Income tax act subsidiary legislation

CHAPTER 323 - INCOME TAX ACT: SUBSIDIARY LEGISLATION

INDEX TO SUBSIDIARY LEGISLATION

AGREEMENT FOR THE AVOIDANCE OF DOUBLE TAXATION-SOUTH AFRICA

Agreements for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income were concluded between the Government of the former Union of South Africa and the Government of the former Federation on the 22nd May, 1956, and on the 30th October, 1959, incorporating the terms set out in Schedules I and II respectively.

AGREEMENT BETWEEN THE GOVERNMENT OF THE UNION OF SOUTH AFRICA AND THE GOVERNMENT OF THE FEDERATION OF RHODESIA AND NYASALAND FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

The Government of the Union of South Africa and the Government of the Federation of Rhodesia and Nyasaland desiring to conclude an agreement for the avoidance of double taxation and the prevention of fiscal evasion in respect of taxes on income, have agreed as foIIows:

1. The taxes which are the subject of the present Agreement are:

(a) in the Union of South Africa: the normaI tax and supertax (hereinafter referred to as "Union tax");

(b) in the Federation of Rhodesia and Nyasaland: the FederaI income tax and supertax (hereinafter referred to as "FederaI tax").

2. The present Agreement shall also apply to any other taxes of a substantially similar character imposed by either Contracting Government subsequently to the date of signature of the present Agreement.

1. In this Agreement, unless the context otherwise requires-

(a) "Union" means the Union of South Africa;

(b) "the Federation" means the Federation of Rhodesia and Nyasaland;

(c) "one of the territories" and "the other territory" mean the Union of South Africa or the Federation of Rhodesia and Nyasaland as the case may be;

(d) "tax" means Union or FederaI tax, as the case may be;

(e) "person" includes any body of persons, corporate or not corporate;

(f) "company" includes any body corporate;

(g) "resident of the Union" and "resident of the Federation" mean respectively any person who is ordinariIy resident in the Union for the purposes of the Union tax and not ordinariIy resident in the Federation for the purposes of the FederaI tax and any person who is ordinariIy resident in the Federation for the purposes of the FederaI tax and not ordinariIy resident in the Union for the purposes of the Union tax; and a company shall be regarded as ordinariIy resident in the Union if its business is managed and controIIed in the Union and ordinariIy resident in the Federation if its business is managed and controIIed in the Federation;

(h) "company of one of the territories" and "company of the other territory" means a company which is a resident of the Union of a company which is a resident of the Federation, as the case may be;

(i) "Union enterprise" and "FederaI enterprise" mean respectively an industrial or commercial enterprise or undertaking carried on by a resident of the Union and an industrial or commercial enterprise or undertaking carried on by a resident of the Federation; and

"enterprise of one of the territories" and "enterprise of the other territory" means a Union enterprise or a FederaI enterprise, as the context requires;

(j) "industrial or commercial enterprise or undertaking" includes an enterprise or undertaking engaged in mining, agricultural or pastoraI activities or in the business of banking, insurance or dealing in investments, and

"industrial or commercial profits" includes profits from such activities or business but does not include income in the form of dividends, interest, rents, royaIties (including rent or royaIties of cinematograph fiIms), management charges, remuneration for personaI services or profits from the operation of transport services;

(k) "permanent establishment" when used with respect to an enterprise of one of the territories means a branch, depot, management, factory, farm, mine, quarry or other fixed place of business including any place of naturaI resources subject to expIoitation and a place where construction work or the installation of pIant or machinery is carried on but does not include any agency unless the agent has, and habitually exercises, a General authority to negotiate and conclude contracts on behalf of the enterprise or has a stock of merchandise from which he regularly fiIIs orders on its behalf. In this connection-

(i) an enterprise of one of the territories shall not be deemed to have a permanent establishment in the other territory merely because it carries on business dealings in that other territory through a bona fide broker or General commission agent acting in the ordinary course of his business as such;

(ii) the fact that an enterprise of one of the territories maintains in the other territory a fixed place of business exclusively for the purchase of goods or merchandise shall not of itself constitute that fixed place of business a permanent establishment of the enterprise;

(iii) the fact that a company which is resident in one of the territories has a subsidiary company which is a resident of the other territory or which is engaged in trade or business in that other territory (whether through a permanent establishment or otherwise) shall not of itself constitute that subsidiary company a permanent establishment of its parent company;

(I) "profits" means "taxabIe income" as defined under the Laws of the Contracting Governments relating to the taxes which are the subject of this Agreement;

(m) "taxation authorities" means the Commissioner-General for InIand Revenue or his authorised representative in the case of the Union and the Commissioner-General of Taxes or his authorised representative in the case of the Federation.

2. "Union tax" and "FederaI tax" do not include any sum payabIe in respect of any defauIt or omission in reIation to the taxes which are the subject to this Agreement or which represents a penaIty imposed under the Law of either territory relating to those taxes.

3. In the application of the provisions of the present Agreement by one of the Contracting Governments any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the Laws of that Contracting Government relating to the taxes which are the subject of the present Agreement.

1. The industrial and commercial profits of an enterprise in one of the territories shall not be subject to tax in the other territory unless the enterprise is engaged in trade or business in the other territory through a permanent establishment in that other territory. If it is so engaged tax may be imposed on those profits by the other territory but only on so much of them as it is attributable to that permanent establishment.

2. Where an enterprise of one of the territories is engaged in trade or business in the other territory through a permanent establishment situated therein-

(a) there shall be attributed to that permanent establishment the industrial or commercial profits which it might be expected to derive in that other territory if it were an independent enterprise engaged in the same or similar activities under the same or similar conditions and dealing at arm's Length with the enterprise of which it is a permanent establishment;

(b) subject to the provisions of sub-paragraph (a), no profits derived from sources outside that other territory shall be attributed to that permanent establishment.

3. No portion of any profits arising from the saIe of goods or merchandise by an enterprise of one of the territories shall be attributed to a permanent establishment situated in the other territory by reason of the mere purchase of the goods or merchandise within that other territory.

4. This Article shall not apply in any case in which its application wouId have the resuIt that income, which but for such application wouId be subject to tax in one of the territories, wouId not be subject to tax in either territory.

(a) an enterprise of one of the territories participates directly or indirectly in the management, control or capital of an enterprise of the other territory; or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the territories and an enterprise of the other territory; and

(c) in either case conditions are made or imposed between the two enterprises, in their commercial or financial relations, which differ from those which wouId be made between independent enterprises;

then any profits which wouId but for those conditions have accrued to one of the enterprises but by reason of those conditions have not so accrued may be included in the profits of that enterprise and taxed accordingly.

Profits derived by the Government of or by a resident of one of the territories from operating transport services in the other territory shall be exempt from tax in that other territory.

Any royalty, rent (including rent or royaIties of cinematograph fiIms) or other consideration received by or accrued to a resident of one of the territories by virtue of the use in the other territory of, or the grant of permission to use in that other territory any patent, design, trade mark, copyright, secret process, formula or any other property of a similar nature shall be exempt from tax in that first-mentioned territory if such royalty, rent or other consideration is subject to tax in the other territory.

1. Any pension (other than a pension paid by the Government of the Union for services rendered to it in the discharge of governmental functions) and any annuity, derived or deemed to have been derived from sources within the Union by an individual who is a resident of the Federation, shall be exempt from Union tax to the extent that it is included in income for FederaI tax purposes.

2. Any pension (other than a pension paid by the Government of the Federation for services rendered to it in the discharge of governmental functions) and any annuity, derived or deemed to have been derived from sources within the Federation by an individual who is a resident of the Union, shall be exempt from FederaI tax to the extent that it is included in income for Union tax purposes.

3. The term "annuity" means a stated sum payabIe periodically at stated times, during Iife or during a specified or ascertainable period of time, under an obIigation to make the payments in consideration of money paid.

1. Remuneration (other than pensions) paid by one of the Contracting Governments to any individual for services rendered to that Contracting Government in the discharge of governmental functions shall be exempt from tax in the territory of the other Contracting Government if the individual is not ordinariIy resident in that territory or is ordinariIy resident in that territory soIeIy for the purpose of rendering those services.

2. Any pension paid by one of the Contracting Governments to any individaI for services rendered to that Contracting Government in the discharge of governmental functions shall be exempt from tax in the territory of the other Contracting Government, if immediateIy prior to the cessation of those services the remuneration thereof was exempt from tax in that territory, whether under paragraph 1 of this Article or otherwise, or wouId have been exempt under that paragraph if the present Agreement had been in force at the time the remuneration was paid.

3. The provisions of this Article shall not apply to payments in respect of services rendered in connection with any trade or business carried on by either of the Contracting Governments for purposes of profit.

4. For the purposes of this Article the term "Contracting Government" where it applies to the Government of the Federation of Rhodesia and Nyasaland includes the Governments of the Territories constituting the Federation.

1. An individual who is a resident of the Union shall be exempt from FederaI Tax on profits or remuneration in respect of personaI (including professionaI) services performed within the Federation in any year of assessment if-

(a) he is present within the Federation for a period or periods not exceeding in the aggregate 183 days during that year; and

(b) the services are performed for or on behalf of a person resident in the Union; and

2. An individual who is a resident of the Federation shall be exempt from Union tax on profits or remuneration in respect of personaI (including professionaI) services performed within the Union in any year of assessment if-

(a) he is present within the Union for a period or periods not exceeding in the aggregate 183 days during that year; and

(b) the services are performed for or on behalf of a person resident in the Federation; and

3. The provisions of this Article shall not apply to the profits or remuneration of pubIic entertainers such as stage, motion picture or radio artists, musicians and athletes.

The remuneration derived by a professor or teacher who is ordinariIy resident in one of the territories, for teaching, during a period of temporary residence not exceeding two years, at a university, coIIege, schooI or other educationaI institution in the other territory, shall be exempt from tax in that other territory if such remuneration is subject to tax in such first-mentioned territory.

A student or business apprentice from one of the territories who is receiving fuII-time education or training in the other territory shall be exempt from tax in that other territory on payments made to him by persons in the first-mentioned territory for the purposes of his maintenance, education or training.

1. Subject to the provisions of the Law in the Federation regarding the allowance of a credit against FederaI tax of tax payabIe in the Union, Union tax payabIe in respect of profits from sources within the Union shall be allowed as a credit against any FederaI tax payabIe in respect of such profits.

2. Where FederaI tax is payabIe in respect of profits derived from sources within the Federation by a person ordinariIy resident in the Union, the Union shall either impose no tax on such profits or, subject to such provisions (which shall not affect the General principIe hereof) as may be enacted in the Union, shall allow the FederaI tax as a credit against any Union tax payabIe in respect of such profits.

3. For the purposes of this Article profits or remuneration for personaI (including professionaI) services performed in one of the territories shall be deemed to be profits from sources within that territory, and the services of an individual whose services are whoIIy or mainIy performed in aircraft or other transport vehicIes operated by a resident of one of the territories shall be deemed to be performed in that territory.

4. Where interest is derived by any person from a person (hereinafter referred to as the debtor) who is ordinariIy resident in one of the territories and the interest wouId, but for the provisions of this paragraph, be subject to tax in both territories, that interest shall be subject to tax only in the territory in which the debtor is ordinariIy resident;

Provided that if the debtor is ordinariIy resident in both territories, the interest shall be subject to tax only in the territory in which that interest is allowable as a deduction in the determination of the debtor's taxabIe income.

The taxation authorities of the Contracting Governments shall exchange such information (being information avaliable under the respective taxation Laws of the Contracting Governments) as is necessary for carrying out the provisions of the present Agreement or for the prevention of fraud or the administration of statutory provisions against IegaI avoidance in reIation to the taxes which are the subject of the present Agreement. Any information so exchanged shall be treated as secret and shall not be discIosed to any persons other than those concerned with the assessment and coIIection of the taxes which are the subject of the present Agreement. No information shall be exchanged which wouId discIose any trade secret or trade process.

The present Agreement shall come into force on the date on which the Iast of all such things shall have been done in both territories as are necessary to give the Agreement the force of Law in each territory and shall thereupon have effect-

(a) in the Union, in respect of assessments for the year of assessment ended on the thirtieth day of June, 1954, and subsequent years;

(b) in the Federation, in respect of assessments for the year of assessment ended on the thirty-first day of March, 1954, and subsequent years.

The present Agreement shall continue in effect indefiniteIy, but either of the Contracting Governments may, on or before the thirtieth day of September in any calendar year after the year 1956, give notice of termination to the other Contracting Government and, in such event, the present Agreement shall cease to be effective-

(a) in the Union, in respect of any year of assessment beginning on or after the first day of JuIy in the calendar year next following that in which such notice is given;

(b) in the Federation, in respect of any year of assessment beginning on or after the first day of April in the calendar year next following that in which such notice is given.

In witness whereof the undersigned Plenipotentiaries, being authorised thereto by their respective Governments, have signed this Agreement and have affixed thereto their seaIs.

Done in dupIicate in the EngIish and Afrikaans Ianguages, at Cape Town this twenty-second day of May, 1956.

For the Government of the Union of South Africa. A.D. CHATAWAY,

For the Government of the Federation of Rhodesia and Nyasaland.

NOTE FROM THE HIGH COMMISSIONER-GENERAL FOR THE FEDERATION IN THE UNION OF SOUTH AFRICA TO THE SECRETARY FOR EXTERNAL AFFAIRS OF THE UNION OF SOUTH AFRICA.

30th October, 1959. Sir,

I have the honour to refer to discussions which have taken place between officiaIs of our two Governments and to propose that the Agreement of the 22nd May, 1956, concluded in the EngIish and Afrikaans Ianguages between the Government of the Union of South Africa and the Government of the Federation of Rhodesia and Nyasaland for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income be amended in respect of the EngIish text by insertion in Article XII, after paragraph 3, of the following paragraph, the existing paragraph 4 thereby becoming paragraph 5:

"4. Any provision in any Law whereby interest is deemed to be derived from a source within one of the territories by virtue of the ordinary residence in that territory of the person from whom the interest is derived shall not be applied in reIation to interest which is payabIe to a person who resides in the other territory, if such interest is subject to tax in that other territory."

In the event of the above proposaI being acceptable to you I have the honour to propose that this note and your confirmatory reply be regarded as constituting an agreement between our two Governments which shall have effect-

(a) in the Union of South Africa, in respect of the year of assessment beginning on or after the first day of JuIy, 1957; and

(b) in the Federation of Rhodesia and Nyasaland, in respect of the year of assessment beginning on or after the first day of April, 1957.

I have the honour to be, Sir,

Your obedient Servant, J.W. MONTAGUE FITT,

High Commissioner-General for the Federation of Rhodesia and Nyasaland. The Secretary for ExternaI Affairs of the Union of South Africa, Pretoria.

NOTE FROM THE SECRETARY FOR EXTERNAL AFFAIRS OF THE UNION OF SOUTH AFRICA TO THE HIGH COMMISSIONER-GENERAL FOR THE FEDERATION IN THE UNION OF SOUTH AFRICA.

30th October, 1959. Sir,

I have the honour to acknowledge receipt of your Note, No. P4/2 of today's date reading as foIIows:

"I have the honour to refer to discussions which have taken place between officiaIs of our two Governments and to propose that the Agreement of the 22nd May, 1956, concluded in the EngIish and Afrikaans Ianguages between the Government of the Union of South Africa and the Government of the Federation of Rhodesia and Nyasaland for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income be amended in respect of the EngIish text by insertion in Article XII, after paragraph 3, of the following paragraph, the existing paragraph 4 thereby becoming paragraph 5:

(a) in the Union of South Africa, in respect of the year of assessment beginning on or after the first day of JuIy, 1957; and

(b) in the Federation of Rhodesia and Nyasaland, in respect of the year of assessment beginning on or after the first day of April, 1957."

In reply thereto, I have the honour to state that the Government of the Union of South Africa are in agreement with the foregoing provisions and that your Note and this confirmatory replyshall be regarded as constituting an agreement between our two Governments.

I have the honour to be, Sir,

Your obedient servant, G.P. JOOSTE,

Secretary for ExternaI Affairs. J.W.M. Fitt, Esq., O.B.E.,

High Commissioner-General for the Federation of Rhodesia and Nyasaland,

CONVENTION FOR THE AVOIDANCE OF DOUBLE TAXATION-FRANCE

An arrangement has been made with the Government of the United Kingdom of Great Britain and Northern Ireland whereby the Convention between that Government and the Government of the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income has been extended to the former Protectorate by and incorporating the terms of the exchange of notes set out in the Schedule.

EXCHANGE OF NOTES BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE GOVERNMENT OF THE FRENCH REPUBLIC EXTENDING TO THE FEDERATION OF RHODESIA AND NYASALAND THE CONVENTION FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME SIGNED AT PARIS ON DECEMBER 14, 1950.

Her Majesty's Ambassador at Paris to the Minister for Foreign Affairs of the French Republic British Embassy, Paris, November 5, 1963. Monsieur le Minister, With reference to the Convention between the United Kingdom of Great Britain and Northern Ireland and France for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, signed at Paris on the 14th of December, 1950, I have the honour to propose on behalf of the Government of the United Kingdom that, in accordance with the provisions of Article XXIII, the above-mentioned Convention should be extended to the Federation of Rhodesia and Nyasaland in the manner, subject to the modifications, and with effect from the dates specified in the Annex to the present Note.By a further Exchange of Notes dates December 31, 1963, it was agreed with the French Ministry of Foreign Affairs that this extension should be regarded as continuing in force in relation to Southern Rhodesia, Northern Rhodesia and Nyasaland individually on the dissolution of the Federation and that references therein to the Federation should be construed accordingly.*

If the foregoing proposal is acceptable to the French Government, I have the honour to suggest that the present Note with its Annex, and Your Excellency's reply to that effect, should be regarded as constituting the Agreement reached between the two Governments in this matter.

(1) The Convention of the 14th December, 1950, as modified by the present Annex shall apply-

(a) as if the Contracting Parties were the Government of France and the Government of the Federation of Rhodesia and Nyasaland;

(b) as if the term "United Kingdom" (except where the context otherwise required) meant the Federation of Rhodesia and Nyasaland; and

(c) as if the taxes concerned in the Federation of Rhodesia and Nyasaland were the Income Tax, Supertax and Undistributed Profits Tax.

(2) When the last of those measures shall have been taken in France and in the Federation of Rhodesia and Nyasaland necessary to give the present extension the force of law in France and in the Federation the present extension shall have effect-(2) By a notification dated December 17, 1963, the French Government informed the United Kingdom Government that these measures had been taken in France.

By a similar notification dated December 31, 1963, the United Kingdom Government informed the French Government that the necessary measures were taken in the Federation of Rhodesia and Nyasaland on December 9, 1963.

(a) in France as respects taxes charged in respect of the year 1962 and subsequent years;

(b) in the Federation of Rhodesia and Nyasaland as respects tax on the profits derived from operating ships or aircraft, for the year of assessment beginning on the 1st April, 1953, and for subsequent year of assessment, and, as respects tax on all other income, for the year of assessment beginning on the 1st April, 1962, and for subsequent years of assessment.*

(3) The French Government shall inform the Government of the United Kingdom in writing when the last of the measures necessary, as indicated in paragraph (2), have been taken in France. The Government of the United Kingdom shall inform the French Government in writing when the last of the measures necessary, as indicated in paragraph (2), have been taken in the Federation of Rhodesia and Nyasaland.

(4) The present extension shall remain in force indefinitely but either of the Contracting Parties may, on or before the 30th June in any calendar year not earlier than the year 1966, give to the other Contracting Party through the diplomatic channel written notice of termination and in such event the present extension shall cease to have effect-

(a) in France as respects taxes charged in respect of any year following the calendar year during which the notice is given;

(b) in the Federation of Rhodesia and Nyasaland as respects tax for any year of assessment beginning on or after the 1st April in the calendar year next following the date of such notice.

The Convention of the 14th December, 1950, shall apply with the modifications that-

(1) the words "shall be exempt from United Kingdom surtax" in Article IX shall be understood as though they read "shall not be Liable to tax in the Federation of Rhodesia and Nyasaland at a rate in excess of the rate applicable to a company"; and

(2) Article XIII shall apply to remuneration, including pensions, paid by or out of funds created by the Government of each of the Territories constituting the Federation, to any individual in respect of services rendered to that Government in the discharge of governmental functions as it applies to similar payments by or out of funds created by the Government of the Federation.

The Minister for Foreign Affairs of the French Republic to Her Majesty's Ambassador at Paris

Paris, le 5 November, 1963.

Par lettre en date de ce jour accompagnÃ©e de son annexe dont la traduction figure ci-apr s, vous avez bien voulu me faire savoir ce qui suit:

"Me rÃ©fÃ©rant Ë† la convention entre le Royaume-Uni de Grande-Bretagne et d'Irlande du Nord et la France tendant Ë† Ã©viter la double imposition et Ë† prÃ©venir l'Ã©vasion fiscale en matiere d'imp(tm)t sur le revenu, signÃ©e Ë† Paris le 14 dÃ©cembre 1950, j'ai l'honneur, au nom du Gouvernement du Royaume-Uni, de proposer, conformÃ©ment aux dispositions de son Article XXIII, que les dispositions en soient Ã©tendues Ë† la FÃ©dÃ©ration de RhodÃ©sie et du Nyassaland, conformÃ©ment Ã© l'Annexe Ã© la prË†sente Lettre et sous rÃ©serve des modifications et Ã© compter des dates qui y sont indiquÃ©es.

(1) By a notification dated December 17, 1963, the French Government informed the United Kingdom Government that these measures had been taken in France.

Pour Ie cas o- cette proposition agrÃ©erait au Gouvernement francais, je suggU re que la prÃ©sente Lettre accompagnÃ©e de son annexe, et la rÃ©ponse de Votre Excellence soient reputees constituer l'Accord intervenu entre les deux Gouvernements en cette matiË†re.

(1) La Convention du 14 dÃ©cembre 1950, telle qu'elle est modifiÃ©e par la prÃ©sente annexe, sera applicable:

(a) comme si les Parties Contractantes Ã©taient le Gouvernement francais et le Gouvernement de la FÃ©dÃ©ration de RhodÃ©sie et du Nyassaland;

(b) comme si le terme "Royaume-Uni", Ë† moins que le contexte ne l'exige autrement, dÃ©signait la FÃ©dÃ©ration de RhodÃ©sie et du Nyassaland;

(c) comme si les imp(tm)ts visÃ©s dans la FÃ©dÃ©ration de RhodÃ©sie et du Nyassaland Ã©taient l'imp(tm)t sur le revenu, la supertaxe et l'imp(tm)t sur les bÃ©nÃ©fices non distribuÃ©s.

(2) Lorsque toutes les mesures nÃ©cessaires pour donner Ë† la prÃ©sente extension force de loi en France et dans la FÃ©dÃ©ration auront Ã©tÃ© prises en France et dans la FÃ©dÃ©ration de RhodÃ©sie et du Nyassaland, la prÃ©sente extension produira ses effets:

(a) en France, pour l'Ã©tablissement des imp(tm)ts exigibles au titre de l'annÃ©e 1962 et des annÃ©es subsÃ©quentes, et

(b) dans la FÃ©dÃ©ration de RhodÃ©sie et du Nyassaland:

-en ce qui concerne l'Ã©tablissement des imp(tm)ts frappant les bÃ©nÃ©fices provenant de l'exploitation de navires ou d'aÃ©ronefs, pour l'annÃ©e d'imposition commencant le ler avril 1953, ainsi que pour les annÃ©es d'imposition subsÃ©quentes.

-en ce qui concerne l"™Ã©tablissement des imp(tm)ts frappant tous les autres revenus, pour l'annÃ©e d'imposition commencant le ler avril 1962 ainsi que pour les annÃ©es d'imposition subsÃ©quentes.

(3) Le Gouvernement francais informera par Ã©crit le Gouvernement du Royaume-Uni lorsque toutes les mesures nÃ©cessaires visÃ©es au paragraphe (2) auront Ã©tÃ© prises en France. Le Gouvernement du Royaume-Uni informera par Ã©crit le Gouvernement francais lorsque toutes les mesures nÃ©cessaires visÃ©es au paragraphe (2), auront Ã©tÃ© prises dans la FÃ©dÃ©ration de RhodÃ©sie et du Nyassaland.

(4) La prÃ©sente extension demeurera en vigueur sans limitation de durÃ©e mais l"™une ou l'autre des Parties Contractantes pourra, Ë† partir de 1966, et au plus tard le 30 juin de chaque annÃ©e civile, notifier par Ã©crit Ë† l'autre Partie Contractante, par la voie diplomatique, qu'elle y met fin. Dans ce cas, la prÃ©sente extension cessera d'avoir effet:

(a) en France, pour L"™Ã©tablissement des imp(tm)ts affÃ©rents aux annÃ©es postÃ©rieures Ë† l'annÃ©e civile au cours de laquelle la notification sera intervenue;

(b) dans la FÃ©dÃ©ration de RhodÃ©sie et du Nyassaland, pour l"™Ã©tablissement de l'imp(tm)t affÃ©rent aux annÃ©es d'imposition commencant le ler avril ou aprÃ©s le ler avril de l'annÃ©e civile suivant immÃ©diatement Ia date d'une telle notification.

La Convention du 14 dÃ©cembre 1950 sopliquera avec les modifications suivantes:

(1) Les termes "sont exempts de la surtaxe du Royaume-Uni" figurant Ë† l'Article IX de la Convention seront interprÃ©tÃ©s comme significant "ne sont pas passibles de l'imp(tm)t ans la FÃ©dÃ©ration de RhodÃ©sie et du Nyassaland Ë† un taux supÃ©r ur Ë† celui qui st applicable Ë† une sociÃ©tÃ©'; et

(2) l'Article XIII sera applicable aux rÃ©munÃ©rations y compris les pensions, versÃ©es par le Gouvernement de chacun des territories constituant la FÃ©dÃ©ration on sur des fonds crÃ©Ã©s par le Gouvernement de chacun desdits territories, Ë† toute personne en contrepartie de services rendus audit Gouvernement dans l'exercise de fonctions officielles, de mË†me qu'il s'applique aux payements similaires effectuÃ©s par le Gouvernement de la FÃ©dÃ©ration ou sur des fonds crÃ©Ã©s par ledit Gouvernement."

J'ai l'honneur de porter Ë† la connaissance de Votre Excellence que les termes de la Lettre qui prÃ©cÃ©de et de son annexe recontrent l'agrÃ©ment du Gouvernement francais. Celle-ci et al prÃ©sente rÃ©ponse constituent l'accord recherchÃ© par nos deux Gouvernements.

Veuillez agrÃ©er, etc.,

(Translation of No. 2) Paris, November 5, 1963. Monsieur l'Ambassadeur, By a letter of today's date accompanied by an annex, the translation of which is given below, you have informed me as follows:

I have the honour to inform Your Excellency that the terms of the preceding letter and its Annex are acceptable to the French Government and together with this reply constitute an Agreement between our two Governments.

Please accept, etc.,

CONVENTION BETWEEN HIS MAJESTY IN RESPECT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE PRESIDENT OF THE FRENCH REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME.

His Majesty the King of Great Britain, Ireland and the British Dominions beyond the Seas and the President of the French Republic, Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, Have appointed for that purpose as their Plenipotentiaries:

His Majesty the King of Great Britain, Ireland and the British Dominions beyond the Seas: For the United Kingdom of Great Britain and Northern Ireland:

His Excellency Sir Oliver Charles Harvey, G.C.M.G., G.C.V.O., C.B., His Ambassador Extraordinary and Plenipotentiary in Paris; The President of the French Republic:

His Excellency Monsieur Alexandre Parodi, Ambassador of the French Republic, General Secretary for Foreign Affairs; Who, having exhibited their respective full powers, found in good and due form, have agreed as follows:

1. The taxes which are the subject of the present Convention are:

(a) In France:

The tax on the income of individuals (proportional tax and progressive surtax), the tax on the income of companies and the tax on undistributed profits under Article 14 of the Law of 31st January, 1950 (hereinafter referred to as "French tax");

(b) In the United Kingdom of Great Britain and Northern Ireland:

The income tax (including surtax) and the profits tax (hereinafter referred to as "United Kingdom tax").

2. The present Convention shallalso apply to any other taxes of a substantially similar character imposed in France or the United Kingdom subsequently to the date of signature of the present Convention.

1. In the present Convention, unless the context otherwise requires-

(a) The term "United Kingdom" means Great Britain and Northern Ireland, excluding the Channel Islands and the Isle of Man;

(b) The term "France" means metropolitan France, and excludes Algeria, the overseas departments, and other territories of the French Union;

(c) The terms "one of the territories" and "the other territory" mean the United Kingdom or France, as the context requires;

(d) The term "tax" means United Kingdom tax or French tax, as the context requires;

(e) The term "person" means-

(i) any physical person;

(ii) any unincorporated body of physical persons; and

(iii) any body corporate;

(f) The term "company" means any body corporate;

(g) The terms "resident of the United Kingdom" and "resident of France" mean respectively any person who is resident in the United Kingdom for the purposes of United Kingdom tax and who has not his fiscaldomicile for the purposes of French tax in France and any person whose fiscaldomicile for the purposes of French tax is in France and who is not resident in the United Kingdom for the purposes of United Kingdom tax; a company shall be regarded as resident in the United Kingdom if its business is managed and controlled in the United Kingdom and as having its fiscaldomicile in France if its business is managed and controlled in France;

(h) The terms "resident of one of the territories" and "resident of the other territory" mean a person who is a resident of the United Kingdom or a person who is a resident of France as the context requires;

(i) The terms "United Kingdom enterprise" and "French enterprise" mean respectively an industrial or commercial enterprise or undertaking carried on by a resident of the United Kingdom and an industrial or commercial enterprise or undertaking carried on by a resident of France; and the terms "enterprise of one of the territories" and "enterprise of the other territory" mean a United Kingdom enterprise or a French enterprise, as the context requires;

(j) The term "industrial or commercial profits" includes in particular profits arising from the business of insurance companies, banks, and other financial enterprises;

(k) The term "permanent establishment", when used with respect to an enterprise of one of the territories, means a branch, management, factory, or other fixed place of business in which is exercised, in whole or in part, the activity of the enterprise, but does not include an agency unless the agent has, and habitually exercises, a General authority to negotiate and conclude contracts on behalf of such enterprise or has a stock of merchandise from which he regularly fills orders on its behalf. In this connection-

(i) An enterprise of one of the territories shall not be deemed to have a permanent establishment in the other territory merely because it carries on business dealings in that other territory through a bona fide broker or General commission agent acting in the ordinary course of his business as such;

(ii) The fact that an enterprise of one of the territories maintains in the other territory a fixed place of business exclusively for the purchase of goods or merchandise shall not of itself constitute that fixed place of business a permanent establishment of the enterprise;

(iii) The fact that a company which is a resident of one of the territories has a subsidiary company which is a resident of the other territory or which carries on a trade or business in that other territory (whether through a permanent establishment or otherwise) shall not of itself constitute that subsidiary company a permanent establishment of its parent company;

(l) The term "taxation authorities" means, in the case of the United Kingdom, the Commissioner-Generals of InIand Revenue or their authorised representative; in the case of France, the Director General of Taxes (Directeur GÃ©nÃ©raI des Imp(tm)ts) or his authorised representative; and, in the case of any territory to which the present Convention is extended under Article XXIII, the competent authority for the administration in such territory of the taxes to which the present Convention applies.

2. Where the present Convention provides that income from a source in one of the territories shall be exempt from tax in that territory if (with or without other conditions) it is subject to tax in the other territory, and under the Law in force in that other territory the said income is subject to tax by reference to the amount thereof which is remitted to or received in that other territory and not by reference to the full amount thereof, then the exemption to be allowed under this Convention in the first-mentioned territory shall apply only to so much of the income as is remitted to or received in the other territory.

3. In the application of the provisions of the present Convention by one of the High Contracting Parties any term not otherwise defined shall unless the context otherwise requires, have the meaning which it has under the Laws in force in the territory of that Party relating to the taxes which are the subject of the present Convention.

1. The industrial or commercial profits of a United Kingdom enterprise shall not be subject to French tax unless the enterprise carries on a trade or business in France through a permanent establishment situated therein. If it carries on a trade or business as aforesaid, tax may be imposed on those profits by France but only on so much of them as is attributable to that permanent establishment: provided that nothing in this paragraph shall affect the provisions of the Law of France, as it stands at the date of signature of this Convention, as respects the taxation of profits of non-residents from the business of insurance.

2. The industrial or commercial profits of a French enterprise shall not be subject to United Kingdom tax unless the enterprise carries on a trade or business in the United Kingdom through a permanent establishment situated therein. If it carries on a trade or business as aforesaid, tax may be imposed on those profits by the United Kingdom, but only on so much of them as is attributable to that permanent establishment.

3. Where an enterprise of one of the territories carries on a trade or business in the other territory through a permanent establishment situated therein, there shall be attributed to that permanent establishment the industrial or commercial profits which it might be expected to derive in that other territory if it were an independent enterprise engaged in the same or similar activities under the same or similar conditions and dealing at arm's Length with the enterprise of which it is a permanent establishment.

4. Where an enterprise of one of the territories derives profits, under contracts concluded in that territory, from sales of goods or merchandise stocked in a warehouse in the other territory for convenience of delivery and not for purposes of display, those profits shall not be attributed to a permanent establishment of the enterprise in that other territory, notwithstanding that the offers of purchase have been obtained by an agent in that other territory and transmitted by him to the enterprise for acceptance.

5. No portion of any profits arising to an enterprise of one of the territories shall be attributed to a permanent establishment situated in the other territory by reason of the mere purchase of goods or merchandise within that other territory by the enterprise.

A company which is a resident of the United Kingdom and which carries on a trade or business in France through a permanent establishment situated therein and which is Liable to the tax on income from movablecapital under Article 39, paragraph 11 of the Decree No. 48-1986, of 9th December, 1948, shall not be charged to that tax on income exceeding the amount of the profits or gains arising in France and chargeable in accordance with Article III.

(a) an enterprise of one of the territories participates directly or indirectly in the management, controlor capital of an enterprise of the other territory, or

(b) the same persons participate directly or indirectly in the management, controlor capital of an enterprise of one of the territories and an enterprise of the other territory, and in either case, conditions are made or imposed between the two enterprises, in their commercial or financialrelations, which differ from those which would be made between independent enterprises, then any profits which would but for those conditions have accrued to one of the enterprises but by reason of these conditions have not so accrued may be included in the profits of that enterprise and taxed accordingly.

Where a company which is a resident of the United Kingdom derives industrial and commercial profits from a permanent establishment in France, and these profits are chargeable both to the tax on undistributed profits under Article 14 of the Law of 31st January, 1950, and to the tax on income from movable capital, the incidence of these two taxes shall not result in a total charge greater than 10 per centum on the amount of the profits chargeable to these two taxes in accordance with Article III. In consequence, the rate of the tax on income from movable capital shall be reduced to 10 per centum.

If, hereafter, the tax on undistributed profits is not imposed, or if it is imposed at a rate different from the rate in force at the date of signature of the present Convention, the taxation authorities of the two High Contracting Parties shall consult together in that event with a view to fixing the appropriate rate of the tax on income from movable capital.

Profits distributed by a company which is a resident of France to a company which is a resident of the United Kingdom and which has owned for a year registered shares (actions ou parts d'intÃ©rË†t) representing at least 50 per centum of the capital of the former company shall be charged to the tax on income from movable capital at the rate determined in accordance with Article VI.

Notwithstanding the provisions of Article III, IV V and VI, profits which a resident of one of the territories derives from operating ships or aircraft shall be exempt from tax in the other territory.

Dividends and interest paid by a company which is a resident of the United Kingdom to a resident of France, who is subject to tax in France in respect thereof and does not carry on trade or business in the United Kingdom through a permanent establishment situated therein, shall be exempt from United Kingdom surtax.

1. Any royalty derived from sources within one of the territories by a resident of the other territory, who is subject to tax in that other territory in respect thereof and does not carry on a trade or business in the first-mentioned territory through a permanent establishment situated therein, shall be exempt from tax in that first-mentioned territory.

2. In this Article the term "royalty" means any royalty or other amount paid as consideration for the use of, or for the privilege of using, any copyright, patent, design, secret process or formula, trade mark or other like property, and includes rents in respect of cinematograph films, but does not include any royalty or other amount paid in respect of the operation of a mine or quarry or of any other extraction of natural resources.

3. Where any royalty exceeds a fair and reasonable consideration in respect of the rights for which it is paid, the exemption provided by the present Article shall apply only to so much of the royalty as represents such fair and reasonable consideration.

4. Any capital sum derived from sources within one of the territories from the sale of patent rights by a resident of the other territory, who does not carry on a trade or business in the first- mentioned territory through a permanent establishment situated therein, shall be exempt from tax in that first-mentioned territory.

A resident of one of the territories who does not carry on a trade or business in the other territory through a permanent establishment situated therein shall be exempt in that other territory from any tax in respect of gains from the sale, transfer, or exchange of capital assets.

1. Income derived from real property in one of the territories by a resident of the other territory shall be subject to tax in accordance with the Laws of the first-mentioned territory. Where the income is also subject to tax in the other territory, relief from double taxation shall be given in accordance with the provisions of Article XX.

2. In this Article, the term "income from real property" means income of whatever nature derived from reaI property, and includes royalties or any other amounts paid in respect of the operation of mines or quarries or any other extraction of natural resources.

1. Remuneration, including pensions, paid by or out of funds created by one of the High Contracting Parties to any individual for services rendered to that Party in the discharge of governmental functions shall be exempt from tax in the territory of the other High Contracting Party, unless the individual is a national of that other Party without being also a national of the first-mentioned Party.

2. The following pensions shall be exempt from United Kingdom tax, regardless of the nationality of the pensioner, so long as they are exempt from French tax:

(a) Pensions granted by virtue of the Law of the 31st March, 1919, to all those persons who since the 2nd August, 1914, have become entitled to military pensions by reason of disabilities resulting whether from hostilities or from ailments or accidents occurring on service;

(b) Pensions granted by virtue of the combined provisions of the Law of the 31st March, 1919, and of Article 1 of the Law of the 22nd June, 1927, to retired soldiers and sailors by reason of wounds received or disabilities or ailments contracted on service before the 2nd August, 1914:

Provided that paragraph 1 of this Article shall apply to such part of the mixed pensions provided for in Article 60-2Ã¸ of the Law of the 31st March, 1919, as relates to Length of service and is not exempted from French tax.

3. The following pensions shall be exempt from French tax, regardless of the nationality of the pensioner, so long as they are exempt from United Kingdom tax:

(a) Wounds pensions granted to members of the naval, military or air forces of the Crown;

(b) Retired pay of disabled officers granted on account of medical unfitness attributable to or aggravated by naval, military or air force service;

(c) Disablement or disability pensions granted to members, other than commissioned officers, of the naval, military or air forces of the Crown on account of medical unfitness attributable to or aggravated by naval, military or air force service;

(d) Disablement pensions granted to persons who have been employed in the nursing services of any of the naval, military or air forces of the Crown on account of medical unfitness attributable to or aggravated by naval, military or air force service;

(e) Injury and disablement pensions payable under any scheme made under the Injuries in War (Compensation) Act, 1914, the Injuries in War Compensation Act, 1914 (Session 2), the Injuries in War (Compensation) Act, 1915, the Pensions (Navy, Army, Air Force and Mercantile Marine) Act, 1939, the Personal Injuries (Emergency Provisions) Act, 1939, or under any War Risks Compensation Scheme for the Mercantile Marine:

Provided that paragraph 1 of this Article shall apply to such part of any income from those pensions as is not exempted from United Kingdom tax.

4. The provisions of paragraph 1 of this Article shall not apply to payments in respect of services rendered in connection with any trade or business carried on by either of the High Contracting Parties for purposes of profit.

1. An individual who is a resident of the United Kingdom shall be exempt from French tax on profits or remuneration in respect of personal (including professional) services performed within France in any year of assessment if-

(a) he is present within France for a period or periods not exceeding in the aggregate 183 days during that year, and

(i) in the case of an employment, the services are performed on behalf of a person who is a resident of the United Kingdom;

(ii) in other cases, he has no office or other fixed place of business in France; and

2. An individual who is a resident of France shall be exempt from United Kingdom tax on profits or remuneration in respect of personal (including professional) services performed within the United Kingdom in any year of assessment if-

(a) he is present within the United Kingdom for a period or periods not exceeding in the aggregate 183 days during that year; and

(i) in the case of an employment, the services are performed on behalf of a person who is a resident of France;

(ii) in other cases, he has no office or other fixed place of business in the United Kingdom; and

3. The provisions of this Article shall not apply to the profits or remuneration of public entertainers such as stage, motion picture or radio artists, musicians and athletes.

1. Any pension (other than a pension of the kind referred to in paragraph 1 or 2 of Article XIII) and any annuity, derived from sources within France by an individual who is a resident of the United Kingdom and subject to United Kingdom tax in respect thereof, shall be exempt from French tax.

2. Any pension (other than a pension of the kind referred to in paragraph 1 or 3 of Article XIII) and any annuity, derived from sources within the United Kingdom by an individual who is a resident of France and subject to French tax in Respect thereof, shall be exempt from United Kingdom tax.

3. The term "annuity" means a stated sum payable periodically at stated times, during life or during a specified or ascertainable period of time, under an obligation to make the payments in return for adequate and full consideration in money or money's worth.

Nothing in the present Convention shall affect the provisions of the Code General des Imp(tm)ts regarding the tax payable by individuals who have not their fiscal domicile in France, but have a residence in France. Subject to these provisions, a resident of the United Kingdom shall not be chargeable to French progressive surtax in respect of income from sources in France.

A professor or teacher from one of the territories who receives remuneration for teaching, during a period of temporary residence not exceeding two years, at a university, college, school or other educational institution in the other territory, shall be exempt from tax in that other territory in respect of that remuneration.

A student or business apprentice from one of the territories who is receiving full-time education or training in the other territory shall be exempt from tax in that other territory on payments made to him by persons resident in the first-mentioned territory for the purposes of his maintenance, education or training.

In the application of paragraph 4 of Article XXII, the High Contracting Parties have agreed as follows:

(1) Individuals who are residents of France shall be entitled to the same personal allowances, reliefs and reductions for the purposes of United Kingdom income tax as British subjects not resident in the United Kingdom.

(2) Individuals who are residents of the United Kingdom shall be entitled for the purposes of French tax to the same reductions of taxes or charges, basic abatements, and allowances on account of family responsibilities as French nationals.

1. The Laws of the High Contracting Parties shall continue to govern the taxation of income arising in either of the territories, except where express provision to the contrary is made in the present Convention. Where income is subject to tax in both territories, relief from double taxation shall be given in accordance with the following paragraphs:

2. Subject to the provisions of the Law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom, French tax payable, whether directly or by deduction, in respect of income from sources within France shall be allowed as a credit against any United Kingdom tax payable in respect of that income. Where such income is a dividend paid by a company resident in France to a company resident in the United Kingdom which controls, directly or indirectly, not less than one-half of the voting power in the former company, the credit shall take into account (in addition to any French tax appropriate to the dividend) the French tax payable by the company in respect of its profits.

(a) Subject to the provisions of sub-paragraph (b) of this paragraph, income derived by a person who is a resident of France (whether or not that person is resident in the United Kingdom for the purposes of United Kingdom tax) from sources in the United Kingdom which, under the Laws of the United Kingdom and in accordance with this Convention, is subject to tax in the United Kingdom either directly or by deduction, shall be exempt from the French proportional tax on the income of individuals, or, as the case may be, from French tax on companies.

(b) Where the income consists of dividends or interest derived from a company which is a resident of the United Kingdom by a person who is a resident of France (whether or not that person is resident in the United Kingdom for the purposes of United Kingdom tax) and the income is subject to United Kingdom tax, either directly or by deduction, it shall be exempt from the French tax on income from movable capital, United Kingdom tax being regarded as wholly covering that tax in view of its rate.

(c) In the cases referred to in sub-paragraph (a) of this paragraph, the income shall be exempt from French progressive surtax but, where the person receiving this income is a resident of France, the income may be taken into account in determining the effective rate of progressive surtax surgeable on his income other than the income referred to.

4. For the purposes of this Article, profits or remuneration for personal (including professional) services performed in one of the territories shall be deemed to be income from sources within that territory, and the services of an individual whose services are wholly or mainly performed in ships or aircraft operated by a resident of one of the territories shall be deemed to be performed in that territory.

The taxation authorities of the High Contracting Parties shall exchange such information (being information which is at their disposaI under their respective taxation Laws in the normaI course of administration) as is necessary for carrying out the provisions of the present Convention or for the prevention of fraud or for the administration of statutory provisions against IegaI avoidance in reIation to the taxes which are the subject of the present Convention. Any information so exchanged shall be treated as secret and shall not be discIosed to any persons other than those concerned with the assessment and coIIection of the taxes which are the subject of the present Convention. No information as aforesaid shall be exchanged which wouId discIose any trade, business, industrial or professionaI secret or trade process.

1. The nationaIs of one of the High Contracting Parties shall not be subjected in the territory of the other High Contracting Party to any taxation or any requirement connected therewith which is other, higher or more burdensome than the taxation and connected requirements to which the nationaIs of the Iatter Party are or may be subjected.

2. The enterprises of one of the territories shall not be subjected in the other territory, in respect of profits or capital attributable to their permanent establishments in that other territory, to any taxation which is other, higher or more burdensome than the taxation to which the enterprises of that other territory are or may be subjected in respect of the like profits or capital.

3. The income, profits and capital of an enterprise of one of the territories, the capital of which is whoIIy or partIy owned or controIIed, directly or indirectly, by a resident or residents of the other territory shall not be subjected in the first-mentioned territory to any taxation which is other, higher or more burdensome than the taxation to which other enterprises of that first- mentioned territory are or may be subjected in respect of the like income, profits and capital.

4. Nothing in paragraph 1 or 2 of this Article shall be construed as obIiging either High Contracting Party to grant to nationaIs of the other High Contracting Party, who are not resident in the territory of the former High Contracting Party, any personaI allowances, reIiefs or reductions for tax purposes. Each of the High Contracting Parties shall adhere to its own IegisIation in this respect, subject to any speciaI agreements which may be made between them determining the arrangements to be applied.

5. In this Article the term "nationaIs" means-

(a) in reIation to France all French subjects and French protected persons residing in France or in any French territory to which the present Convention applies by reason of extension made under Article XXIII and all IegaI persons, partnerships and associations deriving their status as such from the Law in force in any French territory to which the present Convention applies;

(b) in reIation to the United Kingdom, all British subjects and British protected persons residing in the United Kingdom or in any British territory to which the present Convention applies by reason of extension made under Article XXIII and all IegaI persons, partnerships and associations deriving their status as such from the Law in force in any British territory to which the present Convention applies.

6. In this Article the term "taxation" means taxes of every kind and description Ievied on behalf of any authority whatsoever.

1. The present Convention may be extended, either in its entirety or with modifications, to any territory of one of the High Contracting Parties to which this Article applies and which imposes taxes substantially similar in character to those which are the subject of the present Convention, and any such extensions shall take effect from such date and subject to such modifications and conditions (including conditions as to termination) as may be specified and agreed between the High Contracting Parties in notes to be exchanged for this purpose.

2. The termination in respect of France or the United Kingdom of the present Convention under Article XXVI shall, unless otherwise expressIy agreed by both High Contracting Parties, terminate the application of the present Convention to any territory to which the Convention has been extended under this Article.

3. The territories to which this Article applies are-

(a) in reIation to His Majesty the King of Great Britain, Ireland and the British Dominions beyond the Seas:

Any territory other than the United Kingdom for whose internationaI relations the United Kingdom is responsibIe;

(b) in reIation to the President of the French Republic:

Any department, protectorate or other overseas territory, for whose internationaI relations France is responsibIe.

On the entry into force of the present Convention the following agreements between the High Contracting Parties shall be terminated in respect of the territories to which the Convention applies:

(1) The agreement constituted by Exchange of Notes dated the 1st October, 1932, for the exemption from taxation of profits accruing from the business of shipping;

(2) The Agreement dated the 9th April, 1935, for the reciprocaI exemption from income tax of profits arising from the business of air transport;

(3) The Agreement dated the 19th October, 1945, for reIief from double taxation in certain circumstances, excIusive of the ProtocoI of Signature to that Agreement;

and the provisions of those Agreements (other than the ProtocoI of Signature to the Iast- mentioned Agreement) shall cease to have effect:

(a) In the United Kingdom, as respects income tax for the year of assessment beginning on the 6th April, 1950, and subsequent years, and as respects surtax for the year of assessment beginning on the 6th April, 1949, and subsequent years;

(b) In France, as respects taxes charged in respect of the year 1950 and subsequent years.

1. The present Convention shall be ratified and the instruments of ratification shall be exchanged at London as soon as possibIe.

2. The present Convention shall enter into force upon exchange of ratifications and the foregoing provisions thereof shall have effect:

(a) In the United Kingdom: 1950;

as respects income tax for any year of assessment beginning on or after the 6th April, and as respects surtax for any year of assessment beginning on or after the 6th April, 1949;

as respects profits tax in respect of the following profits:

(i) profits arising in any chargeable accounting period beginning on or after the 1st April, 1950;

(ii) profits attributable to so much of any chargeable accounting period falling partIy before and partIy after that date as falls after that date;

(iii) profits not so arising or attributable by reference to which income tax is, or but for the present Convention wouId be, chargeable for any year of assessment beginning on or after the 6th April, 1950;

(b) In France:

as respects taxes charged in respect of the year 1950 and subsequent years, and as respects the undistributed profits tax. NevertheIess, so far as income other than that referred to in Article X of the present Convention is concerned, no repayment shall be made of tax on income from movable capital, which has been deducted in France at the time of payment of the said income and before the date of exchange of ratifications of the present Convention.

The present Convention shall continue in force indefiniteIy but either of the High Contracting Parties may, on or before the 30th June in any calendar year not earIier than the year 1954, give to the other High Contracting Party, through dipIomatic channels, written notice of termination and, in such event, the present Convention shall cease to be effective:

(a) In the United Kingdom:

as respects income tax for any year of assessment beginning on or after the 6th April in the calendar year next following that in which the notice is given;

as respects surtax for any year of assessment beginning on or after the 6th April in the calendar year in which the notice is given; and

as respects profits tax in respect of the following profits:

(i) profits arising in any chargeable accounting period beginning on or after the 1st April in the calendar year next following that in which the notice is given;

(ii) profits attributable to so much of any chargeable accounting period falling partIy before and partIy after that date as falls after that date;

(iii) profits not so arising or attributable by reference to which income tax is chargeable for any year of assessment beginning on or after the 6th April in the next following calendar year;

(b) In France:

as respects taxes charged in respect of the year following the calendar year during which the said notice is given.

CONVENTION FOR THE AVOIDANCE OF DOUBLE TAXATION - SWITZERLAND

[Order by the President]

An arrangement has been made with the Government of the United Kingdom of Great Britain and Northern Ireland whereby the Convention between that Government and the Swiss FederaI CounciI for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income has been extended to the former Protectorate by and incorporating the terms of the Despatch and reply thereto set out in the ScheduIe.

BRITISH EMBASSY, BERNE

13th December, 1963.

Monsieur Ie ConseiIIer FederaI,

I have the honour, upon instructions from Her Majesty's PrincipaI Secretary of State for Foreign Affairs, to refer to the Exchange of Notes between the Government of the United Kingdom of Great Britain and Northern Ireland and the Swiss FederaI CounciI dated the 30th May, 1961, extending to the Federation of Rhodesia and Nyasaland on the basis therein specified, the provisions of the Convention between the United Kingdom and SwitzerIand for the Avoidance of Double Taxation with respect to Taxes on Income, signed at London on the 30th September, 1954.

I have the honour to inform you that on dissoIution of the Federation of Rhodesia and Nyasaland the extension provided for in the above-mentioned exchange of notes wiII continue in force in reIation to Southern Rhodesia, Northern Rhodesia and Nyasaland individualIy, and that references therein to the Federation shouId be construed accordingly, since the three territories wiII individualIy assume the responsibiIities under the agreement which are now heId by the Federation.

I avail myseIf of this opportunity to renew to you, Monsieur Ie ConseiIIer FederaI, the assurances of my highest consideration.

MONSIEUR LE CONSEILLER FEDERAL FRIEDRICH WAHLEN,

FEDERAL POLITICAL DEPARTMENT, BERNE.

DEPARTMENT POLITIQUE FEDERAL, BERNE,

Ie 18 dÃ©cembre 1963. s.B.34.12.GB.5.4.(U'Ch) Monsieur I'Ambassadeur, J'ai eu I'honneur de recevoir Ia note du 13 dÃ©cembre 1963 par IaqueIIe Votre ExceIIence, se fondant sur I'Ã©change de notes du 30 mai 1961 entre Ia Suisse et Ie Royaume-Uni de Grande- Bretagne et d'IrIande du Nord concernant Ia convention envue d'Ã©viter Ies doubles impositions en martiU re d'imp"ts sur Ie revenu du 30 septembre 1954, a bien vouIu me faire savoir qu'aprÅ s dissoIution de Ia FÃ©dÃ©ration de RhodÃ©sie et Nyassaland, Ia RhodÃ©sie du Sud, Ia RhodÃ©sie du Nord et Ie Nyassaland continueront Ë† appliquer Ë† titre individueI Ies dispositions prÃ©vues par I'Ã©change de notes precite. Je remercie Votre ExceIIence de cette obIigeante communication, dont j'ai pris bonne note.

SON EXCELLENCE SIR PAUL GREY,

AMBASSADEUR EXTRAORDINAIRE ET PLENIPOTENTIAIRE DE SA MAJESTE BRITANNIQUE, BERNE.

CONVENTION BETWEEN THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE SWISS CONFEDERATION FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME.

The Government of the United Kingdom of Great Britain and Northern Ireland and the Swiss FederaI CounciI, Desiring to conclude a Convention for the avoidance of double taxation with respect to taxes on income, Have appointed for that purpose as their respective Plenipotentiaries:

The Government of the United Kingdom of Great Britain and Northern Ireland:

Alfred DougIas Dodds-Parker, Esquire, ParIiamentary Under-Secretary of State for Foreign Affairs;

The Swiss FederaI CounciI:

Monsieur Erwin Bernath, Swiss Charg"š d'Affaires ad interim in London;

Who, having communicated to one another their fuII powers, found in good and due form, have agreed as foIIows:

1. The taxes which are the subject of the present Convention are-

(a) In the United Kingdom:

The income tax (including surtax), the profits tax and the excess profits Ievy (hereinafter referred to as "United Kingdom tax");

(b) In SwitzerIand:

The federaI, cantonal and communaI taxes on income (total income, earned income, income from capital, industrial and commercial profits, etc.), but not including the FederaI coupon tax except where expressIy mentioned (hereinafter referred to as "Swiss tax").

2. The present Convention shall also apply to any other taxes of a substantially similar character imposed in the United Kingdom or SwitzerIand subsequently to the date of signature of the present Convention.

1. In the present Convention, unless the context otherwise requires-

(a) The term "United Kingdom" means Great Britain and Northern Ireland, excluding the Channels lands and the Isle of Man;

(b) The term "SwitzerIand" means the Swiss Confederation;

(c) The terms "one of the territories" and "the other territory" mean the United Kingdom or SwitzerIand, as the context requires;

(d) The term "tax" means United Kingdom tax or Swiss tax, as the context requires;

(e) The term "person" includes any individual, company, unincorporated body of persons, and any other entity with or without juridicaI personality;

(f) The term "company" means in reIation to the United Kingdom any body corporate, and in reIation to SwitzerIand any entity with juridicaI personality;

(g) The term "resident of the United Kingdom" means:

(i) any company or partnership whose business is managed and controIIed in the United Kingdom;

(ii) any other person who is resident in the United Kingdom for the purposes of United Kingdom tax and not resident (by reason of domicile or sojourn) in SwitzerIand for the purposes of Swiss tax;

(h) The term " resident of SwitzerIand" means:

(i) any company or partnership ("sociÃ©tÃ© simpIe", "sociÃ©tÃ© en nom coIIectif" or "sociÃ©tÃ© en commandite") created or organised under Swiss Law, if its business is not managed and controIIed in the United Kingdom;

(ii) any other person who is resident (by reason of domicile or sojourn) in SwitzerIand for the purposes of Swiss tax and not resident in the United Kingdom for the purposes of United Kingdom tax;

(i) The terms "resident of one of the territories" and "resident of the other territory" mean a resident of the United Kingdom or a resident of SwitzerIand, as the context requires;

(j) The terms "United Kingdom enterprise" and "Swiss enterprise" mean respectively an industrial or commercial enterprise or undertaking carried on by a resident of the United Kingdom and an industrial or commercial enterprise or undertaking carried on by a resident of SwitzerIand, and the terms "enterprise of one of the territories" and "enterprise of the other territory" mean a United Kingdom enterprise or a Swiss enterprise, as the context requires;

(k) The term "permanent establishment" means a branch, management, office, factory, workshop or other fixed place of business, and a farm, mine, quarry or other place of naturaI resources subject to expIoitation. It also includes a place where building construction is carried on by contract for a period of at Ieast one year, but does not include an agency unless the agent has and habitually exercises a General authority to negotiate and conclude contracts on behalf of an enterprise of one of the territories. In this connection-

(i) An enterprise of one of the territories shall not be deemed to have a permanent establishment in the other territory merely because it carries on business dealings in that other territory through a bona fide broker, General commission agent or other independent agent acting in the ordinary course of his business as such;

(iii) The fact that an enterprise of one of the territories has a subsidiary company which is a resident of the other territory or which is engaged in trade or business in that other territory (whether through a permanent establishment or otherwise) shall not of itself constitute that subsidiary company a permanent establishment of the enterprise of the former territory;

(I) The term "industrial or commercial profits" includes manufacturing, mercantiIe, mining, farming, financial and insurance profits, and rents and royaIties in respect of cinematograph fiIms, but does not include income in the form of dividends, interest or royaIties (other than cinematograph royaIties) except any such income which, under the Laws of one of the territories and in accordance with Article III of the present Convention, is attributable to a permanent establishment situated therein;

(m) The term "competent authority" means, in the case of the United Kingdom, the Commissioner-Generals of InIand Revenue or their authorised representative; in the case of SwitzerIand, the Director of the FederaI Tax Administration or his authorised representative; and in the case of any territory to which the present Convention is extended under Article XXI, the competent authority for the administration in such territory of the taxes to which the Convention applies.

2. Where the present Convention provides that income from a source within SwitzerIand shall be exempt from, or entitIed to a reduced rate of, tax in SwitzerIand if (with or without other conditions) it is subject to tax in the United Kingdom, and under the Law in force in the United Kingdom the said income is subject to tax by reference to the amount thereof which is remitted to or received in the United Kingdom and not by reference to the fuII amount thereof, then the exemption or reduction in rate to be allowed under the Convention in SwitzerIand shall apply only to so much of the income as is remitted to or received in the United Kingdom.

3. Where under any provision of the present Convention a partnership is entitIed to exemption from United Kingdom tax as a resident of SwitzerIand on any income, such a provision shall not be construed as restricting the right of the United Kingdom to charge any member of the partnership, being a person who is resident in the United Kingdom for the purposes of United Kingdom tax (whether or not he is also resident in SwitzerIand for the purposes of Swiss tax), to tax on his share of the income of the partnership; but any such income shall be deemed for the purposes of Article XV to be income from sources within SwitzerIand.

4. Where under any provision of the present Convention an estate of a deceased person is entitIed to exemption from United Kingdom tax as a resident of SwitzerIand on any income, such a provision shall not be construed as requiring the United Kingdom to grant exemption from United Kingdom tax in respect of such part of such income as goes to any heir of such estate who is not resident in SwitzerIand for the purposes of Swiss tax and whose share of such income is not subject to Swiss tax either in his hands or in the hands of the estate.

5. In the application of the provisions of the present Convention by either Contracting Party any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the Laws in force in the territory of that Party relating to the taxes which are the subject of the Convention.

1. The industrial or commercial profits of a United Kingdom enterprise shall not be subject to Swiss tax unless the enterprise is engaged in trade or business in SwitzerIand through a permanent establishment situated therein. If it is so engaged, tax may be imposed on those profits by SwitzerIand, but only on so much of them as is attributable to that permanent establishment.

2. The industrial or commercial profits of a Swiss enterprise shall not be subject to United Kingdom tax unless the enterprise is engaged in trade or business in the United Kingdom through a permanent establishment situated therein. If it is so engaged, tax may be imposed on those profits by the United Kingdom, but only on so much of them as is attributable to that permanent establishment.

3. Where an enterprise of one of the territories is engaged in trade or business in the other territory through a permanent establishment situated therein, there shall be attributed to that permanent establishment the industrial or commercial profits which it might be expected to derive if it were an independent enterprise engaged in the same or similar activities under the same or similar conditions and dealing at arm's Length with the enterprise of which it is a permanent establishment.

4. Where an enterprise of one of the territories, from sales of goods or merchandise stocked in a warehouse in the other territory, those profits shall not be attributed to a permanent establishment of the enterprise in that other territory, notwithstanding that the offers of purchase have been obtained by an agent in that other territory and transmitted by him to the enterprise for acceptance.

6. In the determination of the industrial or commercial profits of a permanent establishment there shall be allowed as deductions all expenses which are reasonabIy applicable to the permanent establishment, including executive and General administrative expenses so applicable , whether incurred in the territory in which the permanent establishment is situated or eIsewhere.

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