Double Taxation Relief (Taxes on Income) (Hellenic Republic) (hellenicrepublic)

L.N. 268 of 2008

INCOME TAX ACT

(CAP. 123)

Double Taxation Relief (Taxes on Income) (Hellenic Republic)

Order, 2008

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

Tax Act, the Minister of Finance, the Economy and Investment has

made the following order>–

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

Income) (Hellenic Republic) Order, 2008.

It is hereby declared>–

CONVENTION

between Malta and the Hellenic Republic

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

taxes on income

The Government of Malta

and

the Government of the Hellenic Republic

Desiring to conclude a Convention for the avoidance of double taxation and the prevention

of fiscal evasion with respect to taxes on income

Have agreed as follows

CHAPTER I

SCOPE OF THE CONVENTION

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, 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 and salaries paid by

enterprises as well as taxes on capital appreciation.

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 Hellenic

Republic with a view to affording relief from double taxation in

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

Republic>–

–

the income tax on natural persons< and

–

the income tax on legal persons<

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

effect<

(c) that the Convention has entered into force on the 30

August, 2008.

The existing taxes to which the Convention shall apply are

a)

In the case of Malta

the income tax;

(hereinafter referred to as “Malta tax”);

b)

In the case of the Hellenic Republic

i) the income tax on natural persons;

ii) the income tax on legal persons;

(hereinafter referred to as "Hellenic 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.

CHAPTER II

DEFINITIONS

Article 3

GENERAL DEFINITIONS

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

the terms “a Contracting State” and “the other Contracting State” mean

Malta or the Hellenic Republic, as the context requires;

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

(including the United Nations Convention on the Law of the Sea -UNCLOS)

and its national law, including its legislation relating to the exploration of

the continental shelf and exploitation of its natural resources;

the term "Hellenic Republic" comprises the territory of the Hellenic

Republic including its territorial sea as well as the part of the sea, the sea-

bed and its subsoil under the Mediterranean Sea, over which the Hellenic

Republic, in accordance with its internal legislation and international law

(including the United Nations Convention on the Law of the Sea -

UNCLOS), has sovereign rights for the purpose of exploration, extraction or

exploitation of the natural resources of such areas;

the term “person” includes an individual, a company and any other body of

persons;

the term “company” means any body corporate or any entity which is treated

as a body corporate for tax purposes;

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;

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;

the term “international traffic” means any transport by a ship or aircraft,

except when the ship or aircraft is operated solely between places in a

Contracting State;

the term “competent authority” means

i)

in Malta, the Minister responsible for finance or his authorised

representative;

ii)

in the Hellenic Republic, the Minister of Economy and Finance or

his authorised representative.

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

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. 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

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);

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;

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;

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 Contracting 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.

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 six months;

b)

the furnishing of services, comprising technical assistance and consultancy

services, by an enterprise through employees or other personnel engaged by

the enterprise for such purpose, where the activities of that nature continue

for a period or periods amounting to or exceeding in the aggregate 120 days

in any twelve month period.

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

establishment" shall be deemed not to include

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

goods or merchandise belonging to the enterprise;

the maintenance of a stock of goods or merchandise belonging to the

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

the maintenance of a stock of goods or merchandise belonging to the

enterprise solely for the purpose of processing by another enterprise;

the maintenance of a fixed place of business solely for the purpose of

purchasing goods or merchandise, or of collecting information, for the

enterprise;

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;

the maintenance of a fixed place of business solely for any combination of

activities mentioned in subparagraphs a) to e), provided that the overall

activity of the fixed place of business resulting from the 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 8 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.

Notwithstanding the preceding provisions of this Article and the provisions of

Article 14, a person who is a resident of a Contracting State and carries on activities

in connection with preliminary surveys, exploration, extraction or exploitation of

natural resources situated in the other Contracting State shall be deemed to be

carrying on in respect of those activities a business in that other Contracting State

through a permanent establishment or a fixed base situated therein, unless such

activities are carried on for a period or periods not exceeding 30 days in the

aggregate in any twelve-month period. However, for the purposes of this paragraph

a)

where an enterprise carrying on activities in the other State is related to

another enterprise and that other enterprise continues as part of the same

project the same activities that are or were being carried on by the first-

mentioned enterprise, and the activities carried on by both enterprises exceed

- when added together - a period of 30 days, then each enterprise shall be

deemed to be carrying on its activities for a period exceeding 30 days in a

twelve-month period;

b)

two enterprises shall be deemed to be related if one is controlled directly or

indirectly by the other, or both are controlled directly or indirectly by a third

person.

An insurance enterprise of a Contracting State shall be deemed to have a permanent

establishment in the other Contracting State if it collects premiums in that other

State through an agent - other than an agent to whom paragraph 8 applies - or

insures risks situated in that other State through such an agent.

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.

However, when the activities of such an agent are devoted wholly or almost wholly

on behalf of that enterprise, he will not be considered an agent of an independent

status within the meaning of this paragraph.

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.

CHAPTER III

TAXATION OF INCOME

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,

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 are 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.

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 derived from the operation of ships engaged in international traffic shall be

taxable only in the Contracting State in which the ships are registered or by which

they are documented.

2. Subject to the provisions of paragraph 1, income derived by an enterprise of a

Contracting State in the operation of a ship in international traffic shall be taxable

only in that Contracting State.

3. Profits derived from the operation of aircraft in international traffic shall be taxable

only in the Contracting State in which the place of effective management of the

enterprise is situated.

4. The provisions of paragraphs 1, 2 and 3 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. a) Such dividends, however, 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 if the recipient is the beneficial owner of the dividends the tax so charged shall

not exceed

i)

5 per cent of the gross amount of the dividends if the beneficial owner is a

company (other than partnership) which holds directly at least 25 per cent of

the capital of the company paying the dividends;

ii)

10 per cent of the gross amount of the dividends in all other cases.

b) Notwithstanding the provisions of paragraph 2 a) where the dividends are paid by

a company which is a resident of Malta to a resident of the Hellenic Republic who is

the beneficial owner thereof, Malta tax charged on the gross amount of the

dividends, in accordance with its internal imputation system, shall not exceed that

charged 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. The competent authorities of the Contracting

States shall by mutual agreement settle the mode of application of these limitations.

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

“jouissance” shares or “jouissance” rights, 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

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 8 per cent of the gross amount of the

interest.

The competent authorities of the Contracting State shall by mutual

agreement settle the mode of application of this limitation.

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 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 payment shall remain taxable

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

provisions of this Convention.

7. The provisions of this Article shall not apply if the debt claim in respect of which

the interest is paid has been created or assigned mainly for the purpose of taking

advantage of this Article and not for valid commercial reasons. In such case the

amount of payments shall be taxed according to the laws of each Contracting State.

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 8 per cent of the gross

amount of the royalties. The competent authorities of the Contracting States shall

by mutual agreement settle the mode of applications of this limitation.

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 and films or tapes for television or

radio broadcasting or broadcasting by satellite, cables, optical fibers or similar

technology used for broadcasting, magnetic tapes, discs or laser discs, any patent,

trade mark, design or model, plan, secret formula or process, or for the use of, or the

right to use, industrial, commercial, or scientific equipment, 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 where 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

fixed base in connection with which the obligation to pay the royalties was incurred

and such royalties are borne by that 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.

7. The provisions of this Article shall not apply if the right or the property giving rise

to the royalties has been created or assigned mainly for the purpose of taking

advantage of this Article and not for valid commercial reasons. In such case the

amount of payments shall be taxable according to the laws of each Contracting

State.

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 consists 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 from the alienation of ships or aircraft operated in international traffic or

movable property pertaining to the operation of such ships or aircraft shall be

taxable only in the Contracting State in which the profits of such ships or aircraft are

taxable according to the provisions of Article 8.

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 an individual who is 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 if

a)

the individual has a fixed base regularly available to him in that other State

for the purpose of performing his activities, or

b)

the individual is present in the other State for a period or periods exceeding

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

ending in the fiscal year concerned,

but only so much thereof as is attributable to that fixed base or to services

performed in that 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 and 19, 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

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, may be taxed in the Contracting State in which the profits from

the operation of the ship or aircraft are taxable according to the provisions of Article

8.

4. Notwithstanding the preceding provisions, salaries, wages and other remuneration

derived by a resident of a Contracting State in respect of an employment connected

with activities mentioned in paragraph 6 of Article 5 carried on through a permanent

establishment or a fixed base in the other Contracting State, may be taxed in that

other 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 SPORTSPERSONS

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 sportsperson, 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

sportsperson, in his capacity as such accrues not to the entertainer or sportsperson,

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 sportsperson are exercised.

3. Notwithstanding the provisions of paragraphs 1 and 2, income derived from

activities referred to in paragraph 1 performed under cultural agreement or

arrangement between the Contracting States shall be exempt from tax in the

Contracting State in which the activities are exercised if the visit to that State is

wholly or substantially supported by public funds of the other Contracting State.

Article 18

PENSIONS

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.

Article 19

GOVERNMENT SERVICES

1. 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.

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. 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.

However, such pension shall be taxable only in the other Contracting State if

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

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

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 STUDENTS

1. Remuneration which a resident of a Contracting State receives for undertaking study

or research at a high level or for teaching, during a period not exceeding two years,

at a university, research institute or other similar establishment for highest or higher

education in the other Contracting State, shall not be taxable in that other State,

provided that this remuneration is taxed in the first-mentioned State.

2. 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 Contracting 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 21

OTHER INCOME

1. Items of income 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.

CHAPTER IV

METHODS FOR ELIMINATION OF DOUBLE TAXATION

Article 22

ELIMINATION OF DOUBLE TAXATION

1. Where a resident of a Contracting State derives income which, in accordance with

the provisions of this Convention, may be taxed in the other Contracting State, the

first - mentioned State shall allow as a deduction from the tax on the income of that

resident, an amount equal to the income tax paid in that other State.

Such deduction in either case shall not, however, exceed that part of the income tax,

as computed in accordance with the relevant provisions of the internal tax law of the

first-mentioned State before the deduction is given, which is attributable, as the case

may be, to the income which may be taxed in that other State.

2. Where dividends are paid by a company which is resident of Malta to a resident of

the Hellenic Republic, the tax taken into account for the deduction provided in

paragraph 1 shall not exceed that actually paid by the resident of the Hellenic

Republic. In no event, in such a case, the tax payable by the company in respect of

the profits out of which such dividends are paid shall be taken into account.

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.

CHAPTER V

SPECIAL PROVISIONS

Article 23

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. These provisions shall, notwithstanding the provisions of Article

1, also apply to persons who are not residents of one or both of the Contracting

States.

2. Stateless persons who are residents of a Contracting State shall not be subjected in

either Contracting State to any taxation or any requirement connected therewith,

which is other or more burdensome than the taxation and connected requirements to

which national of the State concerned in the same circumstances are or may be

subjected.

3. 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.

4. Except where the provisions of paragraph 1 of Article 9, paragraphs 6 and 7 of

Article 11, or paragraphs 6 and 7 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.

5. 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

requirements 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.

Article 24

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 provision 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 23, 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 of 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. When it seems advisable in order to reach agreement to have an oral

exchange of opinions, such exchange may take place through a Commission

consisting of representatives of the competent authorities of the Contracting States.

Article 25

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) involved in 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 (ordre public).

Article 26

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.

CHAPTER VI

FINAL PROVISIONS

Article 27

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

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 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.

(b)

in the Hellenic Republic

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

calendar year next following that in which the Convention enters into force.

Article 28

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 case to have effect

(a)

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.

(b)

in the Hellenic Republic

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

calendar year next following that in which the notice is given.

IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed

this Convention.

Done at Athens on 13 October, 2006 in two originals, in the Greek and English

languages, each text being equally authentic, the English text prevailing in case of doubt.

MICHAEL FRENDO

DORA BAKOYANNIS

For the Government

For the Government

of Malta

of the Hellenic Republic

Mitbug[ fl-Istamperija tal-Gvern — Printed at the Government Printing Press

€2.42