Turkmenistan - United Arab Emirates Tax Treaty

AGREEMENT

BETWEEN THE GOVERNMENT OF THE UNITED ARAB EMIRATES AND THE GOVERNMENT OF TURKMENISTAN FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL

THE GOVERNMENT OF THE UNITED ARAB EMIRATES AND THE GOVERNMENT OF TURKMENISTAN,

desiring to conclude 3. Convention for the avoidance of double taxation with respect to taxes on income and capital and With a

view to promoting economic cooperation between the two countries,

HAVE AGREED AS FOLLOWS:

Article 1 PERSONAL SCOPE

This Convention shall apply to persons who are residents of one or both 0f the Contracting States.

Article 2 TAXES COVERED

IV This Convention shall apply to taxes on income and on capital imposed on behalf of a Contracting State or of its administrative-territorial subdivisions 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, 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

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3, The existing taxes to which the Convention shall appty are in particular:

(a) in Turkmenistan: (1) the proﬁts (income) tax; (ii) the personal income tax from the individuals; (iii) tax on natural resources: (iv) the property tax of enterprises; (v) payment for the lands; (hereinafter referred to as “Turkmen tax”) (b) in case ofthe United Arab Emirates: (i) income tax; (iv) corporation tax; (hereinafter referred to as “the United Arab Emirates tax”);

The Convention shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of signiﬁcant Changes which have been made in their respective taxation laws.

Article 3 G EN ERA L DEFINITIONS

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

(a) the term “Turkmenistan" means ’l‘urkmenistan and, and when used in a geographical sense, includes any area beyond the territorial waters of Turkmenistan which in accordance with international law and the laws of Turkmenistan is an area within which Turkmenistan may exercise rights with respect to the sea bed and subsoil and their natural resources;

(b) the term “the United Arab Emirates“ means the United Arab Emirates, and when used in a geographical sense. means the area in which the territory is under its sovereignty as well as the territorial sea, airspace and submarine areas over which the United Arab Emirates exercises, in conformity with international law and the laws of the United Arab Emirates sovereign rights, including the mainland and islands under its

jurisdiction in respect of any activity carried on in connection with the exploration for or the exploitation of the natural resources;

(d) the term “company" means any body corporate or any entity which is treated as a body corporate for tax purposes;

(e) 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;

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(t) the term “international trafﬁc“ means any transport by a ship, boats or aircraft, or road and railway vehicles operated by an enterprise of a Contracting State, except when the ship, boat or aircraft, or road and railway vehicles is operated solely between places in the other Contracting State;

(g) the term “competent authority” means:

(i) in Turkmenistan the Ministry of Economy and Finances and the Main State Tax Inspection or their authorized representative;

(ii) in the United Arab Emirates= the Ministry ofFinance and Industry; and its authorised representative

(h) the term “national" means: (i) any individual possessing the nationality of a Contracting State;

(ii) any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State.

As regards the application of the 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 Agreement applies.

Article 4 RESIDENT

I, For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the laws 01' 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,

2‘ For the purpose of paragraph 1 above the term "resident" in the case of United Arab Emirates shall include: (a) the Government of the United Arab Emirates or any political subdivision or local authority thereof;

(b) any governmental institutions created under public law such as the Central Bank, funds, corporations, authorities, foundations, agencies or any other similar entities established in the United Arab Emirates;

(c) any inter—govemmcntal entity established in the United Arab Emirates in whose capital the United Arab Emirates subscribes together with other States.

in the ease of Turkmenistan shall include:

(a) the Government of Turkmenistan or any territorial and administrative division or local authority thereof;

(b) any governmental institutions created under public law such as the Central Bank, funds, corporations, authorities, foundations, agencies or any other similar entities established in Turkmenistan;

(c) any inter-govemniental entity established in Turkmenistan in whose capital Turkmenistan subscribes together with other States.

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Where by reason of the provisions of paragraph i an individual is a resident of both Contracting States, then his status shall 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 to him 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, at 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;

(e) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident ofthe State of which he is a national;

(d) if he is a national ofboth 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 ] a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which its place of effective management is situated.

Article 5 PERMANENT ESTABLISHMENT

For the purposes of this Convention, the term “permanent establishment” means a ﬁxed place of business through which the business of an enterprises is wholly or paitly carried on.
The term “permanent establishment" includes especially:

(a) a place ofnianagement;

(b) a branch;

(d) a factory:

(e) a workshop;

(0 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 projects or supervisory activities in

connection therewith, but only when such site, project. or activities continue for a period of more than six months.

(b) the furnishing of services, including consulting 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 ol‘ the connected project) within the country for a period or periods aggregating 183 days or more within any 12-month period.

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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 ofstorage or display 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 or display;

(c) the maintenance of a stock of goods of merchandise belonging to the enterprise solely for the purpose of proceeding by another enterprise:

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

c) 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.

t) the maintenance of a ﬁxed place of business solely for any combination of activities mentioned in sub-paragraphs (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 m" paragraphs 1 and 2 where a person - other than an agent of an independent status to whom paragraph 7 applies - is acting in a Contracting State on behalf ofan enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent establishment in the ﬁrst— mentioned Contracting State in respect of any activities which that person undertakes for the enterprise, if such a person:

a) has and habitually expresses in that State an authority to conclude contracts in the name of 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; or

b) has no such authority, but habitually maintains in the tirst—mentioned State a stock of goods or merchandise from which he regularly delivers goods of merchandise on behalf of the enterprise.

Notwithstanding the preceding provisions of this Article, an insurance enterprise of a Contracting State shall, except in regard to re-insuranee. be deemed to have a permanent establishment in the other Contracting State if it collects premiums in the territory of that other State or insures risks situated therein through a person other than an agent of in dependent 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, general commission agent or any other agent of an independent status. provided that such persons are acting in the ordinary course of their businese. 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 ofan independent status within the meaning ofthis paragraph.
The fact that the 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 the permanent establishment or otherwise) _. shall not of itself constitute either company a permanent establishment of the other.

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Article 6 INCOME FROM IMMOVABLE PROPERTY

l. Income derived by a resident of a Contracting State from the immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.

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 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 of the working of, or the right to work, mineral deposits, sources and other natural resources; ships, boats= aircraft, road vehicles and railroad rolling stock shall not be regarded as immovable property.
The provisions of paragraph 1 shall he applied 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

l. 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 estabhshment. 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.
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 appoltionment as may be customary; the method of apportionment adopted shall, however, be such that the results shall be in accordance with the principles contained in this Article.
No proﬁts shall be attributed to a permanent establishment by principles of 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 sh all he detertn ined by the same method year by year unless there is good and sufﬁcient reason for the- contrary.

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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 INTERNATIONAL TRAFFIC

Notwithstanding the provisions of article 7, proﬁts derived by an enterprise ofa Contracting State from the operation of ships, boats, or aircraft, or road and railway vehicles in international trafﬁc shall be taxable only in that State,
Proﬁts derived by a transportation enterprise which is a resident of a Contracting State from the use, maintenance. or rental of containers (including trailers and other equipment for the transport ot‘containers) used for the transport of goods or merchandise shall be taxable only in that Contracting State unless the containers are used solely within the other Contracting State.
The provisions of paragraph shall also apply to proﬁts from the participation in a pool‘ a joint business or an international operating agency.
Notwithstanding the provisions ot‘ article 7, proﬁts of an enterprise ofa Contracting State engaged in the operation of a road and a railway vehicles as a common carrier derived from:

(a) the transportation of passenger or property between a point outside the other Contracting State and any other point, or

(b) the rental ot'road vehicles (including trailers) or railway rolling stock, used to tranSport passenger or propeny between a point outside the other State and any other point, shall be exempt from tax in that other State.

Article 9 ASSOCIATED ENTERPRISES

Where

(a) an enterprise ofa 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 ot‘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 proﬁt which would. but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accruecL may be included in the profits ofthat enterprise and taxed accordingly.

Where a Contacting State includes in the proﬁt of an enterprise ofthat 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 tirst—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 the appropriate adjustment to the amount of the tax charged therein on those proﬁts. in determining such adjustment, clue 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.

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Article 10 DIVTDENDS

l. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State shall be taxable only in that other State.

The term “dividends“ as used in this Article means income from shares or other rights, not being debt-elaims. 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 and 2 shall not apply ifthe beneﬁcial owner of the dividends, being a resident ot‘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 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 provision ofArtiClc 7 or Article 14, as the case may he, 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 the permanent establishment or a ﬁxed base situated in that other State, not subject the company‘s undistributed proﬁts to a tax on the companys 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 I l INTEREST

Interest arising in a Contracting State and paid to the resident of the other Connecting State shall he taxable only in that other State.
The term “interest” as used in this Article means income from debt—claims of every kind. whether or not secured but 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 and debentures, including premiums and prizes attaching to such securities, bonds and debentures, Penalty charges for late payment shall not be regarded as interest for the purpose of this Article.
The provisions of paragraphs 1 and 2 shall not apply if the beneﬁcial owner of the interest, being a resident of 3 Connecting State, carries on business in the other Contracting State in which the interest arises, throu gh a permanent establishment situated therein, ot'perf‘orrns 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 eﬁeetively connected with such permanent establishment or ﬁxed base. in such case the provisions of Article 7 or Article I4, as the case may he, shall apply.
Interest shall be deemed to arise in a Contracting State when the payer is that State itself, an administrativeatert‘itorial subdivision, a local authority 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 interests is borne by such permanent establishment or ﬁxed base, then such interest shall be deemed to arise in that State in which the permanent establishment of‘ﬁxed base is situated.

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Where, by reason of the special relationship between the payer and the beneﬁcial owner or between both ot'them and some other person, the amount of the interest, having regard to the debt-clairn 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 provision of this Article shall apply only to the last-menticmed amount. In such case. the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being bad to the other provisions of this Convention.

Article 12 ROYALTIES

l. 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 State, but ifthe recipient is the beneﬁcial owner ofthe royalties the tax so charged shall not exceed l0 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 lim itation.

The terms 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 literacy, artistic or scientiﬁc work including cinematography ﬁlms. includes tapes for radio or television broadcasting. computer programs, 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 and Article 14, as the case may be, shall apply.
Royalties shall be deemed to arise in a Contracting State when the payer is 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 any State a permanent establishment or a ﬁxed base in connection with which the liability to pay the royalties was incurred, and such royalties are home by such permanent establishment or ﬁxed base, then such royalties shall be deemed to arise in the State in which the permanent establishment or a fixed base is situated.
Where. by reason of the 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 of 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 bad to the other provisions of this Convention.

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Article [3 CAPITAL GAINS

Gains derived by a resident of a Contracting State from the alienation of the immovable property referred to in Article 6 and situated in the other Contracting State shall be taxable only in the ﬁrst-mcntioned Contracting State.
Gains from the alienation of the immovable 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 tax in that other State.
Gains derived by an enterprise ofa Contracting State from the alienation of ships, boats or aircraft, or road and railway vehicles, shall be taxable only in that State.
Gains from the alienation of the shares of the capital stock of a company the property of which consists directly or indirectly principally of immovable property situated in a. Contracting State shall be taxable in that State
Gains from the alienation of any property other than that referred to in paragraphs 11 21 3, 4 and 5 shall be taxable only in the Contracting State ot'which the alienator is a resident.

Article [4 INDEPENDENT PERSONAL SERVICES

l. Income derived by a resident of a Contracting State in respect of professional services or other activities ofan 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 State; or

(b) if his stay in the other Contracting State is for a period or periods aggregating 133 clays or more in i27rnonth period commencing or ending in the ﬁscal year concurred: in that case only so much of the income as is derived from his activities performed in that other State.

The term “professional services" includes especially independent scientiﬁc, literary, artistic, educational or teaching activities of physicians, lawers, engineers, architects, dentists and accountants.

Article 15 INDEPENDENT PERSONAL SERVICES

1‘ Subject to the provisions ot‘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.

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 shall be taxable only in the ﬁrst mentioned State if:

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(a) the resident is present in the other State for a period or periods not exceeding in the aggregate 183 days in any [2-month period commencing or ending in the ﬁscai 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

Notwithstandtng the preceding provisions of this Article. remuneration derived in respect of an employment exercised in ground and aboard a ship, boat or aircraft, or on road and railway vehicles operated in international traffic, by an enterprise of a Contracting State shall be taxable only in that State.

Article 16 RECTOR'S FEES

Director’s fees and other similar payments derived by a resident ot'a Contracting State in his capacity as a member ofthe 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 ofa Contracting State as an entertainer. such as 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.

When 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, l4 and [5, be taxed in the Contracting State in which the activities ofthe entertainer or sportsman are exercised.
The provisions of paragraphs 1 and 2 shall not apply to income derived from activities performed in a Contracting State by entertainers or sportsmen if the visit to that State is substantially supported by public funds of one or both of the Contracting States or of administrative-territorial subdivisions or local authorities

thereof. In such a case. the income is taxable only in the Contracting State of which the entertainer or sportsman is a resident.

Article 18 PENSIONS

Subject to the provisions of paragraph 2 of Article 19. pensions and other similar remuneration paid to a resident ofa Contracting State in considerations of past employment shall be taxable only in this State.

Article I? GOVERNMENT SERVICE

l. (a) Remuneration, other than a pension, paid by a Contracting State or an administmtive—tenitoriat

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.

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(b) However, such rcmuneration’s shah 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 (it) did not become a resident of that State solely for the putpose of rendering the services,

(a) Any pension paid by, or out of funds created by, a Contracting State or an adrninistrative-territorial 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) However, such pensions shall be taxable only in the other Contracting State if the individual is a resident of, and a national of that State.

The provisions of Articles 15. I6 and l8 shall apply to remuneration and pensions in respect of servtces rendered in connection with a business carried on by a Contracting State or an administrative-territorial subdivision or a local authority thereof.

Article 20 STUDENTS

Payments which a student 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 ﬁrst-mentioned State solely for the purpose of his education or training receives for the purpose of his maintenance. education or training shall not be taxed in that State. provided that such payments arise from sources outside that State.
An individual who, immediately before visiting a Contracting State is or was resident of the other Contracting State and who is temporary present in the ﬁrst-rnentioned State for the purpose of study, research or training as a recipient of a grant, allowance or award from a scientiﬁc. educational. religious or charitable organization or under a technical assistance programme entered into by the Government of a Contracting State shall. from the date of his arrival in the ﬁrst-mentioned State in connection with that visit. be exempt from tax in the State, for a period not exceeding the period of the grant.

Article 21 OTHER INCOME

Items of income ot‘a resident ofa Connecting State, wherever arising, not dealt with in the foregoing Articles of this Convention shall he taxable only 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 effectively connected with such permanent establishment or ﬁxed base. In such case the provisions ot‘Artiele 7 or Article 14. as the case may he, shall apply.
Notwithstanding the provisions of paragraphs 1 and 2 items of income of a resident of a Contracting

State not dealt with in the foregoing Articles of this Convention and arising in the other Contracting State may also be taxed in that other State.

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Notwithstanding the provisions of Articles 5 to 7', l3 and 22 any income and proﬁts derived by a Contracting State its political subdivisions and local governments and their financial institutions arising in the other Contracting State including gains from the alienation of movable and immovable property situated in that other State, shall be exempt from taxes on such income. proﬁts and gains generated in that other Contracting State.

Article 22 C APIT AL

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 [or the purpose of performing. independent. personal services, may be taxed in that. other State.
Capital owned by an enterprise of a Contracting State and represented by ships, boats and aircraft, or road and railway vehicles operated in international trafﬁc, and by movable property pertaining to the operation of such Ships, boats or aircraft, or road and railway vehicles, shall be taxable only in that State.
All other elements of capital of a resident of a Contracting State shall be taxable only in that State.

Article 23 ELIMINATION 01" 'l‘th DOUBLE 'l'AXA‘E‘lON

1, Where a resident of a Contracting State derives income or owns capital which. in accordance with the provisions of this Convention, may be taxed in the other Contracting State, the ﬁrst—mentioned State shall allow:

a) as a deduction from the tax of the income of that resident, an amount equai to the income tax paid in that other State;

b) as a deduction from the tax on the capital ofthis resident, an amount equal to the capital tax paid in that other State. '

Such deductions in either case shall not, however, exceed that part oftheincome tax or capital tax, 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 that other State.

Where in accordance with any provision of the Convention income derived or capital owned by a resident of a Contracting State is exempt from tax in that State: such State may nevertheless, in calculating the amount of tax on the remaining income or capital of such resident, take into account the exempted income or capital.

Article 24 NON-DISCRJMINATION

Nationals of a Contracting State shall not be subject in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome titan 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 subject. This provision shall, notwithstanding the provisions ofArticle 1, also apply to persons who are not residents of one or both of the Connecting States.

x.)

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Stateless persons who are residents of a Contracting State shall not be subject in either Contracting State to any taxation or any requirements connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals ofthe State concerned in the same circumstances are or may be subject.
The taxation on a permanent establishment which an enterprise ofa 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 obliging 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 I of Article 9, paragraph 6 ot‘Article i 1, or paragraph 6 of Article 12, apply, interests. royalties and other disbursements paid by an enterprise of a Contracting State to a resident ofthe other Contracting State shall. for the purpose ofdeten'nining the taxable proﬁts of such enterprise, be deductible under the same conditions as if they have been paid to a resident of the ﬁrst-mentioned State. Similarly, any debts ofan enterprise ofa Contracting State to a resident ofthe other Contracting State shall. for the purpose of determining the taxable capital of that enterprise, be deductible under the same conditions as if they have been contracted to a resident of the ﬁrst-mentioned State.

5, Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlledj directly or indirectly, by one or more residents of the other Contracting State. shall not be subject 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 ofthe ﬁrst—mentioned State are or may be subject.

The provisions of this Article shall. notwithstanding the provisions of Article 2, apply to taxes of every kind and description.

Article 25 MUTUAL. AGREEMENT PROCEDURES

Where a person considers that the actions of one or both ofthe 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 of Article 24, to that ofthe Contracting State of which he is a national, The case must be presented within three years From the ﬁrst notiﬁcation of the action resulting in taxation not in accordance with the provisions ofthe Convention.
The competent authority shall endeavour. ifthe objection appears to it to be justiﬁed and if it is not itself able to arrive to 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

the Convention. Any agreement reached shall be implemented notwithstanding. any time limits to the domestic law ofthe Connecting States.

The competent authorities ofthe Contracting States shall endeavour to resolve by mutual agreement any difﬁculties or doubts arising, as to the interpretation or application ofthe Convention. They may also consult together for the elimination deouble taxation in cases not provided for in the agreement.

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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 proceeding 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 26 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 lavas of the Contracting States concerning taxes covered by the Convention. The exchange of information is not restricted by Article 1. Any information received by a Contracting State shall he treated as secret in the same manner as infomation obtained under the domestic laWS of that State and shall be disclosed only for persons or authorities (including court or administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or 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.
[n 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 or administrative practice of that or the other Contracting State;

(b) to supply information which is not obtainable under the laws or in the normal course of‘ the administration ofthat 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 (order public).

Article 27 MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

Nothing in this Convention shall effect 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 28 ENTRY INTO FORCE

This Convention shall be ratiﬁed and the instruments of ratiﬁcation shall be exchange as soon as possible.
The Convention shall enter into force upon the exchange of instruments of ratiﬁcation and its provisions shall have effect:

a) in respect ot‘taxes withheld at source, - to amounts of income paid on or after the ﬁrst day of January in the calendar year next following the year in which the Convention enters into force; and

h) in respect of other taxes on income and taxes on capital, - to such taxes chargeable for any taxable

year beginning on or after the ﬁrst day of January in the calendar year next following the year in which the Convention enters into force.

._::‘-’-

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Article 29 TERMINATION

This Convention shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Convention, through diplomatic channels1 by giving notice of termination at least six months before the end ofarly calendar year after the period of ﬁve years.

in such event, the Convention shall cease to have effect:

a) in respect of taxes withheld at source, - to amounts of income paid on or after the ﬁrst day of January in the calendar year next following the year in which the notice has been given; and

b) in respect of other taxes on income and taxes on capital, - to such taxes chargeable for any taxable year beginning on or aﬁer the ﬁrst day of January in the calendar year next following the year in which the nutice has been given.

1N WITNESS THEREOF the undersigned, being duly authorized thereto, have singed this Convention.

Done in Abu Dhabi on the 9 of June, 1998 in two original copies, each in English and Russian languages, all texts being equally authentic. in case ot'divergence of interpretation the English text shall prevail,

FOR THE GOVERNMENT FOR THE GOVERNMENT RAB EMIRATES 0F TURKMENISTAN

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