Double Taxation Relief (Taxes on Income)

L.N. 119 of 2013

INCOME TAX ACT

(CAP. 123)

Double Taxation Relief (Taxes on Income)

(The Oriental Republic of Uruguay) Order, 2013

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:-

This title of this order is the Double Taxation Relief (Taxes

on Income) (The Oriental Republic of Uruguay) Order, 2013.

(Article 2)

CONVENTION

BETWEEN

MALTA

AND

THE ORIENTAL REPUBLIC OF URUGUAY

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL

Malta and

the Oriental Republic of Uruguay

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

prevention of fiscal evasion with respect to taxes on income and on capital,

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 and on capital 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 and on capital all taxes

imposed on total income, on total capital, or on elements of income or of capital,

including taxes on gains from the alienation of movable or immovable property,

taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes

on capital appreciation.

It is hereby declared

(a)

that the arrangements specified in the Convention

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

Oriental Republic of Uruguay with a view to affording relief

from double taxation in relation to the following taxes imposed

by the laws of the Oriental Republic of Uruguay

(i) the tax on business income (Impuesto a las

Rentas de las Actividades Económicas -IRAE-);

(ii) the personal income tax (Impuesto a las

Rentas de las Personas Físicas -IRPF-);

(iii) the non-residents income tax (Impuesto a las

Rentas de los No Residentes -IRNR-);

(iv) the tax for social security assistance

(Impuesto de Asistencia a la Seguridad Social -IASS-);

(v)

the capital tax (Impuesto al Patrimonio -IP-);

(b) that it is expedient that those arrangements should

have effect;

(c)

that the Convention has entered into force on the 13

December 2012.

The existing taxes to which the Convention shall apply are in particular

a)

in Malta

the income tax;

(hereinafter referred to as "Malta tax");

(b)

in Uruguay

(i) the tax on business income (Impuesto a las Rentas de las

Actividades Económicas -IRAE- );

(ii) the personal income tax (Impuesto a las Rentas de las

Personas Físicas -IRPF-);

(iii) the non-residents income tax (Impuesto a las Rentas de los

No Residentes -IRNR-);

(iv) the tax for social security assistance (Impuesto de

Asistencia a la Seguridad Social -IASS-); and

(v)

the capital tax (Impuesto al Patrimonio -IP-);

(hereinafter referred to as "Uruguayan 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 that have been made in

their taxation laws.

CHAPTER II

DEFINITIONS

Article 3

GENERAL DEFINITIONS

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

requires

a)

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 exploration of its natural resources;

b)

the term "Uruguay" means the territory of the Oriental Republic

of Uruguay, and when used in a geographical sense means the territory on

which the tax laws are applied, including the airspace, the maritime areas,

under Uruguayan sovereign rights or jurisdiction in accordance with

international law and national law;

c)

the terms "a Contracting State" and "the other Contracting State"

means Malta or Uruguay, as the context requires;

d)

the term "person" includes an individual, a collective investment

scheme, 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 term "enterprise" applies to the carrying on of any business;

g)

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;

h)

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;

i)

the term "competent authority" means

(i) in Malta, the Minister responsible for finance or his

authorized representative;

(ii) in Uruguay, the Minister of Economy and Finance or his

authorized representative;

j)

the term "national", in relation to a Contracting State, means

(i) any individual possessing the nationality or citizenship of

that Contracting State; and

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

status as such from the laws in force in that Contracting State;

k)

the term "business" includes the performance of professional

services and of other activities of an independent character.

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 incorporation, 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 or capital situated therein.

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.

3. The term "permanent establishment" likewise includes

a)

a building site or a construction or installation or assembly

project or inspection related activities, only if it lasts more than six 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 if 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;

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 subparagraphs 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.

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.

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 State in which the permanent establishment is situated

or elsewhere.

4. 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.

5. 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.

6. 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. For the purposes of this Article, profits derived from the operation of

ships or aircraft in international traffic include profits derived from the rental of

ships or aircraft if such ships or aircraft are operated in international traffic or if

such rental profits are incidental to other profits described in paragraph 1 of this

Article.

3. 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.

3. The provisions of paragraph 2 shall not apply in cases where one or

more transactions leading to an adjustment of profits in accordance with paragraph

1 are regarded as fraudulent according to a judicial decision.

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

Uruguay to a resident of Malta who is the beneficial owner thereof, the tax so

charged in Uruguay shall not exceed

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

beneficial owner is a company (other than a partnership) which holds

directly at least 25 per cent of the capital of the company paying the

dividends or if the beneficial owner is a collective investment scheme;

(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 Uruguay 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.

The competent authorities of the Contracting States shall by mutual

agreement settle the mode of application of these limitations.

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,

"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 and the holding in

respect of which the dividends are paid is effectively connected with such

permanent establishment. In such case the provisions of Article 7 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

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 beneficial owner

of the interest is a resident of the other Contracting State, the tax so charged shall

not exceed 10 per cent of the gross amount of the interest. The competent

authorities of the Contracting States 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 and the debt-claim in respect of which the interest is

paid is effectively connected with such permanent establishment. In such case the

provisions of Article 7 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 in connection with which the indebtedness on which the

interest is paid was incurred, and such interest is borne by such permanent

establishment then such interest shall be deemed to arise in the State in which the

permanent establishment 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 in force in that State, but if the

beneficial owner of the royalties is a resident of the other Contracting State, the tax

so charged shall not exceed

a)

5 per cent of the gross amount of the royalties for the use of, or

the right to use, any industrial, commercial or scientific equipment, and

copyright of literary, artistic or scientific work;

b)

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

The competent authorities of the Contracting States shall by mutual

agreement settle the mode of application 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, 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 and the right or property in respect of which the

royalties are paid is effectively connected with such permanent establishment. In such

case the provisions of Article 7 shall apply.

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

is a resident of that State. Where, however, the person paying the royalties,

whether a resident of a Contracting State or not, has in a Contracting State a

permanent establishment in connection with which the obligation to pay the

royalties was incurred, and such royalties are borne by such permanent

establishment, then such royalties shall be deemed to arise in the State in which the

permanent establishment 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 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, including such gains from the

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

may be taxed in that other State.

3. 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.

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

shares deriving more than 50 per cent of their value directly or indirectly from

immovable property situated in the other Contracting State may be taxed in that

other 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

INCOME FROM EMPLOYMENT

1. Subject to the provisions of Articles 15, 17 and 18 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

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 15

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 16

ARTISTES AND SPORTSMEN

1. Notwithstanding the provisions of Articles 7 and 14, 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 and 14, be taxed in the Contracting State in which the

activities of the entertainer or sportsman are exercised.

Article 17

PENSIONS

Subject to the provisions of paragraph 2 of Article 18, 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 18

GOVERNMENT SERVICE

1. a)

Salaries, wages and other similar remuneration 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)

Notwithstanding the provisions of paragraph 1, pensions and

other similar remuneration 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 pensions and other similar remuneration 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 14, 15, 16, and 17 shall apply to salaries,

wages, pensions, and other similar remuneration 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 19

STUDENTS

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 20

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 and the right or property in respect of which the income is paid is

effectively connected with such permanent establishment. In such case the

provisions of Article 7 shall apply.

CHAPTER IV

TAXATION OF CAPITAL

Article 21

CAPITAL

1. Capital represented by immovable property referred to in Article 6,

owned by a resident of a Contracting State and situated in the other Contracting

State, may be taxed in that other State.

2. Capital represented by 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 may be taxed in that other State.

3. Capital represented by ships and aircraft operated in international traffic

and by movable property pertaining to the operation of such ships and aircraft,

shall be taxable only in the Contracting State of the enterprise.

4. All other elements of capital of a resident of a Contracting State shall be

taxable only in that State.

CHAPTER V

METHODS FOR ELIMINATION OF DOUBLE TAXATION

Article 22

ELIMINATION OF DOUBLE TAXATION

1. 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 Uruguay, the Uruguayan tax on such income shall be allowed

as a credit against the relative Malta tax payable thereon.

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

a)

residents in Uruguay, deriving income which has, in accordance

with Malta law and under the provisions of this Convention, been subject to

taxation in Malta, may credit the tax so paid against any Uruguayan tax

payable in respect of the same income, subject to the applicable provisions of

the law of Uruguay. The same shall also apply in respect of capital which has,

in accordance with Malta law and under the provisions of this Convention,

been subject to taxation in Malta; the capital tax so paid may be credited

against any Uruguayan tax payable in respect of the same capital, subject to

the applicable provisions of the law of Uruguay. Such deduction shall not,

however, exceed that part of the Uruguayan tax on income or capital, as

computed before the deduction is given;

b)

where, in accordance with any provision of the Convention,

income derived or capital owned by a resident of Uruguay is exempt from tax

in Uruguay, Uruguay may nevertheless, in calculating the amount of tax on

the remaining income or capital of such resident, take into account the

exempted income or capital.

CHAPTER VI

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. 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. Similarly, any debts of an enterprise of a

Contracting State to a resident of the other Contracting State shall, for the purpose

of determining the taxable capital of such enterprise, be deductible under the same

conditions as if they had been contracted to a resident of the first-mentioned State.

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, notwithstanding the provisions of

Article 2, apply to taxes of every kind and description.

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 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 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 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, including through a joint commission consisting of

themselves or their representatives, for the purpose of reaching an agreement in the

sense of the preceding paragraphs.

Article 25

EXCHANGE OF INFORMATION

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

information as is foreseeably relevant for carrying out the provisions of this

Convention or to the administration or enforcement of the domestic laws

concerning taxes of every kind and description imposed on behalf of the

Contracting States, or of their political subdivisions or local authorities, insofar as

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

information is not restricted by Articles 1 and 2.

2. Any information received under paragraph 1 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, the determination of

appeals in relation to the taxes referred to in paragraph 1, or the oversight of the

above. 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.

3. In no case shall the provisions of paragraphs 1 and 2 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).

4. If information is requested by a Contracting State in accordance with

this Article, the other Contracting State shall use its information gathering

measures to obtain the requested information, even though that other State may not

need such information for its own tax purposes. The obligation contained in the

preceding sentence is subject to the limitations of paragraph 3 but in no case shall

such limitations be construed to permit a Contracting State to decline to supply

information solely because it has no domestic interest in such information.

5. In no case shall the provisions of paragraph 3 be construed to permit a

Contracting State to decline to supply information solely because the information

is held by a bank, other financial institution, nominee or person acting in an agency

or a fiduciary capacity or because it relates to ownership interests in a person.

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 VII

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 with.

2. The Convention shall enter into force on the fifteenth day after the date

of the later of the notifications referred to in paragraph 1 and its provisions shall

have effect

a)

in respect of taxes due at source, for amounts credited or paid on

or after the first day of January in the first calendar year following that in

which this Convention enters into force; and

b)

in respect of other taxes, for the taxable periods beginning on or

after the first day of January in the first calendar year following that in which

this Convention enters into force.

3. Notwithstanding the provisions of paragraph 2, Article 25 shall have

effect

a)

for criminal tax matters, on the date of its entry into force; and

b)

for all other matters, on that date, but only in respect of taxable

periods beginning on or after that date, or where there are no taxable periods,

all charges to tax arising on or after that date.

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 cease to have effect

a)

in respect of taxes due at source, for amounts credited or paid on

or after the first day of January in the first calendar year following that in

which the notice is given;

b)

in respect of other taxes, for the taxable periods beginning on or

after the first day of January in the first calendar year following that in which

the notice of termination is given.

IN WITNESS WHEREOF the undersigned, being duly authorised thereto by

their respective Governments, have signed this Convention.

DONE in duplicate at Rome this 11 th day of March 2011 in the English and

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

between the texts, the English text shall prevail.

FOR MALTA

FOR THE ORIENTAL REPUBLIC

OF URUGUAY

Walter Balzan

Gustavo Alvarez

PROTOCOL

At the moment of signing the Convention between Malta and the Oriental

Republic of Uruguay for the avoidance of double taxation and the prevention of

fiscal evasion with respect to taxes on income and on capital (hereinafter referred

to as "the Convention"), the undersigned have agreed upon the following

provisions which shall form an integral part of the Convention.

1. Ad Article 4, paragraph 1

Notwithstanding any other provision of the Convention

a)

where a partnership which is established in a Contracting State

receives income arising in the other Contracting State and the first-

mentioned State does not subject the partnership as such to tax but subjects

the partners to tax on their share in the partnership’s income, such

partnership shall be treated as a company which is a resident of that

Contracting State;

b)

a collective investment scheme which is established in a

Contracting State shall be considered to be a resident of that Contracting

State. A collective investment scheme means a scheme or arrangement that is

recognised under the legislation of a Contracting State regulating funds;

c)

the entities included in Article 7 of Title 7 Texto Ordenado 1996

under the law of Uruguay shall be considered to be a resident of Uruguay.

2. Ad Article 10, paragraph 2

It is understood that

a)

for the purposes of the provisions of paragraph 2(a) thereof, the

term "collective investment scheme" shall mean any scheme or arrangement

that is licensed or recognised as such under the Investment Services Act,

Cap. 370 of the Laws of Malta;

b)

the provisions of paragraph 2(b) thereof shall continue to apply in

Malta as long as Malta operates the full imputation system of taxation of

company profits and of the subsequent distribution of such profits to the

company’s shareholders. If the present system is changed, Malta shall

communicate to Uruguay, through diplomatic channels, such change and the

Contracting States shall consult with each other to consider whether any such

change in Malta’s system of taxation would necessitate any revision of the

provisions of Article 10.

IN WITNESS WHEREOF the undersigned, being duly authorised thereto by

their respective Governments, have signed this Protocol.

DONE in duplicate at Rome this 11 th day of March 2011 in the English and

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

between the texts, the English text shall prevail.

FOR MALTA

FOR THE ORIENTAL REPUBLIC

OF URUGUAY

Walter Balzan

Gustavo Alvarez

€2.16