Protocol

In case an entity that is treated as a body corporate for tax purposes is liable as such to tax in a territory, but the income of that entity is taxed in the other territory respectively as income of the participants in that entity, the competent authorities shall take such measures that on the one hand no double taxation remains, but on the other hand it is prevented that merely as a result of application of the Agreement income is (partly) not subject to tax.

In respect of paragraphs 1 and 2 of Article 7, where an enterprise of a territory sells goods or merchandise or carries on business in the other territory through a permanent establishment situated therein, the profits of that permanent establishment shall not be determined on the basis of the total amount received by the enterprise, but shall be determined only on the basis of that portion of the income of the enterprise that is attributable to the actual activity of the permanent establishment in respect of such sales of business. Specifically, in the case of contracts for the survey, supply, installation or construction of industrial, commercial or scientific equipment or premises, or of public works, when the enterprise has a permanent establishment, the profits attributable to such permanent establishment shall not be determined on the basis of the total amount of the contract, but shall be determined only on the basis of that part of the contract that is effectively carried out by the permanent establishment in the territory where the permanent establishment is situated. The profits related to that part of the contract which is carried out by the head office of the enterprise shall be taxable only in the territory of which the enterprise is a resident.

It is understood, however, that the mere fact that associated enterprises have concluded arrangements, such as costsharing arrangements or general services agreements, for or based on the allocation of executive, general administrative, technical and commercial expenses, research and development expenses and other similar expenses, is not enough to presume a condition as meant in paragraph 1 of Article 9. However, this does not prevent one of the territories from checking the above-mentioned arrangements for conditions as meant in this paragraph.

It is understood that income received in connection with the (partial) liquidation of a company or a purchase of own shares by a company is treated as income from shares and not as capital gains.

It is understood that an instrumentality (including a financial institution) is controlled by a territory or subdivision or local authority thereof if that territory or subdivision or local authority thereof holds at least 50 per cent of the capital of that instrumentality.

Pensions and other similar remuneration or annuities paid to a resident of a territory shall be considered to be subject as such to the normal rate of income tax if:

It is understood that the provisions of paragraph 2 and 3 of Article 18 and paragraphs 1 and 2 of Article 19 do not prevent the territory referred to in paragraph 2 (b) of Article 2 from applying the provisions of paragraph 2 of Article 23 of the Agreement.

Contributions paid by, or on behalf of. an individual who is a resident of a territory to a pension plan that is recognized for tax purposes in the other territory shall be treated in the same way for tax purposes in the first-mentioned territory as a contribution paid to a pension plan that is recognized for tax purposes in that first-mentioned territory, provided that

For the purpose of this paragraph, the term ‘pension plan’ includes a pension plan created under a public social security system.