Decree of the Minister for Foreign Affairs No. 9 / 1981 Coll.
Decree of the Minister for Foreign Affairs on the Treaty between the Czechoslovak Socialist Republic and the Kingdom of Sweden on the avoidance of double taxation in the field of income and property taxes
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Effective from 08.10.1980
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9
DECLARATION
Minister for Foreign Affairs
of 5 November 1980
on the Treaty between the Czechoslovak Socialist Republic and the Kingdom of Sweden on the avoidance of double taxation in the field of income and property taxes
On 16 February 1979 the Treaty between the Czechoslovak Socialist Republic and the Kingdom of Sweden on the avoidance of double taxation in the field of income and property taxes was signed in Prague.
The Treaty was approved by the Federal Assembly of the Czechoslovak Socialist Republic and ratified by the President of the Republic. The instruments of ratification were exchanged in Stockholm on 8 October 1980.
The Treaty entered into force pursuant to Article 28 thereof on 8 October 1980.
The Czech translation of the text of the Treaty is announced simultaneously.
Minister:
Ing. Chupek v. r.
TREATY
between the Czechoslovak Socialist Republic and the Kingdom of Sweden on the avoidance of double taxation in the field of income and property taxes
the Czechoslovak Socialist Republic and the Kingdom of Sweden,
Desiring to conclude a double taxation contract in the field of income and property taxes,
agree as follows:
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 collected for the benefit of each Contracting State, its lower administrative departments or local authorities, whatever the method of collection.
2. All taxes levied on the total income, on all or parts of the income or assets, including taxes on profits arising 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 shall be treated as income and property taxes.
3. At the same time, the taxes covered by the contract are:
(a) 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) domestic tax; and
(vii) capital contribution
(hereinafter referred to as "Czechoslovak Tax ');
(b) in Sweden:
(i) State income tax including seafarers' tax and coupon tax,
(ii) the company's non-distributed profit tax and the distributed profit tax on the reduction of share capital or the company's cancellation;
(iii) the tax on performers,
(iv) local income tax; and
(v) State property tax
(hereinafter referred to as the Swedish 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 any significant changes to be made to their respective tax laws.
General definitions
1. In this Treaty, unless the link requires a different interpretation:
(a) the term "Czechoslovakia" refers to the Czechoslovak Socialist Republic.
(b) The term "Sweden" shall refer to the Kingdom of Sweden and shall cover any area outside the territorial waters of Sweden over which, under Swedish law and in accordance with international law, the rights of Sweden relating to research and exploitation of natural resources on or under the seabed may be exercised.
(c) The terms "one Contracting State" and "the other Contracting State" refer to Czechoslovakia or Sweden as required by the link.
(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) any natural person who is a national citizen of a Contracting State;
(ii) any legal person, personal company and association 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 places situated in the other Contracting State.
(i) The term "competent authority" shall mean:
(i) in the case of Czechoslovakia, the Minister of Finance of the Czechoslovak Socialist Republic or his authorised representative;
(ii) in the case of Sweden, the Minister for the Budget or his authorised representative.
2. Any expression 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 contracting State governing the taxes which are the subject of the contract, 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 by reason of his residence, residence, place of administration or any other similar criteria.
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 that person is resident in the Contracting State in which he has a permanent residence. If it has a permanent residence in both Contracting States, it is assumed to reside in the Contracting State with which its personal and economic ties are the narrowest (centre of life interests).
(b) If the Contracting State in which that person has a centre of his life interests cannot be designated 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 both Contracting States, or is not present in any of them, he shall be presumed to reside in the Contracting State of which he is a national citizen.
(d) Where that person is a national of both Contracting States or is not a national of any of them, the competent authorities of the Contracting States shall adjust the matter by mutual agreement.
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 Contracting State in which the place of its effective management is situated.
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) workshop,
(f) mine, quarry, or other place where natural resources are extracted;
(g) construction sites or installations lasting more than 12 months.
3. the term "permanent establishment" does not cover:
(a) equipment used to store, issue or supply goods to an 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 advertising, information, scientific research or similar activities for an undertaking having a preparatory or auxiliary character;
(f) installation by an undertaking of one State in conjunction with the supply of machinery or equipment from that State to the other Contracting State.
4. A person acting in one Contracting State as an undertaking of the other Contracting State - other than a representative having an independent position as referred to in paragraph 5 - shall be regarded as a permanent establishment in the first State if he is equipped in that State with the full power normally exercised there and allowing him to conclude contracts on behalf of the undertaking, provided that the activity of that person is not limited to the purchase of goods for the undertaking.
5. The mere fact that an undertaking in that other State carries out its business through a broker, agent general or any other representative having an independent position shall not be regarded as a permanent establishment of an undertaking of one Contracting State in the other Contracting State if such persons act in the proper course of their business.
6. 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 that company a permanent establishment of the other company.
Revenue from immovable property
1. Revenue from immovable property, including income from agricultural or forestry holdings, may be taxed in the Contracting State in which such property is located.
2. (a) Subject to paragraphs (b) and (c), the term "immovable property" shall be defined in accordance with the law of the Contracting State in which such property is located.
(b) The term "immovable property" shall in any case include accessories for immovable property, a live and dead inventory of agricultural and forestry holdings, rights to which the provisions of civil law applicable to immovable 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.
(c) Ships, boats and aircraft shall not be regarded as immovable property.
3. Paragraph 1 shall apply to revenue from direct use, rental or any other use of immovable property.
4. The provisions of paragraphs 1 and 3 shall also apply to income from the immovable property of an undertaking and to income from immovable property used for the exercise of a professional 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 business 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 in each Contracting State to that permanent establishment the profits which it would expect to achieve if, as a separate undertaking, it performed the same or similar activities under the same or similar conditions and traded completely independently with the undertaking of which it is a permanent establishment.
3. When determining the profits of a permanent establishment, the costs incurred for the objectives pursued by that permanent establishment, including management costs and general administrative expenses thus incurred, shall be authorised, whether in the State in which that 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. However, 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 an undertaking engaged in international maritime transport is located on board a ship, it shall be deemed to be located in the Contracting State in which the ship has its home port or does not have its home port, it shall be deemed to be located in the Contracting State in which the operator of the ship is domiciled.
3. The provisions of paragraph 1 shall apply to the profits realised by the air transport consortium of Scandinavian Airlines (SAS), but only to that part of the profits that corresponds to the participation held by the public limited liability company Aerotross (ABA), which is a Swedish partner of Scandinavian Airlines (SAS).
4. The provisions of paragraph 1 shall also apply to profits from the participation of undertakings of the Contracting States in the pool, joint operation or international operational organisation.
Associate undertakings
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 if, in one and the other cases, conditions have been negotiated or imposed between the two undertakings in their commercial or financial relations, which differ from those which would have been negotiated between independent undertakings, profits may be included in the profits of that undertaking and, as a result, profits which would have been achieved without these conditions by one of the undertakings which, however, had not 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, such 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. However, the tax thus imposed shall not exceed 10% of the gross amount of dividends.
3. The Contracting State in which the company has its registered office shall not be taxed, irrespective of the provisions of paragraph 2 of the dividend, paid by that company to a company whose assets are wholly or partly divided into shares and which has its registered office in the other Contracting State and owns directly at least 25% of the assets of the company paying dividends.
4. The competent authorities of the Contracting States shall, by mutual agreement, adapt the method of application of paragraphs 2 and 3.
(5) Paragraphs 2 and 3 shall not affect the taxation of the profits of the company on which dividends are paid.
6. The term "dividends" used in this Article shall refer to income arising from shares or other rights, unless they are claims linked to a profit participation, as well as income from other social rights which are subject to the same taxation as income from shares under the tax legislation of the State in which the company paying dividends is located.
7. Dividends paid by a company having its registered office in one Contracting State, to a company having its registered office in the other Contracting State, shall, notwithstanding the provisions of paragraph 1, be exempt from taxation in that other State to the extent that they would be exempt from the taxation of dividends under the law of that State if both companies had their registered office in that State.
8. The provisions of paragraphs 1, 2 and 3 shall not apply where the recipient of dividends residing or having his registered office in one Contracting State is engaged in an industrial or commercial activity in the second Contracting State in which the company which pays dividends is established through a permanent establishment which is situated there or is engaged in a permanent establishment in that other State of the liberal profession by means of a permanent basis situated there and where the ownership of the shares on the basis of which the dividends are 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.
9. 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 to persons who do not have their registered office or registered office in that other State or subject the company's undistributed profits to the tax on undistributed profits, even if the dividends paid or undistributed profits remain in whole or in part from profits or income derived from 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 non-providing the right to participate in the debtor's profits and, in particular, income from public bonds and bonds, including premiums and winnings associated with such securities.
3. The provisions of paragraph 1 shall not apply where the recipient of interest residing or having his registered office in a Contracting State is engaged in an industrial or commercial activity in the other Contracting State in which the interest has a source, an industrial or commercial activity, through a permanent establishment situated there, or in that other State of a free profession, by means of 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 that case, the provisions of Article 7 or Article 14 shall apply depending on the case.
4. Where the amount of interest paid, in view of the claim on which it is paid, exceeds, by reason of the special relations existing between the payer and the payee or between the two and the third parties, the amount that 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, a part of the interest exceeding that shall be subject to taxation under the legislation 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 a person residing or having his registered office in the other Contracting State may be taxed in that other State.
2. However, such royalties may be taxed in the Contracting State in which their source is located, under the legislation of that State. However, the tax thus imposed shall not exceed 5% of the gross amount of royalties.
3. Licensing fees resulting from copyright in respect of works of literary, artistic or scientific nature shall be subject to taxation, irrespective of the provisions of paragraphs 1 and 2, only in the Contracting State in which the recipient of such royalties is resident or registered.
4. The term "licence fees' used in this Article shall refer to the salaries of any kind accepted as compensation for the use or right to use of any patent, trademark, design or model, plan, secret formula or procedure or industrial, commercial or scientific equipment or to information relating to experience in the field of industrial, commercial or scientific, and to any copyright relating to the work of literary, artistic or scientific, including cinematographic films and films or tapes for television or radio broadcasting.
5. The provisions of paragraphs 1, 2 and 3 shall not apply where the licensee of a licence fee residing or having his registered office in one Contracting State carries out, in the other Contracting State in which the licence fee is paid, a source, an industrial or commercial activity through a permanent establishment which is situated there, or carries out a free occupation in that other State by means of a permanent base situated there, and where the right or property in respect of which the licence fee is paid is actually linked to such a permanent establishment or permanent base. In that case, the provisions of Article 7 or Article 14 shall apply depending on the case.
6. 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.
7. Where, in view of the use, right or information for which they are paid, the amount of royalties paid exceeds the amount which the payer would have agreed with the payee if it were not 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 be subject to taxation under the legislation of each Contracting State, taking into account the other provisions of this Treaty.
Profit from disposal
(1) Profit from the disposal of immovable property, the definition of which is set out in Article 6 (2), or from the disposal of shares or similar rights to companies whose assets remain principally of immovable property, may be taxed in the Contracting State in which such immovable property is situated.
2. Proceeds from the disposal of movable property which is 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 is owned by a person residing in one Contracting State in the other Contracting State for the pursuit of a free occupation, including profits from the disposal of such permanent establishment (alone or together with the whole of the undertaking) or such permanent bases, may be taxed in that other State. However, the proceeds from the disposal of movable property referred to in Article 22 (3) shall be subject to taxation only in the Contracting State in which such movable property is subject to taxation under that Article.
(3) Profit from the disposal of assets other than those referred to in paragraphs 1 and 2 shall be subject to taxation only in the Contracting State in which the transferee resides or resides.
Independent professions
1. Revenue received by a person residing in one Contracting State for services rendered in the course of a professional or other independent activity of a similar nature 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, such income may be taxed in the other Contracting State, but only to the extent that it can be attributed to that permanent base.
2. The term "free profession" includes the particularly independent activities of scientific, literary, artistic, educational or teaching, and 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 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. 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. Where a person resident in Sweden receives remuneration from a job carried on board an aircraft used in international transport by an air transport consortium of Scandinavian Airlines (SAS), such remuneration shall be subject to taxation only in Sweden.
Tantiems
Tantiems and similar salaries which a person residing in one Contracting State receives 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. The income received by artists such as theatre, film, radio or television artists, musicians and athletes from their personal activities 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 the personal activity of an artist or an athlete does not belong to that artist or an athlete himself but to another person, that income may be taxed, regardless 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, carried out in the framework of a cultural exchange between the Contracting States, shall be exempt, notwithstanding the provisions of paragraphs 1 and 2, from tax in the Contracting State in which those activities are carried out.
Government services
1. (a) Salaries, other than pensions, paid by a Contracting State, by its lower administrative department or by a local authority to a natural person for services rendered to that State, administrative department or local authority 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 carried out in that State, the beneficiary shall reside in that second 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; or
(iii) is not subject to tax on such salaries in the Contracting State from which they are paid.
2. (a) Any pension paid by a Contracting State, its lower administrative department or local authority or paid from the funds which they have set up to a natural person for services evidenced by that State, administrative department or local office shall be subject to taxation only in that State.
(b) Such pensions shall, however, be subject to taxation only in the second Contracting State where the beneficiary is a national of that State and is resident in that State.
3. The provisions of Articles 15, 16 and 19 shall apply to salaries and pensions for services shown in conjunction with an industrial or commercial activity carried out by the Contracting State, its lower administrative department or local authority.
Pension
Pensions and other similar salaries referred to a person resident in a Contracting State shall be subject to taxation, subject to the provisions of Article 18 (2), only in the State of origin.
Study
1. A student or apprentice who resides in a Contracting State only for the purpose of his education or practice and who has, or immediately before his stay in that State, his residence in the other Contracting State shall be exempt from the salary tax which he receives for his or her sustenance, education or practice, provided that such salaries are shown to him from sources outside that first State.
2. A student at a university or at another educational institution in one Contracting State who, during his temporary stay in the other Contracting State, is engaged in employment in that other State for a period not exceeding 100 days in a calendar year in order to obtain practical experience related to his studies, shall be subject to tax in that other State only on that part of the income from employment exceeding CZK 1500 in the calendar month or the countervalue in the Czechoslovak currency. However, the tax exemption granted under this paragraph shall not exceed the total amount of CZK 4500 or the consideration in the Czechoslovak currency. Any amount exempt under this paragraph shall include personal tax relief for the relevant calendar year.
Other revenue
The income of a person residing or having his registered office in a Contracting State which is not expressly mentioned in the preceding Articles of this Treaty shall be subject to taxation only in that State.
Property
1. Real estate within the meaning of Article 6 (2) may be taxed in the Contracting State in which it is located.
2. Moved property which is part of the operating property of a permanent establishment of an undertaking, or movable property belonging to a permanent base which is used for the exercise of a free profession, may be taxed in the Contracting State in which the permanent establishment or permanent establishment is situated.
3. Ships and aircraft used in international transport and movable property for 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. All other parts of the property of a person residing in a Contracting State shall be subject to taxation only in that State.
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Regulation Information
| Citation | Decree No. 9 / 1981 Coll., on the Treaty between the Czechoslovak Socialist Republic and the Kingdom of Sweden on the avoidance of double taxation in the field of income and property taxes |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 30.01.1981 |
|---|---|
| Effective from | 08.10.1980 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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