PROTOCOL

to the Convention between the Portuguese Republic and the Republic of

San Marino for the avoidance of double taxation and the prevention of

fiscal evasion with respect to taxes on income.

When signing the Convention concluded today between the Portuguese Republic and the

Republic of San Marino for the avoidance of double taxation and the prevention of fiscal

evasion with respect to taxes on income, the following additional provisions forming

integral part of this Convention have been agreed upon.

It is understood that:

1. The provisions of the Convention shall not prevent the application of the Agreement

between the European Community and the Republic of San Marino providing for

measures equivalent to those laid down in Council Directive 2003/48/EC on taxation of

savings income in the form of interest payments signed at Brussels on 7 December 2004.

2. With respect to paragraph 3 of Article 8, whenever companies from different

countries have agreed to carry on an air transportation business together in the form of a

consortium or a similar form of association, the provisions of paragraph 1 of the same

Article shall apply to such part of the profits of the consortium or association as

corresponds to the participation held in that consortium or association by a company that

is a resident of a Contracting State.

3. With respect to Article 24, it is understood that the provisions of the Convention

shall not be interpreted so as to prevent the application by a Contracting State of the anti-

avoidance provisions provided for in its domestic law, especially regarding the

deductibility of expenses and thin capitalization rules.

4. The competent authorities of the Contracting States shall decide by mutual

agreement the mode of application of this Convention.

IN WITNESS WHEREOF the undersigned, duly authorized thereto, have signed this

Protocol.

DONE in duplicate at SAN MARINO this 18th

day of November, 2010 in the Portuguese,

Italian and English languages, all texts being equally authentic. In case of any divergence

of interpretation of this Protocol, the English text shall prevail.

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