Romania - Lebanon Tax Treaty

CONVENTION

Between Lebanon and Romania for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital

The Government of the Lebanese Republic and the Government of Romania, desiring to promote and strengthen their economic co-operation by concluding a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital, have agreed as follows:

Article 1 Personal Scope

This Convention shall apply to persons who are residents of one or both of the Contracting States.

Article 2 Taxes Covered

1. This convention shall apply to taxes on income and on capital imposed on behalf of a Contracting State or of its local authorities or its administrative - territorial units, irrespective of the manner in which they are levied.

2. 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 salaries and other similar remuneration as well as taxes on capital appreciation.

3. The existing taxes to which this Convention shall apply are:

a) In the case of Romania: (i) the tax on income derived by individuals; (ii) the tax on profit; (iii) the tax on salaries and other similar remuneration; (iv) the tax on agricultural income; (v) the tax on dividends, (vi) the tax on buildings and the tax on land occupied by buildings and constructions: (hereinafter referred ta as "Romanian tax") b) In the case of Lebanon: (i) the tax on the profits of industrial, commercial and non commercial professions; (ii) the tax on salaries, wages and pensions; (iii) the tax on income derived from movable capital: (iv) the tax on built property; (hereinafter referred to as “Lebanese tax")

4. The Convention shall apply also to any identical or substantially similar taxes

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

Article 3 General Definitions

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

a) the terms “a Contracting State” and "the other Contracting State" mean Romania or Lebanon as the context requires;

b) the term "Romania" means Romania and, used in a geographical sense, indicates the territory of Romania including its territorial sea as well as the exclusive economic zone over which Romania exercises sovereignty, sovereign rights and jurisdiction in accordance with its internal law and with the international law, concerning the exploration and the exploitation of the natural, biological, and mineral resources existing in the sea waters, sea- bed and subsoil of these waters;

c) the term "Lebanon" means the territory of the Lebanese Republic including its territorial sea as well as the exclusive economic zone over which Lebanon exercises sovereignty, sovereign rights and jurisdiction in accordance with its internal law and with the international law, concerning the exploration and the exploitation of the natural, biological, and mineral resources existing in the sea waters, sea-bed and subsoil of these waters;

d) the term "tax" means Romanian tax or Lebanese tax as the context requires;

e) the term "person" includes an individual, a company and any other body of persons legally set up in either of the Contracting States;

f) the term “company” means any body corporate or any other 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) in the case of Romania any individual possessing the citizenship of Romania (carrying the Romanian passport or the Romanian

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identification Card and any juristic person, body of persons and any other entity deriving its status as such from the laws in force in Romania;

(i) in the case of Lebanon any individual possessing the citizenship of Lebanon (carrying the Lebanese passport or the Lebanese Identification Card) and any juristic person, body of persons and any other entity deriving its status as such from the laws in force in Lebanon;

i) the term "international traffic’ means any transport by a ship, boat, aircraft, railway or road vehicle operated by an enterprise which has its place of management in a Contracting State, except when such transport is operated solely between places situated in the other Contracting State;

j) the term "competent authority” means:

(i) in the case of Romania, the Minister of Finance or his authorized representative;

(ii) in the case of Lebanon, the Minister of Finance or his authorized representative.

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

Article 4 Resident

For the purposes of this Convention, 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 management or any other criterion of a similar nature. But this term 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 shail be determined as follows:

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

b) if the State in which he has his center of vital interests cannot be determined, or if he has not a permanent home available to him in either

State, he shall be deemed to be a resident of the State in which he has an habitual abode:

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

d) if he is a national of both States or of neither of them, the competent

authorities of the Contracting States shall settle the question by mutual agreement.

3. Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to

be a resident of the Contracting State in which its place of effective management is situated.

Article 5 Permanent Establishment

1. For the purposes of this Convention, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

2. The term "permanent establishment" includes especially: a) a place of management; b) a branch; c) an office; d) a factory; e) a workshop;

f) a farm or any plantation; and

g) a. mine, an oil or gas well, a quarry or any other place of extraction of natural resources.

3. 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 nine months within any twelve months period;

b) the furnishing of services, including consultancy services, by an enterprise of a Contracting State through employees or other personnel engaged for such purposes in the other Contracting State, provided that such activities continue for the same project or a connected project for a period or periods aggregating more than nine months within any twelve months period.

4. 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 sale of goods or merchandise belonging to the enterprise displayed in

the frame of an occasional temporary fair or exhibition after the closing of the said fair or exhibition;

e) the maintenance of a fixed place of business solely for the purpase of

purchasing goods or merchandise or of collecting information, for the enterprise;

f) 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;

g) the maintenance of a fixed place of business solely for any combination of the activities mentioned in subparagraphs a) to f), 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 7 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.

Notwithstanding the preceding provisions of this Article, an insurance

company, except for reinsurance, of a Contracting State shall be deemed to have a permanent establishment in the other Contracting State if it collects premiums on the territory of the other State or it insures risks situated therein

through a person, other than an agent of an independent status to whom paragraph 7 applies.

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, a general commission agent or any other agent of an independent

status, provided that such persons are acting in the ordinary course of their business.

8. 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

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establishment or otherwise), shall not of itself constitute to 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.

2. 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 all 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, boats, aircraft, railway and road vehicles shail 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 paragraph 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 State in which the permanent establishment is

situated or elsewhere. Such deductions shall be determined in accordance with domestic law.

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 deait with separately in other

Articles of this Convention, then the provisions of these Articles shall not be affected by the provisions of this Article.

Article 8 International Traffic

Profits from the operation of ships, boats, aircraft, railway and road vehicles in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

The profits referred to in paragraph 1 of this Article shall not include profits derived from the operations of a hotel if such activity is not linked exclusively with international traffic.

If the place of effective management of a shipping enterprise is aboard a ship, or boat then it shall be deemed to be situated in the Contracting state in which the home harbor of the ship or boat is situated, or, if there is no such home harbor, in the Contracting State of which the operator of the ship or boatis a resident.

The provisions of paragraph 1 shall apply to profits derived from the participation in a pool, a joint business or an international operating agency.

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Articie 9 Associated Enterprises

1. 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 the 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 Convention and the competent authorities of the Contracting States shail, 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 effective (beneficial) owner of the

dividends the tax so charged shall not exceed 5 per cent of the gross amount of the dividends.

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

This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

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3. The term "dividends" as used in this Article means income from shares,

"jouissance" shares, or "jouissance" rights, 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 States of which the company making the distribution is a resident.

. The provisions of paragraphs 1 and 2 shall not apply if the effective (beneficial) owner of the dividends, being a resident of a Contracting State, carries on business in other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed

base. In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company’s undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.

Article 11 Interest

Interest arising in a Contracting State and paid to a resident of the other

Contracting State may be taxed in that other State.

However, such interest may also be taxed in the Contracting State in which it

arises and according to the laws of that State, but if the recipient is the effective (beneficial) owner of the interest, the tax so charged shall not exceed 5 per cent of the gross amount of the interest. The competent authorities of

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

Notwithstanding the provisions of paragraph 2, interest arising in a Contracting

State shall be exempt from tax in that State if itis derived and effectively (beneficially) owned by the Government of the other Contracting State, a loca! authority or an administrative - territorial unit thereof or any agency or bank unit or institution of that Government, a local authority or an administrative - territorial unit or if the debt-claims of a resident of the other Contracting State are warranted, insured or directly or indirectly financed by a financial institution wholly owned by the Government of the other Contracting State.

4. Tne 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.

5. The provisions of paragraphs 1 and 2 shall not apply if the effective (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.

6. Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a local authority, an administrative - territorial unit or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated.

7. Where, by reason of a special relationship between the payer and the effective (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 effective (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 Convention.

8. The provisions of this Article shall not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the debt-claim in respect of which the interest is paid to illegally take advantage of this Article by means of that creation or assignment.

Article 12 Royalties

1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. 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

effective (beneficial) owner of the royalties, the tax so charged shall not

exceed 5 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 cinematorgraph films and films or tapes for radio or television broadcasting, transmission to the public by satellite, cable, optic fiber or similar technology, any patent, trade mark, design or model, plan, secret formula or process, or for the use or for the right to use of any 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 effective (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 shali be deemed to arise in a Contracting State when the payer is that State itself, a local authority, an administrative - territorial unit or a resident of that 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 effective (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 effective (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 Convention.

The provisions of this Article shall not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the rights in respect of which the royalties are paid to illegally take advantage of this Article by means of that creation or assignment.

Article 13 Capital Gains

Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 situated in the other Contracting State may be taxed in the Contracting State in which such property is situated.

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, boats, aircraft, railway and road vehicles operated in international traffic or movable property pertaining to the operation of such means of transport shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

Gains from the alienation of any property other than that referred to in paragraphs 1, 2 and 3 shail be taxable only in the Contracting State of which the alienator is a resident.

Article 14 Independent Personal Services

i: 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 purposes of performing his activities; or

b) if he is present in the other Contracting State for a period or periods amounting to or exceeding in the aggregate 183 days in any twelve months period commencing or ending in the calendar year concerned.

In the cases referred to in subparagraph a) or b) the income may be taxed in the other Contracting State but only so much of it as is attrioutable to the fixed base or is derived from the activities performed in the period in which the resident was present 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

1. Subject to the provisions of Articles 16, 18, 19, 20 and 21, salaries 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 exercised in the other Contracting State, such remuneration as is derived therefrom may be taxed in that other State.

2. 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 shail 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 period of tweive months commencing or ending in the calendar year concerned; and

b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and

c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.

3. Notwithstanding the preceding provisions of this Article, remuneration derived by a resident of a Contracting State in respect of an employment exercised aboard a ship, boat, aircraft, railway and road vehicle operated in intemational traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

Article 16 Director's 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

1. Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theater, motion picture, radio or television artiste, ora musician, or as a sportsman from his

personal activities as such exercised in the other Contracting State, may be taxed in that other State.

2. 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 provisions of paragraphs 1 and 2, the income derived

from the activities referred to in paragraph 1 within the framework of cultural or sports exchanges agreed to by the governments of the Contracting States and carried out other than for the purpose of profit, shall be exempted from tax in the Contracting State in which these activities are exercised.

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 of this Article pensions and

other similar payments made under the social security legislation of a Contracting State shall be taxable only in that State.

Article 19 Government Service

1. a) Remuneration, other than a pension, paid by a Contracting State or a local authority thereof or an administrative - territorial unit thereof to an individual in respect of services rendered to that State or authority or unit shail 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 State; or ii) did not become a resident of that State solely for the purpose of rendering the services.

2. a) Any pension paid by, or out of funds created by a Contracting State or a

local authority thereof or an administrative - territorial unit thereof to an individual in respect of services rendered to that State or authority or unit 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 State.

3. The provisions of Articles 15, 16 and 18 shall apply to remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a local authority thereof or an administrative - territorial unit thereof.

Article 20 Students and Trainees

1. A resident of a Contracting State who is temporary present in the other Contracting State as a student or a trainee who receives a technical, professional or business training shall not be taxed in the other Contracting State for remittances from abroad for the purpose of his maintenance, education or training or as a scholarship to continue his education for a period of 7 years.

2. Remuneration paid to the student or trainee, as the case may be, for services rendered in the other State shall not be taxed in that other State for a period of 2 years provided that such services are connected with his education, maintenance or training.

Article 21 Teachers, Professors and Researchers

1. An individual who is or was a resident of a Contracting State immediately before making a visit to the other Contracting State and who, at the invitation of any university, college, school or other similar non-profitable educational institution, which is recognized by the Government of that other Contracting “State, is present in that other Contracting State for a period not exceeding two years from the date of his first arrival in that other Contracting State, solely for the purpose of teaching or research or both, at such educational institution shail be exempt from tax in that other Contracting State on his remuneration for teaching or research.

2. The provisions of paragraph 1 of this Article shall not apply to income from research if such research is undertaken not in the public interest but for the private benefit of a specific person or persons.

Article 22 Other Income

1. Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Convention shall be taxable only in that State.

However, any such income derived by a resident of a Contracting State from sources in the other Contracting State may also be taxed in that other 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 Taxation of Capital

Capital represented by immovable property, as defined in paragraph 2 of Article 6, owned by a resident of a Contracting State and situated in the other Contracting State may be taxed in that other 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 the Contracting State in which the permanent establishment or fixed base is situated.

Capital represented by ships, boats, aircraft, railway and road vehicles operated by an enterprise of a Contracting State in international traffic, and movable property pertaining to the operation of such means of transport shall be taxable only in the Contracting State in which the place of effective management 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 Elimination of Double Taxation

In the case of Romania, double taxation shall be eliminated as follows: Where a resident of Romania derives income or items of income referred to in Articles 10, 11, and 12, or profits, gains or owns capital which under the law of Lebanon and in accordance with this Convention may be taxed in Lebanon, Romania shall allow as a credit against its tax on the income, items of income, profits, gains or on capital an amount equal to the tax paid in Lebanon.

The amount of credit, however, shall not exceed the amount of Romanian fax on that income, items of income, profits or gains, or on capital computed in accordance with the taxation laws and regulations of Romania.

2. In the case of Lebanon, double taxation shall be eliminated as follows:

Where a resident of Lebanon derives income or items of income referred to in Articles 10, 11, and 12, or profits, gains or owns capital which under the law of Romania and in accordance with this Convention may be taxed in Romania, Lebanon shall allow as a credit against its tax on the income, items of income, profits, gains or on capital an amount equal to the tax paid in Romania.

The amount of credit, however, shall not exceed the amount of Lebanese tax on that income, items of income, profits or gains, or on capital computed in accordance with the taxation laws and regulations of Lebanon.

Article 25 Non-Discrimination

1. 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.

2. Stateless persons who are residents of a Contracting State shall not be subjected in either 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 the State concerned in the same circumstances are or may be subjected.

3. The taxation on a permanent establishment which an enterprise of Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. The provisions of this Article 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.

4. Except where the provisions of Article 9, paragraph 7 of Article 11, or paragraph 6 of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State. Similarly, any debts of an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable capital of such enterprise, be deductible under the same conditions as if they had been contracted 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.

Article 26 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 Convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 of Article 25, to that of the Contracting State of which he is a national. The case must be presented within 2 years from the first notification of the action resulting in taxation not in accordance with the provisions of the Convention.

The competent authority shall endeavor, if the objection appears to it to be justified and if itis not itself able to arrive at a satisfactory solution, to resoive 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 Convention. 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 endeavor to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of this Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention.

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 in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States.

Article 27 Exchange of Information

1. The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention, especially in order to prevent fraud or evasion in respect of such taxes. The exchange of information is not restricted by Article 1. Any information received by a Contracting State shall be treated as secret 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 the Convention. 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 business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (ordre public).

Article 28 Members of Diplomatic Missions and Consular Posts

Nothing in this Convention 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 29 Entry Into Force

This Convention shali be ratified and shall enter into force on the 30th day after the date of the last notification indicating that both States have complied with the domestic legal procedures required in each State for its entry into force. The Convention shall apply in the case of the two Contracting States:

i) in respect of taxes withheld at the source to the income derived on or after the first day of January in the calendar year next following the year in which the Convention enters into force; and

ii) in respect of other taxes on profit, income and on capita! derived on or after the first day of January in the calendar year next following the year in which the Convention enters into force.

Article 30 Termination

1. This Convention shall remain in force indefinitely.

2. Either of the Contracting States may give to the other Contracting State, through diplomatic channels, written notice of termination on or before the thirtieth day of June in any calendar year from the fifth year following that in which the Convention entered into force. In such event, this Convention shall cease to have effect in the case of the two Contracting States:

i) in respect of taxes withheld atthe source to the income derived on or after the first day of January in the calendar year next following the year in which the notice is given; and

ii) in respect of other taxes on profit, income and on capital derived on or after the first day of January in the calendar year next following the year in which the notice of termination is given.

IN WITNESS WHEREOF the undersigned, being duly authorised thereto by their respéctive Governments, have signed this Convention.

DONE in duplicate at Beirut at the 28th of June, 1995 in the Arabic, Romanian and English languages, each text being equally authentic. In case of divergence of interpretation, the English text shall prevail.

For the Government For the Government of of the Lebanese Republic