Double Taxation Relief (Taxes on Income) (repubblikatas-slovenja)

L.N. 145 of 2003

INCOME TAX ACT

(CAP. 123)

Double Taxation Relief (Taxes on Income)

(Republic of Slovenia) Order, 2003

IN exercise of the powers conferred by article 76 of the Income

Tax Act, the Minister of Finance and Economic Affairs has made the

following order:-

The title of this order is the Double Taxation Relief (Taxes on

Income) (Republic of Slovenia) Order, 2003.

Arrangements to

FTEHIM BEJN

MALTA U

R-REPUBBLIKA TAS-SLOVENJA

DWAR {ELSIEN MINN TAXXA DOPPJA

U L-PREVENZJONI TA’ EVA}JONI FISKALI

DWAR TAXXI FUQ L-INCOME

Malta u r-Repubblika tas-Slovenja, billi jixtiequ jag[mlu Ftehim dwar [elsien

minn taxxa doppja u l-prevenzjoni ta’ eva]joni fiskali dwar taxxi fuq l-income, ftehmu

kif ;ej>

Artiklu 1

PERSUNI KOPERTI

Dan il-Ftehim g[andu japplika g[al persuni li jkunu residenti fi Stat Kontraenti

wie[ed jew fit-tnejn li huma.

Artiklu 2

TAXXI KOPERTI

1. Dan il-Ftehim g[andu japplika g[al taxxi fuq l-income imposti f’isem xi Stat

Kontraenti jew is-sottodivi]jonijiet politiçi jew awtoritajiet lokali tieg[u,

irrispettivament mill-mod kif dawn jin;abru.

2. G[andhom jitqiesu b[ala taxxi fuq l-income dawk it-taxxi kollha imposti

fuq l-income totali, jew fuq elementi ta’ income, inklu]i taxxi fuq qlig[ mit-trasferiment

ta’ proprjetà mobbli jew immobbli u taxxi fuq l-ammonti totali ta’ pagi jew salarji

m[allsa mill-intrapri]i, kif ukoll taxxi fuq l-apprezzament tal-kapital.

It is hereby declared:-

have effect.

(a) that the arrangements specified in the Convention set

out in the Schedule to this Order have been made with the Republic

of Slovenia with a view to affording relief from double taxation in

relation to the following taxes imposed by the laws of the Republic

of Slovenia:-

–

the tax on profits of legal persons;-

– the tax on income of individuals, including wages

and salaries, income from agricultural activities, income from

business, capital gains and income from immovable property

and movable property;

(b) that it is expedient that those arrangements should have

effect;

(c) that the Convention has entered into force on the 12 June,

2003. SCHEDULE

CONVENTION BETWEEN

MALTA AND

THE REPUBLIC OF SLOVENIA

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME

Malta and the Republic of Slovenia, desiring to conclude a Convention for the

avoidance of double taxation and the prevention of fiscal evasion with respect to taxes

on income, have agreed as follows

Article 1

PERSONS COVERED

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 imposed on behalf of a

Contracting State or of its political subdivisions or local authorities, irrespective of the

manner in which they are levied.

2. There shall be regarded as taxes on income all taxes imposed on total income,

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

immovable property and taxes on the total amounts of wages or salaries paid by

enterprises, as well as taxes on capital appreciation.

The existing taxes to which this Convention shall apply are

(a)

in Slovenia

(i)

the tax on profits of legal persons;

(ii) the tax on income of individuals, including wages and salaries,

income from agricultural activities, income from business, capital gains and

income from immovable and movable property;

(hereinafter referred to as “Slovenian tax”);

(b) in Malta

the income tax;

(hereinafter referred to as “Malta tax”).

The Convention shall apply also to any identical or substantially similar taxes

which are imposed after the date of signature of the Convention in addition to, or in

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

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

taxation laws.

Article 3

GENERAL DEFINITIONS

1. For the purposes of this Convention, unless the context otherwise requires

(a) the term “Slovenia” means the Republic of Slovenia and, when used in

a geographical sense, the territory of Slovenia, including the sea area, sea bed and

sub-soil adjacent to the territorial sea, over which Slovenia may exercise its

sovereign rights and jurisdiction in accordance with its domestic legislation and

international law;

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

geographical sense, means the Island of Malta, the Island of Gozo and the other

islands of the Maltese archipelago including the territorial waters thereof, as well

as any area of the sea-bed, its sub-soil and the superjacent water column adjacent

to the territorial waters, wherein Malta exercises sovereign rights, jurisdiction, or

control in accordance with international law and its national law, including its

legislation relating to the exploration of the continental shelf and exploitation of

its natural resources;

(c) the terms “a Contracting State” and “the other Contracting State” mean

Slovenia or Malta, as the context requires;

(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 that 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 by a resident of a

Contracting State and an enterprise carried on by a resident of the other Contracting

State;

(g) the term “international traffic” means any transport by a ship or aircraft

operated by an enterprise of a Contracting State, except when the ship or aircraft

is operated solely between places in the other Contracting State;

(h) the term “competent authority” means

(i) in Slovenia: the Ministry of Finance of the Republic of Slovenia or

its authorised representative;

(ii) in Malta: the Minister responsible for finance or his authorised

representative;

(i)

the term “national” means

(i)

any individual possessing the nationality of a Contracting State;

(ii) any legal person, partnership or association deriving its status as

such from the laws in force in a Contracting State.

2. As regards the application of the Convention at any time by a Contracting

State, any term not defined therein shall, unless the context otherwise requires, have

the meaning that it has at that time under the law of that State for the purposes of the

taxes to which the Convention applies, any meaning under the applicable tax laws of

that State prevailing over a meaning given to the term under other laws of that State.

Article 4

RESIDENT

1. For the purposes of this Convention, the term “resident of a Contracting State”

means any person who, under the laws of that State, is liable to tax therein by reason of

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

and also includes that State and any political subdivision or local authority thereof.

This term, however, does not include any person who is liable to tax in that State in

respect only of income from sources in that State.

2. Where by reason of the provisions 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 only of the State in which he has a

permanent home available to him; if he has a permanent home available to him in

both States, he shall be deemed to be a resident only of the State with which his

personal and economic relations are closer (centre of vital interests);

(b) if the State in which he has his centre of vital interests cannot be

determined, or if he has not a permanent home available to him in either State, he

shall be deemed to be a resident only of the State in which he has an habitual

abode;

(c) if he has an habitual abode in both States or in neither of them, he shall

be deemed to be a resident only of the State of which he is a national;

(d) if he is a national of both States or of neither of them, the competent

authorities of the Contracting States shall settle 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 only of the State in which its place of effective management is situated.

Article 5

PERMANENT ESTABLISHMENT

1. For the purposes of this Convention, 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 “permanent establishment” includes especially

(a) a place of management;

(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop; and

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

natural resources including an offshore drilling site.

3. The term “permanent establishment” likewise encompasses

(a) a building site, a construction, assembly or installation project or

supervisory activities in connection therewith, but only where such site, project

or activities continue for a period of more than nine months;

(b) the furnishing of services, including consultancy services, by an

enterprise through employees or other personnel engaged by the enterprise for

such purpose, but only where activities of that nature continue (for the same or a

connected project) within a Contracting State for a period or periods aggregating

more than six months within any twelve-month period.

4. Notwithstanding the preceding provisions of this Article, the term “permanent

establishment” shall be deemed not to include

(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 delivery;

B

(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 of collecting information, for the enterprise;

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

carrying on, for the enterprise, any other activity of a preparatory or auxiliary

character;

(f) the maintenance of a fixed place of business solely for any combination

of activities mentioned in sub-paragraphs (a) to (e), provided that the overall activity

of the fixed place of business resulting from this combination is of a preparatory

or auxiliary character.

Notwithstanding the provisions of paragraphs 1 and 2, where a person - other

than an agent of an independent status to whom paragraph 6 applies - is acting on

behalf of an enterprise and has, and habitually exercises, in a Contracting State an

authority to conclude contracts in the name of the enterprise, that enterprise shall be

deemed to have a permanent establishment in that State in respect of any activities

which that person undertakes for the enterprise, unless the activities of such person are

limited to those mentioned in paragraph 4 which, if exercised through a fixed place of

business, would not make this fixed place of business a permanent establishment under

the provisions of that paragraph.

An enterprise shall not be deemed to have a permanent establishment in a

Contracting State merely because it carries on business in that State through a broker,

general commission agent or any other agent of an independent status, provided that

such persons are acting in the ordinary course of their business.

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 establishment or

otherwise), shall not of itself constitute either company a permanent establishment of

the other.

Article 6

INCOME FROM IMMOVABLE PROPERTY

1. Income derived by a resident of a Contracting State from immovable property

(including income from agriculture or forestry) situated in the other Contracting State

may be taxed in that other State.

2. The term “immovable property” shall have the meaning which it has under

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

shall in any case include property accessory to immovable property, livestock and

equipment used in agriculture and forestry, rights to which the provisions of general

law respecting landed property apply, usufruct of immovable property and rights to

variable or fixed payments as consideration for the working of, or the right to work, or

to explore for, mineral deposits, sources and other natural resources; ships, boats and

aircraft shall not be regarded as immovable property.

3. The provisions of paragraph 1 shall apply to income derived from the direct

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

4. The provisions of paragraphs 1 and 3 shall also apply to the income from

immovable property of an enterprise and to income from immovable property used for

the performance of independent personal services.

Article 7

BUSINESS PROFITS

1. The profits of an enterprise of a Contracting State shall be taxable only in that

State unless the enterprise carries on business in the other Contracting State through a

permanent establishment situated therein. If the enterprise carries on business as

aforesaid, the profits of the enterprise may be taxed in the other State but only so much

of them as is attributable to that permanent establishment.

2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting

State carries on business in the other Contracting State through a permanent

establishment situated therein, there shall in each Contracting State be attributed to that

permanent establishment the profits which it might be expected to make if it were a

distinct and separate enterprise engaged in the same or similar activities under the

same or similar conditions and dealing wholly independently with the enterprise of

which it is a permanent establishment.

3. In determining the profits of a permanent establishment, there shall be allowed

as deductions expenses which are incurred for the purposes of the permanent

establishment, including executive and general administrative expenses so incurred,

whether in the Contracting State in which the permanent establishment is situated or

elsewhere.

4. Insofar as it has been customary in a Contracting State to determine the profits

to be attributed to a permanent establishment on the basis of an apportionment of the

total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude

that Contracting State from determining the profits to be taxed by such an apportionment

as may be customary; the method of apportionment adopted shall, however, be such

that the result shall be in accordance with the principles contained in this Article.

B

5. No profits shall be attributed to a permanent 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 year

unless there is good and sufficient reason to the contrary.

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

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

affected by the provisions of this Article.

Article 8

SHIPPING AND AIR TRANSPORT

1. Profits of an enterprise of a Contracting State from the operation of ships or

aircraft in international traffic shall be taxable only in that State.

2. The provisions of paragraph 1 shall also apply to profits from the participation

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

Article 9

ASSOCIATED ENTERPRISES

1. Where

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

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

or

(b) the same persons participate 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 are 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 taxes 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 the enterprise of the first-mentioned State if the conditions

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

independent enterprises, then that other State shall make an appropriate adjustment to

the amount of the tax charged therein on those profits. In determining such adjustment,

due regard shall be had to the other provisions of this Convention and the competent

authorities of the Contracting States shall if necessary consult each other.

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 in that other State.

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

the company paying the dividends is a resident and according to the laws of that State,

but

(a) where the dividends are paid by a company which is a resident of

Slovenia to a resident of Malta who is the beneficial owner thereof, the Slovenian

tax so charged shall not exceed

(i) 5 per cent of the gross amount of the dividends if the beneficial

owner is a company which holds directly at least 25 per cent of the capital of

the company paying the dividends;

(ii) 15 per cent of the gross amount of the dividends in all other cases;

(b) where the dividends are paid by a company which is a resident of Malta

to a resident of Slovenia who is the beneficial owner thereof, Malta tax on the

gross amount of the dividends shall not exceed that chargeable on the profits out

of which the dividends are paid.

This paragraph shall not affect the taxation of the company in respect of the profits

out of which the dividends are paid.

3. The term “dividends” as used in this Article means income from shares, mining

shares, founders’ shares or other rights, not being debt-claims, participating in profits,

as well as income from other corporate rights which is subjected to the same taxation

treatment as income from shares by the laws of the State of which the company making

the distribution is a resident.

4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner

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

B

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

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

the dividends are paid is effectively connected with such permanent establishment or

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

shall apply.

5. Where a company which is a resident of a Contracting State derives profits or

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

the dividends paid by the company, except insofar as such dividends are paid to a

resident of that other State or insofar as the holding in respect of which the dividends

are paid is effectively connected with a permanent establishment or a fixed base situated

in that other State, nor subject the company’s undistributed profits to a tax on the

company’s undistributed profits, even if the dividends paid or the undistributed profits

consist wholly or partly of profits or income arising in such other 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 also be taxed in the Contracting State in which it

arises, and according to the laws of that State, but if the recipient is the beneficial

owner of the interest, the tax so charged shall not exceed 5 per cent of the gross amount

of the interest.

3. The term “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 right to

participate in the debtor’s profits, and in particular, income from government securities

and income from bonds or debentures, including premiums and prizes attaching to

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

regarded as interest for the purpose of this Article.

4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner

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 performs in that other State independent personal 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 case the provisions

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

5. Interest shall be deemed to arise in a Contracting State when the payer is that

State itself, a political subdivision, a local 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 or a fixed base in connection

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

is borne by such permanent establishment or fixed base, then such interest shall be

deemed to arise in the State in which the permanent establishment or fixed base 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 interest,

having regard to the debt-claim 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 Article shall apply only to the last-mentioned amount.

In such case, the excess part of the payments shall remain taxable according to the

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

Convention.

Article 12

ROYALTIES

1. Royalties 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 royalties may also be taxed in the Contracting State in which

they arise and according to the laws of that State, but if the recipient is the beneficial

owner of the royalties, the tax so charged shall not exceed 5 per cent of the gross

amount of such royalties.

3. The term “royalties” as used in this Article means payments of any kind

received as a consideration for the use of, or the right to use, any copyright of literary,

artistic or scientific work including cinematograph films, any patent, trade mark, design

or model, plan, secret formula or process, or for information concerning industrial,

commercial or scientific experience.

4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner

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

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

situated therein, or performs in that other State independent personal services from a

fixed base situated therein, and the right or property in respect of which the royalties

are paid is effectively connected with such permanent establishment or fixed base. In

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

5. Royalties shall be deemed to arise in a Contracting State when the payer is

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

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

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

fixed base in connection with which the liability to pay the royalties was incurred, and

B

such royalties are borne by such permanent establishment or fixed base, then such

royalties shall be deemed to arise in the State in which the permanent establishment or

fixed base 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 royalties,

having regard to the use, right or information for which they are 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 Article shall apply only to the

last-mentioned amount. In such case, the excess part of the payments shall remain

taxable according to the laws of each Contracting State, due regard being had to the

other provisions of this Convention.

Article 13

CAPITAL GAINS

1. Gains derived by a resident of a Contracting State from the alienation of

immovable property referred to in Article 6 and situated in the other Contracting State

may be taxed in that other State.

2. Gains from the alienation of shares or comparable interests in a company the

assets of which consist directly or indirectly principally of immovable property situated

in a Contracting State may be taxed in that State.

3. Gains from the alienation of movable property forming part of the business

property of a permanent establishment which an enterprise of a Contracting State has

in the other Contracting State or of movable property pertaining to a fixed base available

to a resident of a Contracting State in the other Contracting State for the purpose of

performing independent personal services, including such gains from the alienation of

such a permanent establishment (alone or with the whole enterprise) or of such fixed

base, may be taxed in that other State.

4. Gains derived by an enterprise of a Contracting State from the alienation of

ships or aircraft operated in international traffic, or from movable property pertaining

to the operation of such ships or aircraft, shall be taxable only in that State.

5. Gains from the alienation of any property other than that referred to in

paragraphs 1, 2, 3 and 4 shall be taxable only in the Contracting State of which the

alienator is a resident.

Article 14

INDEPENDENT PERSONAL SERVICES

1. Income derived by a resident of a Contracting State in respect of professional

services or other activities of an independent character shall be taxable only in that

State. However, such income may be taxed in the other Contracting State in the

following circumstances

(a) if he has a fixed base regularly available to him in the other Contracting

State for the purpose of performing his activities; in that case, only so much of the

income as is attributable to that fixed base may be taxed in that other Contracting

State; or

(b) if his stay in the other Contracting State is for a period or periods

amounting to or exceeding in the aggregate 183 days in any twelve-month period

commencing or ending in the fiscal year concerned; in that case, only so much of

the income as is derived from the activity exercised in the other Contracting State

may be taxed in that other State.

2. The term “professional services” includes especially independent scientific,

literary, artistic, educational or teaching activities as well as the independent activities

of physicians, lawyers, engineers, architects, dentists and accountants.

Article 15

DEPENDENT PERSONAL SERVICES

1. Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and

other similar remuneration derived by a resident of a Contracting State in respect of an

employment shall be taxable only in that State unless the employment is exercised in

the other Contracting State. If the employment is so exercised, such remuneration as

is derived therefrom may be taxed in that other State.

2. Notwithstanding the provisions of paragraph 1, remuneration derived by a

resident of a Contracting State in respect of an employment exercised in the other

Contracting State shall be taxable only in the first-mentioned State if

(a) the recipient is present in the other State for a period or periods not

exceeding in the aggregate 183 days in any twelve-month period commencing or

ending in the fiscal year concerned, and

(b) the remuneration is paid by, or on behalf of, an employer who is not a

resident of the other State, and

B

(c) the remuneration is not borne by a permanent establishment or a fixed

base which the employer has in the other State.

3. Notwithstanding the preceding provisions of this Article, remuneration derived

in respect of an employment exercised aboard a ship or aircraft operated in international

traffic by an enterprise of a Contracting State may be taxed in that State.

Article 16

DIRECTORS’ FEES

Directors’ fees and other similar payments derived by a resident of a Contracting

State in his capacity as a member of the board of directors of a company which is a

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

Article 17

ARTISTES AND SPORTSMEN

1. Notwithstanding the provisions of Articles 14 and 15, income derived by a

resident of a Contracting State as an entertainer, such as a theatre, motion picture,

radio or television artiste, or a musician, or as a sportsman, from his personal activities

as such exercised in the other Contracting State, may be taxed in that other State.

2. Where income in respect of personal activities exercised by an entertainer or

a sportsman in his capacity as such accrues not to the entertainer or sportsman himself

but to another person, that income may, notwithstanding the provisions of Articles 7,

14 and 15, be taxed in the Contracting State in which the activities of the entertainer or

sportsman are exercised.

3. The provisions of paragraphs 1 and 2, shall not apply to income from activities

performed in a Contracting State by entertainers or sportsmen if the activities are

substantially supported by public funds of one or both of the Contracting States or of

political subdivisions or local authorities thereof. In such a case, the income shall be

taxable only in the Contracting State of which the entertainer or sportsman is a resident.

Article 18

PENSIONS AND SOCIAL SECURITY PAYMENTS

1. Subject to the provisions of paragraph 2 of Article 19, pensions and other

similar remuneration paid to a resident of a Contracting State in consideration of past

employment shall be taxable only in that State.

2. Notwithstanding the provisions of paragraph 1, pensions paid and other

payments made under the social security legislation of a Contracting State may be

taxed in that State.

Article 19

GOVERNMENT SERVICE

1. (a) Salaries, wages and other similar remuneration, other than a pension,

paid by a Contracting State or a political subdivision or a local authority thereof to an

individual in respect of services rendered to that State or subdivision or authority shall

be taxable only in that State.

(b) However, such salaries, wages and other similar remuneration shall be

taxable only in the other Contracting State if the services are rendered in that State and

the individual is a resident of that State who

(i)

is a national of that State; or

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

rendering the services.

2. (a) Any pension paid by, or out of funds created by, a Contracting State or

a political subdivision or a local authority thereof to an individual in respect of services

rendered to that State or subdivision or authority shall be taxable only in that 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.

3. The provisions of Articles 15, 16, 17 and 18 shall apply to salaries, wages

and other similar remuneration, and to pensions, in respect of services rendered in

connection with a business carried on by a Contracting State or a political subdivision

or a local authority thereof.

Article 20

PROFESSORS AND RESEARCHERS

1. A resident of one of the Contracting States who, at the invitation of a university,

college, school, or other recognised educational institution situated in the other

Contracting State, is temporarily present in the other State solely for the purpose of

teaching, or engaging in research, or both, at the educational institution shall, for a

period not exceeding two years from the date he first arrives in the other State, be

exempt from tax by the other State on his remuneration for such teaching or research,

B

provided that such remuneration is derived by him from sources outside that other

State. If the visit exceeds two years, the other State may tax the individual under its

national law for the entire period of the visit, unless in a particular case the competent

authorities of the States agree otherwise.

2. No exemption shall be granted under paragraph 1 with respect to any

remuneration for research carried on for the benefit of any person other than the

educational institution that extended the invitation referred to in paragraph 1.

Article 21

STUDENTS AND BUSINESS APPRENTICES

Payments which a student or business apprentice who is or was immediately

before visiting a Contracting State a resident of the other Contracting State and who is

present in the first-mentioned State 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.

Article 22

OTHER INCOME

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

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

State.

2. The provisions of paragraph 1 shall not apply to income, other than income

from immovable property as defined in paragraph 2 of Article 6, if the recipient of

such 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 independent personal services from a fixed base situated therein, and

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

with such permanent establishment or fixed base. In such case, the provisions of Article

7 or Article 14, as the case may be, shall apply.

Article 23

ELIMINATION OF DOUBLE TAXATION

1. In the case of Slovenia, double taxation shall be eliminated as follows

Where a resident of Slovenia derives income which, in accordance with the

provisions of this Convention, may be taxed in Malta, Slovenia shall allow as a deduction

from the tax on the income of that resident, an amount equal to the income tax paid in

Malta. Such deduction shall not, however, exceed that portion of the income tax as

computed before the deduction is given, which is attributable to the income which

may be taxed in Malta.

2. In the case of Malta, double taxation shall be eliminated as follows

Subject to the provisions of the law of Malta regarding the allowance of a credit

against Malta tax in respect of foreign tax, where, in accordance with the provisions of

this Convention, there is included in a Malta assessment income from sources within

Slovenia, the Slovenian tax on such income shall be allowed as a credit against the

relative Malta tax payable thereon.

3. Where in accordance with any provision of the Convention income derived

by a resident of a Contracting State is exempt from tax in that State, such State may

nevertheless, in calculating the amount of tax on the remaining income of such resident,

take into account the exempted income.

Article 24

NON-DISCRIMINATION

1. Nationals of a Contracting State shall not be subjected in the other Contracting

State to any taxation or any requirement connected therewith which is other or more

burdensome than the taxation and connected requirements to which nationals of that

other State in the same circumstances, in particular with respect to residence, are or

may be subjected. This provision shall, notwithstanding the provisions of Article 1,

also apply to persons who are not residents of one or both of the Contracting States.

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

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

in that other State than the taxation levied on enterprises of that other State carrying

on the same activities. This provision shall not be construed as obliging a Contracting

State to grant to residents of the other Contracting State any personal allowances,

reliefs and reductions for taxation purposes on account of civil status or family

responsibilities which it grants to its own residents.

3. Except where the provisions of paragraph 1 of Article 9, paragraph 6 of Article

11, or paragraph 6 of Article 12 apply, interest, royalties and other disbursements paid

by an enterprise 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.

B

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

owned or controlled, directly or indirectly, by one or more residents of the other

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

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

taxation and connected requirements to which other similar enterprises of the first-

mentioned State are or may be subjected.

5. The provisions of this Article shall apply to taxes covered by this Convention.

Article 25

MUTUAL AGREEMENT PROCEDURE

1. 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 Convention, he may, irrespective of the remedies provided by the domestic law of

those States, present his case to the competent authority of the Contracting State of

which he is a resident or, if his case comes under paragraph 1 of Article 24, 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 action resulting in taxation not in accordance

with the provisions of the Convention.

2. The competent authority shall endeavour, if the objection appears to it to be

justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case

by mutual agreement with the competent authority of the other Contracting State, with

a view to the avoidance of taxation which is not in accordance with the Convention.

Any agreement reached shall be implemented notwithstanding any time limits in the

domestic law of the Contracting States.

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

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

application 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 Contracting States may communicate with

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

paragraphs.

Article 26

EXCHANGE OF INFORMATION

1. The competent authorities of the Contracting States shall exchange such

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

domestic laws of the Contracting States concerning taxes covered by the Convention

insofar as the taxation thereunder is not contrary to the Convention. The exchange of

information is not restricted by Article 1. Any information received by a Contracting

State shall be treated as secret in the same manner as information obtained under the

domestic laws of that State and shall be disclosed only to persons or authorities

(including courts and administrative bodies) concerned with the assessment or collection

of, the enforcement or prosecution in respect of, or the determination of appeals in

relation to, the taxes covered by the Convention. Such persons or authorities shall use

the information only for such purposes. They may disclose the information 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 obligation

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

administrative practice of that or of the other Contracting State;

(b) to supply information which is not obtainable under the laws or in the

normal course of the administration of that or of the other 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 contrary to public policy (order public).

Article 27

LIMITATION OF BENEFITS

The provisions of this Convention shall not apply to persons entitled to any special

tax benefit under a law of either one of the Contracting States or any substantially

similar law subsequently enacted and which is identified by the Contracting States.

Article 28

MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

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

diplomatic missions or consular posts under the general rules of international law or

under the provisions of special agreements.

B

Article 29

ENTRY INTO FORCE

1. The Contracting States shall notify each other, through diplomatic channels,

that the legal requirements for the entry into force of this Convention have been complied

with.

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

the notifications referred to in paragraph 1 and its provisions shall have effect

(a)

in Slovenia

in respect of income derived in any fiscal year beginning on or after the

first day of January next following the calendar year in which the Convention

enters into force;

(b) in Malta

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 date on which the Convention enters into

force.

Article 30

TERMINATION

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

Either Contracting State may terminate the Convention, 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 Convention shall cease to have effect

(a)

in Slovenia

in respect of income derived in any fiscal year beginning on or after the

first day of January next following the calendar year in which the notice of

termination is given;

(b) in Malta

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 date on which the notice is given.

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

respective Governments, have signed this Convention.

DONE at Valletta this 8th day of October, 2002 in duplicate in the English and

Slovenian languages, both texts being equally authentic. In the case of divergence

between the two texts, the English text shall prevail.

For Malta

For The Republic of Slovenia

Joseph Scicluna

Samuel Zbogar

Permanent Secretary

State Secretary

Ministry of Finance

Ministry of Foreign Affairs

PROTOCOL

At the signing of the Convention between Malta and the Republic of Slovenia for

the avoidance of double taxation and the prevention of fiscal evasion with respect to

taxes on income, the undersigned have agreed that

With reference to Article 27

It is understood that in the case of Malta the persons who are entitled to a special

tax benefit referred to in Article 27 are the following

a) persons who are entitled to a special tax benefit under the Malta Financial

Services Centre Act (Cap. 330) except for those persons who opt under section 41

of the said Act to be subject to the normal provisions of the Income Tax Act (Cap.

123) and the Income Tax Management Act, 1994;

b) persons who and to the extent to which under the provisions of the

Merchant Shipping Act, 1973 are not subject to tax on the profits derived from

the operation of ships in international traffic;

c) persons entitled to any special tax benefit in respect of distributions by

a trust subject to the provisions of the Trusts Act given that a trust as laid down in

that Act is not vested with legal personality and therefore cannot benefit under

this Convention in its own right; and

d) persons entitled to any special tax benefit under any substantially similar

law subsequently enacted which is considered in mutual agreement by the

competent authorities of the Contracting States as special fiscal treatment within

the meaning of Article 27 of this Convention.

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

respective Governments have signed this Protocol.

DONE at Valletta this 8th day of October, 2002 in duplicate in the English and

Sovenian languages, both texts being equally authentic. In the case of divergence

between the two texts, the English text shall prevail.

For Malta

For The Republic of Slovenia

Joseph Scicluna

Samuel Zbogar

Permanent Secretary

State Secretary

Ministry of Finance

Ministry of Foreign Affairs