Article 4-7

1.

For the purposes of this Convention, the term ``resident of a Contracting State'' means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, citizenship, place of management, place of incorporation, or any other criterion of a similar nature.

a)

However, 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.

b)

In the case of income derived by a partnership, trust, or estate, residence is determined in accordance with the residence of the person liable to tax with respect to such income.

2.

Where by reason of the provisions of paragraph 1 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, or if he does not have a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode;

c)

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

d)

if each State considers him as its citizen or if he is a citizen of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

3.

Where by reason of the provisions of paragraph 1 a company is a resident of both Contracting States, the competent authorities of the Contracting States shall endeavor to settle the question by mutual agreement, but if the competent authorities are unable to reach such an agreement, the company shall be treated as a resident of neither Contracting State for the purposes of deriving benefits under this Convention.

4.

Where by reason of the provisions of paragraph 1 a person other than an individual or a company is a resident of both Contracting States, the competent authorities of the Contracting States shall settle the question by mutual agreement and determine the mode of application of the Convention to such person.

1.

For the purposes of this Convention, the term ``permanent establishment'' means a fixed place of business through which a resident of a Contracting State, whether or not a legal entity, carries on business activities in the other Contracting State.

2.

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 extraction of natural resources.

3.

The term ``permanent establishment'' also includes:

a)

a building site or construction, installation or assembly project, supervisory services connected therewith, or an installation or drilling rig or ship used for the exploration or exploitation of natural resources, but only if such site, project, or rig lasts or such services continue for a period of more than 12 months; or

b)

the furnishing of services, including consultancy services, by residents through employees or other personnel engaged by the residents for such purpose, but only where activities of that nature continue (for the same or a connected project) within the country for a period of more than 12 months.

4.

Notwithstanding the preceding provisions of this Article, the term ``permanent establishment'' shall be deemed not to include:

a)

the use of facilities solely for the purpose of storage, display, or delivery of goods or merchandise belonging to the resident;

b)

the maintenance of a stock of goods or merchandise belonging to the resident solely for the purpose of storage, display, or delivery;

c)

the maintenance of a stock of goods or merchandise belonging to the resident solely for the purpose of processing by another person;

d)

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

e)

the maintenance of a fixed place of business solely for the purpose of carrying on, for the resident, any other activity of a preparatory or auxiliary character;

f)

the maintenance of a fixed place of business solely for any combination of the activities mentioned in subparagraphs a) to e).

5.

Notwithstanding the provisions of paragraphs 1 and 2, where a resident of a Contracting State carries on activities in the other Contracting State through an agent, that resident shall be deemed to have a permanent establishment in that other State in respect of any activities which the agent undertakes for that resident, if the agent meets each of the following conditions:

a)

he has an authority to conclude contracts in that other State in the name of the ;

b)

he habitually exercises that authority;

c)

he is not an agent of an independent status to whom the provisions of paragraph 6 apply; and

d)

his activities are not limited to those mentioned in paragraph 4.

6.

A resident of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other 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.

7.

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.

1.

The business profits of a resident of a Contracting State shall be taxable only in that State unless the resident carries on or has carried on business in the other Contracting State through a permanent establishment situated therein. If the resident carries on or has carried on business as aforesaid, the business profits of the resident may be taxed in the other State but only so much of them is attributable

a)

that permanent establishment;

b)

sales in that other State of goods or merchandise of the came kind as those sold through that permanent establishment; or

c)

other business activities carried on in that other State of the same kind as those effected through that permanent establishment.

2.

Subject to the provisions of paragraph 3, where a resident of a Contracting State carries on or has carried 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 business profits which it sight be expected to make if it were a distinct and independent person engaged in the same or similar activities under the same or similar conditions.

3.

In determining the business profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment. There shall be allowed a reasonable allocation, between a resident of a Contracting State and a permanent establishment of such resident situated in the other Contracting State, of properly documented expenses incurred for the purpose of the resident's business activities. Such allocable expenses include executive and general administrative expenses, research and development expenses, interest, and charges for management, consultancy, or technical assistance, whether incurred in the State in which the permanent establishment is situated or elsewhere. The permanent establishment shall not be allowed a deduction for amounts paid to its head office or any of the other offices of the resident 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 by way of interest on moneys lent to the permanent establishment. The business profits attributed to a permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.

4.

No business profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the resident.

5.

Where the information available to or readily obtainable by the competent authority of a Contracting State is not adequate to determine the expenses of a permanent establishment, profits may be calculated in accordance with the tax laws of that State. For purposes of this paragraph 5, information will be considered to be readily obtainable if the taxpayer provides the information to the requesting competent authority within 91 days of a written request by the competent authority for such information.

6.

For purposes of this Article, the term ``business profits'' means profits derived from the active conduct of business. It includes, for example, profits from manufacturing, mercantile, transportation, communication, or extractive activities, and from the furnishing of services of another person. It does not include income received by an individual for his performance of personal services (either as an employee or in an independent capacity) Income of an individual from the performance of services as an employee is dealt with in Article 15 (Income from Employment). Income of an individual from the performance of services in an independent capacity is dealt with in Article 14 (Independent Personal Services).

7.

Where business profits include items of income which are dealt with separately in other Articles of the Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.

1.

Where:

a)

a person which is a resident of a Contracting State participates directly or indirectly in the management, control or capital of a person which is a resident of the other Contracting State; or

b)

the same persons participate directly or indirectly in the management, control or capital of a resident of a Contracting State and any other person; and

c)

in either case conditions are made or imposed between the two persons in their commercial or financial relations which differ from those which would be made between independent persons, then any income, which would have accrued to one of the persons in the absence of those conditions, but has not so accrued because of those conditions, may be included in the income of that person and taxed accordingly.

2.

Where a Contracting State includes in the profits of a resident of that State, and taxes accordingly, profits on which a resident 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 resident of the first-mentioned State if the conditions made between the two persons 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 paid to the other provisions of this Convention and the competent authorities of the Contracting States shall if necessary consult each other.

3.

The provisions of paragraph 1 shall not limit either Contracting State in applying its domestic law to make adjustments to income, deductions, credits, or allowances between persons, whether or not residents of a Contracting State, when necessary to prevent evasion of taxes or clearly to reflect the income of any such persons.

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