Saudi Arabia - Russia Tax Treaty

CONVENTION

between the Government of the Kingdom of Saudi Arabia and

the Government of the Russian Federation

for the avoidance of double taxation and the prevention of tax evasion

with respect to taxes on income and on capital

CONVENTION

between the Government of the Kingdom of Saudi Arabia and the Government of the Russian Federation

for the avoidance of double taxation and the prevention of tax evasion with respect to taxes

on income and on capital

The Government of the Kingdom of Saudi Arabia and the Government of
the Russian Federation,

Desiring to conclude a Convention to avoid double taxation and to
prevent tax 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

  This Convention shall apply to taxes on income and on capital imposed

on behalf of each Contracting State or of its political or administrative sub-divisions or local authorities, irrespective of the manner in which they are levied.

  There shall be regarded as taxes on income and on capital all taxes

imposed on total income and on total capital, or on elements of income or
of capital, including taxes on gains from the alienation of movable or immovable property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.

  This Convention shall apply to the following existing taxes:

(a) In the case of the Kingdom of Saudi Arabia:

(i) The Zakat,

(ii) The income tax including the natural gas investment tax (hereinafter referred to as the "Saudi Tax");

(b) In the case of the Russian Federation:

(i) Tax on profits of organisations,

(ii) Income tax on individuals,

(iii) Tax on property of organisations,

(iv) Tax on property of individuals (hereinafter referred to as the "Russian Tax").

  The  provisions  of  this  Convention  shall  also  apply  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. The
competent authorities in both Contracting States shall notify each other of any significant change in their respective taxation laws.

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" means the Kingdom of Saudi Arabia or the Russian Federation as the
context requires;

(b) The term “Kingdom of Saudi Arabia” means the territory of the Kingdom of Saudi Arabia and also includes the area outside the territorial waters, where the Kingdom of Saudi Arabia exercises its sovereign rights and jurisdiction in its waters and with respect to its seabed, subsoil and natural resources by virtue of its law and the international law;

(c) The term "the Russian Federation” means the territory of the Russian Federation as well as its exclusive economic zone and continental shelf where the Russian Federation exercises its sovereign rights and jurisdiction in
conformity with the United Nations Convention on the Law of the Sea, 1982;

(d) The term "person" includes any natural person, any company or any other body of persons, including inter alia bodies politic (the State, its political or administrative sub-division or local authorities), partnerships, trusts and foundations;

(e) The term "company" means any juridical person or any entity which is treated as a juridical person for tax purposes;

(f) The terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of

a Contracting State and an enterprise carried on by a resident of
the other Contracting State;

(g) The term “national” means:

(i) Any individual possessing the nationality or citizenship of a Contracting State;

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

(h) The term "international traffic" means any transport by a
ship or aircraft operated by an enterprise which has its place of effective management in a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;

(i) The term "competent authority" means:

(i) In the case of the Kingdom of Saudi Arabia, the Ministry of Finance represented by Minister of Finance or his authorized representative;

(ii) In the case of the Russian Federation, the Ministry of Finance or its authorized representative.

  As regards the application of the Convention 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 Convention applies, any meaning
under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State.

Article 4 Resident

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

Contracting State" means:

(a) Any person who, under the law of that State is liable to taxes in that State by reason of his domicile, residence, place of management,
place of registration or any other criterion of a similar nature;

(b) The Government of any of the two Contracting States or any of its legal institutions, agencies or its local authorities.

  Where  by  reason  of  the  provisions  of  paragraph  1  of  this

Article, an individual is considered to be a resident of both Contracting States, then his status shall be determined as follows:

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

(b) If the Contracting 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 Contracting State, he shall be deemed to be a resident only of the Contracting State in which he has an habitual abode;

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

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

  Where by reason of the provisions of paragraph 1 herein, a person

other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident only of the State in which its place of effective management is situated.

Article 5 Permanent Establishment

  For  the  purpose  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.

  The term "permanent establishment" includes but is not limited to:

(a) A place of management;

(b) A branch;

(d) A factory;

(e) A workshop;

(f) A mine, a quarry or any other place of extraction 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 continue for a period of more than six months;

(b) The furnishing of services, including consultancy services, by
an enterprise through employees or other personnel engaged by the
enterprise for such purpose, but only where activities of that nature continue (for the same or a connected project) within the country for a period or periods
aggregating more than six months within any 12-month period.

  Notwithstanding   the  preceding   provisions  of  this   Article  a

permanent establishment does not include a fixed place of business used only for one or more of the following:

(a) The use of facilities for the sole purpose of storage, display of goods or merchandise belonging to the enterprise;

(b) The maintenance of a stock of goods or merchandise belonging to the enterprise for the sole purpose of storage, display;

(c) The maintenance of a stock of goods or merchandise belonging to the enterprise for the sole purpose of processing by another enterprise;

(d) The maintenance of a fixed place of business for the sole purpose of purchasing goods or merchandise or for collecting information for the enterprise;

(e) The maintenance of a fixed place of business for the sole purpose of advertising, submitting data, or similar activities of preliminary or auxiliary nature for the enterprise.

  A  person  acting  in  one  of  the  two  Contracting  States  on

behalf of an enterprise of the other Contracting State - other than an agent of an independent status to whom the provisions of paragraph 6 of this Article apply
– shall be deemed to be a permanent establishment in the first mentioned State, if this person has in the first mentioned Contracting State an authority to conclude contracts in the name of that enterprise and has habitually exercised such authority in it.

  An enterprise in one of the two Contracting States shall not be deemed

to have a permanent establishment in the other 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 this broker or agent is acting in the ordinary course of his business.

  An enterprise in one of the two Contracting States shall not be deemed

to have a permanent establishment in the other Contracting State merely because it carries on at the end of a trade exhibition or conference in the other Contracting State sale of goods or merchandise it displayed at that trade
exhibition or conference.

  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 Contracting State.

  The term "immovable property" shall have the meaning provided for in

the laws or regulations of the Contracting State in which the property in question is situated. This term shall in any case include property accessory to
immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply,
usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources. Ships and aircraft shall not be regarded as immovable property.

  The provisions of paragraph 1 of this Article shall apply to income

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

  The provisions of paragraphs  1 and 3 shall also apply to the income

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

Article 7 Business Profits

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

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

  Subject   to   the   provisions   of   paragraph   3,   where   an

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

  In the determination of the profits of a permanent establishment,

there shall be allowed as deductions expenses which are incurred for the purposes of the business of the permanent establishment including executive and
general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere. However, no such deduction
shall be allowed in respect of amounts, if any, paid (otherwise than towards reimbursement

of actual expenses) by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees
or other similar payments in return for the use of patents or other rights, or by way of commission, for specific services performed or for management, or, except in the
case of a banking enterprise, by way of income from debt-claims with regard to moneys lent to the permanent establishment. Likewise, no account shall be taken,
in the determination of the profits of a permanent establishment, for amounts charged (otherwise than towards reimbursement of actual expenses), by the
permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission for specific services
performed or for management, or, except in the case of a banking enterprise, by way of debt-claims with regard to moneys lent to the head office of the enterprise or any of its other offices.

  The  term "business profits"  includes, but is  not limited to  income

derived from manufacturing, mercantile, banking, insurance, from the operation of inland transportation, the furnishing of services and the rental of tangible
personal movable property. Such a term does not include the performance of
personal services by an individual either as an employee or in an independent capacity.

  Where  profits  include  items  of  income  which  are  dealt  with

separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.

Article 8

Shipping and Air Transport

  Profits from the operation of ships or aircraft in international

traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

  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 harbour of the ship or boat is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship
or boat is a resident.

  The   provisions   of   paragraph   1   shall   also   apply   to

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

Article 9 Associated Enterprises

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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 a 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 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
Contracting 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 Contracting State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed 5% (five per cent) of the gross amount of the dividends.

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

  Notwithstanding  the  provisions  of  paragraphs  1  and  2  of  this

Article, dividends paid by a company which is a resident of a Contracting State shall not be taxable in that Contracting State if the beneficial owner of the dividends is:

(a) the Government, a political or administrative sub-division or
local authority of the other Contracting State; or

(b) the Central Bank of the other Contracting State; or

(c) other governmental agencies or financial institutions as may be specified and agreed to in exchange of notes between the competent authorities of the Contracting States.

  The  term  "dividends"  as  used  in  this  Article  means  income

from shares, "jouissance" shares or "jouissance" rights, mining shares, founders' shares or other rights not being debt-claims, participating in profits, as well as income from other corporate rights which is subject to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident.

  The  provisions  of  paragraphs  1,  2  and  3  shall  not  apply  if

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

  Where a company which is a resident of a Contracting State derives

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

Article 11

Income from Debt-Claims

  Income  from  debt-claims  arising  in  a  Contracting  State  and

paid to a resident of the other Contracting State may be taxed in that other State.

  However,   such   income   from   debt-claims   may   also   be

taxed in the Contracting State in which it arises and according to the laws of that Contracting

State, but if the beneficial owner of the income from debt-claims is a resident of the other Contracting State, the tax so charged shall not exceed 5% (five per cent) of the gross amount of such income from debt-claims.

  Notwithstanding  the  provisions  of  paragraph  2,  income  from

debt claims arising in a Contracting State shall be exempt from tax in that State if:

(a) the payer of the income from debt-claims is the Government of that Contracting State or a local authority thereof; or

(b) the income from debt-claims is paid to the Government of the other Contracting State or local authority thereof or any agency or
instrumentality (including a financial institution) wholly owned by that other Contracting State or local authority thereof; or

(c) the income from debt-claims is paid to any other
agency or instrumentality (including a financial institution) in relation to
loans made in application of any agreement concluded between the Governments
of the Contracting States.

  The term "Income from Debt-Claims" as used in this Article means income

from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and
in particular, income from government securities, and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as income from debt-claims for the purpose of this Article.

  The provisions of paragraphs 1 and 2 shall not apply if the beneficial

owner of the income from debt-claims, being a resident of a Contracting State, carries on business in the other Contracting State in which the income from
debt-claims arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which such 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.

  Income  from  debt-claims  shall  be  deemed  to  arise  in  a

Contracting State when the payer is that State itself, a political subdivision, a
local authority or a resident of that State. Where, however, the person paying such income, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the income is paid was incurred, and such income is borne by such
permanent establishment or fixed base, then such income 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 income from debt-claims, 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 payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

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 Contracting 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% (ten per cent) of the gross amount of the royalties.

  The  term  "royalties"  as  used  in  this  Article  means  payment

of any kind received as a consideration for the use of, or the right to use,
any copyright of literary, artistic or scientific work including cinematography films,
or films 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 equipment, or for information
concerning industrial, commercial or scientific experience.

  The provisions of paragraphs 1 and 2 shall not apply if the beneficial

owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through
a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with
such permanent establishment or fixed base. In such 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 that State itself, a political subdivision, a local authority 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 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 Convention.

Article 13 Capital Gains

  Capital 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.

  Capital gains derived by a resident of a Contracting State from the

alienation of movable property that formed part of the business property of a
permanent

establishment of the alienator in the other Contracting State or is closely connected with the performance of independent personal services (to which
Article 14 applies), by the alienator in that other State, including capital gains arising from the alienation of such a permanent establishment, may be taxed in that other State.

  Notwithstanding  the  provisions  of  paragraph  2,  the  capital

gains resulting from the alienation of the property of shares that constitute a share in the capital of the company which is a resident of one of the two Contracting States are taxable in the State in which the company exists.

  Capital  gains  derived  from  the  alienation  of  any  property

other than that referred to in paragraphs 1, 2 or 3, shall be taxable only in the Contracting State of which the alienator is a resident.

Article 14 Independent Personal Services

  Income   derived   by   a   resident   of   a   Contracting   State

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

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

(b) If his stay in the other Contracting State is for a period
or periods amounting to or exceeding in the aggregate 183 days in any twelve-month period commencing or ending in the fiscal year concerned; in that case, only so much of the income as is derived from his activities performed in that other State may be taxed in that other State; or

(c) If the remuneration for his activities in the other Contracting State is paid by a resident of that Contracting State or is borne
by a permanent establishment situated in that Contracting State and exceeds in the fiscal year one hundred thousand US dollar; in that case, so much of the income as
is derived from the individual's activities in that other State may be taxed in that State.

  The   term   "professional   services"   includes   especially,   the

independent scientific, literary, 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 and 19, 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 commencing or ending in the fiscal year concerned, and

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

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

  Notwithstanding  the  preceding  provisions  of  this  Article,

remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic, or aboard a boat engaged in inland waterways transport, may be taxed in the Contracting State in which the place of effective management of the enterprise is situated.

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 Artists 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 artist, 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.

Article 18 Pensions

  Subject   to   the   provisions   of   Article   19,   pensions   and

other similar remuneration paid to a resident of a Contracting State in
consideration of past employment shall be taxable only in that State.

  Notwithstanding  the  provisions  of  paragraph  1,  pensions  paid

and other payments made under a public scheme which is part of the social security system of a Contracting State or a political, or administrative sub-division
or a local authority thereof shall be taxable only in that State.

Article 19 Government Service

Salaries, wages and other similar remunerations and pensions
paid by a Contracting State, its political or administrative sub-division, or a local authority thereof to an individual in respect of services rendered to that State, its political or administrative sub-division, or local authority thereof shall be taxable only in that State, unless those services are performed in connection with industrial or business activities carried on by the Contracting State, its political or
administrative sub- division, or a local authority thereof in the other Contracting State. In this case, they may be taxed by the other Contracting State.

Article 20 Students

  Payments  which  a  student  or  trainee  who  is  or  was  a

resident of a Contracting State and who is present in the other Contracting State for the purpose of education or vocational or occupational training, receives for the purpose of his maintenance, education or training shall not be taxable in that other State, provided that the payments are transferred from sources outside that other State.

  Payments received by the student or trainee who is or was a resident

of a Contracting State and who is present in the other Contracting State for the purpose of education or training and which constitute remuneration in respect of services performed in that other Contracting State are not taxable in that
other State, provided that services are connected with education or training or are necessary for maintenance purposes.

Article 21 Teachers and Researchers

Remunerations which a teacher or researcher who is or was a resident in a Contracting State prior to being invited to the other Contracting
State for the purpose of teaching or conducting research, receives in respect of such activities shall not be taxed in that Contracting State for a period not exceeding two years.

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 Convention shall be
taxable in that State.

  The provisions of paragraph 1 shall not apply to income, other than

income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on
business in the other Contracting State through a permanent establishment situated
therein, or performs in that other State independent personal services from a
fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base.
In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.

Article 23 Capital

  Capital represented by immovable property referred to in Article 6,

owned by a resident of a Contracting State and situated in the other
Contracting State, may be taxed in that other State.

  Capital  represented  by  movable  property  forming  part  of  the

assets of a permanent establishment which a resident of a Contracting State has in the other Contracting State or by movable property pertaining to a fixed base available to such resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, may be taxed in that other State.

  Capital  represented  by  ships  and  aircraft  operated  by  an

enterprise of a Contracting State in international traffic, or by other kinds of movable property in connection with the operation of such ships and aircraft shall be taxable only in that Contracting State .

   All other elements of capital of a resident of a Contracting State

shall be taxable only in that State.

Article 24

Methods for Elimination of Double Taxation

  It  is  agreed  that  double  taxation  shall  be  avoided  in

accordance with the following paragraph.

  Where  a  resident  of  a  Contracting  State  derives  income  or

owns capital which , in accordance with the provision of this Convention, may be taxed in the other Contracting State, the first-mentioned State shall credit the amount paid, as a tax specified in Article 2 of this Convention, against the tax levied in that State. The amount of credit, however, shall not exceed the amount of the
tax on that income or capital computed in accordance with its taxation laws and regulations.

Article 25 Investment Laws

Tax which was subject to exemption or deduction for a limited period under the provisions of encouragement of investment laws of either Contracting State shall be deemed to have been settled, and must be deductible in the other Contracting State from the taxes payable on such incomes.

Article 26

Mutual Agreement Procedure

  Where a person considers that the actions of one or both of the 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 State of which he is a resident. The case must be presented within two years from the first notification of the action resulting in taxation not in accordance with the
provisions of this Convention.

  The competent authority shall endeavour, if the objection appears to

it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the

case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with this Convention. Any agreement reached shall be implemented notwithstanding
any time limits in the domestic law of the Contracting States.

  The  competent  authorities  of  both  Contracting  States  shall

endeavour to resolve by mutual agreement any difficulties or doubts arising
as to the interpretation or application of this Convention. They may also
consult together for the elimination of double taxation in cases not provided for in this Convention.

  The   competent   authorities   of   the   Contracting   States

shall by mutual agreement settle the appropriate mode of application of this
Convention and, especially, the requirements to which the residents of a Contracting State shall be subjected in order to obtain, in the other State, the tax reliefs
or exemptions provided for by this Convention.

Article 27 Exchange of Information

  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 this Convention insofar as the taxation thereunder is not contrary to this Convention. The exchange of information is not restricted by Article 1. Any
information received by a Contracting State shall be treated as confidential in the same manner as information obtained under the domestic laws of that State and
shall be disclosed only to persons or authorities (including courts and
administrative

bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by this 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 trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy.

Article 28

Diplomatic and Consular Officers

Nothing in this Convention shall affect the fiscal privileges of
members of diplomatic missions or members of consular missions under the general rules of international law or under the provisions of special agreements.

Article 29 Entry into Force

  Each  Contracting  State  shall  notify  the  other  Contracting

State through diplomatic channels of the completion of the procedures required by its regulations for entry into force of this Convention. This Convention shall enter into force for the first time as of the first day of the second month following that month in which the last notice was given.

  The provisions of this Convention shall apply for the first time:

(a) In respect of taxes withheld at the source on the amounts paid on or after the first day of January of the calendar year following that
in which the Convention enters into force;

(b) In respect of other taxes on income and on capital, to taxes chargeable for any taxable period beginning on or after the first day of January in any calendar year following that in which the Convention enters into force.

Article 30 Termination

  This  Convention  shall  remain  in  force  for  a  period  of  ten

years and shall remain in force thereafter for an unlimited period unless renounced in writing by either Contracting State through diplomatic channels twelve months
before its expiration. After the expiry of the period of ten years, this
Convention may be renounced at any time by either Contracting State giving twelve months' notice.

  In the case of application of this Convention for the last time:

(a) In respect of taxes withheld at the source on the amounts paid on or before 31 December of the calendar year in the course of which the
notice of termination of this Convention was given.

(b) In respect of other taxes on income derived in the calendar
year in which the notice of termination of this Convention was given.

(c) As regards the tax on capital owned on the first of January of the calendar year at the end of which it ceases to be in force.

In witness whereof the undersigned, being duly authorized thereto,
have signed this Convention.

Done in duplicate at Riyadh on February 11, 2007 in the Arabic,
Russian and English languages, all texts being equally authentic. In case of
divergence of interpretation the English text shall be operative one.

FOR THE GOVERNMENT OF THE KINGDOM OF SAUDI ARABIA

FOR THE GOVERNMENT OF THE RUSSIAN FEDERATION

IBRAHIM A. AL-ASSAF SERGEY SHATALOV MINISTER OF FINANCE VICE- MINISTER OF FINANCE

PROTOCOL

At the moment of signing the Convention between the Government of the Kingdom of Saudi Arabia and the Government of the Russian Federation for the avoidance
of double taxation and the prevention of tax evasion with respect to taxes on income and on capital, the undersigned have agreed that the following provisions shall form an integral part of the Convention:

Ad Article 4

For the purpose of this Convention, the term “resident of a Contracting State” also means:

A legal person organized under the law of a Contracting State and that is generally exempt from tax in that State and is established and maintained in that State either:

(a) Exclusively for a religious, charitable, educational, scientific,
or other similar purpose; or

(b) To provide pensions or other similar benefits to employees pursuant to plan.

Ad Article 7

    Notwithstanding  other  provisions  of  Article  7  of  this

Convention, the business profits derived by an establishment of a Contracting State
from the exportation of merchandise to the other Contracting State shall not be taxed in that

other Contracting State. Where export contracts include other activities carried on in the other Contracting State such activities shall be taxed in the other Contracting State.

    Nothing in Article 7 of this Convention shall affect the operation

of any law of a Contracting State relating to tax imposed on profits from insurance with non- residents provided that if the relevant law in force in either Contracting State at the date of signature of this convention is varied (otherwise than in minor respects so as not to affect its general character) the Contracting States shall consult with each other with a view to agreeing to any amendment of this paragraph as may be appropriate.

Ad Article 10

In accordance with the provisions of paragraph 3, it is agreed that dividends paid by a company which is a resident of a Contracting State shall not be taxable in that Contracting State if the beneficial owner of the dividends is:

(a) any governmental institution of the other Contracting State created under national legislation of the other Contracting State;

(b) any entity established in the other Contracting State by the Government of that Contracting State or any of its governmental institutions,
together with similar bodies of other states;

(c) a company which is a resident of the other Contracting State and is controlled or at least 25 per cent of its capital is owned directly by the Government

or a governmental institution or other entity thereof, as defined in sub-paragraphs

(a) and (b) above.

Ad Article 19

In the case of the Kingdom of Saudi Arabia the provisions of this
Article also apply to the salaries, wages and other similar remunerations and pensions paid by public juridical persons.

Ad Article 24

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

FOR THE GOVERNMENT OF THE KINGDOM OF SAUDI ARABIA

FOR THE GOVERNMENT OF THE RUSSIAN FEDERATION

IBRAHIM A. AL-ASSAF SERGEY SHATALOV MINISTER OF FINANCE VICE- MINISTER OF FINANCE

Saudi Arabia - Russia Tax Treaty

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