24 DE ABRIL DE 1999

1636-(25)

b) Grants, scholarship or awards supplied by the Government, or a scientific, educational, cultural or other tax-exempt organisation.

Article 22

Other income

1 —Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing articles of this Agreement shall be taxable only in that Contracting State.

2 — The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the income 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.

Article 23

Methods for the elimination of double taxation

In China, double taxation shall be eliminated as follows:

a) Where a resident of China derives income from Portugal, the amount of tax on that income payable in Portugal in accordance with the provisions of this Agreement, may be credited against the Chinese tax imposed on that resident. The amount of the credit, however, shall not exceed the amount of the Chinese tax on that income computed in accordance with the taxation laws and regulations of China;

b) Where the income derived from Portugal is a dividend paid by a company which is a resident of Portugal to a company which is a resident of China and which owns not less than 10 per cent of the shares of the company paying the dividend, the credit shall take into account the tax paid to Portugal by the company paying the dividend in respect of its income.

2 — In Portugal, double taxation shall be eliminated as follows:

a) Where a resident of Portugal derives income which, in accordance with the provisions of this Agreement, may be taxed in China, Portugal shall allow as a deduction from the tax on the income of that resident an amount equal to the income tax paid in China, 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 in China; and

b) Where in accordance with any provision of this Agreement 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.

3 — The tax paid in a Contracting State mentioned in paragraphs 1 and 2 shall be deemed to include the tax which would have been payable but for the legal provisions concerning tax reduction, exemption or other tax incentives for a limited period of time in accordance with the laws of that State for the promotion of economic development.

The provisions of this paragraph shall apply only to the income foreseen in articles 7, 10, 11 and 12 and for the period of the first ten years during which this Agreement is effective. This period may be extended by mutual agreement between the competent authorities of the Contracting States.

Article 24 Non-discrimination

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, in particular with respect to residence, 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 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 responsibilities which it grants to its own residents.

3 — Except where the provisions of paragraph 1 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 enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State.

4 — 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 therewith 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.

5 — The provisions of this article shall, notwithstanding the provisions of article 2, apply to taxes of every kind and description.

Article 25 Mutual agreement procedure

1 — Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Agreement, he may, irrespective of the remedies provided by the domestic (aw of those States, present his case to the competent authority of the Contracting