Double Taxation Re1ief (Taxes on Income) (Republic of Austria) (republicofaustria)

L.N. 130 of 1981

INCOME TAX ACf, 1948

(ACT NO. LIV OF 1948)

Double Taxation Re1ief (Taxes on Income) (Republic of Austria)

Order, 1981

IN exercise of the powers conferred by section 68A of the Income

Tax Act, 1948, the Minister of Finance, Customs and People's Financial

Investments has made the following order:-

l. This order may be cited as the Double Taxation Relief (Taxes

Citation.

on Income) (Republic of Austria) Order, 1981.

It is hereby dec1ared -

Dan l-ordni jista' jissejjaħ l-Ordni ta' 1-1981 dwar Ħelsien minn

Titolu.

Taxxa Doppja <Taxxi fuq Income) (Repubblika ta' l-Awstrja).

Arranġamenti

CONVENTION

BETWEEN

THE REPUBLIC OF MALTA

AND THE REPUBLIC OF AUSTRIA

FOR THE AVOIDANCE OF DOUBLE TAXATION

WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL

The Government of the Republic of Malta and the G ov e r nm ent of the Republic

of Austria, desiring to conc1ude a Convention for the A voidance of Double Taxation

with respect to taxes on income and on capital, have agreed as foHows

CHAPTER I

Scope of the ConventiQn

ARTICLE I

Personal Scope

This Convention shall apply to persons who are residents of one or both of the

Contracting States.

ARTICLE 2

Taxes Covered

(1) This Convention shall apply to taxes on income and on capital imposed on

behalf of each Contracting State or 1ts political su b di v i s i ons or focal authorities,

irrespective of the manner in which t h e y are levied.

(2) There shall be re g ar d e d as taxes on income and on capital all taxes imposed

on total income, on total capital or on elements of income or of capital, inc1uding taxes

on gains from the a l ien a t i on of movable or immovable property, as well as taxes on

capital appreciation.

The existing taxes to w h i c h this Convention shall apply a r e

0)

(a)

in Austria

the income tax (die Eikoillmensteuer);

(i)

the corporation tax (die Korperschaftsteuer);

(iD

the dire ct or s tax (die Aufsichtsratsabgabe);

(iii)

(iv)

the capital tax (die Vermogensteuer);

(v) the tax on property exc1uding death duties (die Abgabe von

Vermogen, die der Erbschaftsteucr entzogen sind);

(vi) the tax on com m erc i a l and industrial enterprises,including the tax

levied on the sum of wages (die Gewerbesteuer einschlieBlich der Lohnsum­

mensteuer) ;

(vii)

the land tax (die Grundsteuer);

(viii) the tax on agricultural and f or e s t r y enterprises (die Abgabe von

land- und forstwirtschaft1ichen Betrieben);

(ix) the contributions from agricultural and forestry enterprises to

the fund for the equalisation of family burdens (die Beitrage von land- und

forstwirtschaft1ichen Betrieben zum Ausgleichsfonds fur Fami1ienbeihilfen);

B

the tax on the va1ue of vacant plots (die A b g abe vom Bodenwert

(x)

bei unbeba u ten Grundstucken);

(hereinafter referred to as "Austrian tax").

in Malta

(b)

the income tax and surtax, inc1uding prepayments of tax whether made

b y deduction at source or otherwise,

(hereinafter referred to as "Malta tax").

(4) This Convention shall app1y also to any identical or subst a nti al I y similar

taxes which a re imposed after the date of signature of this Convention in addition t o ,

or in place of, the existing taxes. The competent authorities of the Contracting States

shall notify to each o t h e r any significant changes which have been made in their

res pe ctiv e taxation 1aws.

(5) Where the Convention provides that income arising in a Contracting State

s h a lI be relieved from tax in that State, either in full Of in part, and, under the 1aw in

force in the other Contracting State, such income is subject to tax by reference to the

amount thereof which is remitted to or received in that other State and not by reference

to th e full amount thereof, then the relief to be aIlowed in the first-mentioned State

shall apply o n l y to so much of the income as is remitted to of received in the other State.

CHAPTER 11

DefiuitioDS

ARTICLE 3

General Definitions

(l)

I n this Convention, unless the context otherwise req uires

(a)

the term "Austria" means the R e p u bl i c of A u str i a;

(b) the term "Malta" means the Republic of Malta, and, when used in a

g eo g r a phic a l sense, the Island of Malta, the Is1and of Gozo and the ot h e r islands of

the Maltese Archipelago, including the territorial waters thereof, and any area

outside the territoria1 sea of Malta which, in accordance with international law,

has been or may hereafter be designated, under the law of Malta concerning the

Continental Shelf, as an area with in which the rights of Malta with respect to the

sea-bed and sub-soil and their natural resources may be e x erc ised ;

(c) the terms "a Contracting State" and "the other Contracting State" mean

Austria or Malta as the context requires;

(d) the term "person" comprises an individual, a company and any other

body of persons;

(e) the term "company" means any body corporate or any entity which is

treated as a body corporate for tax purposes;

(f) the terms "enterprise of a Contracting State" and "enterprise of the

other Contracting State" mean, respectively, an enterprise carried on b y a resident

of .a C ont r act i ng State and an enterprise carried on by a resident of the other

Cont r act i n g State;

the term "national" means

(g)

,

�

!

in respect of A u s t r ia any ind vidual poss�ss ng the n atio�ality of

(i)

. .

A us t r i a and any legal person, partnershIp and aSSOCIatIOn denvmg 1ts status

as sueh from the law in force in Austria;

(i i) in respect of Malta, any citizen of Malta as provided for in

Chapter III of the Constitution of Malta and in the Maltese Citizenship Act,

1965, and any legal person, partnership or association deriving its status as

such from the law in force in Malta;

(h) the term "international traffic" means any transport by a ship or aircraft

operated by an enterprise which has its place of effective management in a Con­

tracting State, except when the ship or aircraft is operated solely between places

in the other Contracting State;

(i)

the term "competent authority" means

in the case of Austria, the Federal Minister of Finance;

(i)

(iD in the case of Malta, the Minister responsible for finance or his

authorised representative.

(2) In the application of this Convention by a Contracting State, any term not

otherwise defined shall, unless the context otherwise requires, have the meaning which

it has under the laws of that Contracting State relating to the taxes which are the sub­

ject of this Convention.

ARTICLE 4

Fiscal Domicile

(1) For the purposes of this Convention, the term "resident of a Contracting

State" means any person who, under the law of that State. is liable to taxation therein

by reason of his domici1e, residence, place of management or any other criterion of a

simi1ar nature. The term does not include any person who is liable to tax in that Con­

tracting State in respect only of income from sources therein or capital situated in

that State.

(2) Where by reason of the prOVlSlOns of paragraph (1) an individual is a

resident of both Contracting States. then his status shall be determined as follows

(a) He shall be deemed to be a resident of the Contracting State in which

he has a permanent home available to him. If he has a permanent home available

to him in both Contracting States, he shall be deemed to be a resident of the

Contracting State with which his personal and economic relations are closest

(centre of vita} interests).

(b) lf the Contracting State in which he has his centre of vital interests

cannot be determined, or if he has no permanent home avai1able to him in either

Contracting State, he shall be deemed to be a resident of the Contracting State in

which he has an habitual abode.

(c) If he has an habitual abode in both Contracting States or in neither of

them, he shaH be deemed to be a resident of the Contracting State of which he is

a national.

(d) If he is a national of both Contracting States or of neither of them.

the competent authorities of the Contracting States shall endeavour to sett1e the

question by mutual agreement.

(3) Where by reason of the provisions of paragraph (1) a person other than an

individual is a resident of both Contracting States, then it shall be deemed to be a

resident of the Contracting State in which its place of effective management is situated.

B

ARTICLE 5

Permanent Establishme!1t

(l) For the purposes of this COllvelltion the term "permanent establishment"

means a fixed place of business in which the business of the enterprise is wholly or

partly carried on.

(2)

The term "permanent establishrnent" shall inc1ude especially

a place of management;

(a)

(b)

a branch;

(c)

an office;

(d)

a factory;

(e)

a workshop;

a mine, quarry or other pl a c e of extraction of natural resources inc1uding

(f)

an off-shore dri1ling site;

(g) a building site or construction or assembly project or supervisory acti­

vities in connection therewith, where sueb site, project or activity continues for

more than 12 months.

The term "permanent establishment" shall not be deemed to include

(3)

(a)

the use of facilities solely for the purpose of storage, display or delivery

of goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to the

enterprise solely for the purpose of storage, display or de1ivery;

(c) the maintenance of a stock of goods or merchandise belonging to the

enterprise solely for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business solely for the purpose of

purchasing goods or merchandise, or for col1ecting information, for the enterprise;

(e) the maintenance of a fixed place of business solely for the purpose of

advertising, for the supply of information, for scientific research or for similar

activities which have a preparatory or auxiliary character for the enterprise.

(4) A person acting in a Contracting State on behalf of an enterprise of the other

Contracting State - other than an agent of an independent status to whom paragraph

(5) applies - shall be deemed to be a permanent establishment in the first-mentioned

State if he has, and habitually exercises in that State, an authority to conc1ude contracts

in the name of the enterprise, unless his activities are limited to the purchase of goods or

merchandise for the enterprise.

(5) An enterprise of a Contracting State shall not be deemed to have a perma­

nent establishment in the other Contracting State merely because it carries on business

in that other State through a broker, general commission agent or any other agent of a n

independent status, where such persons are acting i n the ordinary course o f their

business.

(6) The fact that a company which is a resident of a Contracting State controls

or is controlled by a company which is a resident of the other Contracting State, or

which carries on business in that other State (whether through a permanent establish­

ment or otherwise), shall not of itself make either company a permanent establishment

of the other.

B

CHAPTERIII

Taxation of Income

ARTICLE 6

lncome from lmmovable Property

(1) ln c ome from i mmo v a b l e property may b e taxed in the Co ntr a ct i n g State in

whi c h such property is situated.

(2)

The term "immovable p rop er L y " shall be d e f i ne d in accordancne with the law

of the C on tr a ct ing State in which the property in question is situa t e d . The term shall in

any case in c iu d e property accessm-y to irnmovable p r op e rt y , rights to which the pr o vi ­

si o ns of g e n eral law r espe ct i n g immovable prop�rty apply, usufruct of immovable

property and ri g h t s to variable or fixed payments as conslderation for the working of,

or the rigbt to wor k , mi ner al d epo sit s , sources and other natural resources; ships, bo a ts

and aircraft shall n ot be re ga r d e d as immovabie property.

(3) The pr o vi sions of parag r a ph (1) shall apply to i n com e derived from the direct

use, letting, or use in any other form of immovaoJe prop e rty .

(4) The pr o vi s io n s of paragraphs (l) and (3) shall also apply to t h e income from

immovable property of an en t erpr i se and to income from immovable property used for

the performance of p r ofes s io na l s er v ices .

ARTiCLE 7

Business Pro/its

(1) The profits of an e nter p ri s e of a Contracting State shall be taxable only i n

that State unless th e e n terpr i s e carries on business in the other Co n t r a ct ing State

through a permanent estab1ishment situate d therein. lf the en t er pri s e carries on business

as aforesaid, the p ro f i t s of the e nte r pri s e may be taxed in t he other S t a t e but o nl y so

much of them as is attributable t o that permanent es t a b Jishm en t .

(2)

S u bj ect to the provisions of p a r a g r a ph (3), where an e nterpri se of a Contr a ct ­

ing State carries on b u sine ss in the oth er Contracting State th roug h a perman e n t

establishment situated th erein , there shall in each Contracting S tat e be attributed to that

p e rmanent e sta b 1 i s h m en t the pro fit s which it m i ght be ex pe ct ed to make if it were a

dis t in c t and separate en t erpr ise e n gaged in the same or s i m il a r activities under the same

or similar conditions and dealing wholly independently with the enterprise of whi c h it

is a perma n e n t establishment.

(3) In the d et e rm in a tio n of t h e profits c[ a per m an en t establishment, there shall

be allowed as deductions expenses which are incurred for the purp oses of the permanent

establishment in c lu d i n g executive and general administrative e x p ense s so incurred,

whether in the St ate in which the pe r ma ne n t establishment is situated or elsewhere.

(4) In so far as it has been customary in a Contracting State to de t e rmine t he

p rofits to be a tt ri b ute d to a p er m a nen l establishment on the basis of an app ort i onm en t

of the total prof i ts of the en t er p ri se to i t s v a r i ous p arts , n othi n g in paragraph (2) shaH

preclude that Co n tr a ctin g Sta te f rom deter mini n g t h e p r o f its to be taxed by such an

apport i onment as may be cu s t om ar y . The me t h o d of a pp ortio n m e nt a d o pt ed shall, how­

ever, be such that the res u lt shall be in accordance with th e principles embodied in

this Article.

(5) No p r o fi t s shall be attr i b u t e d to a perm an e nt establishment by re a s o n of the

mere p ur c hase by t h a t permanent establishment of goods or merchandise for the

enterprise.

B

(6) For the purposes of the preceding paragraphs, the profits to be attributed to

the permanent establishment shall be determined by the same method year by year

unless there is good and sufficient reason to the contrary.

(7) The provisions of this ArticIe shall not affect the provisions of the law of a

Contracting State regarding the taxation of profits from the business of insurance.

(8) The term "profits" as used in this Artic1e inc1udes the profits derived by any

partner from his participation in a partnership and, in the case of Austria, from a parti­

cipation in a sleeping partnership ,Stille Gesellschaft) created under Austrian law.

(9) Where profits incIude items of income which are dea1t with separately in

other Articles of this Convention, then the provisions of those Articles shall not be

affected by the provisions of this Artic1e.

ARTICLE 8

Shipping and Air Transport

( 1 ) Profits from the operation of ships or aircraft in international traffic shall be

taxable only in the Contracting State in \-vhich the place of effective management of the

enterprise is situated.

(2) If the place of effective management of a shipping enterprise is aboard a

ship or boat, then it shall be deemed to be situated in the Contracting State in which

the home harbour of the ship or boat is situated, or, if there is no such home harbour,

i n the Contracting State of which the operator of the ship or boat is a resident.

(3) The provisions of paragraph (l) shall also apply to profits derived from the

participation in a pool, a joint business 01' in an international agency.

ARTICLE 9

Associated Enterprises

( 1)

Where-

(a)

an enterprise of a Contracting Sta te p a rt icip a t es directly or indirectly in

the management, control 01' capital of an enterprise of the other Contracting State, or

(b)

the same persons participate directly 01' indirectly in the management,

control or capital of an enterprise of a Contracting State and an enterprise of the

other Contracting State,

and in either case conditions are made or i mpos e d between the two enterprises in

their commercial or financial relations which differ from those which would be made

between independent enterprises, then any profits which would, but for those condi­

tions, have accrued to one of the enterpr ise s but, by reason of those conditions, have

,

not sa accrued, may be inc1uded in the profits of that enterprise and taxed accordingly.

ARTICLE 10

Dividends

(1) Dividends paid by a company which is a resident of a Contracting State to

a resident of the other Contracting State may be taxed i n that other State.

(2) However, such dividends may be taxed in the Contracting State of which the

company paying the dividends is a r eside nt and according to the law of that State but

,

(a)

where the dividends are paid by a cornpany resident of Austria to a

resident of Malta, the Austrian tax sa charged shall not exceed 15 per cent of the

gross amount thereof;

(b)

where the dividends are paid by a company resident of Malta to

a

resident of Austria

B

(i)

Malta tax shall not exceed that chargeable on the campany paymg

the dividends in respect of the prafits sa distributed, and in any case it shall

not exceed 32.5 per cent of the gross amount of the dividends;

(ii) natwithstanding the provisions of sub-paragraph (i), Malta tax shall

not exceed 15 per cent of the gross amount of the dividends if such dividends

are paid out of gains or profits earned in any year in respect of which the

company is in receipt of tax benefits under the provisions regulating aids t o

industries in Malta, and the shareholder submits retums and accounts t o the

taxation authorities of Malta in respect of his income liable to Malta tax for

the relative year of assessment;

(iii) no surtax otherwise chargeable under the law of Malta shall be

1evied on the dividends.

This paragraph shall not effect the taxation of the company in respect of the

profits out of which the dividends are paid.

(3) The tenn "dividends" as used in this Artic1e means income from shares,

"jouissance" shares or "jouissan�e" rights, mining shares, founders' shares or other

rights, not being debt-cJaims, participating in profits, as well as income from other

corporate rights which is subjccted to the same taxation treatment as income from

shares by the taxation law of the State of which the Company making the distribution

is a resident.

(4) The provisions of paragraphs (l) and (2) shall nat a p p ly if the recipient of

the dividends, being a resident of a Contracting State, carries on business in the other

Contracting State, of which the company paying the dividends is a resident, through

a permanent establishment situated therein, or performs in that other State profes­

sional services from a fixed base situated therein and the holding in respect of which

the dividends are paid is effectively connected with such pe r manent establishment or

fixed base. In such a case, the provisions of Artic1e 7 or Artic1e 14, as the case may be,

shall apply.

Where a company which is a resi d e nt of a Contracting State derives profits

(5)

Of income from the other Contracting State, that other State may not impose any tax

on the dividends paid by the company to residents of the first-mentioned State, or

subject the company's undistributed profits to a tax on undistributed profits, even if

the dividends paid or the undistributed pr o f i ts consist wholly or part1y of profits or

income arising in that other State. The provisions of this paragraph shall not prevent

that other State from taxing dividends paid to residents of that State or dividends

relating to a holding which is effec t i v c l y connected with a p e rm a ne n t establishment or

fixed base maintained in that other State by a resident of the f i r st me n tioned State.

-

ARTICLE 11

Interest

(1) Interest arising in a Contracting State and paid to a resident of the other

Contracting State may be taxed in that other State.

(2) However, such interest may be taxd in the Contracting State in which it

arises, and according to the law of that State, but the tax so charged shall not exceed

5 per cent of the gross amount of the interest.

(3) The tenn "interest" as used in this Article means inco m e from debt-claims

of every kind, whether or not secured by m ortgage, and whether or not carrying a right

to participate in the debtor's profits, and, in particular, income from Govemment securi-

B

ties and income from bonds or de ben tures , inc1uding premiums and prizes attaching

to bonds or debentures. Penalty charges for late payment shall not be regarded as

interest for the purpose of this Artic1e.

(4) The provisions of paragraphs (1) and (2) shall not apply if the recipjent of

the interest, being a resident of a Contracting State. carries on business in the other

Contracting State in which the interest arises, through a permanent establishment

situated therein, or perfomlS in that other State professional services from a fixed base

situated therein and the debt-claim in respect of which the interest is paid is effectively

connected with such permanent establishment or fixed base. In such a case, the provi­

sions of Artic1e 7 or ArticIe 14, as the case may be, shall apply.

(5) Interest shall be deemed to arise in a ContraetingState when the payer is

that State itself, a political subdivision, a loeal authority or a resident of that State.

Where, however, the person paying the interest, whether he is a resident of a Contracting

State or not, has in a Contracting State a permanent establishment in connection with

which the indebtedness on which the interest is paid was incurred, and such interest is

bome by sueh permanent establishment, then such interest shaH be deemed to arise

in the Contracting State in which the permanent establishment is situated.

(6) Where, owing to a special relationship between the payer and the recipjent

or between both of the m and some other person. the amount of the interest paid, having

regard to the debt-claim for which it is paid, ex.ceeds the amount which would have

been agreed upon by the payer and the recipjent in the absence of such relationship,

the provisions of this Article shall apply only to the last-mentioned amount. In that case,

the ex cess part of the payments shall rcmain taxable according to the law of each Con­

tracting State, due regard being had 10 the other provisions of this Convention.

ARTICLE 12

Roya[ties

(l) Royalties arising in a Contracting State and paid to a resident of the other

Contracting State shall be taxable only in that other State if such royalties consist of

payments of any kind reeeived as eOllsideration for the use of, or the right to use, any

copyright of literary, artistic or scientific work.

(2) Royalties ar i s i ng in a Contracting State and paid to a resident of the other

Contracting State may be taxed in that other Contracting State if the royalties consist

of payments of any kind received as a conside:ration for the use of, or the right to use,

cinematographic fi!ms or tapes for television or broadcasting, any patent, trade mark,

design, mode!, plan, secret formula or process, industria t. commercial or scientific

equipment, or information concerning industrial, commercial or scientific experience.

However, such royalties may also be taxed in the Contracting State in which they arise,

and according to the Jaw of that State, but the tax so charged shall not exceed 10 per

cent of the gross amount of sueh royalties.

(3) The provisions of paragraphs (l) and (2) shall not apply if the recipient of

the royalties, being a resident of a Contracting State, caITies on business in the other

Contracting State in which the royalties arise, through a permanent establishment

situated therein, or peliorms in that other State professlonal services from a fixed base

situated therein, and the right or property in respect of which the royalties are paid is

effectively conneeted with such pernlanent establishment or fixed base. In such a ease,

the provisions of Article 7 or Article 14, as the case may bc, shall apply.

(4) Royalties shall be deemed to arise in a 'Contracting State when the payer is

that State itself, a political subdivision, a Iocal authority ora resident of that State.

B

Where, however, the perso n p a ying the royalties, whether he is a res i d en t of a Con­

tr ac ting State or not has in a Contracting State a p e rman e n t establishment in connec­

,

tion with wh ic h the l i ab i l it y to pay the royalties was incuned. a nd such ro y a lt i es are

bome by such pcrmanent establishment, then well rOYCllties shall be deemed to a ri se

in the Contra c ti ng State in which the pe:rmanent establishment is situated.

(5) Where, owing to a special relationship between the payer and the recipient

or between both of them and s:)me other pe!'son, the arn'JUl1t of t he royalties pa i d

,

hav i ng rega r d to iħe use, right or information for which they a re pa i d exceeds the

amount which would have been agreed upon by the payer and the re ci pie nt in the

absence of s u c h relationship, the provisions of tbis Article shall appl y on1y to the last­

mentioned amount. In that case. the Excess p1rt of the payments shall remain taxab1e

according to th e law of each Contraciing Stat�. due reg a r d being had to the other

prov i s i o ns of thi s Convention.

ARTICLE

Capital Gains

(1) G ains from the alienaticn of immovable prop e r t y as defined in p ar a g r a ph

,

(2) of ArticJe 6, m ay be taxed in the Contracting State in whi c h sucħ property is

situated.

(2) G a i n s from the aliena rien of movablc property forming part of the business

property of a permanent establishment whi c h an enterprise of a Contracting State has

in the other Contracting State or of m o vabl e property pertaining to a fix e d base

available to a resident of a Contracting S t a t e in the other Contracting Sta t e for the

purpose of performing professionai services, including such gains from the alienation

of s11eh a permanent establishmcnt a1 0 ne or together with the whole enterprise) or of

(

su c h a fixed base, may be taxed in the other Sta te. Hov.:ever, gains fr o m the alienation

of movab1e property of the kind referred to in paragraph (3) of Article 22 sha ll be

taxable only in the Contracting State in which s1.1eh mova b le property is taxable

a c cord i ng to the said Ar tic Je

.

(3) Gains from the a1ienation of any property other than those mentioned in

paragraphs (l) and (2) sha 11 be taxa ble only in t h e Contracting State of which the

alienator is a r es id ent .

ARTICLE 14

Independent Personal Services

(1) I n c ome derived by a resident of a Contracting State in r espe c t of profes­

siona1 services oi other independent activities of a simihr c h a r ac ter shall be taxable

only in that State unless he has a fixed base regula rl y available to him in the other

Con t racting State for the pnrpose of performing his a c tiv i t i es lf he has such a fixed

.

base, the income may be taxed i n the other Contracting State but onl y sa mu c h of it

as is attributable to that fixed base.

(2) The term "professional services" includes, especially, independent scientific,

1 iter a ry artis tic ed u c at io na l 01' teachilJg activities as well af; the in d epen d e nt activities

,

,

of phys ic ians Iawyers, engineers, a r c hite c ts dentists and accountants.

,

,

B

ARTICLE 19

Government ServiCC'

(1)

(a) Remuneration paid by a C o n t r a c t i n g Stare or a political subdivision o r

a I oc al a ut h orit y thereof to any individual in respect of services rendered to that

State, or subdivision or local authority thereof shall be taxable only in that State.

(b)

However, such remuner.ation shall be taxable only in the other Con­

trac t in g State if the services are rendered in that State and the recipient is a

resident of that other Co ntr a ctin g State who

is a nati o nal of that St ate; 01'

(i)

(li) did not become a resident of that State solely for the purpose of

performing the services.

(2) The provisions of Articles 15, 16 and 17 shall a pply to remuneration in

respect of services rendered in connection with any business carried on by a Contract­

i n g State, a political subdivision or a loeal authority t he r e o f.

(3) The provisions of paragraph ( l ) (a) shall likewise apply in respect of remu­

neration paid, under a dev e l o pment assistance programme of a Con t r a c t in g State, a

po l it ical subdivision or a Iocal au t h o rity thereof, out of funds exc1usively supp1ied by

that State, those political subdivisions or lo:.:al auth or ities the re of, to a s p e c i al ist or

volunteer seconded to the other C on t racting State with the consent of that other State.

ARTICLE 20

Teachers, Students and Trainees

(l) Remune rat ion which a professor or t e acher who is, or immediately before

was, a residen t of a Contracting State and who visits the other Contracting State for a

perio d not exceedi ng two years f o r the purp o se of carrying out advanced study or

research or for teaching at a university, college, school or other educational institution

receives for s u c h work shall not be taxed in that other State. provided that such remu­

neration is derived by h im from outside that other State.

(2) An individual who was a resident of a Contr3.cting State immediately before

v isitin g t h e o t h er Co ntr a ctin g State and is temp o r ar iIy present in that o ther State so l e l y

as a student at a university, college, school or other similar educational institution in

that o t he r State or as a business apprentice shall, from the datc of his first arrival in

that o the r State in conneetion with tha t visit. be exempt from tax in th a t other

St a te

o n all remittances from abroad for purposes of his maintenance, educa­

(a)

tion o r tr a ini ng; and

(b) for any remuneration for an empl o ym e nt exercised in the ot h er Contract­

ing State for a p eri o d not exceeding 183 days in the calendar year for the purposes

of h is pr a ctic a l t r a i n i n g .

(3) An individual who was a resident of a C o ntracting State immediately b efo r e

visi t i ng the other Contracting State a nd is temporarily present in that other State so l e ly

for the purpose of study, rese a rch or training as a re c ipien t of a grant, allowance or

award from a scientific, e duc a ti o nal , r elig i o u s Dr charitable organization Dr under a

technical assistance programme entered into by the Government of a Contracting State

shall, from the date of his arrival in that other St a te in connection wi th that visit,

be exempt from tax in that other State

on the amount of such grant, allowance 01' a ward ; and

(a)

on all remittances from abroad for the purposes of h i s ma i n te nan ce ,

(b)

education Dr t ra i ning .

B

ARTICLE 19

Government ServiCC'

(1)

(a) Remuneration paid by a C o n t r a c t i n g Stare or a political subdivision o r

a I oc al a ut h orit y thereof to any individual in respect of services rendered to that

State, or subdivision or local authority thereof shall be taxable only in that State.

(b)

However, such remuner.ation shall be taxable only in the other Con­

trac t in g State if the services are rendered in that State and the recipient is a

resident of that other Co ntr a ctin g State who

is a nati o nal of that St ate; 01'

(i)

(li) did not become a resident of that State solely for the purpose of

performing the services.

(2) The provisions of Articles 15, 16 and 17 shall a pply to remuneration in

respect of services rendered in connection with any business carried on by a Contract­

i n g State, a political subdivision or a loeal authority t he r e o f.

(3) The provisions of paragraph ( l ) (a) shall likewise apply in respect of remu­

neration paid, under a dev e l o pment assistance programme of a Con t r a c t in g State, a

po l it ical subdivision or a Iocal au t h o rity thereof, out of funds exc1usively supp1ied by

that State, those political subdivisions or lo:.:al auth or ities the re of, to a s p e c i al ist or

volunteer seconded to the other C on t racting State with the consent of that other State.

ARTICLE 20

Teachers, Students and Trainees

(l) Remune rat ion which a professor or t e acher who is, or immediately before

was, a residen t of a Contracting State and who visits the other Contracting State for a

perio d not exceedi ng two years f o r the purp o se of carrying out advanced study or

research or for teaching at a university, college, school or other educational institution

receives for s u c h work shall not be taxed in that other State. provided that such remu­

neration is derived by h im from outside that other State.

(2) An individual who was a resident of a Contr3.cting State immediately before

v isitin g t h e o t h er Co ntr a ctin g State and is temp o r ar iIy present in that o ther State so l e l y

as a student at a university, college, school or other similar educational institution in

that o t he r State or as a business apprentice shall, from the datc of his first arrival in

that o the r State in conneetion with tha t visit. be exempt from tax in th a t other

St a te

o n all remittances from abroad for purposes of his maintenance, educa­

(a)

tion o r tr a ini ng; and

(b) for any remuneration for an empl o ym e nt exercised in the ot h er Contract­

ing State for a p eri o d not exceeding 183 days in the calendar year for the purposes

of h is pr a ctic a l t r a i n i n g .

(3) An individual who was a resident of a C o ntracting State immediately b efo r e

visi t i ng the other Contracting State a nd is temporarily present in that other State so l e ly

for the purpose of study, rese a rch or training as a re c ipien t of a grant, allowance or

award from a scientific, e duc a ti o nal , r elig i o u s Dr charitable organization Dr under a

technical assistance programme entered into by the Government of a Contracting State

shall, from the date of his arrival in that other St a te in connection wi th that visit,

be exempt from tax in that other State

on the amount of such grant, allowance 01' a ward ; and

(a)

on all remittances from abroad for the purposes of h i s ma i n te nan ce ,

(b)

education Dr t ra i ning .

B

ARTICLE 21

Ofher lncome

(1) Items of income of a resident of a Contracting State, wherever arising, not

dea1t with in the foregoing Articles of this Convention shall be taxable only in that

State.

(2) The provisions of paragraph (1) shall not apply if the recipient of the income,

being a resident of a Contracting State, carries on business in the other Contracting

State through a permanent establishment situated therein, or performs in that other

State professional services from a fixed base situated therein, and the r igh t or property

in respect of which the income is paid is effectively connected with such permanent

establishment or fixed base. In such a case, the provisions of Article 7 or Artic1e 14,

as the case rnay be, shall apply.

CHAPTER IV

Taxation of Capital

ARTICLE 22

Capital

(l) Capital represented by immovable property, as defined in paragraph (2) of

Article 6, may be taxed in the Contracting Statc in which such property is situated.

Capital represented by movable propcrty forming part of the business property

(2)

of a permanent establishrnent of an enterprise, or by 1l10vable property pertaining to a

fixed base used for the performance of professional services, rnay be taxed in the

Contracting State in which the permanent establishment or fixed base is situated.

(3) Ships and aircraft operated in international traffic, and movable property per­

taining to the operation of such ships and aircraft, shall be taxable only in the Contract­

ing State in which the plac e of effective management of the enterprise is situated.

(4) All other elements of capitaI of a residcnt of a Contracting State shall be

taxable only in that State.

CHAPTER V

Elimination of Double Taxation

ARTICLE 23

Elimil1af;o!1 of Double Taxatiol1

(1) Where a resident of a Contracting State derives income or owns capital which

may be taxed in the other Contracting State in accordance with the provisions of this

Convention, the first-mentioned State shall, subject to the provisions of paragraph (2)

hereof, exernpt such income or capital from tax but rnay, in calculating tax on the other

incorne or capital of that person, apply the tax which would have been applicable if

the exempted incorne or capital had not been so exempted.

(2) Where a resident of a Contracting State derives income which may be taxed

in the other Contracting St at e in accordance with the provisions of paragraph (2) of

each one of Articles 10, 11 and 12 of this Convention, the first-mentioned State shall

B

a110w as a deduction from its tax on the income of that person an amount equal to the

tax p a id thereon in the other State. In Austria such d e d u c ti on sha11 not, however,

exceed that pan of its tax as computed before the de d u c ti o n is given which is appro­

priate to the income derived from Malta and in the case of Malta, the deduction shall

be computed in accordance "vith the pro v isions of the law of Malta re garding the allow­

an ce of a credit a g a i ns t Malta tax in r e sp ect of foreign tax.

(3) Where a dividend is distr i bute d by a company which is a resident of Malta to

a company which is a r eside n t of A n st ri a , such dividend sha11 be exempt from the

corpora t ion. tax and from the business tax in Austria if the Austrian Company receiving

the dividcnd co nt r ol s not less t h an 25 per cent of the voting power of the Malta company.

(4) For the purposes of paragraph (2), Malta tax shall be deemed to have been

charged as fol1o w s

in the c a s e of interest, at the rate of 5 per cent;

(a)

in the case of royalties, at the rate of 10 per cent;

(b)

in the case of dividends referred to in p a r ag ra p h (2) (b) (ii) of Aliicle 10,

(c)

a t the r a te chargeable under pa r a g raph (2) (b) (i) thereof,

of the gross amount of the income in each case.

CHAPTER VI

Special Provisions

A RTI C L E 24

N on-discriminatiol1

(1) N ot w it h standin g the provisions of Artic1e l, the nationals of a Contracting

State wh e the r or not t hey are residents of one of the Co n tracting States, shall not be

subjected in the other Contracting S t a t e to any t a x ation or any r eq u irement connected

therewith, which is ot h e r or m o r e burdemom(; t h an the ta x a ti a n and connected require­

rnents to which nationals of that ot h e r Slate in the same circumstances are Of may be

subjected.

(2) The tax ation of a p e rm a n e n t establishment which an en t erpri se of a Con­

tracting State has in the other Contracting State shall not be less favourably levied in

that othe r State than the taxation leviecl on enlerpriscs of t h a t other State ca r ryin g on

the same activities.

This provision shall n ot be construed as obliging a Contracting State to grant

to residents of the other Contiactiag State any personal allowances, r e lie f s and reduc­

tions for taxation purpo s es 011 ac cou nt of civil st a t us or family responsibilities or any

other personal circumstances which it grants to i t s ow n r e s i d e nt s .

(3) Except where the pr o vi si o n s of Article 9, paragraph (6) of Artic1e 11, or para­

graph (5) of Article 12 a pp ly , interest, royaltics and other disbursements paid by an

enterprise of a Contracting State to a resident of the other C ontracting State shall, for

the purpose of de t ermini n g the taxab1e pr o f it s of such enterprise, be deductible under

the same conditions as if the y had been p a i d to a resident of the first-mentioned State.

Similarly, any de b ts of an enterp r i s e of a C ont ra c t i ng State to a resident of the

other Contracting State shall, for the purp os e of d e te rmini n g the taxable capital of such

I enterprise,

be deductible as if they had been contracted to a r es iden t of the first­

mentioned State.

(4) E n terpri se s of a Contracting State, the capital of which is wholly or partly

owned or controlled, d i rect ly or indirectly, by one or m ore residents of the other Con-

B

tracti�g State, shall n?t be subjected in t h e first-mentioned C ont r ac tin g State to any

taxat10n or any reqUlrement conneeted therewith which is other or more burdensome

than the taxation and connected requirements to which other s i m il a r enterprises of that

first-mentioned State a r e or may be subjected.

In this Article the term "taxation" me a n s taxes of e v e r y kind and d es cri p ti o n

(5)

.

ARTICLE 25

Mufllaf Agreement Proceduf'(!

(1) Where a resident of a C on t ra cti n g State considers that the actions of one or

both of the Contracting Statcs resu1t or wi11 result for him in taxation not in accordance

with this Convention, he may, n ot w ith st a l1 din g the re m e di e s provided b y the national

laws of those States, present his case to the compClent authorily of the Contracting State

of which he is a resident or, in any case referred to in p a r a gr a p h (1) of Article 24, to that

of the Contracting State of which he is a national. 1 his case must be presented within

three years of the first notification of the a c ti o ns w;lich give rise to taxation not in

accordance with the Convention.

(2) The competent authority shall e nde avou r if the objection appears to it to

,

be justified and if it is not itse!f able to arrive at a n a pp ro p r ia t e solution, to resolve

the case by mutual agreement with th e competent authority of the other Contracting

State, with a view to the avoidance of taxalion not in accordance with the Convention.

Any agreement reached shall be implemented notwithstanding any t i m e limits in the

national laws of the Contracting State.

(3) The competent authorities of the Contracting States shall endeavour to resolve

by mutual agreement any difficu1ties or doubts arising as to the interpretation or appli­

cation of the Convention. They may also consult together for the elimination of double

taxation in cases not provided for in the Convention.

(4) The competent authorities of the C on t ra ctin g States may communicate with

each other directly for the purpose of r eac h in g an agreement in the sense of the preced­

ing paragraphs.

ARTICLE 26

Exchange of Information

(l) The compctenl authorities of the Contracting States s h a l l exchange sueh infor­

mation as is necessary for the carrying ou t of this Convention and of the domestic laws

of the Contracting States concerning taxes covered by this Convention insofar as the

taxation thereunder is jn accordance with this Convention. Any information so ex­

changed shall be treated as secret and shaH nat be disc10sed to any persons or authorities

including courts other than those concerned with the assessment or collection of the taxes

which are the subject of the Convention, or with t h e proseculion of offences in r elation

thereto.

(2) In no case shall the provisions of paragraph (l) be construed so as to impose

on one of the Contracting States the obligation

(a) to carry, out administrative rneasures at varian�e with the laws or the

administrative practice of that or o f the other C o nt r a c t m g State;

(b) t o supply particulars w h ic h are not obtainable under the l�ws or in the

nonnal course of the administration of that 01' of the other Contractmg State;

(c) to supply information which wouId disc10se any tr�de, bus � ness, ind�s·

trial commercial or professional secret Of trade process, or mformatIOn, the dlS­

clos � re of which would be contrary to public policy.

B

ARTICLE 27

Diplomatic and Consular Otticials

Nothing in this Convention shall affect the fiscal privileges of diplomatic or con.

sular officials under the general rules of international law or under the provisions of

special agreements.

CHAPTER VII

Fina) Provisions

ARTICLE 28

Entry info F o r ce

(1) This Convention shall be ratified and the instruments of ratificat10n shall be

exchanged at Vienna as soon as possible.

(2) The Convention shall enter into force 60 days after the exchange of instru­

ments of ratification, and its provisions shall have effect -

(a)

in respect of taxes on income derived on or after the first day of January,

1977;

(b)

in respect of taxes on capital levied as from the first day of January,

1977. ARTICLE 29

Termination

This Convention shall remain in force indefinitely but either of the Contracting

States may, on or before the thirtieth day of J une in any calendar year beginning after

the expiration of a period of three years from the date of its entry into force. give to the

other Contracting State, through diplomatic channels, written notice of termination and,

in such event, the Convention shall cease to be effective

(a)

in respect of taxes on income derived on or after the first day of January

next following the year during which notice of termination has been given;

(b)

in respect of taxes on capitallevied as from the first day of January next

foHowing the year during which notice of termination has been given.

IN WITNESS WHEREOF the undersigned. being duly authorised thereto, have

signed this Convention.

DONE at Bonn on the 29th day of May, 1978, in duplicate in the German and

Englisħ languages, both texts being equally authentic.

E. ATTARD BEZZINA

FRANZ PEIN

For the Republic of Austria

For the Republic of Malta

[ppubblikat mit-Taqsima tat·Tagħri!

Kastilja

Pllblished by the IllformatlOIl D/vlsloll

Kas/il;"

-

-

-

Mitbugħ fl�Jstamperij2 tsl Gvern

Printed

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Gnvernrru'nt Prinfing

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..

-

-

Arrangements

to have effect.

(a) that the arrangements specified in the Convention set out

in the Schedule to this order have been made with the Government

of the Republic of Austria with a view to affording relief from

double taxation in relation to the following taxes imposed by the

laws of the Republic of Austria

(i)

Income Tax;

(ii)

Corporation Tax;

(iiD

Directors Tax;

(iv)

Capital Tax;

Tax on Property excluding death duties;

(v)

(vi) Tax on Commercial and Industrial Enterprises,

including the tax levied on the sum of wages;

(vii)

Land Tax;

(viii)

Tax on Agricultural and Forestry Enterprises;

(ix) Contributions from Agricultural and Forestry

Enterprises to the Fund for the Equalisation of Family

Burdens;

(x)

Tax on the value of Vacant Plots; and

(b)

that it is expedient that these arrangements should have

effect.

B