See treaty text Clause Samples

See treaty text. The usual OECD provisions, that nationals of one of the States shall not be subjected in the other State to any taxation or any requirement connected with tax, which is other or more burdensome than the taxation and connected requirements to which nationals of the other State in the same circumstances are or may be subjected. There is an extension so that the principle of non-discrimination also applies to persons not residents of either Sweden or China. It applies to all taxes, not merely those listed in Article 2.

See treaty text. Any income not dealt with in the preceding Articles is taxable only in the State of residence but if it arises in the other State then the other State may tax it according to domestic law. Thus the default position regarding the two States is that the State of source has primary taxing rights. Income not arising in either State may only be taxed by the State of residence. These rules follow the UN Model Treaty. There is an express provision that income in respect of rights or property which is connected to a permanent establishment is taxed under Article 7 as the income of that permanent establishment. Income from immovable property remains taxable under Article 6 in the State in which the property is located.

See treaty text. The provisions of this Convention shall not affect the fiscal privileges of diplomatic agents or consular officials under the general rules of international law.

See treaty text. The usual provision founding the OECD Model is used but with different time limits. Where a person considers that the actions of one or both of the States result or will result for him in taxation not in accordance with the provisions of this Treaty, he may present his case to the competent authority of the State of which he is resident or if not resident in either Canada or China, to the competent authority of which he is a national. This is so irrespective of the remedies provided by domestic law. No time limit for bringing a claim is set. The two tax authorities will try to resolve the case by mutual agreement. They will also try to agree on definitions of terms not specifically defined in the Treaty and on general matters of interpretation of the Treaty. Thus this Article removes the need for the tax authorities in each State to go through diplomatic channels: They may simply contact each other directly. The mutual agreement procedure is commonly used to decide matters concerning income and expense allocations and transfer pricing. As both States are Member States of the EU, the provisions of the EU Arbitration Convention will also apply (see analysis of Article 9).

See treaty text. Any income not dealt with in the preceding Articles is taxable only in the State of residence but if it arises in the other State then the other State may tax it according to domestic law. Thus the default position regarding the two States is that the State of source has primary taxing rights. This is normal in Canadian tax treaties and also in treaties based on the UN Model.

See treaty text. This Treaty provides that interest is as a main rule taxable in the Contracting State in which the beneficial owner thereof is resident. However, the Contracting State in which the payer of the interest is resident is also entitled to tax such interest. The maximum rate of withholding tax on these payments is 10%.

See treaty text. Any income not dealt with in the preceding Articles is taxable only in the State of residence. There is an express provision that income in respect of rights or property which is connected to a permanent establishment are taxed under Article 7 as the income of that permanent establishment. Income from immovable property remains taxable under Article 6 in the State in which the property is located.

See treaty text. Salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of employment are taxable only in that State unless the employment is exercised in the other State. If so, remuneration derived from the other State is taxable in the other State. However, the other State (the source State) will not tax provided: •The recipient is present in the other State for no more than 183 days in aggregate in the calendar year concerned; •The remuneration is paid by, or on behalf of, an employer not resident in the other State; and •The remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. The purpose of this article is to ensure symmetry in taxation. If the employer is not taxable in a State, because it is neither resident there nor has a permanent establishment there then it will not receive any tax deduction in that State for wages and salaries paid. Wages and salaries paid by the employer in respect of short term employment postings of employees to that State are correspondingly exempted from tax in that State in the hands of the employee. The treatment of employee stock options is not expressly dealt with and can be difficult as entitlement to the benefit taxable as a result of the option may have accrued partly whilst the employee was working temporarily in one of the States but there may be no taxable event, such as exercise of the option until the employee returns to the other State. A State is permitted to tax that part of the taxable benefit that can be related to the portion of the entitlement period spent working in that State. Determining the extent to which an employee stock option benefit is derived from employment exercised in a particular State has to be done on a case by case basis, taking into account all relevant facts and circumstances. Whether a period of employment would be considered in allocating taxing rights between two States would depend on whether the entitlement to exercise the stock option was contingent upon continuing employment during that period. If an option was granted with a right to exercise, say, in three years’ time, regardless of continuing employment then time elapsing between grant and exercise would not count towards an apportionment of the taxing rights over the benefit in the absence of any other factors. Periods of employment before the option was granted may be considered in the apportionment of taxing rights if the grant of...

See treaty text. Withholding tax is limited to 10% provided the recipient is also the beneficial owner. There are no special rates for technical equipment use or know how. Royalties are defined as payments of any kind received as a consideration for the use of, or the right to use, any patent, know-how, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience, any copyright of literary, artistic or scientific work, including cinematographic films and films or tapes for television or radio broadcasting. There are the usual provisions such that royalties received by a non-resident but which relates to a permanent establishment which that non-resident has in the other Contracting State are taxed under Article 7 and thus escape withholding tax. Also, royalties paid by an enterprise which are borne by a permanent establishment are deemed to arise in the State in which the permanent establishment is situated. Hence, if the permanent establishment and the recipient are in the same State, no withholding tax can arise. Where the payer and beneficial owner are connected and the amount of royalties exceeds an arm's length amount, the excess amount paid will not enjoy the treaty benefits and will be liable to tax in the payer's State at the normal domestic rate of withholding tax. Withholding tax of 10%. Zero withholding tax on payments to legal entities. Progressive rates of withholding tax on payments to individuals.