Lithuania - Guernsey Tax Treaty

AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA AND THE STATES OF GUERNSEY FOR THE EXCHANGE OF INFORMATION RELATING TO TAX MATTERS

whereas the Government of the Republic of Lithuania and the States of Guernsey recognise that present legislation already provides for cooperation and the exchange of

information in criminal tax matters;

whereas the Parties have long been active in international efforis in the fight

against financial and other crimes, including the targeting of terrorist financing;

whereas it is acknowledged that the States of Guernsey has the right, under the terms of the Entrustment from the United Kingdom of Great Britain and Northern Ireland, to negotiate, conclude, perform and subject to the terms of this Agreement terminate a tax

information exchange agreement with the Government of the Republic of Lithuania;

whereas the Parties wish to enhance and facilitate the terms and conditions

governing the exchange of information relating to taxes;

now, therefore, the Parties have agreed to conclude the following Agreement which

contains obligations on the part of the Parties only:

Article 1 Object and Scope of the Agreement

The Parties, through their competent authorities, shall provide assistance through exchange of information that is foreseeably relevant {o the administration and enforcement of the domestic laws of the Parties concerning taxes covered by this Agreement, including information that is foreseeably relevant to the determination, assessment and collection of

such taxes, the recovery and enforcement of tax claims, or the investigation of tax matters

or the prosecution of criminal tax matters in relation to such persons. Information shall be exchanged in accordance with the provisions of this Agreement and shall be treated as confidential in the manner provided in Article 8. The rights and safepuards secured to persons by the laws or administrative practice of the requested Party remain applicable to

the extent that they de not unduly prevent or delay the effective exchange of information. Article 2 Jurisdiction A requested Party is net obligated to provide information which is neither held by

its authorities nor in the possession of or obtainable by persons who are within its

territorial jurisdiction.

Article 3

Taxes Covered

1, The taxes which are the subject of this Agreement are:

a) in the case of Guernsey:

(i) income tax,

(ii) dwellings profits tax.

b} in the case of Lithuania:

{i} personal income tax,

(ii) corporate Income tax,

(iii) inheritance tax.

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 ihe competent authorities of the Parties so agree. Furthermore, the taxes covered may be expanded or modified by mutual agreement of the Parties in the form of an exchange of letters. The competent authority of each Party shall notify the other of any substantial changes to its taxation and related information gathering measures which may affect the obligations of that Parly pursuant to

the Agreement.

Article 4

Definitions

I. In this Agreement:

a) “Guernsey” means the States of Guernsey and, when used in a geographical sense, means Guernsey, Alderney and Herm, including the territorial sea adjacent to those

islands in accordance with international law:

b) “Lithuania” means the Republic of Lithuania and, when used in a geographical sense, means the territory under its sovereignty and other areas over which the Republic of

Lithuania exercises sovereign rights or jurisdiction in accordance with international law;

c) “collective investment fund or scheme” means any pooled investment vehicle, irrespective of legal form, The term “public collective investment fund or scheme” means any collective investment fund or scheme in which the purchase or sale of units, shares or

other interests is not implicitly or explicitly restricted to a limited group of investors;

d) “company” means any body corporate or any entity that is treated as a body

corporate for tax purposes:

e) “competent authority” means, in the case of Lithuania, the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania; and in the case of Guernsey, the Director of Income Tax or his delegate:

f} “eriminal laws” means all criminal laws designated as such under domestic law irrespective of whether such are contained in the tax laws, the criminal code or other statutes.

g) “criminal tax matters” means tax matters involving intentional conduct, whether before or after the entry into force of this Agreement, which is Hable to

prosecution under the criminal laws of the requesting Party;

h) “information” means any faci, statement, document or record in any form

whatever;

i) “information gathering measures” means laws and administrative or judicial

procedures that enable a Party to obtain and provide the requested information;

}) “Parties” means:

(i) Guernsey; and

(ii) Lithuania;

k) “person” means a natural person, a company and any other body of persons:

1. “principal class of shares” means the class or classes of shares representing a

majority of the voting power and value of the company;

m) “publicly traded company” means any company whose principal class of shares is listed on a recognised stock exchange provided its listed shares can be readily purchased or sold by the public. Shares can be purchased or sold “by the public” if the purchase or sale of shares is not implicitly or explicitly restricted to a limited group of

investors;

n) “recognised stock exchange” means any stock exchange agreed upon by the

competent authorities of the Parties;

o) “requested Party” means the Party to this Agreement which is requested to provide or has provided information in response to a request, or is requested to provide or

has provided other assistance in accordance with this Agreement;

p) “requesting Party” means the Party to this Agreement submitting a request for or having received information from the requested Party, or submitting a request for or

having received other assistance in accordance with this Agreement;

q) “tax” means any tax covered by this Agreement;

2. As regards the application of this Agreement at any time by a Party, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the laws of that Party, any meaning under the applicable tax laws of

that Party prevailing over a meaning given to the term under other laws of that Party.

Article 5

i’xehange of Information Upon Request

1. The competent authority of the requested Party shall provide upon request by the requesting party information for the purposes referred to in Article 1. Such information shall be exchanged without regard to whether the requested Party needs such information for its own tax purposes or the conduct being investigated would constitute a crime under the laws of the requested Party if such conduct had occurred in the territory of the requested Party, The competent authority of the requesting Party shall only make a request for information pursuant to this Article when it is unable to obtain the requested information by other means within its own territory except where recourse to such means

would give rise to disproportionate difficulty.

2. Ifthe 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, the requested Party shall use at its own discretion all relevant information gathering measures necessary to provide the requesting Party with the information requested, notwithstanding that ihe

requested Party may not need such information for its own tax purposes.

3. If specifically 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 allowable under its domestic laws, in the form of depositions of witnesses and

authenticated copies of original records,

4. Each Party shall ensure that it has the authority, subject to the terms of Article | and within the constraints of Article 2, to obtain and provide, through its competent

authority, and upon request:

a) information held by banks, other financial institutions, and any person,

including nominees and trustees, acting in an agency or fiduciary capacity:

b) G) information regarding the legal and beneficial ownership of companies, partnerships, foundations and other persons, including in the case of collective investment

funds or schemes, information on shares, units and other interests;

(ii) in the case of trusts, information on settlors, trustees, protectors, enforcers and beneficiaries, and in the case of foundations, information on founders, members of the

foundation council and beneficiaries.

5. Notwithstanding the preceding paragraphs, this Agreement does not create an obligation for a Party to obtain or provide ownership information with respect to publicly traded companies or public collective investment funds or schemes, unless such

information can be obtained without giving rise to disproportionate difficulties.

6. Any request for information shall be formulated with the greatest detail possible

and shall specify in writing:

a) the identity of the person under examination or investigation;

b) the period for which the information is requested:

c) the nature of the information requested and the form in which the requesting

Party would prefer to receive it;

d) the tax purpose for which the information is sought;

e) the reasons for believing that the information requested is forseeably relevant to tax administration and enforcement of the requesting Parly, with respect to the person

identified in subparagraph a) of this paragraph:

f) the grounds for believing that the information requested is present in the requested Party or is in the possession of or obtainable by a person within the jurisdiction

of the requested Party;

g) to the extent known, the name and address of any person believed to be in

possession of or able to obtain the requested information;

h) a statement that the request is in conformity 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 or in the

normal course of administrative practice and that it is in conformity with this Agreement;

i) astatement that the requesting Party has pursued all means available in its own territory to obtain the information, except where that would give rise to disproportionate

difficulties.

7, The competent authority of the requested Party shall use its best endeavours to forward the requested information to the requesting Party with the least possible delay. To

ensure a prompt response, the competent authority of the requested Party shail:

a} confirm receipt of a request in writing to the competent authority of the requesting Party and shall notify the competent authority of the requesting Party of

deficiencies in the request, if any, within 60 days of the receipt of the request;

b) if the competent authority of the requested Party has been unable to obtain and provide the information within 90 days of receipt of the complete request, including if it encounters obstacles in furnishing the information or it refuses to furnish the information, it shall immediately inform the competent authority of 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. With reasonable notice, the requesting Party request that the requested Party may allow representatives of the competent authority of the requesting Party to enter the territory of the requested Party, to the extent permitted under its domestic laws, to interview individuals and examine records with the written consent of the persons concerned. The competent authority of the requesting Party shall notify the competent authority of the requested Party of the time and place of the meeting with the individuals

concerned.

2. At the request of the competent authority of the requesting Party, and in accordance with its domestic laws, the competent authority of the requested Party may allow representatives of ihe competent authority of the requesting Party to be present at the

appropriate part of a tax examination in the requested Party.

3. If the request referred to in paragraph 2 is acceded to, the competent authority of the requested Party conducting the examination shall, as soon as possible, notify the competent authority of the requesting Party about the time and place of the examination, the authority or official designated to carry out the examination and the procedures and conditions required by the requested Party for the conduct of the examination, All decisions with respect to the conduct of the tax examination shall be made by the requested

Party conducting the examination.

Article 7

Possibility of Declining a Request

1. The competent authority of the requested Party may decline to assist:

a) where the request is not made in conformity with this Agreement;

b) where the requesting Party has not pursued all means available in its own territory to obtain the information, except where recourse to such means would give rise to

disproportionate difficulty; or

c) where the disclosure of the information requested would be contrary to public

policy (ordre public).

2. This Agreement shall not impose on a requested Party the obligation to provide items subject to legal privilege or which would disclose any trade. business, industrial, commercial or professional secret or trade process, provided that information of the type referred to in Article 5, paragraph 4 shall not by reason of that fact alone be treated as such

a secret or trade process.

3. A request for information shall not be refused on the ground that the tax claim

giving rise to the request is disputed.

4. The requested Party shall not be required to obtain and provide information which if the requested information was within the jurisdiction of the requesting Party the competent authority of the requesting Party would not be able to obtain under its laws or in

the normal course of administrative practice.

5. 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 comected therewith, which discriminates against a citizen of the requested Party as compared with a citizen of the requesting Party in the

same circumstances.

Article 8 Confidentiality

1. All information provided and received by the competent authorities of the

Parties shall be kept confidential.

2, Such information shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the purposes specified in Article I, and used by such persons or authorities only for such purposes, including the determination of any appeal. For these purposes, information may be disclosed in public court proceedings

or in judicial decisions.

3. Such information may not be used for any purpose other than for the purposes stated in Article | without the express written consent of the competent authority of the

requested Party.

4. Information provided to a requesting Party under this Agreement may not be

disclosed to any other jurisdiction.

Article 9 Costs

Unless the competent authorities of the 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 or otherwise) shall be borne by the requesting Party. The respective competent authorities shall consult with regard to this Article, and in particular the competent authority of the requested Party shall consult with the competent authority of the requesting Party in advance if the costs of providing information with respect lo a

specific request are expected to be significant.

Article 10

Language

Requests for assistance and responses thereto shall be drawn up in English.

Article 11

Mutual Agreement Procedure

t. Where difficulties or doubts arise between the Parties regarding the implementation or interpretation of this Agreement, the respective competent authorities

shall use their best efforts to resolve the matter by mutual agreement.

2. In addition to the agreements referred to in paragraph 1, the competent authorities of the Parties may mutually agree on the procedures to be used under Articles 5,

6 and 9.

3. Formal communications, including requests for information, made in connection with or pursuant to the provisions of the Agreement will be in writing directly io the competent authority of the requested Party at such address as may be notified by one Party to the other. Any subsequent communications regarding requests for information will be either in writing or verbally, whichever is most practical, between the competent

authorities.

Article 12

Mutual Assistance Procedure

if both competent authorities of the Parties consider it appropriate to do so they may agree to exchange technical know-how, develop new audit techniques, identify new

areas of non-compliance, and jointly study non-compliance areas.

Article 13

Entry into force

This Agreement shall enter into force on the thirtieth day afier the later of the dates on which cach of the Parties has notified the other in writing of the completion of the

procedures required by its law for entry into force. The Agreement shall have effect: a) for criminal tax matters on the date of entry into force: and

b) for all other matters covered in Article 1 on that date, but only in respect of any tax year beginning on or after the first day of January of the calendar year next following that in which this Agreement enters into force or, where there is no tax year, all charges to

tax arising on or after that date.

Article 14

Termination 1, This Agreement shall remain in force until terminated by either Party.

2. Either Party may terminate the Agreement by giving writlen notice of termination at least six months before the end of any calendar year. in such event, the Agreement shall cease to have effect on the first day of January in the calendar year next following that in which the notice is given. All requests received up to the effective date of

termination will be dealt with in accordance with the terms of this Apreement.

3. Ifthe Agreement is terminated the Parties shall remain bound by the provisions

of Article 8 with respect to any information obtained under this Agreement.

In witness whereof the undersigned being duly authorised thereto have signed this

Agreement.

4 ¥ . . syyphow Loe Done in duplicate at Aomiyent. : this aC

4

. . . . , 2013, in two originals in the Lithuanian and English languages, both texts being equally

authentic. For the Government of For the States the Republic of Lithuania of Guernsey ae a oo ¢ oD ls pleolar cps KY weet hceete

,