Decree of the Minister for Foreign Affairs No. 17 / 1985 Coll.
Decree of the Minister for Foreign Affairs on the Treaty between the Czechoslovak Socialist Republic and the Italian Republic on the avoidance of double taxation in the field of income taxes and tax evasion
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Effective from 26.06.1984
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17
DECLARATION
Minister for Foreign Affairs
of 22 October 1984
on the Treaty between the Czechoslovak Socialist Republic and the Italian Republic on the avoidance of double taxation in the field of income tax and the prevention of tax evasion
On 5 May 1981 the Treaty between the Czechoslovak Socialist Republic and the Italian Republic on the avoidance of double taxation in the field of income taxes and the prevention of tax evasion was signed in Prague.
The Treaty was approved by the Federal Assembly of the Czechoslovak Socialist Republic and ratified by the President of the Czechoslovak Socialist Republic. The instruments of ratification were exchanged in Rome on 26 June 1984.
The Treaty entered into force on 26 June 1984 pursuant to Article 29 thereof.
The Czech version of the Treaty is hereby published at the same time.
Minister:
Cupcake v. r.
TREATY
between the Czechoslovak Socialist Republic and the Italian Republic on the avoidance of double taxation in income tax and tax evasion
the Czechoslovak Socialist Republic and the Italian Republic,
Desiring to conclude a double taxation contract in the field of income taxes and avoidance of tax evasion, the following provisions have been agreed:
Persons covered by the contract
This Treaty shall apply to persons residing or having their registered office in one or both Contracting States.
Taxes covered by the contract
1. This Treaty shall apply to income taxes collected for the benefit of each of the Contracting States, its lower administrative departments or territorial corporations, whatever the method of collection.
2. Income taxes shall be regarded as income taxes, levied on income or on parts of income, including taxes on profits from the disposal of movable or immovable property, taxes on the total amount of wages paid by undertakings and taxes on the increase in value.
3. The current taxes covered by the contract are:
(a) in Czechoslovakia:
This is the total amount of subordinated mutual member accounts that meet the criteria for Tier 1.
2 - payroll tax;
3 - income tax on literary and artistic activities;
4 - agricultural tax;
5 - income tax on the population;
6 - Home tax
including any deduction at source, any advance payment or advance payment for the taxes referred to above (hereinafter referred to as "Czechoslovak tax ');
(b) in Italy:
1 - personal income tax (l'imposta sul reddito delle persone fysiche);
2 - Corporate tax (l'imposta sul reddito delle persone giuridiche);
3 - local income tax (l'imposta locale sui redditi),
Although these taxes are levied by withholding at source (hereinafter referred to as "Italian tax ').
4. This Treaty shall also apply to taxes of the same or similar kind to be collected after signature of this Treaty, in addition to or in their place. The competent authorities of the Contracting States shall communicate to each other significant changes to be made to their respective tax laws.
General definitions
1. Within the meaning of this Treaty, where the link does not require a different interpretation:
(a) the term "Czechoslovakia" refers to the Czechoslovak Socialist Republic;
(b) the term "Italy" shall mean the Italian Republic;
(c) the terms "one Contracting State" and "the other Contracting State" refer to Czechoslovakia or Italy as appropriate;
(d) the term "person" includes natural persons, companies and any other association of persons;
(e) the term "company" refers to legal persons or rightholders treated as legal persons for taxation purposes;
(f) the terms "undertaking of one Contracting State" and "undertaking of the other Contracting State" refer to an undertaking operated by a person residing or having his registered office in one Contracting State or, where appropriate, an undertaking operated by a person residing or having his registered office in the other Contracting State;
(g) the term "international transport" shall mean any transport carried out by a ship or aircraft operated by an undertaking whose place of effective management is situated in one Contracting State, provided that the ship or aircraft is not operated only between those of the other Contracting State;
(h) the term "nationals" means:
(i) all natural persons who are nationals of a Contracting State;
(ii) all legal persons, personal companies and associations of persons established under the law in force in a Contracting State;
(i) the term "competent authority" shall mean:
(i) in the case of Italy, the Ministry of Finance;
(ii) in the case of Czechoslovakia, the Minister of Finance of the Czechoslovak Socialist Republic or his authorised representative.
2. Any term which is not otherwise defined shall have the meaning, under the law of that State, of the Contracting State which governs the taxes to which this Treaty applies, unless the link requires a different interpretation.
Tax domicile
1. For the purposes of this Treaty, the term "resident or domiciled person" shall mean any person who, under the law of that State, is subject to taxation in that State on account of his residence, permanent residence, place of actual management or any other similar criterion. This term does not, however, include persons who are subject to taxation in that State solely from income from resources located in that State.
2. Where, pursuant to paragraph 1, a natural person resides in both Contracting States, the following procedure shall apply:
(a) it is assumed that that person is resident in the Contracting State in which he is resident; if it has a permanent residence in both Contracting States, it is assumed to reside in the Contracting State to which it has the closest personal and economic relations (centre of life interests).
(b) If it cannot be determined in which Contracting State the person has a centre of his life interests or if he does not have a permanent residence in any Contracting State, he shall be presumed to reside in the Contracting State in which he normally resides.
(c) Where the person normally resides in the two Contracting States or is not normally present in any of them, he shall be presumed to reside in the Contracting State of which he is a national citizen.
(d) If that person is a national citizen of both Contracting States or if he is not a national citizen of any of them, the competent authorities of the Contracting States shall endeavour to adjust the matter by mutual agreement.
3. Where a person other than a natural person has its registered office in both Contracting States pursuant to paragraph 1, it shall be presumed to have its registered office in the State in which the place of its effective management is situated.
Permanent establishment
1. The term "permanent establishment" means, within the meaning of this Treaty, a permanent establishment for a business through which an undertaking carries out its activities in whole or in part.
2. the term "permanent establishment" includes in particular:
(a) the place of management;
(b) the plant;
(c) an office;
(d) the factory;
(e) workshop;
(f) mine, quarry or any other place where natural resources are extracted;
(g) construction sites or installations, if they last for more than 12 months.
3. The following shall not be considered a permanent establishment:
(a) an establishment used only for the storage, display or supply of goods belonging to the undertaking;
(b) a supply of goods belonging to an undertaking which is maintained only for storage, display or delivery;
(c) the supply of goods belonging to an undertaking which is maintained only for the purpose of processing by another undertaking;
(d) permanent business equipment used only for the purpose of purchasing goods or collecting information for the undertaking;
(e) permanent business equipment used for the purposes of advertising, providing information, scientific research or similar activities of a preparatory or auxiliary nature.
4. A person acting in one Contracting State on the behalf of an undertaking of the other Contracting State - other than an independent representative to whom paragraph 5 applies - shall be considered to be a "permanent establishment 'in the former State if he is equipped in that State with the full power normally exercised there and which allows him to conclude contracts on behalf of an undertaking, unless the activity of that person is limited to buying goods for an undertaking.
5. An undertaking shall not be presumed to have a permanent establishment in a Contracting State only because it carries on its business there through a broker, a general agent or any other independent agent, in so far as such persons act in the course of their proper activities.
6. The fact that a company which has its registered office in one Contracting State controls the company or is controlled by a company which has its registered office in the other Contracting State or which carries out its activities there (whether through a permanent establishment or not) does not in itself make it a permanent establishment of any other company.
Revenue from immovable property
1. Revenue from immovable property, including income from agricultural and forestry undertakings, may be taxed in the Contracting State in which such property is located.
2. the term "immovable property" shall be defined in accordance with the law of the Contracting State in which the property lies. In any case, this term includes the accessories of immovable property, the dead and the living inventory of agricultural and forestry undertakings and the rights to which the rules of civil law applicable to land apply. In addition, the right of consumption of immovable property and the right to variable or fixed salaries shall be deemed to be mining or authorised to mine mineral deposits, springs and other natural resources. Ships, boats and aircraft shall not be considered property.
3. The provisions of paragraph 1 shall apply to income from direct use, hire or hire and any other use of immovable property.
(4) Paragraphs 1 and 3 shall apply in the same way to income from the company's immovable property and to income from immovable property used for the pursuit of an independent profession.
Profits of enterprises
1. The profits of an undertaking of one Contracting State may be taxed only in that State if the undertaking does not carry out its activities in the other Contracting State through a permanent establishment located there. Where an undertaking carries out its activities in this way, the profits of the undertaking may be taxed in that other State, but only to the extent that they can be attributed to that permanent establishment.
2. Where an undertaking of a Contracting State carries out its activities in the other Contracting State through a permanent establishment situated there, it shall be attributed, subject to the provisions of paragraph 3 in each Contracting State of that State, to profits which could have been achieved if, as a separate undertaking, it had been engaged in the same or similar activities under the same or similar conditions and was wholly independent in contact with the undertaking of which it is a permanent establishment.
3. In calculating the profits of a permanent establishment, it shall be permitted to deduct the costs incurred for the objectives pursued by that permanent establishment, including management costs and general administrative expenses, whether incurred in the State in which the permanent establishment is located or elsewhere.
4. Where, in a Contracting State, it is customary to determine the profits to be added to a permanent establishment on the basis of the distribution of the company's total profits by its various parts, the provisions of paragraph 2 shall not preclude that State from determining the profits to be taxed by this normal division; However, the method of distribution of profits used shall be such that the result complies with the principles set out in this Article.
5. A permanent establishment shall not make any profits on the basis that it only purchased goods for the undertaking.
(6) For the purposes of the preceding paragraphs, the profits to be attributed to a permanent establishment shall be determined in the same way each year, unless there are sufficient grounds for otherwise.
7. Where profits include revenue which is dealt with separately in other Articles of this Treaty, the provisions of those Articles shall not be affected by the provisions of this Article.
Transport by ship and air
1. Profit from the operation of ships or aircraft in international transport may be taxed only in the Contracting State in which the head office of the undertaking's actual management is located.
2. Where the head office of a shipping undertaking is on board a ship, that head office shall be deemed to be situated in the State in which the home port of that ship is situated or, if the home port is not, in the Contracting State in which the operator of the ship is domiciled.
3. Paragraph 1 shall also apply to profits arising from participation in a pool, joint operation or other international operational organisation.
Associate undertakings
If
(a) the undertaking of one Contracting State participates, directly or indirectly, in the management, control or capital of the undertaking of the other Contracting State; or
(b) the same persons are directly or indirectly involved in the management, control or capital of the undertaking of one Contracting State and of the undertaking of the other Contracting State;
and where, in such cases, both undertakings are bound in their commercial or financial relations by conditions which have been agreed or imposed on them and which differ from those which would have been negotiated between independent undertakings, profits of that undertaking may be included and, as a result, taxed profits which would have been achieved without such conditions by one of the undertakings which, however, could not have been achieved under those conditions.
Dividends
1. Dividends paid by a company having its registered office in one Contracting State, to a person residing or having its registered office in the other Contracting State, may be taxed in that other State.
2. However, these dividends may be taxed in the Contracting State in which the company which pays them has its registered office, under the law of that State, but the tax thus determined may not exceed 15% of the gross amount of dividends if the person who receives the dividends is the actual beneficiary. The competent authorities of the Contracting States shall, by mutual agreement, adapt the methods of applying this restriction.
This paragraph shall not affect the taxation of the profits of the company used for the payment of dividends.
3. The term "dividends," used in this Article, refers to income from shares, profit participation shares or profit participation certificates, coupons, founding shares or other rights, with the exception of receivables, and income from other shares in companies which, under the law of the State in which the company which pays dividends has its registered office, are tax-related to income from shares.
4. The provisions of paragraphs 1 and 2 shall not apply where the beneficial beneficiary of dividends domiciled in one Contracting State carries out in the other Contracting State in which the company which pays dividends, industrial or commercial activities through a permanent establishment which is located there or an independent profession through a permanent base situated there, and where the participation for which dividends are paid actually belongs to that permanent establishment or to that permanent base. In such a case, dividends may be taxed in that other Contracting State under its national law.
5. Where a company having its registered office in one Contracting State achieves profits or income from the other Contracting State, that other State may not tax dividends paid by the company, unless those dividends are paid to a person resident in that other State, or that the holding for which dividends are paid actually belongs to a permanent establishment or a permanent base located in that other State, or to subject the company's undistributed profits to the tax on undistributed profits, even if the dividends paid or earnings distributed are wholly or partly derived from profits or income obtained in that other State.
Interest
1. Interest having a source in one Contracting State and paid to a person residing or having its registered office in the other Contracting State may be taxed only in that other State if that person is actually their beneficiary.
2. The term "interest 'used in this Article refers to revenue from public loans, bonds, whether or not covered by a mortgage on immovable property or a profit participation clause, and to claims of all kinds, as well as any other income assimilated to income from loans by the tax legislation of the State in which the source of such income is a source.
3. The provisions of paragraph 1 shall not apply where the recipient of interest residing or having his registered office in one Contracting State is engaged in an industrial or commercial activity in the other Contracting State in which the interest is received through a permanent establishment situated there or through an independent profession located there, and where the claim on which the interest is paid actually belongs to that permanent establishment or to that permanent establishment. In such a case, interest may be taxed in that other Contracting State under its national law.
4. Where the amount of interest, in view of the claim on which it is paid, exceeds, by reason of the special relations existing between the debtor and the beneficial beneficiary, or which are maintained with third parties, the amount which the debtor would have agreed with the actual beneficiary if it had not been for such relations, the provisions of this Article shall apply only to that last amount. In this case, the amount of the salary exceeding it may be taxed under the legislation of each Contracting State and taking into account the other provisions of this Treaty.
Licence fees
1. Licensing fees having a source in one Contracting State and paid to a person residing or having his registered office in the other Contracting State may be taxed only in that other State if that person is their actual beneficiary.
2. Notwithstanding the provisions of paragraph 1, royalties referred to in paragraph 3 (b) may also be taxed in the Contracting State in which their source is located, under the legislation of that State. However, the tax thus established may not exceed 5% of the gross amount of the royalties if the person who receives the royalties is the actual beneficiary.
3. The term "licence fees" used in this Article shall mean:
(a) compensation of any kind paid for the use or admission of copyright to the work of literary, artistic or scientific, including cinematographic and television films;
(b) compensation of any kind paid for the use or admission to the use of a patent, trade mark, design or model, plan, secret formula or production process, as well as for the use or admission to the use of industrial, commercial or scientific equipment, unless it is an immovable property referred to in Article 6 and for information relating to experience acquired in the field of industrial, commercial or scientific.
4. The provisions of paragraphs 1 and 2 shall not apply where the licensee, residing or domiciled in a Contracting State, carries out either an industrial or commercial activity through a permanent establishment situated there or an independent profession through a permanent establishment situated there in the other Contracting State in which the licence fee is charged, and where the right or property giving rise to the royalties is actually linked to it. In this case, royalties may be taxed in that other Contracting State under its national law.
5. Licensing fees shall be presumed to have a source in one Contracting State if the debtor is the latter itself, its lower administrative department, the Territorial Corporation or the person residing or having its registered office in that State. However, where a licence fee debtor, whether or not domiciled in a Contracting State, has a permanent establishment in a Contracting State for which a contract has been negotiated on the basis of which the licence fee is paid and who bears such royalties on his or her own account, those royalties shall be presumed to have a source in the Contracting State in which the permanent establishment is situated.
6. Where the amount of the licence fees, assessed in the light of the transactions for which they are paid, exceeds, as a result of the special relations existing between the debtor and the actual beneficiary, or which are maintained by one or the other with third parties, the amount which the debtor would have agreed with the actual recipient if it had not been for such relations, the provisions of this Article shall apply only to that last amount. In this case, the amount of the salary exceeding it may be taxed under the legislation of each Contracting State and taking into account the other provisions of this Treaty.
Profit from disposal
(1) Profit from the disposal of immovable property as defined in Article 6 (2) may be taxed in the Contracting State in which the property is located.
2. Proceeds from the disposal of movable property which is part of the assets of a permanent establishment held by an undertaking of one Contracting State in the other Contracting State, or of movable property belonging to a permanent base which a person resident in one Contracting State has in the other Contracting State to pursue an independent occupation, including such profits obtained from the disposal of such permanent establishment (alone or together with the whole of the undertaking) or such permanent base, may be taxed in that other State. Profit from the disposal of ships or aircraft used in international transport and movable property which serves the operation of such ships or aircraft may be taxed only in the Contracting State in which the head office of the undertaking's management is located.
3. Proceeds from the disposal of assets not referred to in paragraphs 1 and 2 may be taxed only in the Contracting State in which the transferee is domiciled or established.
Independent professions
1. Revenue received by a person residing in one Contracting State from an independent profession or other independent activities may be taxed only in that State, provided that such person does not normally have a permanent basis in the other Contracting State to carry out his activity. If such a permanent base is available, income may be taxed in the other State, but only to the extent that it can be attributed to that permanent base.
2. The term "independent profession" shall include, in particular, the independent activities of scientific, literary, artistic, educational or teaching, as well as the independent activities of doctors, legal representatives, engineers, architects, dentists and accountants.
Employment
1. The salaries, wages and other similar remuneration which a person residing in one State receives on account of paid employment may be taxed only in that State, subject to the provisions of Articles 16, 18 and 19, if the employment is not carried out in the other Contracting State. If there is employment there, the remuneration received for them may be taxed in that other State.
2. Remuneration received by a person residing in a Contracting State on account of paid employment in the other Contracting State may, notwithstanding the provisions of paragraph 1, be taxed only in the former State where:
(a) the beneficiary shall stay in the other State for one or more periods not exceeding 183 days in total in the tax year; and
(b) the remuneration is paid by the employer or by an employer who is not domiciled in the other State; and
(c) the remuneration shall not be borne by a permanent establishment or permanent base held by an employer in the other State.
3. Notwithstanding the previous provisions of this Article, remuneration received on account of paid employment carried on board a ship or an aircraft in international transport may only be taxed in the Contracting State in which the head office of the undertaking is situated.
Tantiems
Tantiéms, compensation for participation in administrative bodies and other similar remuneration received by a person residing in one Contracting State as a member of the administrative or supervisory board of a company having its registered office in the other Contracting State may be taxed in that other State.
Artists and athletes
1. Revenue received in public by performers such as theatre, film, radio and television artists and musicians or as sportsmen from their activities carried out in person may be taxed in the Contracting State in which they are carried out, irrespective of the provisions of Articles 14 and 15.
2. Where the income from an activity carried out personally by an artist or athlete in that characteristic does not result from that artist or athlete alone, but from another person, that income may be taxed, irrespective of the provisions of Articles 7, 14 and 15 (1), in the Contracting State in which the artist or athlete carries out his activity.
3. The revenue from the activities defined in paragraph 1 shall be exempt, notwithstanding the provisions of paragraphs 1 and 2 of this Article, from taxation in the State in which those activities are carried out where those activities are carried out under a cultural agreement negotiated between the Contracting States.
Pension
Pensions and other similar salaries paid on account of former employment to a person residing in a Contracting State may be taxed only in that State, subject to the provisions of Article 19 (2).
Public functions
1. (a) Rewards, other than pensions, paid by a Contracting State, a lower administrative department or a local corporation of that State to a natural person for services demonstrated to that State, a lower administrative department or corporation may be taxed only in that State.
(b) However, such remuneration may only be taxed in the other Contracting State if the services were carried out in that State, the recipient is resident in that other Contracting State, and
(i) is a State citizen of that State; or
(ii) has not obtained residence in that State solely for the purpose of such services.
2. (a) Penalties paid by a Contracting State, a lower administrative department or a territorial corporation of that State either directly or from the funds which they have set up, to a natural person for services rendered to that State, to a lower administrative department or corporation may be taxed only in that State.
(b) Such pensions may, however, be taxed only in the second Contracting State if the beneficiary is resident in that State and is a national citizen of that State.
3. The provisions of Articles 15, 16 and 18 shall apply to the remuneration and pensions of services shown in the course of an industrial or commercial activity carried out by a Contracting State, a lower administrative department or a local corporation of that State.
Professors and teachers
Professors or teachers who are temporarily present in one Contracting State for a period not exceeding two years to teach or undertake research there at the University, College, School or other educational institution which is not intended to obtain profit and who have, or were present immediately before such stay, resided in the other Contracting State shall be exempt in the former Contracting State from the remuneration tax for such teaching or research.
Study
Salaries paid by a student or trainee who has or had his or her residence in the other Contracting State prior to his or her arrival in the other Contracting State and who resides in the former State only in order to continue his or her studies or education there shall not be subject to taxation in that State, provided that they originate from sources outside that State.
Other revenue
1. The income of a person residing or having his registered office in a Contracting State not specifically referred to in the previous Articles of this Treaty may be taxed only in that State, irrespective of where it comes from.
2. The provisions of paragraph 1 shall not apply to income other than income from immovable property within the meaning of Article 6 (2), where the recipient of such income domiciled in or established in a Contracting State carries on industrial or commercial activity in the other Contracting State through a permanent establishment which is located there or an independent profession through a permanent base situated there, and the right or property value for which the income is paid actually belongs to that permanent establishment or to that permanent establishment. In this case, such income may be taxed in that other State under its national law.
Provisions on the exclusion of double taxation
It has been agreed that double taxation shall be excluded in accordance with the provisions of the following paragraphs of this Article:
1. For Italy:
Where a person residing or having his registered office in Italy has income which may be taxed in Czechoslovakia, Italy may include that income in the taxable base of that tax when charging its income tax referred to in Article 2 of this Treaty, unless the explicit provisions of this Treaty prevent that.
In such a case, Italy shall deduct from the taxes thus levied the income tax paid in Czechoslovakia, but the amount to be deducted may not exceed the proportion of the Italian tax applicable to that income corresponding to the ratio of that income to the total income.
However, no amount shall be deducted if a certain part of the income in Italy is subject, at the request of the recipient, to a definitive withholding tax at source in accordance with Italian national rules.
2. In the case of Czechoslovakia:
(a) Where a person domiciled or domiciled in Czechoslovakia receives income which may be taxed in Italy under the provisions of this Treaty, Czechoslovakia shall, subject to the provisions referred to in (b), exempt that income from taxation. However, Czechoslovakia may use the same tax rate when calculating the amount of tax on other income of that person as if the income in question were not exempt from taxation.
(b) Czechoslovakia may include in the tax base the income which may also be taxed in Italy under the provisions of Articles 10, 12, 16 and 17 of this Treaty when imposing taxes on persons residing in Czechoslovakia. Czechoslovakia shall allow the amount of tax levied on the income of that person to be reduced by an amount equal to that paid in Italy. However, the amount by which the tax will be reduced shall not exceed that part of the Czechoslovak tax calculated before its reduction, which is proportional to the revenue received from Italy.
Principle of equal treatment
1. Nationals of one Contracting State shall not be subject in the other Contracting State to any taxation or obligations associated with it which are different or more burdensome than that of taxation and to which nationals of that other State may or may be subject who are in the same situation. This provision shall also apply, notwithstanding the provisions of Article 1, to persons who do not have their domicile or registered office in either of the two Contracting States.
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Regulation Information
| Citation | Decree of the Minister for Foreign Affairs No. 17 / 1985 Coll., on the Treaty between the Czechoslovak Socialist Republic and the Italian Republic on the avoidance of double taxation in the field of income taxes and the prevention of tax evasion |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 15.03.1985 |
|---|---|
| Effective from | 26.06.1984 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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