Communication from the Ministry of Foreign Affairs No 203 / 1999 Coll.
Communication from the Ministry of Foreign Affairs on the Treaty between the Czech Republic and the Republic of Bulgaria on the avoidance of double taxation and the prevention of tax evasion in the field of income and property taxes
Valid
Effective from 02.07.1999
Text versions:
15.09.1999
Zobrazeno prvních 200 z celkem 256 ustanovení tohoto předpisu.
Zobrazit celý předpis →
Pro stažení celého znění použijte tlačítko Stáhnout výše.
203
COMMUNICATION
Ministry of Foreign Affairs
The Ministry of Foreign Affairs announces that on 9 April 1998 a Treaty was signed in Sofia between the Czech Republic and the Republic of Bulgaria to avoid double taxation and prevent tax evasion in the field of income and property taxes.
The Parliament of the Czech Republic agreed to the Treaty and the President of the Republic ratified the Treaty.
The Treaty entered into force on 2 July 1999 pursuant to Article 28 (2) thereof. Its provisions shall be implemented in accordance with paragraph 2 (a) and (b). According to paragraph 3 of that Article, on the date on which this Treaty is implemented, the following shall cease to be implemented in relations between the Czech Republic and the Republic of Bulgaria:
Treaty on the prevention of double taxation of income and property of natural persons, signed in Miskovci on 27 May 1977, published under No 30 / 1979 Coll.,
and
Treaty on the prevention of double taxation of corporate income and property, signed at Ulanbatar on 19 May 1978, published under No 49 / 1979 Coll.
The Czech version of the Treaty is hereby published at the same time. The English version of the Treaty, which is relevant for its interpretation, can be consulted by the Ministry of Foreign Affairs and the Ministry of Finance.
TREATY
between the Czech Republic and the Republic of Bulgaria on the avoidance of double taxation and the prevention of tax evasion in the field of income and property taxes
the Czech Republic and Bulgaria,
Desiring to conclude a contract to avoid double taxation and prevent tax evasion in the field of income and property taxes,
agree as follows:
Persons to whom the Treaty applies
This Agreement shall apply to persons resident in one or both Contracting States.
Taxes to which the Treaty applies
1. This Agreement shall apply to income and property taxes levied on behalf of each of the Contracting States or its local authorities, whatever the method of collection.
2. All taxes levied on total income, on total assets or on parts of income or on assets, including taxes on profits from the disposal of movable or immovable property, taxes on total wages or salaries paid by undertakings as well as taxes on the increase of assets, shall be regarded as income and property taxes.
3. The current taxes to which the Treaty applies are in particular:
(a) in the Czech Republic:
(i) income tax on natural persons;
(ii) corporation tax;
(iii) real estate tax;
(hereinafter referred to as the "Czech tax ');
(b) Bulgaria:
(i) income tax on natural persons;
(ii) company income tax;
(iii) real estate tax;
(hereinafter referred to as "Bulgarian tax ').
4. The Treaty will also apply to any similar taxes which will be imposed after the signature of the Treaty in addition to or instead of the current taxes. The competent authorities of the Contracting States shall communicate to each other any substantial changes to be made to their respective tax laws.
General definitions
1. For the purposes of this Treaty, unless the link requires a different interpretation:
(a) the terms "one Contracting State" and "the other Contracting State" indicate, as appropriate, the Czech Republic or Bulgaria;
(b) the term "Czech Republic" refers to the territory of the Czech Republic in which, under Czech law and in accordance with international law, the sovereign rights of the Czech Republic are exercised;
(c) the term "Bulgaria" refers to the Republic of Bulgaria and, where it is used in geographical importance, indicates the territory and the territorial waters where Bulgaria exercises its national sovereignty, as well as the continental shelf and the exclusive economic zone where Bulgaria exercises sovereign rights and jurisdiction under international law;
(d) the term "person" includes a natural person, a company and any other association of persons;
(e) the term "company" refers to any legal person or any rightholder regarded as a legal person for taxation purposes;
(f) the terms "undertaking of one Contracting State" and "undertaking of the other Contracting State" indicate, according to the context, an undertaking operated by a resident of one Contracting State and an undertaking operated by a resident of the other Contracting State;
(g) the term "national" means:
(i) any natural person who is a national citizen of a Contracting State;
(ii) any legal person, personal company or association established under the legislation in force in a Contracting State;
(h) the term "international transport" shall mean any transport by ship, aircraft, railway or road vehicle operated by an undertaking of a Contracting State, except where a ship, aircraft, railway or road vehicle is operated only between points in the other Contracting State;
(i) the term "competent authority" shall mean:
(i) in the case of the Czech Republic, the Minister of Finance or his authorised representative;
(ii) in the case of Bulgaria, the Minister for Finance or his authorised representative.
2. With regard to the implementation of the Treaty at any time by any of the Contracting States, any expression which is not defined therein, unless the link requires a different interpretation, shall have the meaning which it has at that time under the legislation of that State for the purposes of the taxes to which the Treaty applies, and any meaning under the tax laws of that State shall prevail over the meaning of that State's other legislation.
Resident
1. For the purposes of this Treaty, the term "resident of one Contracting State" shall mean any person who, under the legislation of that State, is subject to taxation in that State on account of his residence, residence, nationality, place of administration, place of establishment or any other similar criterion, and shall also include that State and any local authority of that State. However, this term does not include any person who is subject to taxation in that State solely because of income from resources in that State or of assets placed there.
2. Where, pursuant to paragraph 1, a natural person is resident in both Contracting States, its status shall be determined as follows:
(a) it is assumed that this person is only resident in the State in which he has a permanent residence; if it has a permanent residence in both countries, it is assumed that it is only resident in the State to which it has closer personal and economic relations (centre of life interests);
(b) where it cannot be determined in which State that person has a centre of his or her life interests, or if he or she does not have a permanent residence in any State, he / she shall be presumed to be resident only in the State in which he / she normally resides;
(c) if the person normally resides in both States or in none of them, he shall be presumed to be resident only in the State of which he is a national;
(d) where that person is a national of both States or none of them, the competent authorities of the Contracting States shall amend the matter by mutual agreement.
3. Where, pursuant to paragraph 1, a person other than a natural person is resident in both Contracting States, he shall be presumed to be resident only in the State under whose law he was established.
Permanent establishment
1. The term "permanent establishment" shall, for the purposes of this Treaty, indicate a permanent place of business through which the business of the undertaking is to be carried out 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; and
(f) mine, oil or gas site, quarry or any other place where natural resources are extracted.
3. the term "permanent establishment" also covers:
(a) construction site, construction, installation or supervision associated with it, but only if such construction, project or supervision lasts more than 12 months;
(b) the provision of services, including consultancy or management services, by an undertaking of one contracting State through staff or other personnel hired by the undertaking for that purpose, but only if the activities of that nature persist within the territory of the other contracting State for one or more periods exceeding six months in total in any 12-month period.
4. Notwithstanding the previous provisions of this Article, the term "permanent establishment 'shall not include:
(a) an establishment which is used only for the purpose of storing, issuing or delivering goods belonging to the undertaking;
(b) the supply of goods belonging to an undertaking which is maintained only for storage, display or delivery;
(c) a stock of goods belonging to an undertaking which is maintained only for the purpose of processing by another undertaking;
(d) a permanent place of business which is maintained only for the purpose of purchasing goods or collecting information for the undertaking;
(e) a permanent place of business which shall be maintained only for the purpose of carrying out any other activity having a preparatory or ancillary character for the undertaking;
(f) a permanent place of business which shall be maintained only for the pursuit of any combination of the activities referred to in points (a) to (e) where the total activity of the permanent place of business resulting from that concentration is of a preparatory or auxiliary nature.
5. Where, irrespective of the provisions of paragraphs 1 and 2, a person - other than an independent representative to whom paragraph 7 applies - acts on the behalf of an undertaking in a Contracting State and has and usually uses an authorisation to conclude contracts on behalf of an undertaking, that undertaking shall be deemed to have a permanent establishment in that State in respect of all activities carried out by that person for the undertaking, provided that the activities of that person are not limited to the activities referred to in paragraph 4, which, if carried out through a permanent place of business, would not be based on that permanent establishment in accordance with the provisions of this paragraph.
6. Notwithstanding the previous provisions of this Article, an insurance undertaking of one Contracting State, with the exception of reinsurance premiums, shall be presumed to have a permanent establishment in the other Contracting State where it collects insurance premiums in the territory of that other State or insure the risks that are present there through a person other than an independent representative to whom paragraph 7 applies.
7. An undertaking shall not be considered to have a permanent establishment in a Contracting State only because it carries out its business in that State through a broker, a general agent or any other independent agent, where such persons act in the course of their proper activities. However, where the activities of such a representative are wholly or almost entirely devoted to the interests of that undertaking, that representative shall not be considered as independent within the meaning of this paragraph.
8. The fact that a company which is a resident of one Contracting State controls or is controlled by a company which is a resident of the other Contracting State or which carries out its business in that other State (whether through a permanent establishment or otherwise) does not in itself make that company a permanent establishment of the other company.
Revenue from immovable property
1. Revenue received by a resident of one Contracting State from immovable property (including agricultural or forestry income) located in the other Contracting State may be taxed in that other State.
2. The term "immovable property" shall have such meaning as it may have under the law of the Contracting State in which the property is located. The term covers, in any case, the accessories of immovable property, the live and dead inventory used in agriculture and forestry, the rights to which the provisions of civil law applicable to land, the right to consume immovable property and the right to variable or fixed payments for mining or to be allocated to mining mineral deposits, springs and other natural resources apply; ships and aircraft shall not be considered immovable property.
3. Paragraph 1 shall apply to revenue received from direct use, hire or any other use of immovable property.
(4) Paragraphs 1 and 3 shall also apply to income from the company's immovable property and to income from immovable property used to pursue an independent profession.
Profits of enterprises
1. The profits of an undertaking of one Contracting State shall be subject to taxation only in that State if the undertaking does not carry out its activities in the other Contracting State through a permanent establishment situated there. If an undertaking carries out its activities in this way, the profits of the undertaking may be taxed in the other State, but only to the extent that they can be attributed to this permanent establishment.
2. Where an undertaking of a Contracting State carries on 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 permanent establishment, to profits which could have been achieved if it had been engaged in the same or similar activities as a separate undertaking 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 the permanent establishment, including management costs and general administrative expenses thus incurred, whether they arise in the State where 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 different parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by this normal division; However, the method of division 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 added to a permanent establishment shall be determined in the same way each year, unless there are sufficient grounds for otherwise.
7. Where profits include parts of income which are dealt with separately in other Articles of this Treaty, the provisions of those Articles shall be without prejudice to the provisions of this Article.
International transport
1. The profits received by the undertaking of the Contracting State from the operation of ships, aircraft, railway or road vehicles in international transport shall be subject to taxation only in that State.
2. Paragraph 1 shall also apply to profits received from participation in a pool, joint operation or an 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 participate, directly or indirectly, in the management, control or capital of the undertaking of one Contracting State and of the undertaking of the other Contracting State
and if, in such cases, both undertakings are bound in their commercial or financial relations by conditions which have been negotiated or imposed on them and which differ from those which would have been negotiated between independent undertakings, any profits which, if not for those conditions, would have been achieved by one of the undertakings but have not been achieved, may be included in the profits of that undertaking and subsequently taxed.
Dividends
1. Dividends paid by a company resident in one Contracting State may be taxed in that other State.
2. However, such dividends may also be taxed in the Contracting State of which the company which pays them is resident under the law of that State, but where the beneficial owner of dividends is resident in the other Contracting State, the tax thus imposed shall not exceed 10 per cent of the gross amount of dividends.
The competent authorities of the Contracting States shall, by mutual agreement, adapt the method of application of this restriction.
This paragraph shall not affect the taxation of the profits of the company on which dividends are paid.
3. The term "dividends" used in this Article refers to income from shares or other rights, with the exception of receivables, with a share in profits, as well as other income which is subject to the same tax regime as income from shares under the legislation of the State of which the company which divides profits is resident.
4. The provisions of paragraphs 1 and 2 shall not apply where the beneficial holder of dividends resident in one Contracting State is engaged in an industrial or commercial activity in the other Contracting State of which the dividend company is resident through a permanent establishment situated there or in that other State of an independent profession from a permanent base located there, and where the participation for which dividends are paid is actually linked to that permanent establishment or permanent base. In that case, the provisions of Article 7 or Article 14 shall apply depending on the case.
5. Where a company which is resident 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 such dividends are paid to the resident of that other State or that the participation for which dividends are paid actually relates to a permanent establishment or a permanent base located in that other State, or to subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or earnings distributed are wholly or partly derived from profits or income having a source in that other State.
Interest
1. Interest having a source in one Contracting State and paid to the 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 they have a source under the law of that State, but if the beneficial owner of the interest is resident in the other Contracting State, the tax thus imposed shall not exceed 10% of the gross amount of interest.
The competent authorities of the Contracting States shall, by mutual agreement, adapt the method of application of the restrictions and restrictions referred to in paragraph 3.
3. Notwithstanding the provisions of paragraph 2, interest shall be exempt from taxation in the Contracting State in which they have a source if they are:
(a) received and actually owned:
(i) the Government of the second Contracting State, including any local office of that State, central bank or any financial institution wholly owned by that Government; or
(ii) resident of the second Contracting State in connection with a loan or loan guaranteed by the Government of that other State;
(b) paid in connection with the sale of any equipment or goods on a commercial credit.
4. The term "interest 'used in this Article shall refer to revenue from claims of any kind, whether secured or not, or not secured by a lien on immovable property or having or not having the right to participate in the debtor's profit, and in particular income from government securities and income from bonds or bonds, including premiums and winnings related to such securities, bonds or bonds. Penalties imposed for late payment shall not be considered as interest for the purposes of this Article.
(5) Paragraphs 1, 2 and 3 shall not apply where the beneficial owner of interest resident in one of the Contracting States 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 in that other State in an independent profession from a permanent base situated there, and where the claim on which interest is paid is actually linked to that permanent establishment or permanent base. In that case, the provisions of Article 7 or Article 14 shall apply depending on the case.
6. Interest is assumed to have a source in the Contracting State if the payer is a resident of that State. However, if the interest payer, whether or not he is resident in a Contracting State, has a permanent establishment or a permanent base in the Contracting State in conjunction with which the debt on which the interest is paid has been incurred and such interest is charged to such a permanent establishment or permanent base, such interest shall be assumed to have a source in the State in which the permanent establishment or permanent base is located.
7. If the amount of interest relating to the claim on which it is paid exceeds, due to the special relationship between the payer and the beneficial owner or between both of them and any other person, the amount which the payer would have agreed with the beneficial owner if it had not been for such a relationship, the provisions of this Article shall apply only to that latter amount. In this case, the amount of payments exceeding it shall be taxed in accordance with the laws of each Contracting State, taking into account the other provisions of this Treaty.
Licence fees
1. Licensing fees having a source in one Contracting State and paid to the 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 have a source under the legislation of that State, but if the beneficial owner of the royalties is resident in the other Contracting State, the tax thus imposed shall not exceed 10 per cent of the gross amount of royalties.
The competent authorities of the Contracting States shall, by mutual agreement, adapt the method of application of this restriction.
3. The term "licence fees' used in this Article refers to payments of any kind received as compensation for use or as a right to use any copyright for the work of literary, artistic or scientific, including cinematographic films and films, recordings or discs for television or radio broadcasting, any patent, trade mark, design or model, plan, secret formula or production process, or any industrial, commercial or scientific establishment, or for information relating to experience acquired in the field of industrial, commercial or scientific (knowhow).
4. The provisions of paragraphs 1 and 2 shall not apply where the beneficial owner of a licence fee resident in a Contracting State is engaged in a source, industrial or commercial activity through a permanent establishment situated there or in a permanent establishment situated there in that other State, and where the right or property giving rise to royalties is actually linked to that permanent establishment or permanent establishment. In that case, the provisions of Article 7 or Article 14 shall apply depending on the case.
5. Licensing fees are assumed to have a source in a Contracting State if the payer is a resident of that State. However, where a licence fee payer, whether or not he is a resident of a Contracting State, has a permanent establishment or permanent base in the Contracting State in conjunction with which a licence fee has been paid and such royalties are charged to such a permanent establishment or permanent base, it is assumed that such licence fees have a source in the State in which the permanent establishment or permanent base is located.
6. Where the amount of royalties relating to the use, right or information for which they are paid exceeds, as a result of the special relationship between the payer and the beneficial owner or between both of them and any other person, the amount which the payer would have agreed with the beneficial owner if it had not been for such relations, the provisions of this Article shall apply only to that latter amount. In this case, the amount of payments exceeding it shall be taxed in accordance with the laws of each Contracting State, taking into account the other provisions of this Treaty.
Profit from disposal
(1) Profit received by a resident of a Contracting State from the disposal of immovable property referred to in Article 6, located in the other Contracting State, may be taxed in that other State.
(2) Profit from the disposal of movable property which is part of an operating property of a permanent establishment which is owned by an undertaking of one Contracting State in the other Contracting State, or of movable property belonging to a permanent base which is owned by a resident of one Contracting State in the other Contracting State for the purpose of carrying out an independent occupation, including profits from the disposal of such permanent establishment (alone or together with the whole undertaking) or such permanent base, may be taxed in that other State.
3. Profit from the disposal of assets owned by a contracting State undertaking and remaining from ships, aircraft, railway or road vehicles operated by that undertaking in international transport or from the disposal of movable property owned by that undertaking and used to operate such ships, aircraft, railway or road vehicles shall be subject to taxation only in that Contracting State.
(4) Profit from the disposal of any assets other than those referred to in paragraphs 1, 2 and 3 shall be subject to taxation only in the Contracting State of residence of which the extraneous is resident.
Free and other independent professions
1. Revenue received by a resident of a Contracting State from a professional or other independent activity shall be subject to taxation only in that State, except in the following cases where such revenue may also be taxed in the other Contracting State:
(a) where the resident is regularly available in the second Contracting State to carry out his activities; in that case, only part of the income attributable to this permanent base may be taxed in that other State; or
(b) if his stay in the other State for one or more periods exceeds 183 days in total in any 12-month period beginning or ending in the relevant tax year; in that case, only that part of the income received from his activities in that other State may be taxed in that other State.
2. The following days shall be included in the calculation of the period referred to in paragraph 1 (b):
(a) all days of physical presence including days of arrival and departure; and
(b) days spent outside the State of activities such as Saturdays and Sundays, national holidays, holidays and business trips directly linked to the pursuit of the activity of the beneficiary in that State, after which the activity in that State was continued.
3. The term "free profession" shall include the particular independent activities of scientific, literary, artistic, educational or teaching and the independent activities of doctors, lawyers, engineers, architects, dentists and accountants.
Employment
1. Salaries, wages and other similar remuneration received by a resident of a Contracting State on account of employment shall be subject to taxation in that State only, subject to the provisions of Articles 16, 18, 19 and 20, if the employment is not carried out in the other Contracting State. If there is employment there, the remuneration received may be taxed in that other State.
2. The remuneration received by a resident of a Contracting State on the grounds of employment in the other Contracting State shall, notwithstanding the provisions of paragraph 1, be subject to taxation only in the former State if all the following conditions are met:
(a) the beneficiary is employed in the other State for one or more periods not exceeding 183 days in total in any 12-month period beginning or ending in the relevant tax year; and
(b) remuneration is paid by an employer or an employer who is not a resident of the other State; and
(c) remuneration shall not be borne by a permanent establishment or a permanent base held by an employer in the other State.
3. The following days shall be included in the calculation of the period referred to in paragraph 2 (a):
(a) all days of physical presence including days of arrival and departure; and
(b) days spent outside the State of activities such as Saturdays and Sundays, national holidays, holidays and business trips directly linked to the employment of the beneficiary in that State, after which the activity in that State continued.
4. The term "employer" referred to in paragraph 2 (b) shall refer to a person who has the right to work done and who bears the responsibility and risk associated with carrying out the work.
5. Notwithstanding the previous provisions of this Article, remuneration received on account of employment carried on board a ship, aircraft, railway or road vehicle operating in international transport may be taxed by an undertaking of the Contracting State in that State.
Tantiems
Tantiéms and other similar payments received by a resident of a Contracting State as a member of the Management Board or any other similar body of a company resident of the other Contracting State may be taxed in that other State.
Artists and athletes
1. Revenue received by a resident of a Contracting State as a public performer, such as a theatre, film, radio or television artist or musician or as an athlete from such personally performed activities in the other Contracting State may be taxed in that other State, irrespective of the provisions of Articles 14 and 15.
2. Where the income from activities personally carried out by an artist or athlete does not originate from artists or athletes themselves but from other persons, that income may be taxed, irrespective of the provisions of Articles 7, 14 and 15, in the Contracting State in which the activities of an artist or athlete are carried out.
Pension
1. Pensions and other similar salaries paid by a resident of a Contracting State on account of former employment shall be subject to taxation in that State only, subject to the provisions of Article 19 (2).
2. Notwithstanding the provisions of paragraph 1, paid pensions and other similar salaries made on the basis of a public plan which is part of a social security scheme of a Contracting State shall be subject to taxation only in that State.
Public functions
1. (a) Salaries, wages and other similar remuneration other than pensions paid by one Contracting State or local authority to that State to a natural person for services rendered to that State or office shall be subject to taxation only in that State.
(b) However, such salaries, wages and other similar remuneration shall be subject to taxation only in the second Contracting State where the services are demonstrated in that State and the natural person resident in that State:
(i) is a national of that State; or
(ii) it did not become a resident of that State solely for the purpose of proving these services.
2. (a) Any pension paid by one Contracting State or local authority of that State or paid from the funds which they have set up shall be subject to taxation only in that State to a natural person for the services shown to that State or office.
(b) However, such pensions shall be subject to taxation only in the second Contracting State if the natural person is resident and a national of that State.
3. Article 15, 16, 17 and 18 shall apply to salaries, wages and other similar remuneration and pensions for services demonstrated in connection with industrial or commercial activities carried out by a Contracting State or a local authority of that State.
Students
1. Payments which he receives for the purpose of paying the cost of his or her nutrition, education or training of a student or apprentice who, or immediately before his or her arrival in a Contracting State, is resident in a second Contracting State and who is present in the former State only for the purpose of his or her education or training, shall not be subject to taxation in that State provided that such payments originate from sources outside that State.
2. In addition, as regards the support, training and remuneration of non-employment referred to in paragraph 1, the student or apprentice referred to in paragraph 1 shall have the right, during such training or training, to the same tax exemptions, discounts or reductions as are due to the residents of the State in which he resides.
Other revenue
Parts of the income of a resident of a Contracting State not specifically mentioned in the previous Articles of this Treaty shall be taxed only in that State, except where such income is received from sources in the other Contracting State. In that case, such revenue may also be taxed in that other State.
Sign in for notes, favorites and notifications
Regulation Information
| Citation | Communication from the Ministry of Foreign Affairs No. 203 / 1999 Coll., on the Agreement between the Czech Republic and the Republic of Bulgaria on the prevention of double taxation and the prevention of tax evasion in the field of income and property taxes |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 15.09.1999 |
|---|---|
| Effective from | 02.07.1999 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
Comments 0