comply with the request for information, that Party shal1 use al1 relevant information gathering measures to provide the requesting Party with the information requested, notwithstanding that the requested Party may not need such information for its own tax purposes.

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3. If specificalIy requested by the competent authority of the requesting Party, the competent authority of the requested Party shall provide information under this Article, to the extent alIowable under its domestic laws, in the form of depositions of witnesses and authenticated copies of original records. 4. Each Contracting Party shall ensure that its competent authorities for the purposes specified in Article 1 ofthe Agreement, have the authority to obtain and provide upon request: a) information held by banks, other financial institutions, and any person acting in an agency or fiduciary capacity including nominees and trustees; b) information regarding the ownership of companies, partnerships, trusts, foundations, "Anstalten" and other persons, including, within the constraints of Article 2, ownership information on all such persons in an ownership chain; in the caseof trusts, information on settlors, trustees and beneficiaries; and in the case of foundations, information on founders, members of the foundation council and beneficiaries. Further, this Agreement does not create an obligation on the Contracting Parties to obtain or provide ownership information with respect to publicly traded companies or public colIective investment funds or schemes unless such information can be obtained without giving rise to disproportionate difficul ties. 5. The competent authority of the requesting Party shall pro vide the folIowing information to the competent authority of the requested Party to demonstrate the foreseeable relevance of the information to the request: (a) the identity ofthe person under exarnination or investigation; (b) a statement of the information sought including its nature and the fonn in which the requesting Party wishes to receive the information from the requested Party; (c) the tax purpose for which the information is sought; (d) grounds for believing that the information requested is held in the requested Party or is in the possession or control of a person within the jurisdiction of the requested Party; (e) to the extent known, the name and address of any person believed to be in possession of the requested information; (f) a statement that the request is in confonnity with the law and administrative practices of the requesting Party, that if the requested information was within the jurisdiction of the requesting Party then the competent authority of the requesting Party would be able to obtain the information under the laws of the requesting Party 01' in the normal course of administrative practice and that it is in conformity with this Agreement; (g) a statement that the requesting Party has pursued all means available in its own territory to obtain the information, except those that would give rise to disproportionate difficulties. 6. The competent authority of the requested Party shall forward the requested information as promptly as possible to the requesting Party. To ensure a prompt response, the competent authority ofthe requested Party shall:

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a) Confirm reeeipt of a request in writing to the eompetent authority ofthe requesting Party and shall notify the eompetent authority of the requesting Party of defieieneies in the request, if any, within 60 days of the reeeipt of the request. b) If the eompetent authority of the requested Party has been unable to obtain and provide the infonnation within 90 days of reeeipt of the request, including if it eneounters obstacles in furnishing the information or it refuses to furnish the information, it shall immediately inform the requesting Party, explaining the reason for its inability, the nature of the obstacles or the reasons for its refusal.

Article 6 Tax Examinations Abroad

1. A Contraeting Party may allow representatives of the competent authority of the other Contraeting Party to enter the territory of the first-mentioned Party to interview individuals and exarnine records with the prior written consent of the persons coneerned. The competent authority of the second-mentioned Party shall notify the competent authority of the firstmentioned Party ofthe time and place ofthe meeting with the individuals coneerned.

2. At the request of the eompetent authority of one Contraeting Party, the eompetent authority of the other Contracting Party may allow representatives ofthe competent authority of the first mentioned Party to be present at the appropriate part of a tax examination in the seeond-mentioned Party.

3. If the request referred to in paragraph 2 is aeeeded to, the eompetent authority of the Contraeting Party eonducting the examination shall, as soon as possible, notify the eompetent authority of the other Party about the time and place of the examination, the authority or offieial designated to carry out the examination and the proeedures and conditions required by the first mentioned Party for the eonduet of the examination. All decisions with respeet to the eonduet of the tax examination shall be made by the Party condueting the examination.

Article 7 Possibility of Declining a Request

1. The requested Party shall not be required to obtain or pro vide information that the requesting Party would not be able to obtain under its own laws for purposes of the administration or enforeement of its own tax laws. The competent authority of the requested Party may deeline to assist where therequest is not made in eonformity with this Agreement.
2. The provisions of this Agreement shall not impose on a Contraeting Party the obligation to supply information whieh would disclose any trade, business, industrial, commereial Ol' professional seeret or tra de process. Notwithstanding the foregoing, information of the type referred to in Article 5, paragraph 4 shall not be treated as such a secret Ol' trade process merely beeause it meets the criteria in that paragraph.

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3. The provisions of this Agreement sha11not impose on a Contracting Party the obligation to obtain or provide information, which would reveal confidential communications between a c1ient and an attorney, solicitor or other admitted legal representative where such conummications are: (a) produced for the purposes of seeking or providing legal advice or (b) produced for the purposes of use in existing or contemplated legal proceedings. 4. The requested Party may decline a request for information if the disclosure of the information would be contrary to public policy (core principals/aims ofthe society/public). 5. A request for information sha11not be refused on the ground that the tax claim giving rise to the request is disputed. 6. The requested Party may decline a request for information if the information is requested by the requesting Party to administer or enforce a provision of the tax law of the requesting Party, or any requirement connected therewith, which discriminates against a national of the requested Party as compared with a national of the requesting Party in the same circumstances.

Article 8 Confidentiality Any information received by a Contracting Party under this Agreement sha11 be treated as confidential and may be disclosed only to persons or authorities (including courts and administrative bodies) in the jurisdiction of the Contracting Party concerned with the assessment or co11ection 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 sha11use such information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. The information may not be disclosed to any other person or entity Ol' authority or any other jurisdiction without the express written consent ofthe competent authority ofthe requested Party.

Article 9 Costs Unless the competent authorities of the Contracting Parties otherwise agree, ordinary costs incurred in providing assistance shall be borne by the requested Party, and extraordinary costs incurred in providing assistance (including costs of engaging external advisors in connection with litigation Ol' otherwise necessary to comply with the request) shall be borne by the requesting Party. The competent authorities shall consult from time to drne with regard to this Article. The agreement regarding ordinary costs and extraordinary costs is as contained in the Proto col referenced in Article 14.

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Article 10 Implementation Measures The Contracting Parties shall adopt and publish the laws, regulations and administrative provisions necessary to eomply with, and give effeet to, the terms of the Agreement, Article 11 Language Requests for assistanee and answers thereto shall be drawn up in English.

Other International

Article 12 Agreements

or Arrangements

The possibilities of assistanee provided by this Agreement do not limit, nor are they limited by, those eontained in existing international agreements or other arrangements between the Contraeting Parties whieh relate to the eo-operation in tax matters.

Article 13 Mutual Agreement Procedure

1. Where difficulties or doubts arise between the Contraeting Parties regarding the implementation or interpretation of the Agreement, the eompetent authorities shall endeavour to resolve the matter by mutual agreement.
2. In addition to the agreements referred to in paragraph 1, the eompetcnt authorities of the Contracting Parties may mutually agree on the procedures to be used under Articles 5 and 6.
3. Thc competent authorities of the Contracting Parties may communicate with each other directly for purposes of reaching agreernents under this Article.

Article 14 Protocol

The attached AIIDexcontains an explanatory Protocol to the Agreement and shall be an integral part of this Agreement.

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Article 15 Entry into Fone Each of the Contracting Parties shall notify the other of the completion of the procedures required by its domestic law for the bringing into forc,e of :his Agr~ement.. ~he Agreement shall enter into force on the date of the later of these notifications and rts provisions shall have effect Ca)for criminal tax matters on that date; and (b) for all other matters covered in Article 1 in respect of any tax year beginning on or after that date, or where there is no taxable period, for all charges to tax arising on Ol' after that date.

At-ticle 16 Termination

1. This Agreement shall remain in force until terminated by a Contracting Party. Either Contracting Party may terminate the Agreement, through the diplomatic channels, by giving written notice oftermination. In such event, the Agreement shall cease to have effect in both Contracting Parties on 1st January in the calendar year next following that in which the notice is given.
2. The Contracting Party that terminates the Agreement shall remain bound by the provisions of Article 8 with respect to any information obtained under the Agreement.

In witness whereof, the undersigned, Agreement.

being duly authorized

thereto, have signed the

Done in duplicate, in the Czech and English languages, each text being equally authentic.

Done at Bermuda on August the 15th day in the year 2011.

For the Government ofthe Czech Republic Ladislav Minčič..

For the Government ofBermuda Paula A. Cox

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ANNEX PROTOCOL CONCERNING THE INTERPRETATION AND APPLICATION OF THE AGREEMENT BETWEEN THE GOVERNMENT OF THE CZECH REPUBLIC AND THE GOVERNMENT OF BERMUDA ON THE EXCHANGE OF INFORMATION ON TAX MATTERS.

1. This Proto col sets out the intentions of the Contracting Parties regarding the matters addressed herein.

2. Pursuant to Article 1 ofthe Agreement it is mutually agreed that in this Article the term "relevant" includes the standard for the term "foreseeably relevant" and "foreseeable relevance" as explained in paragraph numbered 4 of the 2002 OECD Model Agreement on Exchange of Information on Tax Matters Commentary on Article 1 of that Model.

3. Pursuant to Article 5 the requested Party may not require certain records to be kept for longer than a specified period under the domestic law of the requested Party consistant with international standards, however the competent authority of the requested Party will, nevertheless, use all relevant inforrnation-gathering measures to pro vide any information requested, where that information is, in fact, kept.

4. Pursuant to Article 9 ofthe Agreement the following is mutually agreed:

(a)

Ordinary costs that are incurred for the purpose of responding to a request for information will be borne by the requested Party. Such ordinary costs will normally cover internal administration costs of the competent authority and any minor external costs such as the costs of couriers.

(b)

AU reasonab1e costs incurred by third parties in complying with the request for exchange of information are considered extraordinary costs and will be borne by the requesting Party. Examples of extraordinary costs include, but are not limited to, the following: (i)reasonable fees charged for staff employed by third parties in assisting with the request;

(ii)reasonable fees charged by third parties for carrying out research; (iii)reasonable fees charged by third partie s for copying documents; (iv)reasonable costs of engaging experts, interpreters, or translators; (v)reasonable costs of conveying documents to the requesting Party; (vi)reasonable litigation costs of the requested Party in relation to a specific request for information; (vii) reasonable costs for obtaining depositions or testimony; and (viii) reasonable fees and expenses, determined in accordance with amounts allowed under applicable law, on the person who voluntarily appears for an interview, deposition or testimony relating to a particular information request.

(c) The competent authorities will consult each other in any particular case where extraordinary costs are likely to exceed $US500 to determine whether the requesting Party will continue to pursue the request and bear the cost.

(d) In the event that the requested Party finds it difficult or impossible to comply with a single or multiple requests for information from the requesting Party because of limited staff ar financial resources, the competent authorities will consult, and if mutually agreed, the requesting Party will bear the costs associated with complying with a request or multiple requests.

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