dtc agreement between latvia and georgia

7/30/2019 DTC agreement between Latvia and Georgia

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CONVENTIONBETWEENTHEREPUBLICOFLATVIAANDGEORGIA

FORTHEAVOIDANCEOFDOUBLETAXATIONANDTHEPREVENTIONOFFISCALEVASION

WITHRESPECTTOTAXESONINCOMEANDONCAPITALArticle1

Personscovered

ThisConventionshallapplytopersonswhoareresidentsofoneorbothoftheContractingStates.

Article2

Taxescovered

1.ThisConventionshallapplytotaxesonincomeandoncapitalimposedonbehalfofaContracting

Stateorofitspoliticalsubdivisionsorlocalauthorities,irrespectiveofthemannerinwhichtheyare

levied.

2.Thereshallberegardedastaxesonincomeandoncapitalalltaxesimposedontotalincome,ontotal

capital,oronelementsofincomeorofcapital,includingtaxesongainsfromthealienationofmovable

orimmovableproperty,aswellastaxesoncapitalappreciation.

3.TheexistingtaxestowhichtheConventionshallapplyareinparticular:

(a) inLatvia:

(i) theenterpriseincometax(uznemumuienakumanodoklis);

(ii) thepersonalincometax(iedzivotajuienakumanodoklis);

(iii) theimmovablepropertytax(nekustamaipasumanodoklis);

(hereinafterreferredtoas"Latviantax");

(b) inGeorgia:

(i) thetaxonprofitofenterprises;


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(ii) thetaxonpropertyofenterprises;

(iii) thetaxonincomeofindividuals;and

(iv) thetaxonpropertyofindividuals;

(hereinafterreferredtoas"Georgiantax").

4.TheConventionshallapplyalsotoanyidenticalorsubstantiallysimilartaxeswhichareimposedafter

thedateofsignatureoftheConventioninadditionto,orinplaceof,theexistingtaxes.Thecompetent

authoritiesoftheContractingStatesshallnotifyeachotherofanysignificantchangeswhichhavebeen

madein

their

respective

taxation

laws.

Article3

Generaldefinitions

1.ForthepurposesofthisConvention,unlessthecontextotherwiserequires:

(a) theterm"Latvia"meanstheRepublicofLatviaand,whenusedinthegeographicalsense,means

theterritoryoftheRepublicofLatviaandanyotherareaadjacenttotheterritorialwatersofthe

RepublicofLatviawithinwhichunderthelawsofLatviaandinaccordancewithinternationallaw,the

rightsofLatviamaybeexercisedwithrespecttotheseabedanditssubsoilandtheirnaturalresources;

(b) theterm"Georgia"meanstheterritoryrecognisedbytheinternationalcommunitywithinthe

statebordersofGeorgia,includinglandterritory,internalwatersandterritorialsea,theairspaceabove

them,inrespectofwhichGeorgiaexercisesitssovereignty,aswellastheexclusiveeconomiczoneand

continentalshelfadjacenttoitsterritorialseainrespectofwhichGeorgiamayexerciseitssovereign

rightsinaccordancewiththeinternationallaw;

(c) theterms"aContractingState"and"theotherContractingState"meanLatviaorGeorgia,asthe

contextrequires;

(d) theterm"person"includesanindividual,acompanyandanyotherbodyofpersons;

(e) theterm"company"meansanybodycorporateoranyentitywhichistreatedasabody

corporatefortaxpurposes;

(f) theterms"enterpriseofaContractingState"and"enterpriseoftheotherContractingState"

meanrespectivelyanenterprisecarriedonbyaresidentofaContractingStateandanenterprisecarried

onbyaresidentoftheotherContractingState;


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(g) theterm"internationaltraffic"meansanytransportbyashiporaircraftoperatedbyan

enterpriseofaContractingState,exceptwhentheshiporaircraftisoperatedsolelybetweenplacesin

theotherContractingState;

(h) theterm"competentauthority"means:

(i) inLatvia,theMinistryofFinanceoritsauthorisedrepresentative;

(ii) inGeorgia,theMinistryofFinanceoritsauthorisedrepresentative;

(i) theterm"national"means:

(i) anyindividualpossessingthenationalityofaContractingState;

(ii) anylegalperson,partnershiporassociationderivingitsstatusassuchfromthelawsinforceina

ContractingState.

2.AsregardstheapplicationoftheConventionatanytimebyaContractingState,anytermnotdefined

thereinshall,unlessthecontextotherwiserequires,havethemeaningthatithasatthattimeunderthe

lawofthatStateforthepurposesofthetaxestowhichtheConventionapplies,anymeaningunderthe

applicabletaxlawsofthatStateprevailingoverameaninggiventothetermunderotherlawsofthat

State.

Article4

Resident

1.ForthepurposesofthisConvention,theterm"residentofaContractingState"meansanyperson

who,underthelawsofthatState,isliabletotaxthereinbyreasonofhisdomicile,residence,placeof

management,placeofincorporationoranyothercriterionofasimilarnature,andalsoincludesthat

Stateandanypoliticalsubdivisionorlocalauthoritythereof.Thisterm,however,doesnotincludeany

personwhoisliabletotaxinthatStateinrespectonlyofincomefromsourcesinthatStateorcapital

situatedtherein.

2.Wherebyreasonoftheprovisionsofparagraph1anindividualisaresidentofbothContracting

States,thenhisstatusshallbedeterminedasfollows:


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(a) heshallbedeemedtobearesidentonlyoftheStateinwhichhehasapermanenthome

availabletohim;ifhehasapermanenthomeavailabletohiminbothStates,heshallbedeemedtobea

residentonlyoftheStatewithwhichhispersonalandeconomicrelationsarecloser(centreofvital

interests);

(b)

ifthe

State

in

which

he

has

his

centre

of

vital

interests

cannot

be

determined,

or

if

he

has

not

a

permanenthomeavailabletohimineitherState,heshallbedeemedtobearesidentonlyoftheState

inwhichhehasanhabitualabode;

(c) ifhehasanhabitualabodeinbothStatesorinneitherofthem,heshallbedeemedtobea

residentonlyoftheStateofwhichheisanational;

(d) ifheisanationalofbothStatesorofneitherofthem,thecompetentauthoritiesofthe

ContractingStatesshallsettlethequestionbymutualagreement.

3.Wherebyreasonoftheprovisionsofparagraph1apersonotherthananindividualisaresidentof

bothContractingStates,thecompetentauthoritiesoftheContractingStatesshallendeavourtosettle

thequestionbymutualagreement.Untilsuchagreementhasnotbeenreached,forthepurposesofthe

Convention,thepersonshallnotbeentitledtoclaimanybenefitsprovidedbythisConvention.

Article5

Permanentestablishment

1.Forthe

purposes

of

this

Convention,

the

term

"permanent

establishment"

means

afixed

place

of

businessthroughwhichthebusinessofanenterpriseiswhollyorpartlycarriedon.

2.Theterm"permanentestablishment"includesespecially:

(a) aplaceofmanagement;

(b) abranch;

(c) anoffice;

(d) afactory;

(e) aworkshop,and

(f) amine,anoilorgaswell,aquarryoranyotherplaceofextractionofnaturalresources.


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3.Abuildingsiteorconstructionorinstallationprojectconstitutesapermanentestablishmentonlyifit

lastsmorethansixmonths.

4.NotwithstandingtheprecedingprovisionsofthisArticle,theterm"permanentestablishment"shallbe

deemednottoinclude:

(a) theuseoffacilitiessolelyforthepurposeofstorage,displayordeliveryofgoodsormerchandise

belongingtotheenterprise;

(b) themaintenanceofastockofgoodsormerchandisebelongingtotheenterprisesolelyforthe

purposeofstorage,displayordelivery;

(c) themaintenanceofastockofgoodsormerchandisebelongingtotheenterprisesolelyforthe

purposeof

processing

by

another

enterprise;

(d) themaintenanceofafixedplaceofbusinesssolelyforthepurposeofpurchasinggoodsor

merchandiseorofcollectinginformation,fortheenterprise;

(e) themaintenanceofafixedplaceofbusinesssolelyforthepurposeofcarryingon,forthe

enterprise,anyotheractivityofapreparatoryorauxiliarycharacter;

(f) themaintenanceofafixedplaceofbusinesssolelyforanycombinationofactivitiesmentioned

insubparagraphs(a)to(e),providedthattheoverallactivityofthefixedplaceofbusinessresulting

fromthiscombinationisofapreparatoryorauxiliarycharacter.

5.Notwithstandingtheprovisionsofparagraphs1and2,whereaperson otherthananagentofan

independentstatustowhomparagraph6applies isactingonbehalfofanenterpriseandhas,and

habituallyexercises,inaContractingStateanauthoritytoconcludecontractsinthenameofthe

enterprise,thatenterpriseshallbedeemedtohaveapermanentestablishmentinthatStateinrespect

ofanyactivitieswhichthatpersonundertakesfortheenterprise,unlesstheactivitiesofsuchpersonare

limitedtothosementionedinparagraph4which,ifexercisedthroughafixedplaceofbusiness,would

notmake

this

fixed

place

of

business

apermanent

establishment

under

the

provisions

of

that

paragraph.

6.AnenterpriseshallnotbedeemedtohaveapermanentestablishmentinaContractingStatemerely

becauseitcarriesonbusinessinthatStatethroughabroker,generalcommissionagentoranyother


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agentofanindependentstatus,providedthatsuchpersonsareactingintheordinarycourseoftheir

business.

7.ThefactthatacompanywhichisaresidentofaContractingStatecontrolsoriscontrolledbya

companywhichisaresidentoftheotherContractingState,orwhichcarriesonbusinessinthatother

State(whetherthroughapermanentestablishmentorotherwise),shallnotofitselfconstituteeither

companyapermanentestablishmentoftheother.

Article6

Incomefromimmovableproperty

1.IncomederivedbyaresidentofaContractingStatefromimmovableproperty(includingincomefrom

agricultureorforestry)situatedintheotherContractingStatemaybetaxedinthatotherState.

2.Theterm"immovableproperty"shallhavethemeaningwhichithasunderthelawoftheContracting

Stateinwhichthepropertyinquestionissituated.Thetermshallinanycaseincludepropertyaccessory

toimmovableproperty,livestockandequipmentusedinagricultureandforestry,rightstowhichthe

provisionsofgenerallawrespectinglandedpropertyapply,anyoptionorsimilarrighttoacquire

immovableproperty,usufructofimmovablepropertyandrightstovariableorfixedpaymentsas

considerationfortheworkingof,ortherighttowork,mineraldeposits,sourcesandothernatural

resources.Shipsandaircraftshallnotberegardedasimmovableproperty.

3.Theprovisionsofparagraph1shallapplytoincomederivedfromthedirectuse,letting,oruseinany

otherformofimmovableproperty,aswellasincomefromthealienationofimmovableproperty.

4.Wheretheownershipofsharesorothercorporaterightsinacompanyentitlestheownerofsuch

sharesorcorporaterightstotheenjoymentofimmovablepropertyheldbythecompany,theincome

fromthedirectuse,letting,oruseinanyotherformofsuchrighttoenjoymentmaybetaxedinthe

ContractingStateinwhichtheimmovablepropertyissituated.

5.Theprovisionsofparagraphs1,3and4shallalsoapplytotheincomefromimmovablepropertyofan

enterpriseandtoincomefromimmovablepropertyusedfortheperformanceofindependentpersonal

services.

Article7


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Businessprofits

1.TheprofitsofanenterpriseofaContractingStateshallbetaxableonlyinthatStateunlessthe

enterprisecarriesonbusinessintheotherContractingStatethroughapermanentestablishment

situatedtherein.Iftheenterprisecarriesonbusinessasaforesaid,theprofitsoftheenterprisemaybe

taxedin

the

other

State

but

only

so

much

of

them

as

is

attributable

to

that

permanent

establishment.

2.Subjecttotheprovisionsofparagraph3,whereanenterpriseofaContractingStatecarrieson

businessintheotherContractingStatethroughapermanentestablishmentsituatedtherein,thereshall

ineachContractingStatebeattributedtothatpermanentestablishmenttheprofitswhichitmightbe

expectedtomakeifitwereadistinctandseparateenterpriseengagedinthesameorsimilaractivities

underthesameorsimilarconditionsanddealingwhollyindependentlywiththeenterpriseofwhichitis

apermanentestablishment.

3.IndeterminingtheprofitsofapermanentestablishmentinaContractingState,thereshallbeallowed

asdeductionsexpenseswhichareincurredforthepurposesofthepermanentestablishment,including

executiveandgeneraladministrativeexpensessoincurred,whetherintheStateinwhichthe

permanentestablishmentissituatedorelsewhere.

4.Noprofitsshallbeattributedtoapermanentestablishmentbyreasonofthemerepurchasebythat

permanentestablishmentofgoodsormerchandisefortheenterprise.

5.Forthepurposesoftheprecedingparagraphs,theprofitstobeattributedtothepermanent

establishmentshallbedeterminedbythesamemethodyearbyyearunlessthereisgoodandsufficient

reasontothecontrary.

6.WhereprofitsincludeitemsofincomewhicharedealtwithseparatelyinotherArticlesofthis

Convention,thentheprovisionsofthoseArticlesshallnotbeaffectedbytheprovisionsofthisArticle.

Article8

Shippingandairtransport

1.Profitsfromtheoperationofshipsoraircraftininternationaltrafficshallbetaxableonlyinthe

ContractingStateinwhichtheplaceofeffectivemanagementoftheenterpriseissituated.


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2.Theprovisionsofparagraph1shallalsoapplytoprofitsfromtheparticipationinapool,ajoint

businessoraninternationaloperatingagency.

Article9

Associatedenterprises

1.Where

(a) anenterpriseofaContractingStateparticipatesdirectlyorindirectlyinthemanagement,

controlorcapitalofanenterpriseoftheotherContractingState;or

(b) thesamepersonsparticipatedirectlyorindirectlyinthemanagement,controlorcapitalofan

enterpriseofaContractingStateandanenterpriseoftheotherContractingState,

andin

either

case

conditions

are

made

or

imposed

between

the

two

enterprises

in

their

commercial

or

financialrelationswhichdifferfromthosewhichwouldbemadebetweenindependententerprises,

thenanyprofitswhichwould,butforthoseconditions,haveaccruedtooneoftheenterprises,but,by

reasonofthoseconditions,havenotsoaccrued,maybeincludedintheprofitsofthatenterpriseand

taxedaccordingly.

2.WhereaContractingStateincludesintheprofitsofanenterpriseofthatState andtaxesaccordingly

profitsonwhichanenterpriseoftheotherContractingStatehasbeenchargedtotaxinthatother

Stateandtheprofitssoincludedareprofitswhichwouldhaveaccruedtotheenterpriseofthefirst

mentionedState

ifthe

conditions

made

between

the

two

enterprises

had

been

those

which

would

have

beenmadebetweenindependententerprises,thenthatotherStateshallmakeanappropriate

adjustmenttotheamountofthetaxchargedthereinonthoseprofits.Indeterminingsuchadjustment,

dueregardshallbehadtotheotherprovisionsofthisConventionandthecompetentauthoritiesofthe

ContractingStatesshallifnecessaryconsulteachother.

Article10

Dividends

1.DividendspaidbyacompanywhichisaresidentofaContractingStatetoaresidentoftheother

ContractingState

may

be

taxed

in

that

other

State.

2.However,suchdividendsmayalsobetaxedintheContractingStateofwhichthecompanypayingthe

dividendsisaresidentandaccordingtothelawsofthatState,butifthebeneficialownerofthe

dividendsisaresidentoftheotherContractingState,thetaxsochargedshallnotexceed:


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(a) 5percentofthegrossamountofthedividendsifthebeneficialownerisacompany(otherthan

apartnership)whichholdsdirectlyatleast25percentofthecapitalofthecompanypayingthe

dividendsandthevalueofthisinvestmentisnotlessthanseventyfivethousandUnitedStatesdollars

(75000USD);

(b)

10per

cent

of

the

gross

amount

of

the

dividends

in

all

other

cases.

3.Theterm"dividends"asusedinthisArticlemeansincomefromsharesorotherrights,notbeingdebt

claims,participatinginprofits,aswellasincomefromotherrightswhichissubjectedtothesame

taxationtreatmentasincomefromsharesbythelawsoftheStateofwhichthecompanymakingthe

distributionisaresident.

4.Theprovisionsofparagraphs1and2shallnotapplyifthebeneficialownerofthedividends,beinga

residentofaContractingState,carriesonbusinessintheotherContractingStateofwhichthecompany

payingthedividendsisaresident,throughapermanentestablishmentsituatedtherein,orperformsin

thatotherStateindependentpersonalservicesfromafixedbasesituatedtherein,andtheholdingin

respectofwhichthedividendsarepaidiseffectivelyconnectedwithsuchpermanentestablishmentor

fixedbase.InsuchcasetheprovisionsofArticle7orArticle14,asthecasemaybe,shallapply.

5.WhereacompanywhichisaresidentofaContractingStatederivesprofitsorincomefromtheother

ContractingState,thatotherStatemaynotimposeanytaxonthedividendspaidbythecompany,

exceptinsofarassuchdividendsarepaidtoaresidentofthatotherStateorinsofarastheholdingin

respectofwhichthedividendsarepaidiseffectivelyconnectedwithapermanentestablishmentora

fixedbasesituatedinthatotherState,norsubjectthecompany'sundistributedprofitstoataxonthe

company'sundistributedprofits,evenifthedividendspaidortheundistributedprofitsconsistwhollyor

partlyofprofitsorincomearisinginsuchotherState.

Article11

Interest

1.InterestarisinginaContractingStateandpaidtoaresidentoftheotherContractingStatemaybe

taxedinthatotherState.


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2.However,suchinterestmayalsobetaxedintheContractingStateinwhichitarisesandaccordingto

thelawsofthatState,butifthebeneficialowneroftheinterestisaresidentoftheotherContracting

State,thetaxsochargedshallnotexceed10percentofthegrossamountoftheinterest.

3.Notwithstandingtheprovisionsofparagraph2interestarisinginaContractingState,derivedand

beneficiallyownedbytheGovernmentoftheotherContractingState,includingitspoliticalsubdivisions

andlocalauthorities,theCentralBankoranyfinancialinstitutionwhollyownedbythatGovernment,or

interestderivedonloansguaranteedbythatGovernmentshallbeexemptfromtaxinthefirst

mentionedState.

4.Theterm"interest"asusedinthisArticlemeansincomefromdebtclaimsofeverykind,whetheror

notsecuredbymortgageandwhetherornotcarryingarighttoparticipateinthedebtor'sprofits,andin

particular,income

from

government

securities

and

income

from

bonds

or

debentures,

including

premiumsandprizesattachingtosuchsecurities,bondsordebentures.Theterm"interest"shallnot

includeanyincomewhichistreatedasadividendundertheprovisionsofArticle10.Penaltychargesfor

latepaymentshallnotberegardedasinterestforthepurposeofthisArticle.

5.Theprovisionsofparagraphs1,2and3shallnotapplyifthebeneficialowneroftheinterest,beinga

residentofaContractingState,carriesonbusinessintheotherContractingStateinwhichtheinterest

arises,throughapermanentestablishmentsituatedtherein,orperformsinthatotherState

independentpersonalservicesfromafixedbasesituatedtherein,andthedebtclaiminrespectofwhich

theinterest

is

paid

is

effectively

connected

with

such

permanent

establishment

or

fixed

base.

In

such

casetheprovisionsofArticle7orArticle14,asthecasemaybe,shallapply.

6.InterestshallbedeemedtoariseinaContractingStatewhenthepayerisaresidentofthatState.

Where,however,thepersonpayingtheinterest,whetherheisaresidentofaContractingStateornot,

hasinaContractingStateapermanentestablishmentorafixedbaseinconnectionwithwhichthe

indebtednessonwhichtheinterestispaidwasincurred,andsuchinterestisbornebysuchpermanent

establishmentorfixedbase,thensuchinterestshallbedeemedtoariseintheStateinwhichthe

permanent

establishment

or

fixed

base

is

situated.

7.Where,byreasonofaspecialrelationshipbetweenthepayerandthebeneficialownerorbetween

bothofthemandsomeotherperson,theamountoftheinterest,havingregardtothedebtclaimfor

whichitispaid,exceedstheamountwhichwouldhavebeenagreeduponbythepayerandthe

beneficialownerintheabsenceofsuchrelationship,theprovisionsofthisArticleshallapplyonlytothe


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lastmentionedamount.Insuchcase,theexcesspartofthepaymentsshallremaintaxableaccordingto

thelawsofeachContractingState,dueregardbeinghadtotheotherprovisionsofthisConvention.

Article12

Royalties

1.RoyaltiesarisinginaContractingStateandpaidtoaresidentoftheotherContractingStatemaybe

taxedinthatotherState.

2.However,suchroyaltiesmayalsobetaxedintheContractingStateinwhichtheyariseandaccording

tothelawsofthatState,butifthebeneficialowneroftheroyaltiesisaresidentoftheotherContracting

State,thetaxsochargedshallnotexceed10percentofthegrossamountoftheroyalties.

3.Theterm"royalties"asusedinthisArticlemeanspaymentsofanykindreceivedasaconsiderationfor

theuseof,ortherighttouse,anycopyrightofliterary,artisticorscientificworkincluding

cinematographfilmsandfilmsortapesforradioortelevisionbroadcasting,anypatent,trademark,

designormodel,plan,secretformulaorprocess,orfortheuseof,ortherighttouse,industrial,

commercialorscientificequipment,orforinformationconcerningindustrial,commercialorscientific

experience.

4.Theprovisionsofparagraphs1and2shallnotapplyifthebeneficialowneroftheroyalties,beinga

residentof

aContracting

State,

carries

on

business

in

the

other

Contracting

State

in

which

the

royalties

arise,throughapermanentestablishmentsituatedtherein,orperformsinthatotherStateindependent

personalservicesfromafixedbasesituatedtherein,andtherightorpropertyinrespectofwhichthe

royaltiesarepaidiseffectivelyconnectedwithsuchpermanentestablishmentorfixedbase.Insuchcase

theprovisionsofArticle7orArticle14,asthecasemaybe,shallapply.

5.RoyaltiesshallbedeemedtoariseinaContractingStatewhenthepayerisaresidentofthatState.

Where,however,thepersonpayingtheroyalties,whetherheisaresidentofaContractingStateornot,

has

in

a

Contracting

State

a

permanent

establishment

or

a

fixed

base

in

connection

with

which

the

liabilitytopaytheroyaltieswasincurred,andsuchroyaltiesarebornebysuchpermanentestablishment

orfixedbase,thensuchroyaltiesshallbedeemedtoariseintheStateinwhichthepermanent

establishmentorfixedbaseissituated.


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6.Where,byreasonofaspecialrelationshipbetweenthepayerandthebeneficialownerorbetween

bothofthemandsomeotherperson,theamountoftheroyalties,havingregardtotheuse,rightor

informationforwhichtheyarepaid,exceedstheamountwhichwouldhavebeenagreeduponbythe

payerandthebeneficialownerintheabsenceofsuchrelationship,theprovisionsofthisArticleshall

applyonlytothelastmentionedamount.Insuchcase,theexcesspartofthepaymentsshallremain

taxableaccording

to

the

laws

of

each

Contracting

State,

due

regard

being

had

to

the

other

provisions

of

thisConvention.

Article13

Capitalgains

1.GainsderivedbyaresidentofaContractingStatefromthealienationofimmovablepropertyreferred

toinArticle6andsituatedintheotherContractingStateorsharesinacompanytheassetsofwhich

consistmainlyofsuchpropertymaybetaxedinthatotherState.

2.Gainsfromthealienationofmovablepropertyformingpartofthebusinesspropertyofapermanent

establishmentwhichanenterpriseofaContractingStatehasintheotherContractingStateorof

movablepropertypertainingtoafixedbaseavailabletoaresidentofaContractingStateintheother

ContractingStateforthepurposeofperformingindependentpersonalservices,includingsuchgains

fromthealienationofsuchapermanentestablishment(aloneorwiththewholeenterprise)orofsuch

fixedbase,maybetaxedinthatotherState.

3.Gainsfrom

the

alienation

of

ships

or

aircraft

operated

in

international

traffic

or

movable

property

pertainingtotheoperationofsuchshipsoraircraft,shallbetaxableonlyintheContractingStatein

whichtheplaceofeffectivemanagementoftheenterpriseissituated.

4.Gainsfromthealienationofanypropertyotherthanthatreferredtoinparagraphs1,2and3,shallbe

taxableonlyintheContractingStateofwhichthealienatorisaresident.

Article14

Independent

personal

services

1.IncomederivedbyanindividualwhoisaresidentofaContractingStateinrespectofprofessional

servicesorotheractivitiesofanindependentcharactershallbetaxableonlyinthatStateunlesshehasa

fixedbaseregularlyavailabletohimintheotherContractingStateforthepurposeofperforminghis

activities.Ifhehassuchafixedbase,theincomemaybetaxedintheotherStatebutonlysomuchofit

asisattributabletothatfixedbase.Forthispurpose,whereanindividualwhoisaresidentofa

ContractingStatestaysintheotherContractingStateforaperiodorperiodsexceedingintheaggregate


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183daysinanytwelvemonthperiodcommencingorendinginthefiscalyearconcerned,heshallbe

deemedtohaveafixedbaseregularlyavailabletohiminthatotherStateandtheincomethatisderived

fromhisactivitiesreferredtoabovethatareperformedinthatotherStateshallbeattributabletothat

fixedbase.

2.Theterm"professionalservices"includesespeciallyindependentscientific,literary,artistic,

educationalorteachingactivitiesaswellastheindependentactivitiesofphysicians,lawyers,engineers,

architects,dentistsandaccountants.

Article15

Dependentpersonalservices

1.SubjecttotheprovisionsofArticles16,18and19,salaries,wagesandothersimilarremuneration

derivedbyaresidentofaContractingStateinrespectofanemploymentshallbetaxableonlyinthat

StateunlesstheemploymentisexercisedintheotherContractingState.Iftheemploymentisso

exercised,suchremunerationasisderivedtherefrommaybetaxedinthatotherState.

2.Notwithstandingtheprovisionsofparagraph1,remunerationderivedbyaresidentofaContracting

StateinrespectofanemploymentexercisedintheotherContractingStateshallbetaxableonlyinthe

firstmentionedStateif:

(a) therecipientispresentintheotherStateforaperiodorperiodsnotexceedingintheaggregate

183daysinanytwelvemonthperiodcommencingorendinginthefiscalyearconcerned;and

(b) theremunerationispaidby,oronbehalfof,anemployerwhoisnotaresidentoftheother

State;and

(c) theremunerationisnotbornebyapermanentestablishmentorafixedbasewhichthe

employerhasintheotherState.

3.Notwithstandingthe

preceding

provisions

of

this

Article,

remuneration

derived

in

respect

of

an

employmentexercisedaboardashiporaircraftoperatedininternationaltraffic,maybetaxedinthe

ContractingStateinwhichtheplaceofeffectivemanagementoftheenterpriseissituated.

Article16

Directors'fees


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Directors'feesandothersimilarremunerationderivedbyaresidentofaContractingStateinhis

capacityasamemberoftheboardofdirectorsoranyothersimilarorganofacompanywhichisa

residentoftheotherContractingStatemaybetaxedinthatotherState.

Article17

Artistesandsportsmen

1.NotwithstandingtheprovisionsofArticles14and15,incomederivedbyaresidentofaContracting

Stateasanentertainer,suchasatheatre,motionpicture,radioortelevisionartiste,oramusician,oras

asportsman,fromhispersonalactivitiesassuchexercisedintheotherContractingState,maybetaxed

inthatotherState.

2.Whereincomeinrespectofpersonalactivitiesexercisedbyanentertainerorasportsmaninhis

capacityassuchaccruesnottotheentertainerorsportsmanhimselfbuttoanotherperson,thatincome

may,notwithstandingtheprovisionsofArticles7,14and15,betaxedintheContractingStateinwhich

theactivitiesoftheentertainerorsportsmanareexercised.

Article18

Pensions

Subjecttotheprovisionsofparagraph2ofArticle19,pensionsandothersimilarremunerationpaidtoa

residentofaContractingStateinconsiderationofpastemploymentshallbetaxableonlyinthatState.

Article19

Governmentservice

1. (a) Salaries,wagesandothersimilarremuneration,otherthanapension,paidbyaContracting

Stateorapoliticalsubdivisionoralocalauthoritythereoftoanindividualinrespectofservicesrendered

tothatStateorsubdivisionorauthorityshallbetaxableonlyinthatState.

(b) However,suchsalaries,wagesandothersimilarremunerationshallbetaxableonlyintheother

ContractingStateiftheservicesarerenderedinthatStateandtheindividualisaresidentofthatState

who:

(i)

isanational

of

that

State;

or

(ii) didnotbecomearesidentofthatStatesolelyforthepurposeofrenderingtheservices.


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2. (a) Anypensionpaidby,oroutoffundscreatedby,aContractingStateorapoliticalsubdivision

oralocalauthoritythereoftoanindividualinrespectofservicesrenderedtothatStateorsubdivisionor

authorityshallbetaxableonlyinthatState.

(b) However,suchpensionshallbetaxableonlyintheotherContractingStateiftheindividualisa

residentof,

and

anational

of,

that

State.

3.TheprovisionsofArticles15,16,17,and18shallapplytosalaries,wagesandothersimilar

remuneration,andtopensions,inrespectofservicesrenderedinconnectionwithabusinesscarriedon

byaContractingStateorapoliticalsubdivisionoralocalauthoritythereof.

Article20

Students

Paymentswhichastudent,anapprenticeoratraineewhoisorwasimmediatelybeforevisitinga

ContractingStatearesidentoftheotherContractingStateandwhoispresentinthefirstmentioned

Statesolelyforthepurposeofhiseducationortrainingreceivesforthepurposeofhismaintenance,

educationortrainingshallnotbetaxedinthatState,providedthatsuchpaymentsarisefromsources

outsidethatState.

Article21

Offshoreactivities

1.TheprovisionsofthisArticleshallapplynotwithstandingtheprovisionsofArticles4to20ofthis

Convention.

2.ForthepurposesofthisArticle,theterm"offshoreactivities"meansactivitiescarriedonoffshoreina

ContractingStateinconnectionwiththeexplorationorexploitationoftheseabedandsubsoiland

theirnaturalresourcessituatedinthatState.

3.ApersonwhoisaresidentofaContractingStateandcarriesonoffshoreactivitiesintheother

ContractingStateshall,subjecttoparagraph4,bedeemedtobecarryingonbusinessinthatotherState

throughapermanentestablishmentorafixedbasesituatedtherein.


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4.Theprovisionsofparagraph3shallnotapplywheretheoffshoreactivitiesarecarriedonforaperiod

orperiodsnotexceedingintheaggregate30daysinanytwelvemonthperiod.Forthepurposesofthis

paragraph:

(a) offshoreactivitiescarriedonbyapersonwhoisassociatedwithanotherpersonshallbe

deemedto

be

carried

on

by

the

other

person

if

the

activities

in

question

are

substantially

the

same

as

thosecarriedonbythefirstmentionedperson,excepttotheextentthatthoseactivitiesarecarriedon

atthesametimeasitsownactivities;

(b) apersonshallbedeemedtobeassociatedwithanotherpersonifoneiscontrolleddirectlyor

indirectlybytheother,orbotharecontrolleddirectlyorindirectlybyathirdpersonorthirdpersons.

5.Salaries,wagesandothersimilarremunerationderivedbyaresidentofaContractingStateinrespect

ofanemploymentconnectedwithoffshoreactivitiesintheotherContractingStatemay,totheextent

thatthedutiesareperformedoffshoreinthatotherState,betaxedinthatotherState.However,such

remunerationshallbetaxableonlyinthefirstmentionedStateiftheemploymentiscarriedonforan

employerwhoisnotaresidentoftheotherStateandforaperiodorperiodsnotexceedinginthe

aggregate30daysinanytwelvemonthperiod.

6.GainsderivedbyaresidentofaContractingStatefromthealienationof:

(a) explorationorexploitationrights;or

(b) propertysituatedintheotherContractingStatewhichisusedinconnectionwiththeoffshore

activitiescarriedoninthatotherState;or

(c) sharesderivingtheirvalueorthegreaterpartoftheirvaluedirectlyorindirectlyfromsuch

rightsorsuchpropertyorfromsuchrightsandsuchpropertytakentogether;

maybetaxedinthatotherState.

Inthisparagraphtheterm"explorationorexploitationrights"meansrightstoassetstobeproducedby

offshoreactivitiescarriedonintheotherContractingState,ortointerestsinortothebenefitofsuch

assets.

Article22


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Otherincome

1.ItemsofincomeofaresidentofaContractingState,whereverarising,notdealtwithintheforegoing

ArticlesofthisConventionshallbetaxableonlyinthatState.

2.Theprovisionsofparagraph1shallnotapplytoincome,otherthanincomefromimmovableproperty

asdefinedinparagraph2ofArticle6,iftherecipientofsuchincome,beingaresidentofaContracting

State,carriesonbusinessintheotherContractingStatethroughapermanentestablishmentsituated

therein,orperformsinthatotherStateindependentpersonalservicesfromafixedbasesituated

therein,andtherightorpropertyinrespectofwhichtheincomeispaidiseffectivelyconnectedwith

suchpermanentestablishmentorfixedbase.InsuchcasetheprovisionsofArticle7orArticle14,asthe

casemaybe,shallapply.

Article23

Capital

1.CapitalrepresentedbyimmovablepropertyreferredtoinArticle6,ownedbyaresidentofa

ContractingStateandsituatedintheotherContractingState,maybetaxedinthatotherState.

2.Capitalrepresentedbymovablepropertyformingpartofthebusinesspropertyofapermanent

establishmentwhichanenterpriseofaContractingStatehasintheotherContractingStateorby

movablepropertypertainingtoafixedbaseavailabletoaresidentofaContractingStateintheother

ContractingStateforthepurposeofperformingindependentpersonalservices,maybetaxedinthat

otherState.

3.Capitalrepresentedbyshipsandaircraftoperatedininternationaltrafficandbymovableproperty

pertainingtotheoperationofsuchshipsoraircraft,shallbetaxableonlyintheContractingStatein

whichtheplaceofeffectivemanagementoftheenterpriseissituated.

4.AllotherelementsofcapitalofaresidentofaContractingStateshallbetaxableonlyinthatState.

Article24

Eliminationofdoubletaxation

1.InthecaseofaresidentofLatvia,doubletaxationshallbeavoidedasfollows:


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(a) WherearesidentofLatviaderivesincomeorownscapitalwhich,inaccordancewiththis

Convention,maybetaxedinGeorgia,unlessamorefavourabletreatmentisprovidedinitsdomestic

law,Latviashallallow:

(i) asadeductionfromthetaxontheincomeofthatresident,anamountequaltotheincometax

paidthereon

in

Georgia;

(ii) asadeductionfromthetaxonthecapitalofthatresident,anamountequaltothecapitaltax

paidthereoninGeorgia.

Suchdeductionineithercaseshallnot,however,exceedthatpartoftheincometaxorcapitaltaxin

Latvia,ascomputedbeforethedeductionisgiven,whichisattributable,asthecasemaybe,tothe

incomeorthecapitalwhichmaybetaxedinGeorgia.

(b) Forthepurposesofsubparagraph(a),whereacompanythatisaresidentofLatviareceivesa

dividendfromacompanythatisaresidentofGeorgiainwhichitownsatleast10percentofitsshares

havingfullvotingrights,thetaxpaidinGeorgiashallincludenotonlythetaxpaidonthedividend,but

alsotheappropriateportionofthetaxpaidontheunderlyingprofitsofthecompanyoutofwhichthe

dividendwaspaid.

2.Inthe

case

of

aresident

of

Georgia,

double

taxation

shall

be

avoided

as

follows:

(a) WherearesidentofGeorgiaderivesincomeorownscapitalwhich,inaccordancewiththe

provisionsofthisConvention,maybetaxedinLatvia,Georgiashallallow:

(i) asadeductionfromthetaxontheincomeofthatresident,anamountequaltotheincometax

paidinLatvia;

(ii) asadeductionfromthetaxonthecapitalofthatresident,anamountequaltothecapitaltax

paidinLatvia.

Suchdeductionineithercaseshallnot,however,exceedthatpartoftheincometaxorcapitaltaxin

Georgia,ascomputedbeforethedeductionisgiven,whichisattributable,asthecasemaybe,tothe

incomeorthecapitalwhichmaybetaxedinLatvia.


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(b) WhereinaccordancewithanyprovisionoftheConventionincomederivedorcapitalownedby

aresidentofGeorgiaisexemptfromtaxinGeorgia,Georgiamaynevertheless,incalculatingthe

amountoftaxontheremainingincomeorcapitalofsuchresident,takeintoaccounttheexempted

incomeorcapital.

Article25

Nondiscrimination

1.NationalsofaContractingStateshallnotbesubjectedintheotherContractingStatetoanytaxationor

anyrequirementconnectedtherewith,whichisotherormoreburdensomethanthetaxationand

connectedrequirementstowhichnationalsofthatotherStateinthesamecircumstances,inparticular

withrespecttoresidence,areormaybesubjected.Thisprovisionshall,notwithstandingtheprovisions

ofArticle1,alsoapplytopersonswhoarenotresidentsofoneorbothoftheContractingStates.

2.StatelesspersonswhoareresidentsofaContractingStateshallnotbesubjectedineitherContracting

Statetoanytaxationoranyrequirementconnectedtherewith,whichisotherormoreburdensomethan

thetaxationandconnectedrequirementstowhichnationalsoftheStateconcernedinthesame

circumstances,inparticularwithrespecttoresidence,areormaybesubjected.

3.ThetaxationonapermanentestablishmentwhichanenterpriseofaContractingStatehasinthe

otherContractingStateshallnotbelessfavourablyleviedinthatotherStatethanthetaxationleviedon

enterprisesofthatotherStatecarryingonthesameactivities.Thisprovisionshallnotbeconstruedas

obligingaContractingStatetogranttoresidentsoftheotherContractingStateanypersonalallowances,

reliefsandreductionsfortaxationpurposesonaccountofcivilstatusorfamilyresponsibilitieswhichit

grantstoitsownresidents.

4.Exceptwheretheprovisionsofparagraph1ofArticle9,paragraph7ofArticle11,orparagraph6of

Article12,apply,interest,royaltiesandotherdisbursementspaidbyanenterpriseofaContractingState

toaresidentoftheotherContractingStateshall,forthepurposeofdeterminingthetaxableprofitsof

suchenterprise,

be

deductible

under

the

same

conditions

as

ifthey

had

been

paid

to

aresident

of

the

firstmentionedState.Similarly,anydebtsofanenterpriseofaContractingStatetoaresidentofthe

otherContractingStateshall,forthepurposeofdeterminingthetaxablecapitalofsuchenterprise,be

deductibleunderthesameconditionsasiftheyhadbeencontractedtoaresidentofthefirst

mentionedState.


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5.EnterprisesofaContractingState,thecapitalofwhichiswhollyorpartlyownedorcontrolled,directly

orindirectly,byoneormoreresidentsoftheotherContractingState,shallnotbesubjectedinthefirst

mentionedStatetoanytaxationoranyrequirementconnectedtherewithwhichisotherormore

burdensomethanthetaxationandconnectedrequirementstowhichothersimilarenterprisesofthe

firstmentionedStateareormaybesubjected.

6.TheprovisionsofthisArticleshall,notwithstandingtheprovisionsofArticle2,applytotaxesofevery

kindanddescription.

Article26

Mutualagreementprocedure

1.WhereapersonconsidersthattheactionsofoneorbothoftheContractingStatesresultorwillresult

forhimintaxationnotinaccordancewiththeprovisionsofthisConvention,hemay,irrespectiveofthe

remediesprovidedbythedomesticlawofthoseStates,presenthiscasetothecompetentauthorityof

theContractingStateofwhichheisaresidentor,ifhiscasecomesunderparagraph1ofArticle25,to

thatoftheContractingStateofwhichheisanational.Thecasemustbepresentedwithinthreeyears

fromthefirstnotificationoftheactionresultingintaxationnotinaccordancewiththeprovisionsofthe

Convention.

2.Thecompetentauthorityshallendeavour,iftheobjectionappearstoittobejustifiedandifitisnot

itselfabletoarriveatasatisfactorysolution,toresolvethecasebymutualagreementwiththe

competentauthority

of

the

other

Contracting

State,

with

aview

to

the

avoidance

of

taxation

which

is

notinaccordancewiththeConvention.Anyagreementreachedshallbeimplementednotwithstanding

anytimelimitsinthedomesticlawoftheContractingStates.

3.ThecompetentauthoritiesoftheContractingStatesshallendeavourtoresolvebymutualagreement

anydifficultiesordoubtsarisingastotheinterpretationorapplicationoftheConvention.Theymayalso

consulttogetherfortheeliminationofdoubletaxationincasesnotprovidedforintheConvention.

4.ThecompetentauthoritiesoftheContractingStatesmaycommunicatewitheachotherdirectly,

includingthroughajointcommissionconsistingofthemselvesortheirrepresentatives,forthepurpose

ofreachinganagreementinthesenseoftheprecedingparagraphs.

Article27

Exchangeofinformation


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1.ThecompetentauthoritiesoftheContractingStatesshallexchangesuchinformationasisnecessary

forcarryingouttheprovisionsofthisConventionorofthedomesticlawsoftheContractingStates

concerningtaxescoveredbytheConventioninsofarasthetaxationthereunderisnotcontrarytothe

Convention.TheexchangeofinformationisnotrestrictedbyArticle1.Anyinformationreceivedbya

ContractingStateshallbetreatedassecretinthesamemannerasinformationobtainedunderthe

domesticlaws

of

that

State

and

shall

be

disclosed

only

to

persons

or

authorities

(including

courts

and

administrativebodies)concernedwiththeassessmentorcollectionof,theenforcementorprosecution

inrespectof,orthedeterminationofappealsinrelationto,thetaxescoveredbytheConvention.Such

personsorauthoritiesshallusetheinformationonlyforsuchpurposes.Theymaydisclosethe

informationinpubliccourtproceedingsorinjudicialdecisions.

2.Innocaseshalltheprovisionsofparagraph1beconstruedsoastoimposeonaContractingStatethe

obligation:

(a)

tocarry

out

administrative

measures

at

variance

with

the

laws

and

administrative

practice

of

thatoroftheotherContractingState;

(b) tosupplyinformationwhichisnotobtainableunderthelawsorinthenormalcourseofthe

administrationofthatoroftheotherContractingState;

(c) tosupplyinformationwhichwoulddiscloseanytrade,business,industrial,commercialor

professionalsecretortradeprocess,orinformation,thedisclosureofwhichwouldbecontrarytopublic

policy(ordrepublic).

Article28

Membersofdiplomaticmissionsandconsularposts

NothinginthisConventionshallaffectthefiscalprivilegesofmembersofdiplomaticmissionsor

consularpostsunderthegeneralrulesofinternationallaworundertheprovisionsofspecial

agreements.

Article29

Entry

into

force

1.EachoftheContractingStatesshallnotifytheotherthroughdiplomaticchannelsofthecompletionof

theproceduresrequiredbyitslawfortheentryintoforceofthisConvention.


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2.ThisConventionshallenterintoforceonthefirstdayofthethirdmonthnextfollowingthereceiptof

latternotificationfromtheContractingStatesindicatingthecompletionofthelegalprocedures

necessaryfortheentryintoforceofthisConvention.ThisConventionshallhaveeffectinbothStates:

(a) inrespectoftaxeswithheldatsource,onincomederivedonorafterthefirstdayofJanuaryin

thecalendar

year

next

following

the

year

in

which

the

Convention

enters

into

force;

(b) inrespectofothertaxesonincomeandtaxesoncapital,fortaxeschargeableforanyfiscalyear

beginningonorafterthefirstdayofJanuaryinthecalendaryearnextfollowingtheyearinwhichthe

Conventionentersintoforce.

Article30

Termination

ThisConvention

shall

remain

in

force

until

terminated

by

aContracting

State.

Either

of

the

Contracting

Statemayaftertheexpirationofaperiodoffiveyearsfromthedateofitsentryintoforce,terminate

thisConvention,bygivingwrittennoticeofterminationtotheotherContractingStatethroughthe

diplomaticchannelsatleastsixmonthsbeforetheexpirationofanycalendaryear.Insuchevent,the

ConventionshallceasetohaveeffectinbothContractingStates:

(a) inrespectoftaxeswithheldatsource,onincomederivedonorafterthefirstdayofJanuaryin

thecalendaryearnextfollowingtheyearinwhichthenoticehasbeengiven;

(b) inrespectofothertaxesonincomeandtaxesoncapital,fortaxeschargeableforanyfiscalyear

beginningonorafterthefirstdayofJanuaryinthecalendaryearnextfollowingtheyearinwhichthe

noticehasbeengiven.

Inwitnesswhereof,theundersigned,dulyauthorisedthereto,havesignedthisConvention.

Doneinduplicateat....this13thdayofOctober2004,intheLatvian,GeorgianandEnglishlanguages,all

threetexts

being

equally

authentic.

In

the

case

of

divergence

of

interpretation

the

English

text

shall

prevail.

PROTOCOL

AtthesigningoftheConventionbetweentheRepublicofLatviaandGeorgiafortheavoidanceof

doubletaxationandthepreventionoffiscalevasionwithrespecttotaxesonincomeandoncapitalthe

undersignedhaveagreeduponthefollowingprovisionswhichformanintegralpartoftheConvention:


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1.Withreferencetoparagraph1ofArticle2:

Itis

understood

that

in

the

case

of

Georgia

the

term

"political

subdivisions"

means

territorial

administrativesubdivisions.

2.WithreferencetotheprovisionsoftheConvention:

Wheretheterm"businessprofits"appearsitisunderstoodthatthistermalsoincludesprofitsfrom

economicactivity.

3.Withreferencetosubparagraph(e)ofparagraph1ofArticle3:

Itisunderstoodthattheterm"company",inthecaseofGeorgia,alsoincludesanenterpriseasdefined

underitsdomesticlaw.

4.Withreferencetoparagraph3ofArticle7:

ItisunderstoodthattheexpensestobeallowedasdeductionsinaContractingStateshallnotinclude

theexpenseswhichwouldnotbedeductibleifapermanentestablishmentwereaseparateenterprise

ofthat

Contracting

State.

5.WithreferencetoArticle8,Article13,Article15,Article23:

Itisunderstoodthattheprovisionsofparagraph1ofArticle8,paragraph3ofArticle13,paragraph3of

Article15andparagraph3ofArticle23arenotapplicableuntilLatviahasnotintroducedinitsdomestic

legislationtheplaceofeffectivemanagementasacriteriaforthedeterminationofresidence,butthe

followingprovisionsareapplicableinstead:

Article8,paragraph1

"ProfitsofanenterpriseofaContractingStatefromtheoperationofshipsoraircraftininternational

trafficshallbetaxableonlyinthatState".


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Article13,paragraph3

"GainsderivedbyanenterpriseofaContractingStateoperatingshipsoraircraftininternationaltraffic

fromthealienationofshipsoraircraftoperatedininternationaltrafficormovablepropertypertaining

totheoperationofsuchshipsoraircraft,shallbetaxableonlyinthatState".


"NotwithstandingtheprecedingprovisionsofthisArticle,remunerationderivedinrespectofan

employmentexercisedaboardashiporaircraftoperatedininternationaltrafficbyanenterpriseofa

ContractingStatemaybetaxedinthatState".


"Capitalrepresentedbyshipsandaircraftoperatedininternationaltrafficbyanenterpriseofa

ContractingStateandbymovablepropertypertainingtotheoperationofsuchshipsandaircraft,shall

betaxableonlyinthatState".

6.WithreferencetoArticle22:

Notwithstandingtheprovisionsofparagraph1,incomeofaresidentofaContractingStateintheform

ofwinningsfromgaming,arisingintheotherContractingState,mayalsobetaxedinthatotherState.

7.WithreferencetoArticle23:

Itisunderstoodthattheterm"capital"forpurposesofArticle23meansmovableandimmovable

property,andmayincludecash,stockorotherevidenceofownershiprights,bondsorotherevidences

ofindebtedness,andpatents,trademarks,copyrightsorotherlikerightorproperty.

Inwitnesswhereof,theundersigned,dulyauthorisedthereto,havesignedthisProtocol.


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Doneinduplicateat....this13thdayofOctober2004,intheLatvian,GeorgianandEnglishlanguages,all

threetextsbeingequallyauthentic.InthecaseofdivergenceofinterpretationtheEnglishtextshall

prevail.

dtc agreement between latvia and georgia

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