7 DE MAIO DE 1980

795

This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are attributed or paid.

3 — The term ((dividends)) as used in this article means income from shares, «jouissance shares)) or «justance» rights, mining shares, founders' shares or other rights, not telng debt-claims, partb'pating 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 term includes atoo wCth regard to Portuguese Republic profits attributed under an arrangement for participation in profits (conta em parti cpacao).

4— The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the ■company attributing or paying the dividends is a resident, through a peirrroan'snt establishment situated therein, or performs in ilhat other State independent personal services from a fixed base s^uaited therein and the holding in icrpect of which the dividends are attributed or paid is effectively connected with such permanent establishment or fixed base. In such case, dividends may b; taxed in that other State and according to its taxation law.

5 — 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 attributed or paid by the company, except insofar as such dividends are attributed or paid to a resident of that other State or insofar as the holding in respect of which the dividends are attributed or paid is effectively connected with a permanent establishment or a fixed base situated rn that other State, nor subject the company's umWstri'buited profits to a tax on the company's undistributed profits, even if the dividends attributed or paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.

ARTICLE 11 (Interest)

1 — Interest arising in a Contracting State and attributed or paid to a resident of the other Contracting State may be taxed in that other State.

2 — However, such interest may also be taxed in the Contracting State in which it arises, and according to the laws of that State, but if the recipient is the beneficial owner of the interest the tax so charged shall not exceed 15 percent of the gross amount of the interest.

The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation.

3 — Notwithstanding the provisions of paragraph 2, interest arising from a loan granted by the Government of a Contracting State or a bank or any other institution, in the name of, or on behalf of such Government, shall be taxable only in the Contracting State of which the recipient is a resident.

4 — The term «interest» as used in this article means income from Government securities, bonds or

debentures, whether or not secured by mortgage and whether or not carriyng a right to participate in profits, and debt-claims of every kind as well as all other income assimilated to income from money lent by the taxation law of the State in which the income arises.

5 — The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated there in, and the debt-claim in respect of which the interest is attributed or paid is effectively connected with such permanent establishment or fixed base. In such case, interest may be taxed in that other State and according to its taxation law.

6 — Interest shall be deemed to arise in a Contracting State, when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person attributing or 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 attributed or paid was incurred, and such interest is borne by such permanent establisment or fixed base, then such interest shall 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 of the interest, having regard to the debt-claim for which it is attributed or 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 had to the other provisions of this Convention.

ARTICLE 12 (Royalties)

1 — Royalties arising in a Contracting State and attributed or paid to a resident of the other Contracting State may be taxed in that other State.

2 — However, such royalties may also be taxed in the Contracting State in which they arise, and according to the laws of that State, but if the recipient is the beneficial owner of the royalties the tax so charged shall not exceed 10 per cent of the gross amount of the royalties. The competent authorities of the Contracting State shall by mutual agreement settle the mode of application of this limitation.

3 — The term ((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 literary, artistic or scientific work including cinematograph films, and films or tapes for television or radio broadcasting, any patent, trade mark, design c