25 DE MAIO DE 1995

717

2 — The term «immovable property* or «real property*, as the case may be, shall have the meaning that it has under the law of the Contracting State in which the property in question is situated. The term in any case shall include property accessory to immovable property (real 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 (real 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 (real property).

3 — The provisions of paragraph 1 shall apply toi income derived from the direct use, letting, or use in any other form of immovable property (real property).

4 — The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property (real property) of an enterprise and to income from immovable property (real property) used for the perfomance of independent personal services.

Article 7 Business profits

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

2 — Subject to the provisions of paragraph 3, where an enterprise 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 might be expected to make if it were a district an independent 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 and with any other associated enterprise. •

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, including research and development expenses, interest, and other similar expenses and a reasonable allocation of executive and general administrative expenses, whether incurred in the State in wich the permanent establishment is situated or elsewhere.

'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 enterprise. ■

5 — For the purposes of the preceding paragraphs, the business 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.

6 — Where business profits include items of income that are dealt with separately in other articles of the Convention, the provisions of those articles shall not be affected by the provisions of this article.

Article 8 Shipping and air transport

1 —Profits of an enterprise of a Contracting State from the operation of shipps or aircraft in international traffic shall be taxable only in that State.

2 — The provisions of the preceding paragraph shall also apply to profits from participation in a pool, a joint business,

[hi is

- ,.-7 • Article 9 3.

•"'1' Associated enterprises 3-

A— Where: •

*' a) An enterprise of a Contracting State participates directly or indirectly in the management, control, it or capital of an entreprise of the other Contracting ;/ State; or

• b) The same persons participate directly or indirectly in the management, control, or capital of an enterprise of a Contracting State and a 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 that would be made between independent enterprises, then any profits that, but for those conditions, would have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

2 -r- Where a Contracting State includes in the profits of an entreprise of that State, and taxes accordingly, profits on which an enterprise of the other Contracting State has been charge to tax in that other State, and the competent authority of that other State agrees that the profits so included are profits that would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those that would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amounth 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 the applications of any provisions of the law of either Contracting State relating to the determination of the tax liability of a person, provided that the determination of that tax liability is consistent with the principles stated in this article.

Article 10 Dividends

1 — Dividends paid by a company that is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other Sate.

2 —However, such dividends may also be taxed in the Contrating State of which the company paying the dividends is a resident, and according to the laws of that State, but if the beneficial.owner of the dividends.is a resident of the other Contracting State, the tax so charged shall not exceed 15 percent; of the gross, amount of the dividends. The competent authorities of the Contracting States shall by mutual agreement settle the mode.of application of this limitation. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.