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Double Taxation Avoidance Agreement
This Agreement is entered into on [DATE], between [PARTY A], a corporation organized and existing under the laws of [COUNTRY A], and [PARTY B], a corporation organized and existing under the laws of [COUNTRY B], for the purpose of avoiding double taxation and preventing fiscal evasion with respect to taxes on income, goods and services, and capital gains.
I. Definitions
As used in this Agreement, the following terms shall have the following meanings:
A. “Agreement” means this Agreement including the Annexes, the Protocols and all other instruments executed pursuant to this Agreement.
B. “Annexes” means the Annexes set forth in this Agreement.
C. “Competent Authority” means the competent authority of a Contracting Party as defined in relevant laws, regulations and other instruments and as defined in this Agreement.
D. “Contracting Party” means [COUNTRY A] or [COUNTRY B], as applicable.
E. “Person” means any natural or legal person.
F. “Protocols” means the Protocols executed pursuant to this Agreement and forming an integral part of this Agreement.
II. Scope of Coverage
A. This Agreement shall apply to taxes imposed on behalf of [COUNTRY A] or [COUNTRY B] or any of their political subdivisions or local authorities, whether now existing or hereinafter imposed.
B. The taxes to which this Agreement shall apply and the competent authorities, who shall be competent to administer this Agreement, are set out in the Annexes to this Agreement.
III. General Terms
A. Each Contracting Party shall allow a deduction from the tax payable by a resident of one Contracting Party in the other Contracting Party for income, goods and services, and capital gains taxes paid to the other Contracting Party.
B. The amount of the deduction shall not exceed the amount of income, goods and services, and capital gains taxes paid to the other Contracting Party.
C. The rights and obligations of the Contracting Parties under this Agreement shall be subject to the provisions of the applicable tax laws, regulations and other instruments in force in each Contracting Party and applicable to their citizens, residents and enterprises and to the mutual agreement of the competent authorities.
D. Nothing in this Agreement shall be interpreted, construed or otherwise taken as creating or recognizing any right or obligation of either Contracting Party or of any person beyond the scope of this Agreement.
E. In the event of any inconsistency between this Agreement and any applicable laws, regulations or other instruments, the laws, regulations or other instruments shall prevail to the extent of the inconsistency.
IV. Exchange of Information
A. Information concerning persons who are residents of one Contracting Party may be requested by the other Contracting Party for one or more of the following purposes:
1. Determining a person’s resident or non-resident status for tax purposes;
2. Establishing the existence of permanent establishments;
3. Establishing the liability to tax of a person;
4. Establishing the existence of tax avoidance schemes;
5. Obtaining evidence of conduct which would constitute an offence under the laws relating to taxes covered by this Agreement; and
6. Obtaining information for the purpose of enforcing the provisions of this Agreement.
B. Information so requested shall be exchanged to the greatest extent possible and shall include, but not be limited to:
1. Detailed information regarding income and capital, including ownership interests;
2. Financial statements and tax returns;
3. Information regarding transactions between related persons;
4. Information regarding policies, practices, procedures and agreements of both Contracting Parties.
C. The Contracting Parties may request such further information as may be necessary to determine whether a person is liable to tax in either Contracting Party.
V. Consultations and Dispute Resolution
A. The competent authorities of the Contracting Parties shall endeavor to resolve in a timely manner any disagreements or disputes which may arise between them in connection with the implementation or interpretation of this Agreement.
B. When a dispute affects the rights or obligations of either Contracting Party, or of a resident or enterprise of either Contracting Party, either Contracting Party may refer the dispute to the competent authorities for settlement.
C. The competent authorities shall endeavor to resolve the dispute through discussions and consultations. In the event the dispute is not resolved within four months from the date of its referral, the parties shall either seek to resolve the dispute through a mutually agreed forum, such as arbitration or mediation, or shall refer the dispute to an independent third party for determination.
VI. Exemptions and Exceptions
A. In the case of a permanent establishment in either Contracting Party, the tax imposed on the income attributable to that permanent establishment shall not be less than the taxes that would be imposed by the other Contracting Party on the same income.
B. The provisions of this Agreement shall not apply to estates, inheritances, donations and other transfers categories of income, goods and services which are taxed differently by either Contracting Party.
C. No provision of this Agreement shall be interpreted as requiring information to be disclosed which is not necessary for the application or enforcement of taxes and duties imposed in either Contracting Party.
VII. Miscellaneous Provisions
A. This Agreement shall be interpreted in accordance with the law of each Contracting Party.
B. This Agreement shall not prejudice nor diminish the rights of any Person or Enterprise that have been or may be accorded by either Contracting Party to any other Person or Enterprise.
C. This Agreement does not derogate from or limit the rights or obligations set out in any other Agreement or arrangement between the Contracting Parties which relates to related matters.
D. A competent authority in one Contracting Party may communicate directly with a competent authority in the other Contracting Party in order to carry out the provisions of this Agreement.
E. Nothing in this Agreement shall create any right to obtain or extend any tax advantage or immunity that is not otherwise available under the laws of either Contracting Party.
F. Nothing in this Agreement shall be interpreted as creating for either Contracting Party any rights or obligations, other than those set out herein, with respect to the taxes that are the subject of this Agreement.
G. The Annexes, Protocols, and other instruments executed pursuant to this Agreement form an integral part of this Agreement.
H. No provision of this Agreement shall be given any legal effect while it is contrary to the law of either Contracting Party.
I. All notifications, communications and requests that are required to be made under this Agreement shall be made in writing.
J. This Agreement shall come into force on the date of its signature and shall remain in force unless and until terminated in accordance with its terms.
IN WITNESS WHEREOF, the undersigned, being authorised to do so, have executed this Agreement
[PARTY A]
[Name], [Title], [Company]
[PARTY B]
[Name], [Title], [Company]
Done in [CITY], [COUNTRY] on [DATE]
