798

II SÉRIE - NÚMERO 53

erty as defined in paragraph 2 ©f article 6, denied by a resident of a Contracting State who carries on business in the other Contracting State through a permanent establishment situated therein, or piriforms 'n that other State independent personal services from a fixed base situated therein, provided that the right or property in respect of wihch the income is paid is effectively connected with such permanent establishment or fixed base.

ARTICLE 22 (Methods for elimination of double taxation]

1 — In Czechoslovakia, double taxation will be avoided in the following manner:

a) Where a resident of Czechoslovakia denHes

income which, in accordance with the provisions of this Convention, may be taxed in Portugal. Czechoslovakia shall, subject to the provisions of subparagraphs b), c) and d) of this article, exempt such income from tax but may, in calculating tax on the remaining income of that person, apply the rate of tax which would have been applicable if the exempted income had not been so exempted;

b) Czechoslovakia when imposing taxes on its

residents includes in the basis upon which such taxes are imposed the items of income which according to the provisions of articles 10, 11 and 12 of this Convention may also be taxed in Portugal. Czechoslovakia shall allow as a deduction from the amount of tax computed on such a basis an amount equal to the tax paid in Portugal. Such deduction shall not, however, exceed that part of the Czechoslovak tax, as computed before the deduction is given, which is appropriate to the income which, in accordance with the provisions of articles 10, 11 and 12 of this Convention may be taxed in Portugal;

c) The provisions of head b) of this paragraphe

shall also apply when the Portuguese income tax appropriate to dividends, interest and royalties has been wholly relieved or reduced as if no such relief had been given or no such reduction had been allowed;

d) Notwithstanting the provisions of head c) of

this parapraphe, dividends attributed or paid by a company which is a resident of Portugal to a company which is a resident of Czechoslovakia, shall be exempted from Czechoslovak tax to the extent to which, in accordance with the laws of Czechoslovakia, the dividends have been exempted from Czechoslovak tax if the first-mentioned company had been a resident of Czechoslovakia and not a resident of Portugal.

2:

a) Where a resident of Portugal derives income which, in accordance whith the provisions of this Convention, may be taxed in Czechoslovakia, Portugal shall allow as a deduc-

tion from the tax on the income of that resident, an amount equal to the income tax paid in Czechoslovakia.

Such deduction shall not, however, exceed that part of the income tax as computed before the deduction is given, which is attributable to the income which may be taxed Czechoslovakia;

b) Where in accordance with any provision of the Convention income derived by a resident of Portugal is exempt from tax in this State, Portugal may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income.

ARTICLE 23 (Non-discrlmlnatlon)

1 — Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. This provision shall, notwithstanding the provisions of article 1, also apply to persons who are not residents of one or both of the Contracting States.

2 — The term «nationals» means:

a) Ail individuals possessing the nationality of a

Contracting State;

b) All legal persons, partnerships and associations

deriving their status as such from the laws in force in a Contracting State.

3 — The taxation on a permanent establishment which an enterprise of a 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, reliefs and reductions for taxation purposes on account of civil status or family responsabilities which it grants to its own residents.

4 — Except where the provisions of article 9, paragraph 7 of article 11, or paragraph 6 of article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprises, be deductible under the same conditions as if they had been paid to a resident of the first mentioned State.

5 — Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first mentioned State to any taxation or any requirement connected there with which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first mentioned State are or may be subjected.