1004-(60)

II SÉRIE-A — NUMERO 41

4 — The term «dividends» as used in this article means income from shares, «jouissance» shares or

«jouissance» rights, mining shares, founders' shares or

other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected 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.

5 — The provisions of paragraphs 1, 2 and 3 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 paying the dividens is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividens are paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of article 7 or article 14, as the case may be, shall apply.

6 — 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 paid by the company, except insofar as such dividends are paid to a resident of that other State, or insofar as the holding in respect of which the dividends' are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends 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 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 beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the interest.

3 — Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempted from tax in that State:

a) If the debtor of such interest is the Government of that State, a political or administrative subdivision, a local authority or an administrative-territorial unit thereof; or

b) If interest is paid to the Government of the other Contracting State, a political or administrative subdivision, a local authority or an administrative-territorial unit thereof or an institution or body (including a financial institution) in connection with any financing granted by them under an agreement between the Governments of the Contracting States; or

c) In respect of loans or credit made by the Central banks of the Contracting States and any other financial institution controlled by the State and financing external business which may be agreed upon between the competent authorities of the Contracting States.

4 — The term «interest» as used in this article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right

to participate in the debtor's profits, and in particular,

income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this article.

5 — The provisions of paragraphs 1, 2 and 3 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 therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of article 7 or article 14, as the case may be, shall apply.

6 — Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political or administrative subdivision, a local authority, an administrative-territorial unit or a resident of that State. Where, however, the person 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 paid was incurred, and such interest is borne by such permanent establishment 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 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 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 ot 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.

3 — The term «royalties» as used in this article means payments of any kind, including payments in 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 radio or television broadcasting, transmission to the public by satellite, cable, optic fibre or similar technology, any patent, trade mark, design or model, plan, secret formula or process, or for the use or for the right to