Double Tualion Relid (faxes on Inrome) (faxesoninrome)

LN . 6S~ 1997

INCOME TAX ACT

(CAP. 123)

Double Tualion Relid (faxes on Inrome)

(Rnm&nla) Onkr , 1.997

IN exercise of the powers conferred by section 76 o f the Income

Tax Act, the Minislerof Finance and Commerce has made the following

order:-

I. This order may be cited as the Double Taxation Relief(Taxes 0 . ....

on Income) (Romania) OnIer, 1997.

.. -

AGREEMENT

BETWEEN THE GOVERNMENT OF MALTA

AND THE GOVERNMENT OF ROMANIA

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FlSCAL EVASION

WITH RESPECT TO TAXES ON INCOME

The Government of Malta and the Government of Romania, desiring to conclude

an Agreement forthe avoidance of double taxation and the prevention offiscal evasion

with respect to taxes on income, and to promote and strengthen the economic relations

between th e two countries on th e basis of nationa l sove reig nty and respect of

independence, full equal rights, mutual advantage and non-interference in the internal

affairs, have agreed as follows

AIlTlCLE I

Persona) Scope

This Agreement shall app ly 10 persons who are residents of one or both ofthe

Contracting States.

AIlTlCLE 2

Taxes Covered

1. This Agree ment shall apply to taxes on income imposed by each of the

Contracting States or by its territorial - adm inistrative units, irrespective of the manner

in wh ich they are levied.

2. There shall be regarded as taxes on income all taxes imposed on total inc(Xue.

or on elements of income, including taxes on gains from the al ienati on of movable or

immovable property.

It is hereby declared: -

Au a

(a) that the arrangements specified in the Agreement set

out in the Schedule to this Orde r have been made wit h th e

Govemment of Romania with a view to affording rel ief from double

taxation in relati on to the following taxes imposed by the laws of

Romania

the tax on income derived by individuals

(i)

(ii) the tax on profit;

the tax on salaries and other similarremuneration;

(iii)

(iv)

the tax on dividends;

(v)

the tax on agricul tura l income;

that it i~ expedienl Ihat those arrange ments should have

(b)

efrect;

(e) that the: Agreement has enleRld into rorce on the 16th

AuguSt . 1996.

The existing taxes to whi ch th is Agreeme nt shall apply are in particular

(a)

In the case of Romania

(i)

the lax on income derived by indi viduals

the tax on profit

(ii)

(iii)

the tax on salaries and other similar remuneration

(iv)

the tax on dividends: and

the tax on agricultural income;

(v)

(hereinafter referred to as "Romanian tax");

(b)

In the case of Malta

the income tax;

M

(hereinafter referred to as "Malta tax

) .

This Agreement shall also apply to any identical or substant ially similar taxes

which are imposed after the dale of signature of this Agreement in addition to. or in

place of. the existing taxes. The competent authorities of the Contracting Slates shall

notify each other of any significant changes which have been made in their respective

taxation laws.

.o,

m>o .

General Definitions

1. For the purposes of this Agreement . unless the context otherwise requires

(a) the terms "a ContnlCting State'· and ··the otherConrracting State" mean

Romania or Malta as the con text requires;

(b) the term ""Romania" means Roman ia and, used in a geographical sense,

indicates the territory of Romania including ilS territorial sea as well as theexclusive

economic zone over which Romania exercises sovereignlY , sovereign rights and

jurisdiction in accordance with ilS internal law and with the intemationallaw,

concerning the exploration and exploitation of the natural , biological and mineral

resources existing in the sea waters, sea bed and subsoil of these waters;

(e) the term ··Malta" means the Republi c of Malta and, when used in a

geographical sense, the term "Malta" means the Island of Malta, the Island of

Goro and the other islands of the Maltese Archipelago including the terri torial

waters thereof. and any area outside the terri torial waters of Malta which. in

accordance with international law , has been or may hereafter be designated. under

the law of Malta concerning tht, Continental Shelf, as an lITea within which the

rightS of Malta with respect to the sea bed and subsoil and their natural resources

may be ellercised;

(d) the term '·person"" includes 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 lax purposes;

(0 the terms "enterprise of a Contracting Stale" andfor "enterprise o f the

otherCootracling State" mean, respectively.an enterprise carried on by a residen t

of a Contractin g State andfor an enterprise earried on by a resident of the O(her

Contracting State;

(g)

the term "nationals" means

in respect of Romania . all individuals possessing the citizenship

(i)

of Romania and all legal persons or other entities set up under its own

legislation;

rii) in respect of Malta, any citizen of Malta and any legal person,

partnership or association deriving ilS litatus as such in accordance wi lh its

own legislation;

(h) the term "intemationaltraffic" means any transport by a ship, boat,

aircraft. railway or TOad vehicle operated by an enterprise which has its place of

effective management in a Contracting State, e ... cept when the ship, boat ,aircraft,

railway or TOad vehicle is operated solely between places in the other Contracting

State;

(i)

the term "competent authority" means

in the case of Romania, the Minister of Finance or his authorized

(i)

representative;

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

authorized representative.

2. In the application of this Agreement by a Contracting State any term not

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

it has under the law of that State concerning the t:u.es to which this Agreement applies.

Resident

1. For the purposes of this Agreement.theterm "resident of a Contracting Slate"

means any person who. under the laws orthat Slate. is liable to tax the re in by reason of

his domicile. residence, place of management or any other criterion of a similar nature,

2. Where by reason of the provisions of paragraph I an individual is a resident

of both Contracting StDles, then his StatuS shall be determined as follows

(a) he shall be deemed to be a resident solely of the Contracting Stale 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

solely of the Contracting State with which his personal and economic relations

are closer (centre of vital interests);

(b) if the Contracting State in which he hru; his centre of vital interests

cannot be detennined, or if he has not a pennanent home available to him in

either Contracting State. he shall be deemed to be a resident solely o f the

Contracting State in which he has an habitual abode;

(c) if he has an habitual abode in both Contracting States or in nei ther of

the Contracting States, he shall be deemed to be a resident solely of the Contracting

State of which he is a national;

(d) if he is a national of both Contracting States or of neither of the

Contracting States, the competent authorities ofthe Contracting States shall setde

the question by mutual agreement.

3. Where by reason of the provisions of paragraph I a person other than an

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

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

situated.

Penna nent Establishment

I. Forthe purposes of this Agreement, the term "permanent establishment" means

a fixed place of business through which the business of an enterprise is wholly or

partly carried on.

2. The term "pennanent establishment" includes especially

(.) a place of management;

a branch;

(h)

an office;

(e)

(d)

a factory

a workshop;

(0)

(f) a mine, an oil oc gas well, a quarry or any other place of extraction of

natural resources;

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

activities in connection therewith which continues for more than 12 months;

8 424

(h) the fumishi ng of serv ices. including consultancy services, by an

enterprise of a Contracting State through its employees or other personnel, where

activities of th at nature continue in the other Contracting State for a period or

periods aggregating more than 183 days within any twelve-month period.

3. Nocwithstanding the pret:eding provisions of th is Anicle, the term "permanent

establishment" shall be dee med not to include

(a) the use offacililies solely for the purpose of storage. display or delivery

of goods or merc handise belonging 10 Ihe enterprise

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

enterprise solely for the pul"pOSC o f storage. display or delivery

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

enterprise solely for the purpose of processing by another enterprise

(d) the main tenance of a fixed place o f business solely for the purpose of

purchasing goods or merchandise, orofcollecli ng information. forthe enterprise;

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

advertising. for supply of information, for scientific research or for similar act ivities

which have a preparatory or auxi liary character for the enterprise

(t) the maintenance o f goods or mcrc handise exposed by the enterprise in

a fai r or an exhibiti on which are sold after the closing of the said fair or exhibiti on.

4 . Notwithstanding the provisions of paragraphs I an d 2, where a person - O(her

than an agent of an independent status to whom paragraph 5 applies - is acting on

behalf of an enterprise and has. and habitually excrcises. in a Contracting Statc an

authority to concl ude contracts in the na me of the enterprise. th at enterprise shall be

dee med to have a permanent establishment in that State in respec t of any activities

which that person undertakes for the en tcrprise . un less the acti vities of such peJ1;on

are limited 10 those mentioned in paragraph 3 which. if exercised through a fixed

place of business. would not make this fixed place of business a permanentestablishmclll

under the provisions of th:1I paragraph.

S. An enterprise of a ComraCiing State shall not bedeemed to have a permanent.

es tabl ishmem in the other Contracting State merely because it carries on businesS in

that other Statc through a bro ker. ge neral commission agent or any other agent of an

independent status. whe re such persons are acting in the ordinary course of the ir

business . However. when .he activities of sueh an age:n t are dev()(ed wholly or almost

wholly on behalf ofthc enterprise. he: shall nO( beconsidered as agent of an independent

status within the meaning of this paragraph. ifit is shown that the: transactions between

the agen t and the enterprise were not made unde r arm's length conditions.

Ma ghandhom jigu attribw ili ebda profitti 1iI stabb ili me nt pc:rmanenti

minhabba biss ix-xiri min n dak I-istabbiliment permanenti ta ' oggetti jew merkanzija

ghal1-impriia.

The fact that a comlJ8.ny which is a resident of a Contracting State controls or

is controlled by a company which is a resident of the other ConlraCting SUIte,or which

carries on business in that other State (whether through a pennanent establishment or

otherwise). shal l not o f ilSeif constitute ei ther company a pennanent establishment of

the other.

Inco me from Immovlilble Property

I . Incomederived by a residentofa ContnlCting SllUe from immovable property

(including income from agriculture and foresuy) situated in the otherContnlCting State

may be taxed in that other State.

2. The term " immovable prope rty" shall have the mean in g wh ich it has under

the law of the Contracting State in which the property in question is situated. The!enn

sball in any case include property aecessory 10 immovable property. livestock and

equipment used in agriculture and f(RStry. rights to which the provisions of genenl

law re3pc<:ti ng immovable property apply, U5U!'ruct o( immovable property and ri ghts

to variable or filled payments as consideration for the working of. or the right to work.

or 10 explore for . mineral deposits. sources and OIher natural resources; ships, boats,

aircraft, rai lway and road vehicles shall not be regarded as immovable property.

3. The provisions of paragraph I shall apply 10 income derived from the direct

use. lening, or use in any other form of immovable property.

4 . The provisions of pangraphs I and 3 shall also apply 10 the income from

inmovable propeny of an enterprise and to income from immovable propert y used for

the performance of independent personal services.

Business Proms

I. The profits of an enterprise of a Contracting State shall be wable only in

thatState unless the enterprise canies on business in the other Contnlcting State through

a pennantnt establishment siluated there in. If the enterprise carries on business as

aforesaid. the profits o(the enterprise may be wed in the other State but only so much

of them as is attribu table to that permanent establishment.

2 . Subject to the provisions o(paragraph 3, where an enterpriseo( a ConlraCti ng

S late carries on business in the other Contracting Slate Ihrough a permanen t

establishment situated therei n. there shall in each Contracting State be attribuled to

thatpennanen t establishment the profits which it might be expected 10 make ir it were

a distinct and sepante enterprise engaged in the same Of similar activities under the

same Of similar conditions and dealing wholly independenLly with the enterprise of

which it is a pennanent establishment.

3. In the determination of the profits of a permanent establishment, there shall

be allowed as deductions expenses of the enterprise, being expenses which are incumd

for the purposes of the permanent establishment (including ellecutive and general

administrative expenses so incurred) and which would be deductible if the permanent

establishment were an independent entity which paid those expenses, whether incurred

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

4, The profits to be attributed [0 a permanent establishment shall be detennined

on the basis of separate business books kept by the permanent establishment. If such

books do not constitute an adequate basis forthepurposes of determining the profits of

the permanent establishment, then such profits may be determined on the basis of an

apportionment of the total profits of the enterprise to its various parts. The method of

apportionment adopted shall, however, be such that the result shall be in accordance

with the principles embodied in this Anic le.1f necessary, the competent authorities of

the Contracting States shall endeavour to agree on the method for apportioning the

profits of the enterprise.

5. No profits shall be attributed to a pennanent establishment by reason of the

mere purchase by that permanent establishment of goods or merchandise for the

enterprise.

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 'lear

unless there is good and sufficient reason to the contrary.

Where profits include items of income which are dealt with separately in

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

affected by the provisions of this Anicle.

International Traffic

I. Profits from the operation of shi ps, boats, aircraft, railway or road vehicles in

international traffic shall be taxable only in the Contracting State in which 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, in the

Contracting State of which the operator of the ship or boat is a res ident.

3. The provisions of paragraph I shall also apply to profits from the participation

in a pool, ajoint business or an international operating agency.

4. Notwithstanding the provisions of paragraph I of this Anicle and of Anicle

7, the profits derived by an enterprise of a Contracting State from the operation of

ships, boats, aircraft, railway or road veh icles used mainly for transpon ex.clusive1y

between places siruated in a Contracting State ate taxable in that State.

ARTlCLE 9

Associa ted Enterprises

I . Where

(a) an enterprise ora Contracting State participates directly or indirectly in

the management, control orcapital of an enterprise of theother Contracting State,

0<

(b) the same persons panicipale directly or 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 ate made or imposed 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 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.

2. Where a Contracting State includes in the profits of an enterprise of that

State, and tues accordingly. profits on which an enterprise of the other Contracting

State has been charged to tax in that other State and the profits so included are profits

which would have accrued to theenlerprise of the first-mentioned State if the conditions

made between the two enterprises had been those which would have been made between

independenl enlerprises, then that other State shall make an appropriate adjustment 10

the amou nt of the tax charged therein on those profits . In dete nnining such adjustment,

due regard shall be had 10 the other provisions of this Agreement and the competent

authori ties of the Contracting States shall if necessary consult each other.

ART1QJ! 10

Dividends

I. Dividends paid by a company which is a resident of a Contracting State 10 a

resident of the other Contracting State may be taxed in that other State.

2. However, such dividends may also be taxed in IheContracting State of which

the company paying the dividends is a resident ~nd according to the law of that State,

but

(a) where the dividends are paid by a company resident of Romania 10 a

resi dent of Malta who is the beneficial owner thereof, the Romanian tax socharged

shal l not exceed 5 per cent of the gross amounl of the dividends;

owner of the interest, the tax socharged shall not exceed S per cent of the gross amount

of the interest.

3. Notwithstanding the provisions of paragraph 2, interest arising in a Contracting

State shall be exe mp: from tax in that State if it is deri ved and beneficially owned by

the Government of the other Conlnlcting State, or a territorial-administrati ve unit thereof

or any agency or bank uni t or institution of that Governmen t , o r a territorial-

adm inistrative unit or if the debt claims of a res ident of the other Conuacting State are

wunnted, insured, or directly or indirectly financed by a fi nanc ial institution wholly

owned by the Government of the other Conlnlcting State.

4. The tenn " interest" as used in this Article means income from debt-claims of

every kind , whether or not secured by mortgage and whether or not carrying a ri ght to

partici pate in the debtor's profits,and in partiCUlar, income from government securities

and income from bonds or debentu res, including premiums and prizes attaching to

such securiti es, bonds or debentures. Penalty charges for late payment shall not be

regarded as interest for the purpose of this Article.

5. The provisions of parngraph I and 2 shall not apply if the beneficial owner

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

ConUllCting State in which the interest arises. through a permanent establishment situated

there in ,orperforms in that other State independent personal services from a fixed base

situated therei n, and the debt-claim in respect of which the interest is paid is effectively

connected with such permanent establishment or fixed base. In such case the provisions

of Article 7 or Art icle 15, as the case may be, shall apply.

6. In terest shall be deemed to arise in a Contracting State when the payer is that

Stateitself,a terri torial-administrative unit 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 i~ a Contracting State a pennanent establishment or fixed base in connection with

\\·hidl the indebledDe5s on which the inte rest is paid was incuTnld, and such interest is

bol.1le by such pennantnt establishment or fixed base, then such intere:stshall bedeemcd

to arise in the Slate in which the pennancnt establishment or fixed base is si tuated.

7. Where, by reason of a special relationship between the payer and the beneficial

owner or betwee n both oflhem and some other person, the amount of the interest paid,

hning regard to the debt-claim for whi ch it is paid, exceeds the amount whi ch would

ha\"e been agreed upon by the payer and the beneficial owner in the absence of such

rehtionsh ip, the provisions of this Anicle shall appl y only to the last -mentioned amount.

III snch case, the excess part of the payments shall remain taxable according to the

lawsof each Contracting State, due regard being had to the other prov isions of this

Agreement.

ARTICLE 12

Commission

1. Commission 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 commission may also be taxed in the Contracting State ill

which it arises and according to the laws of that S{ate, but if the recipient is the beneficial

owner of the comm ission. the tax so charged shall not CllCeed 10 per ce nt of the gross

amount of the commission.

3. The term "commission" as used in this Article means a payment made to a

broker, a general commission agent or to any other perwn assimilated to a broker or

agent by the taxation law of the Contracting State in which such commission arises.

The provisions of paragraphs I and 2 shall not apply if the beneficial OWiId

4. of the commission, being a resident of a Contracting Slate. has, in the olher ConcractiIlg

State in which the commission arises, a permanent establishment or a filled base "ilh

which the activi ty givi ng rise to the commission is effectively connected. In such case.

thc provisions of Article 7 or Article 15, as the case may be, shall apply_

5. Commission shall be deemed to arise in a Contracting Stale when the payer

is that State itself, a territorial-administrative unit or a resident of that State . Where

however, the person paying the commission, whether he is a resident of a Contracing

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

which the activities for which the payment is made was incurred, and such commission

is borne by such permanent establishment, then such commission shall be deemed to

arise in the Contracting State in which the permanent establishmcnt is situated.

6. Where, by reason of a special relationShip between the payer and the beneficial

owner or between both of them and some other person, the amount of the comnission,

having regard to the activities for which it is paid, exceeds the amount which would

have been agreed upon by the payer and the beneficial owner in the absence of such

relationship, the provisions of this Anicle shall apply only to the last-mentioned amotult·

In that case, the ellce~~ pan of the payments shall remain taxat]e according to the laws

of each Contracting State, due regard being had to the other provisions of this Agreement.

AlI.llCLE IJ

Royalties

I. Royalties arising in a Contracting State and paid to a resident of the other

Contracting State may be taxed in tha! other State.

(b) However. such remuneration shall be taxable only in the other

Contracting State if the services are rendered in [hat State and the individual is a

resident of thut Stafe who

(i)

is a national of thaI State; or

(ii) did nOI become n resident of thal State solely for the purpose of

rendering the services.

') (a) Any pension paid by, or out of funds created by. a Conr.racting State

or a Icrrirorial-adminislfalive uniL thereof to an mdividual in respect of services

rendered to that Slate or unit shall be taxable only in thai State.

(b) However, such pension shall be taxable only in the other Contracting

State if the individual is a resident of. and a national of, that State.

J. The proVisions of Articles 16. 17 and 19 shall apply to remuneration and

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

a Conlfacting Slate or a territorial-administrative unit thereor.

....MncLE 21

Professors, Teachers and Researchers

A professor. a teacher or a researcher who makes a temponuy visit to a

I.

Contracting State for a period not exceeding two years for the purpose of teaching or

conducting research or a Unlvcrslty. college, school or other educational inslJtutioo.

and Yo ho IS. or immedIately before such VIsit was. a resident of the other Contracting

Stute shall be exempt from tax in [he first·mentioned Contracting Stale in rcspccl of

remuneration rorsuch teaching or research.

This Article ..hull not apply to income from research jf such research is

2. undertaken primarily for [he private benefit of a specific person or persons.

ARTICLE 22

Students and Trainees

Payments which a student or a trainee who is ~r was immediatel~ before vi~itjng

Contracting State a resident of the other ContractlDg State and who IS present In the

~rst-mentioned Contracting Stale solely for the purpose of his education or training

receives for the purpose of his maintenance. education or training shall not be taxed in

that State. provided that such payments arise from sources outside that State.

ARllCLE2J

Olher Income

I. hems of income of a resident of a Contracting Siale which arc nol expressly

mentioned in the foregoing Articles oflhis Agreemenl in respect of which he is subject

to tax in that Stale shall be taxable only in thai State.

2. TI,e provISions of parngraph I shall aot apply to income. other than income

from immovnble propeny as denaed in paragrnph 2 of Anicle 6, ii the recipient of

such income, being aresident of 1I Contracting Stille, carries on business in the other

Contracting Stdle through apennanent establishment situated therein, or perfonns in

thn! other Stale independent personal services from a nxed base situated therein, and

the right or property in respect of which the income is paid is cffectively connected

with such permanent cstablishmcnt or nxed base. In such case the provisions ofMiele

7 or Artiele 15, ns the case may be, shall apply.

ARllCLE24

Eliminatioll of Double Taxation

Double taxalion shall becliminated as follows

1. In the case of Romania, where aresidenr of Romania derives income or items

of income referred to in Articles 10, 11.12 and 13. or profits, or g.1ins or income from

the alienation of property which under the law of Malta and in accordance with this

Agreement may be taxed in Malta, Romania shall allow as a credit against its tax on

the income, items of income. profits, gains or on income from the alienation of property

an amount equal to the tax paid in Malta.

The amount of credil, however, shall nO( exceed the amount of Romanian tax on

that income, items of income, profits or gains, or on income from fhe alienation of

property computed in accordance with the taxation laws and regulations of Romania.

2. In the case of Malta, subjeci to Ihe provisions of the law of Malta regarding

the allowance of acredit against Malia lax in respect offorcign HIX r where. in accordance

with the provisions of Ihis Agreement. there is included in a Malta aSSCSlimem income

from sources within Romanill, the Romaniulllru on :>uch income ~hall be allowed as a

credit againsl the relative Malta tax pa)'able thereon.

3. For the purposes of allowance as a credit. the tax payable in Romania or

Malta. as Ihe context requires, shall be deemed to include the tax which is otherwise

payable in aContrncting Siale but has been reduced or waived by thai St1lte under its

legal provisions for lax incentives.

ARTla..E25

Non-Discrimination

J• The nationals of a Contracting State, whether or not residents of the mentioned

Contracting State, shall not be subjected in the other Conlracting Slate to any taxation

or any requirement connected lherewith which is other or more burdensome than the

taxation and connected requirements 10 which nationals of that other Stale in !.he same

circumstances are or may be subjected.

2. The taxation on a permanent establishment which an enterprise of a

Contructing State hn) in the other Conlractillg Stalt: ~haJJ not be less favourably levied

in that other Slate Ihan the taxation levied on emerprises oflhat other State carrying on

the same activities.

3. Except where the provisions of paragraph I of Anicle 9, paragraph 7 of Article

I I ,paragraph 6 of Article 12.or paragraph 60f Aniele 13 apply, interest, commission,

royalties and other disbursements paid by an enterpnse of a Contracting State to a

resident of the other Contracting State shall, for the purpose of determining the taxable

profits of such enterprise. be deductible under the same conditions as if they had been

paid to a resident of the first-mentioned State.

4. Enterprises of a Contracting State. the capital of which is wholly or partJy

owned or controlled. directly or indirect.ly, by one or more residents of the other

Contracting State. shall not be subjected in the first-mentioned Slate to any taxation or

any requirement connected therewith which is other or more burdensome than the

taxahon and connected requirements to which other SImilar enterprises of that first-

mentioned State an: or may be subjected.

5. NOIhing in this Article shall be: construed as obliging a Contracting State to

gram to individuals who are residents of the other Contracting State any personal

allowances, reliefs and reductions for tax purposes on account of civil status. family

responsibilities or any other personal circumstances which it grants to its own residents.

ARTICLE26

Mutual Agreement Procedure

I. Where a person considers that the actions of one or both of the Contracting

States result or will result for him in taxation not in accordance with the provisions of

this Agreement, he may. irrespective of the remedies provided by the domestic law of

those Slaies. present his case to the competent authority of the Contracting State of

which he is a resident or. if his case comes under paragraph I of Article 25. to that of

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

three years from the first notification of the oction resulting in taxation not in accordance

with the provisions of the Agreement.

2. The competent authority shall endeavour. if it is not itself able 10 arrive at a

satisfactory Solulion, to resolve the case by mutual agreement with the competent

authority o(theother Contracting State, with a view to the avoidance of laXation which

is not In accordance with the Agreement. Any agreement reached shall be implemented

notwithstanding any time limits in the domestic law of the Contracting Slates.

3. The competent authorilies of the Contracting States shall endeavour to resolve

by mutual agreement any difficulties or doubts arising as to the interpretation or

applicatIon of the Agreement. They may also consull IOgclher for the elimination of

double taxation in cases not provided for in the Agreement.

4. The competent authorities of the Contracting Slates may communicate with

each other directly for dle purpose of reaching an agreement in the sense of the preceding

paragraphs. When it seems ad\'isable in order to reach agreement to have an oral

ex.change of opinions. such ex.change may take place through a Commission consisting

of rcpresentatives of the competcnt authorities of the Contracting States.

AIl:T1CLE17

Exchange of Information

I. The competent authorities of the Contracling Slates shall exchange such

information as is necessary for carrying out the provisions of this Agreement or of the

domestIc laws of the Contracting States concerning taxes co\'ered by the Agreement

insofar as the laxation Ihereunder is not contrary 10 Ihe Agreement. The exchange of

information is nOI restricted b)' Article I. Any information received by a Conlf3eting

Slate shall be treated as secret in the same manner as infonmllion obtained under the

domestic laws of lhal State and shall be dIsclosed onl)' 10 authorilies (inclUding courts

and administrative bodies) involved in lheassessmem orcolledion of, the enforcement

or prosecution in respeel of. or the determination of appeals or the prevention of fiscal

evasion in relalion to. the taxes covered by the Agreement. Such authorities shall use

the infoonation only for such purposes. They may disclose the infomlation in public

court proceedings or in judicial decisions.

2. In no case shall the proviSIOns of paragraph 1 be construed so as to impose on

a Contracting State the obligillion

(a) to carry out administrative measures at variance wilh the laws and

administrative practice of that or of the other Contracting State;

(b) 10 suppl)' information which is not obtainable under the laws or in the

normal course of the administration of that or of the OIhcr Contracting State

(c) to supply information which would disclose any trade. business.

industrial.commercial or professional secret or trade process. or information. the

disclosure of which would be conlrary to public policy (ordre public).

ARTICLE 21

Members of Diplomatic Missions and Consular Posts

Nothing in this Agreement shall affect the fiscal privileges of members of

diplomatic missions or consular posts under the general rules of intemationallaw or

under the provisions of special agreements.

Entry into Force

1. The Contracting States shall notify each other that the constilUrional

requirements for the entry into force of this Agreement have been complied with.

2. This Agreement shall enter into force thirty days after the date of the later of

the notifications referred to in paragraph I and its provisions shall have effect in respect

of taxes on income derived during any calendar year or accounting period, as the case

may be, beginning on or after the first day of January immediately following the dale

on which the Agreement enters into force.

ARllCLEJO

Termination

This Agreement shall remain in force until terminated by a Contracting State.

Either Contracting State may tenninate the Agreement, through diplomatic channels.

by giving notice of termination at least six months before the end of any calendar year

beginning after the expiration of a period of five years from the date of its entry into

force. In such event, the Agreement shall cease 10 have effect in respect of taxes on

income derived during any calendar year or accounting period. as the case may be,

beginning on or after the hrst day of January immedIately followlflg the date on which

the notice is given.

IN WITNESS WHEREOF the undersigned, being duly authorised by their

respective Governments, have signed this Agreement.

DONE at Bucharest on the 30th November, 1995, in two original copies in the

Romanian and English languages. both texts being equally authentic. In case there is

any divergence of interpretation of the provisions of this Agreement, the English text

shall prevail.

FLORIN GEORGESCU

JOHN DALLI

FOR THE GOVERNMENT OF ROMANIA

FOR THE GOVERNMENT OF MALTA

PROTOCOL

At the moment of signing the Agreement between the Government of Romania

and the Government of Malta for the avoidance of double taxation and the prevention

of fiscal evasion with respect to taxes on income, the two parties have agreed upon the

following provisions, which will form an imegral part of the Agreement

With reference to Article 2. section 76 of the Income Tax Act in Malta provides

thai no double taxalion agreemenl concluded by Malta shall apply to tax paid or payable

in Malta in accordance with the provisions of subsection (13) of seclion 56 of the

Income Tax Act concerning the chargeable income of any person engaged in the

production of petroleum produced in Malta or any substantially similar provision which

is imposed after the date of signature of this Agreemem.

With reference to Article 7. each Contracting State shall tax the profits from the

business of in urance in accordance with the provisions of its own law.

With reference to Article 10. under the Malta law in force, income tax paid or

payable by a company, as is referable to that part of its profits which is distributed by

way of dividends, is assimilated with the personal income tax of the shareholder in

reccipt of such a dividend. In the shareholder's hands the dividend is charged to tax

gross and the relevant amount oftax. so assimilated, is set off against the shareholder's

lax liability on his income from all liable sources.

IN WITNESS WHEREOF the undersigned, being duly authorised thereto by their

respective Governments. have signed this Protocol.

DONE in duplicate al Bucharest this 30th day of November, 1995, in the Romanian

and English languages, all texts being equally authemic. In case there is any divergence

of interpretation of the provisions of this Protocol, the English text shall prevail.

FLORIN GEORGESCU

JOHN DALLI

FOR THE GOVERNMENT OF MALTA

FOR THE GOVERNMENT OF ROMANIA

l~ mld-Dlpa1irrm: la' 1.ln(omw.lpnl - J. P.Fza Kaslilja PubluhM bJ" ~ Drponntmt rf hlfon.~ _ J. Casrillt PlatY

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