Turkmenistan - Lithuania Tax Treaty

AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA AND THE GOVERNMENT OF TURKMENISTAN 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 Republic of Lithuania and the Government of Turkmenistan.

desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital,

have agreed as follows:

CHAPTER I SCOPE OF THE AGREEMENT

Article 1

Persons Covered

This Agreement shall apply to persons who are residents of one or both of the

Contracting States.

Article 2

Taxes Covered

This Agreement shalt apply to taxes on income and on capital imposed on behalf of a Contracting State of its administrative subdivisions or local authorities, irrespective of the manner in which they are levied.
There shall be regarded as taxes on income and on capital ail 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 en the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.

The existing taxes to which the Agreement shalt apply are in particular: a) in Lithuania:

(1) the pretit tax; (iii) the income tax; (iii) the immovable property tax; (hereinafter referred to as "Lithuanian tax”); b) in Turlmienistzmz (i) the tax on profits (income) of juridical persons; (ii) the tax on income of individuals; (iii) the tax on property;

(hereinafter referred to as “’Turkmen tax").

4‘ The Agreement shall apply EliSO te any identical or substantially similar taxes that are imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify

each other of any signiﬁcant changes that have been made in their taxation laws.

CHAPTER II DEFINETIONS

Article 3

General Definitions

1 . For the purposes of this Agreement, unless the context otherwise requires: a) the term "Lithuania" means the Repubiie of Lithuania and, when used in the

geographical sense, means the territory under its sovereignty and other areas over which the Republic of Lithuania exercises sovereign rights or jurisdiction in accordance with international law;

b) the term “Turkmenistan” means the territory et‘ rt‘urkmenistan comprised

within its land borders together with the maritime zones (including both

marine and sub—inarine zones) over which Turkmenistan exercises sovereign or jurisdictional rights under international law; c) the terms "a Contracting State" and "the other Contracting State" mean

Lithuania or Turkmenistan, as the context requires;

d) the term "person" includes an individual, a company and any other body of persons; e) the term "company" means any body corporate or any entity that is treated

as a body corporate for tax purposes;

f) the terms "enterprise of a Contracting State" ant "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 "international traffic” means any transport by a Ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; 11) the term "competent authority“ means: (i) in Lithuania, the Minister of Finance or his authorised representative; (ii) in 'E‘tn‘kmenistan, the Ministry Of Finance and the Main State Tax Service 01' their authorized representative; i) the term "national", in relation to a Contracting State, means: (i) any indivithiat possessing:I the natienaiity of that Contracting State; and (ii) any iegal person partnership or association deriving its status as

such from the laws in force in that Contracting State.

AS regards the applicatien 0f the Agreement at any time by a Contracting State, any term not defined therein shalt, unless the context otherwise requires, have the meaning that it has at that time under the taw Ofthat State for the purposee at the taxes to which the Agreement applies. any meaning under the applicable tax laws of that State

prevailing over a meaning given tn the term under other ans et“ that State.

Article 4

Resident

For the purposes of this Agreement. the term "resident of a Contracting State" means any person who, under the laws of that State: is liable to tax therein by reason of his domicile, residence, place of incorporation, place of management or any other criterion of a similar nature, and also includes that State and any administrative subdivision or local authority thereof. This term, however, does not include any person who is liable to tax in that State in respect only of income from sources in that State or capital situated

therein.

Where by reason el‘ the provisions otiparagraph 1 an individual is a resident Ol‘heth 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 avaiiable to him in both States, he shall be deemed to be a resident only 03' the State with which his personal and economic relations are closer (centre of vital interests):

h) if the State in which he has his centre ol‘ Vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident only of the State in which he has an habitual ahecte;

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

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

Where by reason of the proytsions of paragraph I a person other than an indivédual is a resident of bath Contracting States, the eempetent authorities of the Contracting States shaft endeavour to settle the question by mutual agreement having regard to the person’s place of incorporation, the place of effective management and any

other relevant factors. In the absence of such agreement, let the purposes of the

Agreement, the person shall not be entitled to claim any beneﬁts provided by this Agreement.

Article 5 Permanent Establishment

For the purposes of this Agreement, the term "permanent establishment"

means a ﬁxed place at business through which the business of an enterprise is wholly or

partly carried on.

The term "permanent establishment" includes especially:

a) a place of management;

b) a branch;

c) an ofﬁce;

d) a Factory;

e) a workshop, and

f) a mine, an oil or gas well, a quarry or any other place of exploration,

extraction and development of natural resources.

The term "permanent establishment" also includes: a) a building site, a construction, assembly or installation project or

supervisory activities in connection therewith, but only when such site, project, or activities last for more than twelve months;

b) the furnishing of services. including consultancy servicea by an enterprise through employees or other personnel engaged by the enterprise for such purposes, but only if activities of that nature continue (for the same or a connected project) within a Contracting State tor a period of periods aggregating more than 183 days within any twelve-month period.

Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall be deemed not to include: a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;

b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose ot'storage, display Ot' delivery;

c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose ot’proeessing by another enterprise;

d) the maintenance 01’ a fixed place of business solely For the purpose ot" purchasing goods or merchandise or 01" collecting information, for the enterprise;

e) the maintenance of a fixed place at business solely for the purpose of carrying on, for the enterprise, any other activity oi? a preparatt'iry or auxiliary character;

f) the maintenance of a ﬁxed place of business solely for any combination of activities mentioned in subparagraphs a) to e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.

Notwithstanding the provisions of paragraphs 1 and 2, where a person *

other than an agent of an independent status to whom paragraph 6 applies m is acting on behalf of an enterprise and has, and habituaily 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 tor the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a ﬁxed place ol‘ business, would not matte this ﬁxed place ol’ business a permanent establishment under the

provisions of that paragraph.

An enterprise shall not be deemed to have a permanent establishment in a C‘ontractinu State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, he will not

be considered an agent of an independent states within the meaning of this paragraph.

The fact that a company which is a resident of a Contracting State controls

or is controlled by a company which is a resident of the other Contracting State, or which 6

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.

CHAPTER Hi TAXATION OF ENCOME

Article 6

income from lmmovabie Property

Income derived by a resident a Contracting, State from immovable property (including income from agriculture or forestry) situated in the other Contracting

State may be taxed in that other State.

The term "innnovable property" shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or ﬁxed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships and aircraft shall not be regarded as immovable property.
The provisions ol'paragraph 1 shall apply to income derived l‘rom the direct Lise, letting, or use in any other form ol’ immovable property, as well as income from the

alienation of immovable property.

Where the ownership ot‘ shares or other corporate rights in a company entitles the owner ol‘ such shares or corporate rights to the enjoyment ot‘ immovable property held by the company, the income from the direct use, letting, or use in any other term ot‘ such right to the enjoyment may be taxed in the Contracting State in which the

immovable property is situated.

The provisions of paragraphs 1, 3 and 4 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 01" a Contracting State shall be taxable only in that State unless the enterprise carries on business in the 011101' Contracting State through a permanent estabtishment situated therein. it' the enterprise carries on business as al‘oresaid, the proﬁts ot‘ the enterprise may be taxed in the other State but only so much 0 1' 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 01' similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.
In determining the proﬁts of a permanent estabiishment, there shalt be allowed as deductions expenses which are incurred for the purposes 01’ the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere. The expenses to be allowed as deductions by a Contracting State shall include only expenses

that ate deductible under the domestic laws ot'that State.

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 shalt preclude that Contracting State from determining the proﬁts to be taxed by such an apportionment

as may he customary; the method of apportionment adopted shat], however; be such that

the result shall be in aeeoa‘danee with the principles contained in this Article.

No proﬁts shall be attributed to a permanent establishment by reason 01‘ the

mere purchase by that permanent establishment 01‘ goods or merchandise 1'or the enterprise.

For the purposes ol’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 01‘ income which are dealt with separately in other Articles of this Agreement: then the provisions 01" those Articles shall not be tllTCCtCCl

by the provisions of this Article.

Article 8

Shipping and Air Transport

Proﬁts of an enterprise 01" a Contracting State from the operation ot" ships or

aircraft in international trat’tic shall be taxable only in that State.

The provisions of paragraph 1 shall also apply to protits From the

participation in a pool, a j oint business or an internationat operating agency.

Article 9

Associated Enterprises

Where

a) an enterprise of a Contracting State participates directiy or indirectly in the management, control or capital 01' an enterprise ot‘ the other Contracting State, or

b) the same persons participate directly Ot' indirectly in the management, control or capital of an enterprise ot‘ a Contracting State and an enterprise ol‘

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 pt‘ol’its which would, but 1‘or those conditions, have accrued to one 01‘ the enterprises, but. by reason of those conditions. have not so

accrued, may be included in the proﬁts ol’that enterprise and taxed accordingly.

Where a Contracting State includes in the proﬁts of an enterprise 01‘ that State — and taxes accordingly - prolits on which an enterprise 01' the other C ontracting State has been charged to tax in that other State and the prolits so included are prolits which would have accrued to the enterprise of the ﬁrst-mentioned State ii‘ 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 01' the tax charged therein on those proﬁts, il’ it considers this adjustment to be j usti tied. In determining such adjustment, clne regard shalt be had to the other provisions of this Agreement and the competent authorities of the Contracting States shall it necessary

consult each other.

Article 1t)

Dividends

Dividends paid by a company which is a resident at 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 accordingI to the laws ot‘ that State. but it' the beneﬁcial owner 01’ the dividends is a resident of the other Contracting State, the tax so charged shalt not exceed:

a) 5 per cent of the gross amount 01’ the dividends 11’ the benetieial owner is a company (other than a partnership) which holds directly at least 25 per cent otthe capital 01‘ the company paying the dividends;

b) 10 per cent otthe gross amount 01“ the dividends in all other cases.

This paragraph shall not affect the taxation of the company in respect of the proﬁts

out of which the dividends are paid.

.2. The term "dividends" as used in this Article means income l‘i'om shares or other rights, not being debt-claints. participating in proﬁts, as well as income 1"1'om other corporate rights which is subjected to the same taxation treatment as income l'i‘otn shares

by the laws ot’the State 01" which the company making the distt'ibution is a resident.

The provisions ol’paragraphs 1 and 2 shall not apply if the beneﬁcial owner of the dividends, being a resident ot“ a Contracting1 State, carries on business in the other Contracting:i State 01‘ which the company paying the dividends is a resident1 through a permanent establishment situated therein, or per1brms in that other State independent personal services from a [Exed base situated therein. and the holding:' in respect 01" which the dividends are paid is effectively connected with such permanent establishment or ﬁxed

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

Where a company which is a resident 01‘ 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 o1‘ that other State or insofar as the holding in respect 01' which the dividends are paid is effectively connected with a permanent establislnnent or a tixed base situated in that other State, nor subject the company's undistribuled proﬁts to a tax on the company’s undistributed proﬁts, even 11’ the dividends paid or the undistributed proﬁts consist wholly

or partty 0113101113 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 ot'tha't State, but it~ the beneﬁcial owner ot‘the interest is a resident of the other Conttacting State, the tax so charged shall not exceed 10 per cent of

the gross amount of the interests

.3. Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State derived and beneﬁcially owned by the Government ol' the other Contracting State, including its local attthotities, the Centrai Bank or any tinaneiai institution wholly owned by that Government, shall he exempt From tax in the ﬁrst»

mentioned State.

The term "interest" as used in this Article means income from clebt—elaims at every kind. whether or not secured by mortgage and whether or not carrying a right to participate in the debtor’s proﬁts, and in particular, income from government securities and income from bonds or debentures. including premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as

interest for the purpose of this Article.

The provisions of paragraphs t and 2 shall not apply if the beneﬁcial owner of the intei'esL being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises. thi'ough a permanent CStﬂbiisl‘JmCt‘tt situated therein, or performs in that other State independent personal services from a lixed base situated therein, and the debt—claim in respect of which the interest is paid is effective] y connected with such permanent establishment or ﬁxed base. in such case the provisions of

Article 7 or Artieie 14, as the case may he, shall appiy.

Interest shall be deemed to arise in a Contracting; State when the payer is a resident ol‘ that State. Where, however, the person paying the interest, whether he is a resident ofa Contracting, State or not, has in a Contracting State a permanent establishmeiit or a lixed 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 tixecl base. then such interest shat] be deemed to arise in the State in which the permanent establishment or

ﬁxed base is situated.

7‘ 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 01‘ the interest. having regard to the debt-claim For which it is paid, exceeds the amount which

would have been agreed upon by the payer and the beneficial owner in the absence of such

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resident ot‘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

Si mate (1.

Where. by reason of a special relationship between the payer and the

beneﬁcial owner or betWCen both of them Lind some other person. the amount of the

royalties, having regard to the use. right or information tbr which they are paid. exceed the amount which would have been agreed upon by the payer and the beneﬁcial owner in the absence of such relationship. the provisions ol‘this Article shall appiy oniy to the East— mentioned amount. hi such case. the excess part of the payments shall remain tuxable according to the laws of each Contracting State, due regard being had to the other

provisions of this Agreement.

Article 13 Capitai Gains

Gains derived by a resident of a Contracting State lrom the alienation of immovable property referred to in Article 6 [Incl situated in the Other Contracting State may

be taxed in that other State.

Gains hem the alienation ol‘movabte property forming part of the business property ofa permanent estabiishment which an enterprise ot‘a Contracting State has in the other Contracting State or of mevahle property pertaining to a ﬁxed base avaifahle to 21 resident of a Contracting State in the other Contracting State for the purpose of peribrming independent personal services. including such gains From the alienation of such a permanent establishment (atone or with the Whoie enterprise) or ol'such fixed huse. may be taxed in that other State.
Guins derived by an enterprise of a ContractingI State operating ships: or aircraft in international trafﬁc from the aiienation 01' ships or aircraft operated in

international trafﬁc or movabie property pertaining to the operationofsueh ships or

aircraft, shall be taxable only in that State.

Gains from the aiieuatéen (if any property other than that referred to in paragraphs 3. 2 and 3. shalt be taxable Otiiy in the Contracting State of which the alienator

is a resident.

Article 14

Independent Personal Services

Income derived by an individual who is a resident ol’a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State unless he has a ﬁxed base :‘eguiarly availabie to him in the other Contracting State for the purpose of performing his activities. If he has such a ﬁxed base. the income may be taxed in the other State but Olliy so much 01‘ it as is attributable to that ﬁxed base. For this purpose. where an individual whe is a resident ot‘a Contracting State stays in the other Contracting State fer a period or periods exceeding in the aggregate E83 days in any twelve month period commencing, er ending in the ﬁscal year concerned. he shall be deemed to have a ﬁxed base regularly available to him in that other State and the income that is derived from his activities referred to above that are pertbrmed in that other

State shall be attributable to that ﬁxed base.

The term "professionai services" includes especially independent scientiﬁc, literary. artistic, educational or teaehin '1 activities as weil as the indejendent activities of . E l

physicians. lawyers. engineers. architects, dentists and accountants.

Artieie 15

income from Employment

Subject to the provisiens ofArticies 16. 18 and 19., salaries, wages and other simihn‘ remuneration derived by a resident 01"21 Contracting State in respect 01" an employment shat] be taxable only in that State unless the employment is exercised in the

ether Contracting State. It‘the empioyment is so exercised. sueh remuneration as is derived

therefrom may be taxed in that other State.

Notwithstanding the provisions of paragraph 1, remuaeration derived by a resident 01" a Contracting State in respect of an employment exercised in the other Contracting, State shall be taxable only in the lirst—mentioned State it”:

a) the recipient is present in the other State for a period or periods not exceeding in the aggregate i83 days in any twelve month period commencing or ending, in the ﬁscal year concerned, and

b) the remuneration is paid by, or on behalf 01‘, an employer who is not a resident of the other State, and

e) the remuneration is not borne by a permanent establishment or a lixed 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 by an enterprise ol‘a Contracting State may be taxed in that State.

Article 16

Directors' Fees

Directors" fees and other simiiar payments derived by a resident 01" a Contracting State in his capacity as a member of the board 01‘ directors or any other similar organ 01’ a company which is a resident of the other Contracting State may be taxed in that other State. Article 17

Artistes and Sportsmen

Notwithstanding, the provisions ol'Artieles 14 and 15, income derived by a resident ol‘a Contracting State as an entertainer, such as a theatre motion picture, radio or television artiste, or a musician, or as a sportsman, from his personal activities as such

exercised in the other Contracting State, may be taxed in that other State.

Where income in respect ol‘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 Contractin‘cI State in which the activities ol‘ the entertainer or sportsman

are exercised.

Article 18

i’ensions

Subject to the provisions of paragraph 2 Of Article 19, pensions and other simiiar remuneration paid to a resident ol’a Contracting State in consideration 01’ past employment

shall be taxable only in that State.

Article 1‘)

Government Service

a) Salaries. wages and other similar remuneration paid by a Contracting State or an administrative subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

b) l“lOWCVCt‘, such salaries= wages and other similar remuneration shall be taxable only in the other Contracting State it' the services are rendered in that State and the individual is a resident of that State who:

(i) is a national otithat State; or (ii) did not become a resident of that State so1e1y for the purpose of

rendering, the services.

a) Notwithstanding the provisions of paragraph 1, pensions and other simi1ar remuneration paid by, or out of Funds created by. a Contracting State or an administrative subdivision or a local authority thereof to an individual in respect ot'serviees rendered to that State or subdivision or authority shall be taxable only hi that State?

b) However, such pensions and other similar remuneration shall be taxable

only in the other Contracting State if the individual is a resident ol‘, and a

national ol‘. that State.

The provisions of Articles 15. 16. 17‘ and 18 shall apply to salaries wages, pensions and other similar remuneration in respect 01’ services rendered in connection with a business carried on by a Contracting State or administrative subdivision or a local

authority thereof.

Article 20 Students

’ayments which a student, trainee or business apprentice who is or was immediately before Visiting a Contracting, State a resident of the other Contracting State and who is present in the iirst~mentioned State solely for the purpose ol’ his education or training receives for the purpose of his maintenance, education or trainingI shall not be

taxed in that State, provided that such payments arise li‘om sources outside that State.

Article 21

Other Income

Items of income of a resident of a Contracting:T State, wherever arising, not

dealt with in the 'l’oregoing Articles of this Agreement shall be taxable only in that State.

The pt‘ovisions of paragraph 1 shail not apply to income. other than income from immovable property as deﬁned in paragraph 2 of Article 6, if the recipient 01’ such income, being a resident ol‘ 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 ol‘ 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 he, shall apply.

CHAPTER IV TAXATION OF CAPITAL

Article 22 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 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 that other State.

Capital represented by ships and aircraft operated in international trai'lie by an enterprise of a Contracting State and by movable property pertaining to the operation of

such ships and aircraft, shall be taxable oaty in that State.

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

taxable only in that State.

CHAPTER V METHODS FOR ELIMINATION OF DOUBLE TAXATEON

Article 23

Elimination of Double Taxation

in Lithuania double taxation shall be eliminated as lbilows: Where a resident ot‘ Lithuania derives income or owns eapitai whielL in accordance with this Agreement, may be taxed in Turkmenistan, unless a more l‘avota'able treatment is

provided in its domestic law, Lithuania shall allow:

a) as a deduction from the tax on the income of that resident, an amount equal

to the income tax paid thereon in Turkmenistan;

b) as a deduction from the tax on the capital of that resident. an amount equal

to the Capital tax paid thereon in Turkmenistan.

Such deduction in either case shall not. however, exceed that part ot'thc income tax or capital tax in Lithuania. as computed before the deduction is given. which is attributable. as the case may be, to the income or the capital which may be taxed in Turkmenistan.

in Turkmenistan double taxation shall be eliminated as Follows:

Where a resident of Turkmenistan derives income or owns capital which, in accordance with the provisions of this Agreement, may be taxed in Lithuania, Turkmenistan shall allow:

a) as a deduction from the tax on the income of that resident, an amount equal

to the income tax paid in Lithuania;

b) as a deduction from the tax on the capital 01‘ that resident, an amount equal

to the capital tax paid in Lithuania.

Such deduction in either case shall not, however. exceed that part of the income tax or capital tax in Turkmenistan, as computed bel‘ore the- dedttctioh is given. which is attributable, as the case may be, to the income or the capital which may be taxed in

Lithuania.

W here in accordance with any provision of the Agreement income derived or capital owned by a resident o‘l’a Contracting State is exempt from tax in that State. such State may nevertheless. in calculating the amount oftax on the remaining income or capital

at such resident, take into account the exempted income or capital.

CHAPTER VI SPECIAL PROVISIONS

Articie 24

Non—Discrimination

Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith. which is other or more burdensome than the taxation and connected requirements to which nationals at 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 I, also apply to persons who are not residents of one or both of the Contracting States.
Statelcss persons who are residents oi" 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, in particular with respect to residence. are or may be subjected.
The taxation on a permanent establishment which an enterprise of a 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. This provision shall not be construed as obhging a Contracting State to grant to residents of the other Contracting State any personal allowances, relieves and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.
Except where the provisions of paragraph 1 of Article 9, paragraph 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 shat]. tor the purpose of determining the taxable proﬁts at 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 C attracting State. shall not be subjected in the ﬁrst-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first—mentioned State are or may be subjected.
The provisions of this Articte shalt. notwithstanding the provisions of

Article 2. apply to taxes ot‘every kind and description.

Article 25

Mutual Agreement Procedure

Where a person considei's that the actions 01" one or both 01‘ the Contracting States result or will result lor him in taxation not in accordance with the provisions of this Agreement. he may, irrespective of the remedies provided by the domestic law 01' those States. present his case to the competent authority of the Contracting State at which he is a resident or. it" his casc comes under paragraph t of Article 2th to that of the Contracting State of which he is a national. The case mast be presented within three y -‘ars li‘om the lirst notiﬁcation ol‘ the action resulting in taxation not in accordance with the provisions ol’ the

Agreement.

The competent authority shall endeavoai', if the objection appears to it to be justiﬁed and i'l’it is not itselfable 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 ol‘ taxation which is not in accordance with the Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the domestic

law ol“the Contracting States.

The competent authorities of the Contracting States shall endeavour to resolve

by mutual agreement any difﬁculties or doubts arising as to the interpretation or application of the Agreement. They may atso consult together for the eiimination ot’donble

taxation in cases not provided for in the Agreement.

The competent authorities of the Contracting States may communicate with each other directly. including through a joint commission consisting of themselves or their

representatives, for the purpose of reaching an agreement in the sense of the preceding paragraphs.

Artiste 26 Exchange of information

The competent authorities of the Contracting States shall exchange such

information as is foreseeably relevant for carrying out the provisions of this Agreement or to the administration or cntbrcement 01" the domestic laws concerning taxes ot‘eyery kind and description imposed on behalf of the Contracting States. or 01’ their administrative subdivisions or local authorities. insofar as the taxation thereunder is not contrary to the

Agreement. The exchange of information is not restricted by Articles 1 and 2.

Any information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, the determination of appeals in relation to the taxes referred to in paragraph 1. or the oversight of the above. Such persons or authorities shail use the inl‘oi'mation only for such purposes. They may disclose the inlormation in public court

proceedings or in judicial decisions.

in no case shall the provisions of paragraphs 1 and 2 be construed so as to impose on a ContractitnjI State the obligation: a) to carry out administrative measures at variance with the laws and administrative practice 01‘ that or 01' the other ContractinU State:

b) to supply information which is not obtainable under the laws or in the

normal course of the administration of that or 01‘ the other Contracting State; c) to supply information which would disclose any trade. business. intlttstriat. commercial or professional secret or trade process. or information. the

disclosure of which would be contrary to public poiicy (ardrc public).

it in formation is requested by a Contracting State in accordance with this Ai'ticle. the other Contracting State shall use its information gathering measures to obtain the requested information. even though that other State may not need such information For its own tax purposes. The obligation contained in the pi'eceding sentence is subject to the limitations of paragraph 3 but in no case shalt such limitations be construct to permit a Contracting State to decline to supply information solely because it has no domestic

interest in such in Formation.

In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to decline to supply information solely because the in Formation is held by a bank, other financial institution, nominee or person acting in an agency or a ﬁduciary capacity or because it relates to ownership interests in a person.

Article 27

Members of Diplomatic Missions and Consalar Posts

Nothing in this Agreement shall affect the ﬁscal privileges at members of diplomatic missions or consular posts under the general rates of international law or under

the provisions of special agreements.

CHAPTER VII FINAL ROVISIONS

Article 28

Entry into Force

This Agreement shall be ratiﬁed and the instruments of ratiﬁcation shall he

exchanged at as soon as possible.

The Agreement shall enter into force upon the exchange of instruments of ratiﬁcation and its provisions shall have effect in both Contracting States: a) in respect of taxes withheld at source, on income derived an or utter the llrst clay of January in the calendar year next following the year it) which the- Agreement enters into force; b) in respect of other taxes on income Lurcl on capital, for taxes chargeable for any taxable year beginning on or alter the ﬁrst clay of January in the calendar

year next following the year in which the Agreement enters into force.

Artiste 29

Termination

This Agreement Shall remain in force until terminated by a Contractingl State Either Contracting State may terminate the Agreement, through diplomatic channels, by giving written notice ot'terminution at least six months before the end ol’ztny calendar year after the period of five years trom the date on which the Agreement entered to force. In such event the Agreement shall cease to have effect in both Contracting States:

a) in respect of taxes withheld at source on income derived on or alter the ﬁrst day of January in the calendar year next following the year in which the notice has been given;

b) in respect of other taxes on income and taxes on capital, for taxes chargeable for any taxable year beginning, on or after the ﬁrst clay of January in the calendar year next following the year in which the notice hats

been given.

lN WITNESS WHEREOF, the undersigned, being duly authorised thereto, have

signed this Agreement.

Done in duplicate at Ashgabat this 18 day of June 2013, in the Lithuanian.

Turkmen tutti English languages, all three texts being equally authentic. In the ease of

divergence of interpretation, the English text shall prevail.

For the Government of the Fer the Government of Republic of Lithuania Turkmenistan

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