Decree of the Minister for Foreign Affairs No. 53 / 1983 Coll.
Decree of the Minister for Foreign Affairs on the Treaty between the Government of the Czechoslovak Socialist Republic and the Government of the Kingdom of Denmark on the avoidance of double taxation in the field of income and property taxes
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Effective from 27.12.1982
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53
DECLARATION
Minister for Foreign Affairs
of 15 February 1983
on the Treaty between the Government of the Czechoslovak Socialist Republic and the Government of the Kingdom of Denmark on the avoidance of double taxation in the field of income and property taxes
On 5 May 1982 the Treaty between the Government of the Czechoslovak Socialist Republic and the Government of the Kingdom of Denmark on the avoidance of double taxation in the field of income and property taxes was signed in Prague. The Treaty entered into force on 27 December 1982 pursuant to Article 29 (2) thereof. On that date, the Agreement between the Czechoslovak Socialist Republic and the Kingdom of Denmark on the reciprocal exemption of airlines from taxation negotiated by an exchange of notes on 25 October 1962, published on 4 / 1963 Coll.
The Czech translation of the Treaty is announced simultaneously.
Minister:
Ing. Chupek v. r.
TREATY
between the Government of the Czechoslovak Socialist Republic and the Government of the Kingdom of Denmark on the avoidance of double taxation in the field of income and property taxes
The Government of the Czechoslovak Socialist Republic and the Government of the Kingdom of Denmark,
awareness of the principles enshrined in the Final Act of the Conference on Security and Cooperation in Europe
and wishing to exclude double taxation in the field of income and property taxes,
agree to conclude the following contract:
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 and property taxes levied for the benefit of a Contracting State, its lower administrative departments or local authorities, whatever the method of collection.
2. All taxes levied on total income, on total assets or on individual parts of income or assets, including taxes on profits accruing from the disposal of movable or immovable property and taxes on the increase in value, shall be treated as income and property taxes.
3. The current taxes covered by the contract are in particular:
(a) in Denmark:
(i) income tax in favour of the State (indkomstskatten til staten),
(ii) income tax in favour of the municipality (den kommunale indkomst skat),
(iii) income tax in favour of the district (den amtskommunale indkomstskat),
(iv) old-age insurance contributions (folkepensionsbidragen),
(v) tax on seafarers (somandsskatten),
(vi) special income tax (den saerlige indkomstskat),
(vii) church tax (kirkeskatten),
(viii) dividend tax (udbytteskatten),
(ix) sickness insurance allowance (bidrag til dagpengefonden),
(x) State property tax (formuskatten til staten)
(hereinafter referred to as "Danish tax ').
(b) in Czechoslovakia:
(i) profit payment and profit tax,
(ii) payroll tax,
(iii) income tax on literary and artistic activities,
(iv) agricultural tax;
(v) population income tax,
(vi) home tax,
(vii) capital contribution
(hereinafter referred to as "Czechoslovak Tax ').
4. The contract will also apply to all identical or substantially similar taxes which will be imposed upon signature of the contract in addition to or in place of current taxes. The competent authorities of the Contracting States shall notify each other of significant 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" refer to Denmark or Czechoslovakia as appropriate.
(b) the term "Denmark" refers to the Kingdom of Denmark and covers any area beyond the territorial waters of Denmark, which has been or may be designated, in accordance with international law, under Danish law, as an area over which Denmark may exercise sovereign rights relating to the research and exploitation of the natural resources of the seabed and its subsoil; This term does not cover the Faroe Islands and Greenland.
c) The term "Czechoslovakia" refers to the Czechoslovak Socialist Republic.
(d) The term "person" includes natural persons, companies and any other association of persons.
(e) The term "company" shall refer to any legal person or substance considered to be a legal entity for tax purposes.
(f) The terms "undertaking of one Contracting State" and "undertaking of the other Contracting State" shall refer to an undertaking operated by a person resident or domiciled in one Contracting State or, where appropriate, an undertaking operated by a person domiciled or domiciled in the other Contracting State.
(g) The term "member" shall mean:
(i) all natural persons who are nationals of a Contracting State;
(ii) all legal persons, personal companies and associations established under the law in force in a Contracting State.
(h) The term "international transport" shall mean any transport carried out by a ship or aircraft operated by an undertaking the actual management of which is located in a Contracting State, unless the ship or aircraft is used only between locations situated in the other Contracting State.
(i) The term "competent authority" shall mean:
(i) in the case of Denmark, the Minister for State Revenue, Customs and Excise Duties or his authorised representative;
(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 defined in the contract shall have meaning for its application by the contracting State, which shall belong to it under the law of that State governing the tax which is the subject of that contract, unless the link requires a different interpretation.
Tax domicile
1. For the purposes of this Treaty, the term "resident or registered in a Contracting State 'shall mean any person who, under the law of that State, is subject to taxation in that State by reason of his residence, residence, place of administration or any other similar criterion. However, this term does not include persons who are subject to taxation in that State only with income from resources or property situated in that State.
2. Where, pursuant to paragraph 1, a natural person resides in both Contracting States, his status shall be determined as follows:
(a) It is assumed that this person is resident in the State in which he is resident. If she has a permanent residence in both Contracting States, she shall be presumed to reside in the State with which her personal and economic relations are closest (centre of life interests).
(b) If the State in which the person has a centre of his or her life interests cannot be designated or if he or she does not have a permanent residence in either of the two States, he / she shall be presumed to reside in the State in which he / she usually resides.
(c) Where such person is normally present in both States or if he is not normally present in any of them, he shall be presumed to reside in the State of which he is a national.
(d) Where that person is a national of both States or is not a national of any of them, the competent authorities of the Contracting States shall adjust the matter by common accord.
3. Where a person other than a natural person has its registered office in both Contracting States in accordance with the provisions of paragraph 1, it shall be presumed to have its registered office in the State in which its actual management is located.
Permanent establishment
1. For the purposes of this Treaty, the term "permanent establishment" shall mean a permanent establishment for the business in which the undertaking carries out its activities in whole or in part.
2. the term "permanent establishment" includes in particular:
(a) place of management;
(b) the race;
(c) an office;
(d) the factory,
(e) a workshop; and
(f) mine, oil or gas, quarry or other site of extraction of natural resources.
3. Construction sites or installations shall be a permanent establishment only if they last for more than 12 months.
4. Notwithstanding the previous provisions of this Article, the term "permanent establishment 'shall not include:
(a) equipment used only for the storage, display or supply of goods to the undertaking;
(b) the supply of goods to an undertaking which is maintained only for storage, display or delivery;
(c) the supply of goods to an undertaking which is maintained only for the purpose of processing by another undertaking;
(d) permanent business equipment which is maintained only for the purpose of purchasing goods or collecting information for the undertaking;
(e) permanent business equipment which is maintained only for the purpose of carrying out other activities for an undertaking having a preparatory or ancillary character;
(f) a permanent establishment for business which shall be maintained only for the purpose of carrying out several of the activities referred to in (a) to (e), provided that the total activity of that permanent establishment for business resulting from the concentration of those activities is of a preparatory or ancillary nature.
5. A person - other than a representative having an independent position, referred to in paragraph 6, who acts as an undertaking and is equipped in a Contracting State with the full power normally exercised there and which permits him to conclude contracts on behalf of an undertaking, shall, irrespective of the provisions of paragraphs 1 and 2, be regarded as a permanent establishment of an undertaking in that State, taking into account the activities carried out by that person for the undertaking, provided that the activities of such a person are not limited to the activities referred to in paragraph 4 which, had been carried out through a permanent establishment for business, would not have made that permanent establishment into a permanent establishment under the provisions of this paragraph.
6. It is not assumed that an undertaking has 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 representative having an independent position, if such persons act in the proper framework of their activities.
7. The fact that a company which has its registered office in one Contracting State controls a company or is controlled by a company which has its registered office in 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 it a permanent establishment of any other company.
Revenue from immovable property
1. Revenue received by a person residing or having his registered office in one Contracting State from immovable property (including income from agricultural or forestry holdings), situated in the other Contracting State, may be taxed in that other State.
2. The term "immovable property" shall have the meaning which it has under the law of the Contracting State in which such property is situated. The term covers, in any case, accessories for immovable property, a live and dead inventory of agricultural and forestry holdings, rights to which the provisions of civil law applicable to land property, the consumption of immovable property and the right to variable or fixed salaries for mining or the right to mine mineral deposits, springs and other natural resources apply; ships and aircraft shall not be considered immovable property.
3. The provisions of paragraph 1 shall apply to revenue from direct use, rental and any other use of immovable property.
4. The provisions of paragraphs 1 and 3 shall also apply to income from the company's immovable property and to income from immovable property used for the performance of services provided in person by an independent profession.
Profits of enterprises
1. The profits of undertakings 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. 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 it is expected to achieve if, as a separate undertaking, it carries out the same or similar activities under the same or similar conditions and trade completely independently with the undertaking of which it is a permanent establishment.
3. In determining 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 so incurred either 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 different parts of it, the provisions of paragraph 2 shall not preclude that Contracting State from determining the profits to be taxed by division as usual. The method of distribution of profits adopted shall be such that the result is consistent 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 each year on the basis of the same method, unless there are serious and sufficient grounds for a different procedure.
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.
Sea and air transport
1. Profit from the operation of ships or aircraft in international transport shall be subject to taxation only in the Contracting State in which the actual management of the undertaking is located.
2. Where the actual management of a shipping undertaking is on board a ship, it shall be deemed to be located in the Contracting State in which the ship has its home port, or if the ship does not have its home port, it shall be deemed to be located in the State in which the operator of the ship has his registered office or registered office.
3. Paragraph 1 shall also apply to profits arising from participation in a pool, joint operation or an international operational organisation.
4. Paragraph 1 shall apply only to that part of the profits achieved by the Danish, Norwegian and Swedish Air Transport Consortium, Scandinavian Airlines (SAS), which corresponds to the participation in the consortium of the company owned by Det Danske Luftfartsselskab (DDL), which is the Danish partner of Scandinavian Airlines (SAS).
United enterprises
1.
(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 one or the other cases, conditions have been negotiated or imposed between both undertakings in their commercial or financial relations, which differ from those which would have been negotiated between independent undertakings, profits which would have been achieved without such conditions may have been made by one of the undertakings, but which, in view of those conditions, have not been achieved, be incorporated into the profits of that undertaking and consequently taxed.
2. If one contracting State includes in the profits of the undertaking of that State and as a result the profits from which the undertaking of the other contracting State was taxed in that other State, and the profits thus included are profits which would have been achieved by the undertaking of the first State if conditions had been agreed between the two undertakings such as those agreed between the independent undertakings, the other State shall adjust accordingly the amount of tax imposed by it on those profits. This adjustment shall be made with due regard to the other provisions of this Treaty and the competent authorities of the Contracting States shall consult each other if necessary.
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 also be taxed in the Contracting State in which the company which pays them has its registered office, under the law of that State. However, where the beneficiary is the beneficial owner of dividends, the tax thus imposed shall not exceed 15% 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.
The provisions of 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 shall refer to income from shares or other rights if they are not claims and give the right to participate in profits, as well as income from other social rights which are subject to the same tax as income from shares under the law of the State in which the company paying dividends is situated.
4. The provisions of paragraphs 1 and 2 shall not apply where the beneficial owner of dividends domiciled in or established in one Contracting State carries out, in the second Contracting State in which the company paying dividends has its registered office, an industrial or commercial activity through a permanent establishment situated there or provides, in that other State, personal services in the context of an independent profession from a permanent base located there, and where the participation on the basis of which dividends are paid is actually linked to such 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 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 that company, except in cases where such dividends are paid to a person resident in that other State or where the participation on the basis of which dividends are paid is actually linked to a permanent establishment or a permanent base situated in that other State, or subject the company's undistributed profits to the tax on undistributed profits, even if the dividends paid or earnings retained in whole or in part from profits or income obtained in that other State.
Interest
1. Interest having a source in one Contracting State and paid to a person domiciled or domiciled in the other Contracting State shall be subject to taxation only in that other State.
2. The term "interest" used in this Article shall refer to income from claims of any kind, secured or not secured by a lien on immovable property, providing and not providing the right to participate in the debtor's profits, and in particular to income from public bonds and bond income, including premiums and winnings associated with such bonds and bonds. Penalties for late payment shall not be considered as interest for the purposes of this Article.
3. The provisions of paragraph 1 shall not apply where the actual beneficiary of interest residing or having his registered office in a Contracting State is engaged in an industrial or commercial activity in the second Contracting State in which the interest is paid through a permanent establishment situated there or provides personal services in that other State in the context of an independent profession from a permanent base situated there, and where the claim on which the interest is paid is actually linked to such a permanent establishment or permanent base. In this case, the provisions of Article 7 or Article 14 shall apply depending on the case.
4. Where the amount of interest, in the light of the claim on which it is paid, exceeds, by reason of the special relations existing between the payer and the actual payee or between the two and the third parties, the amount which the payer would have agreed with the actual payee if it had not been for such relations, the provisions of this Article shall apply only to that last amount. The part of the salary exceeding that shall in this case remain subject to taxation under the law 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 in that other State.
However, the licence fees referred to in paragraph 3 (a) may be taxed in the Contracting State in which their source is located, under the law of that State. However, the tax thus imposed shall not exceed 5% 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 salaries of any kind paid for use or for the right to use
(a) patents, trade marks, designs or models, plans, secret formulas or processes or industrial, commercial or scientific equipment, or for information relating to industrial, commercial or scientific experience;
(b) copyright for works of literature, art and science, including cinematographic films and films or tapes for television and radio broadcasting.
4. The provisions of paragraphs 1 and 2 shall not apply where the licensee of a licence fee residing or having his registered office in a Contracting State carries out, in the second Contracting State in which the licence fee is paid, a source, an industrial or commercial activity through a permanent establishment situated there, or provides services in that other State in the pursuit of the profession from a permanent base situated there, and where the right or property for which the licence fee is paid is actually linked to such permanent establishment or permanent base. In that case, the provisions of Article 7 or Article 14 shall apply depending on the case.
5. Licensing fees shall be presumed to have a source in one Contracting State where the payer is the latter himself, the lower administrative department or local office of that Contracting State or the person residing or having his registered office in that Contracting State. However, where a person who pays royalties, whether or not he is domiciled in a Contracting State, has a permanent establishment in a Contracting State in conjunction with which an obligation to pay royalties has arisen and that permanent establishment bears such royalties at its expense, 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 royalties paid, assessed in the light of the use, right or information for which they are paid, exceeds, as a result of the special relations existing between the payer and the payee or between the two and a third party, the amount which the payer would have agreed with the payee if it had not been for such relations, the provisions of this Article shall apply only to that last amount. In this case, the part of the salaries exceeding it shall remain subject to taxation under the law of each Contracting State and taking into account the other provisions of this Treaty.
Capital gains
1. Profit realised by a person resident or domiciled in one Contracting State from the disposal of immovable property referred to in Article 6 and located in the other Contracting State may be taxed in that other State.
2. Proceeds from the disposal of movable property forming part of the operating property of a permanent establishment held by an undertaking of a Contracting State in the other Contracting State or of movable property belonging to a permanent base which a person residing in one Contracting State has in the other Contracting State for the provision of personal services in the course of 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 ships and aircraft used in international transport or of movable property belonging to the operation of such ships and aircraft shall be subject to taxation only in the Contracting State in which the actual management of the undertaking is located.
4. Profit from the disposal of assets other than those referred to in paragraphs 1, 2 and 3 shall be subject to taxation only in the Contracting State in which the transferee is resident or established.
Independent personal services
1. Revenue received by a person resident in one Contracting State for services rendered in the course of an independent profession or other independent activity shall be subject to taxation only in that State, provided that such person does not regularly have a permanent basis in the other Contracting State for the pursuit of his activities. If it has such a permanent base, income can be taxed in the other State, but only to the extent that it can be attributed to that permanent base.
2. The term "services provided in the course of an independent profession" shall include the particular independent activities of scientific, literary, artistic, educational or teaching, as well as the independent activities of doctors, lawyers, engineers, architects, dentists and accountants.
Dependent employment
1. Wages, salaries and other similar remuneration which a person residing in one Contracting State receives from employment shall be subject to taxation in that State only, 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 from that employment may be taxed in that other State.
2. Remuneration which a person residing in one Contracting State receives from employment in the other Contracting State shall be subject to taxation in the first State only if:
(a) the consignee shall stay in the other State for one or more periods which shall not exceed 183 days in whole in the calendar year concerned; and
(b) the remuneration is paid by the employer or on behalf of an employer who is not domiciled in that other State; and
(c) the remuneration shall not be borne by a permanent establishment or permanent base held by an employer in that other State.
3. Remuneration from the employment carried out on board a ship or aircraft in international transport may be taxed, notwithstanding the previous provisions of this Article, in the Contracting State in which the actual management of the undertaking is located.
4. Where a person residing in Denmark receives remuneration from a job carried on board an aircraft operated in international traffic by the Scandinavian Airlines Consortium (SAS), such remuneration shall be subject to taxation only in Denmark.
Tantiems
Tantiems and other similar salaries which a person resident in one Contracting State receives as a member of the administrative or supervisory board of a company which has its registered office in the other Contracting State may be taxed in that other State.
Artists and athletes
1. Revenue received by a person residing in one Contracting State, acting as an artist, such as a theatre, film, radio or television artist, a musician or an athlete, from his personal activity in the other Contracting State, may be taxed in that other State, notwithstanding the provisions of Articles 14 and 15.
2. Where the income from a personal activity carried out by an artist or an athlete as such is not attributable to the artist or sportsman himself but to another person, such 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.
3. Revenue from the activities referred to in paragraph 1 which take place under a cultural agreement concluded between the Contracting States shall be subject to taxation only in the sending State.
Social security pensions and salaries
1. Pensions and other similar salaries paid on account of former employment to a person residing in a Contracting State shall be subject to taxation only in that State, subject to the provisions of Article 19 (2).
2. Public social security salaries of a Contracting State shall be subject to taxation, irrespective of the provisions of paragraph 1, only in that State.
Public services
1. (a) Salaries other than pensions, paid by one contracting State, by a lower administrative department or by a local authority of that State to a natural person for services rendered to that State, to a lower administrative department or to an office shall be subject to taxation only in that State.
(b) However, such salaries shall be subject to taxation only in the second Contracting State where the services have been performed in that State and the natural person is resident in that State; and
(i) is a national of that State; or
(ii) has not obtained residence in that State solely for the purpose of such services.
2. (a) Any pension paid by one Contracting State, a lower administrative department or a local authority of that State or from the funds which they have established shall be subject to taxation only in that State to a natural person for the services shown to that State, a lower administrative department or an office.
(b) Such pensions shall, however, be subject to taxation in the second Contracting State only if the natural person is resident in that State and is a national of that State.
3. The provisions of Articles 15, 16 and 18 shall apply to the remuneration and pensions of services performed in conjunction with an industrial or commercial activity carried out by the Contracting State, its lower administrative department or local authority.
Study
Salaries which are paid for the cost of nutrition, education or practice by students or apprentices who, immediately before visiting a Contracting State, were resident in the other Contracting State and who reside in the first State for the sole purpose of education or practice, will not be taxed in that State provided that such salaries come from sources outside that State.
Other revenue
1. The income of a person resident or domiciled in a Contracting State not covered by the preceding Articles of this Treaty, wherever their source is, shall be subject to taxation only in that State.
2. The provisions of paragraph 1 shall not apply to income other than income from immovable property as defined in Article 6 (2), where the recipient of such income residing or having its registered office in a Contracting State carries out an industrial or commercial activity in the other Contracting State through a permanent establishment situated there or provides personal services in that other State in the pursuit of an independent profession from a permanent base situated there, and where the right or property for which the income is paid is actually linked to such permanent establishment or permanent basis. In that case, the provisions of Article 7 or Article 14 shall apply depending on the case.
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Regulation Information
| Citation | Decree of the Minister for Foreign Affairs No. 53 / 1983 Coll., on the Treaty between the Government of the Czechoslovak Socialist Republic and the Government of the Kingdom of Denmark on the avoidance of double taxation in the field of income and property taxes |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 30.05.1983 |
|---|---|
| Effective from | 27.12.1982 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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