Double Taxation Relief (Taxes on Income)

L.N. 159 of 2013

INCOME TAX ACT

(Cap.123)

Double Taxation Relief (Taxes on Income)

(Russian Federation) Order, 2013

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

Tax Act, the Minister for Finance has made the following order

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

on Income) (Russian Federation) Order, 2013.

Article 2

CONVENTION

BETWEEN

THE GOVERNMENT OF

MALTA

AND

THE GOVERNMENT

OF THE RUSSIAN

FEDERATION

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 Russian Federation

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

prevention of fiscal evasion with respect to taxes on income have agreed as

follows

Article 1

PERSONS COVERED

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

the Contracting States.

Article 2

TAXES COVERED

1. This Convention shall apply to taxes on income imposed on behalf of a

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

the manner in which they are levied.

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

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

movable or immovable property and taxes on the total amounts of wages or

salaries paid by enterprises.

It is hereby declared

Arrangements to

have effect.

(a)

that the arrangements specified in the Convention

set out in the Schedule to this Order (hereinafter referred to as

"the Convention") have been made with the Government of the

Russian Federation with a view to affording relief from double

taxation in relation to the following taxes imposed by the laws

of the Russian Federation

(i)

the tax on profits of organisations;

(ii) the tax on income of individuals;

(b)

that it is expedient that those arrangements should

have effect following the entry into force of the Convention and

in accordance with the relevant provisions of the Convention;

(c)

that the Convention shall enter into force on such

date as may be announced by notice in the Government Gazette.

The existing taxes to which this Convention shall apply are in

particular

(a)

in Malta

the income tax;

(hereinafter referred to as "Malta tax");

(b)

in Russia

(i)

the tax on profits of organisations;

(ii) the tax on income of individuals;

(hereinafter referred to as " Russian tax").

The Convention shall apply also to any identical or substantially similar

taxes that 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 taxation laws.

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 exploitation of its natural resources;

(b)

the term "Russia" means the Russian Federation; when used in

geographical sense, means all the territory of the Russian Federation and also

its exclusive economic zone and continental shelf, defined according to the

UN Convention on the law of the seas (1982);

(c)

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

mean Malta or Russia, as the context requires;

(d)

the term "person" includes an individual, a company and any

other body of persons;

(e)

the term "company" means any body corporate or any entity that

is treated as a body corporate for tax purposes;

(f)

the terms "enterprise of a Contracting State" and "enterprise of

the other Contracting State" mean respectively an enterprise carried on by a

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

the other Contracting State;

(g)

the term "international traffic" means any transport by a ship or

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

ship or aircraft is operated solely between places in the other Contracting

State;

(h)

the term "business" includes the performance of professional

services and of other activities of an independent character;

(i)

the term "competent authority" means

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

authorised representative; and

(ii) in Russia: the Ministry of Finance of the Russian

Federation or its authorised representative;

(j)

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

(i)

any individual possessing the nationality of a Contracting

State; and

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

status as such from the laws in force in a Contracting State.

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

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

requires, have the meaning that it has at that time under the law of that State for the

purposes of the taxes to which the Convention applies, any meaning under the

applicable tax laws of that State prevailing over a meaning given to the term under

other laws of that State.

Article 4

RESIDENT

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

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

by reason of his domicile, residence, place of 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.

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. Where the place of effective management of a

person other than an individual cannot be determined, the competent

authorities of the Contracting States shall endeavour, having regard to all

factors they consider relevant, to determine by mutual agreement the place of

effective management in each individual case.

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. A building site or construction or installation project constitutes a

permanent establishment only if it lasts more than twelve months.

4. Where an enterprise of a Contracting State performs services in the

other Contracting State

(a)

through an individual who is present in that other State for a

period or periods exceeding in the aggregate 183 days in any twelve month

period, and more than 50 % of the gross revenues attributable to active

business activities of the enterprise during this period or periods are derived

from the services performed in that other State through that individual, or

(b)

for a period or periods exceeding in the aggregate 183 days in

any twelve month period, and these services are performed for the same

project or for connected projects through one or more individuals who are

present and performing such services in that other State, the activities carried

on in that other State in performing these services shall be deemed to be

carried on through a permanent establishment of the enterprise situated in

that other State, unless these services are limited to those mentioned in

paragraph 5 which, if performed 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, 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 sub-paragraphs a) to e), provided that

the overall activity of the fixed place of business resulting from this

combination is of a preparatory or auxiliary character.

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

other than an agent of an independent status to whom paragraph 7 applies - is

acting in a Contracting State on behalf of an enterprise of the other Contracting

State, and has, and habitually exercises, in that 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 Contracting 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 5 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 of a Contracting State shall not be deemed to have a

permanent establishment in the other Contracting State merely because it carries

on business in that other State through a broker, general commission agent or any

other agent of an independent status, provided that such persons are acting in the

ordinary course of their business.

The fact that a company which is a resident of a Contracting State

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

State, or which carries on business in that other State (whether through a

permanent establishment or otherwise), shall not of itself constitute either

company a permanent establishment of the other.

Article 6

INCOME FROM IMMOVABLE PROPERTY

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

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

Contracting State may be taxed in that other State.

2. The term "immovable property" shall have the meaning which it has

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

The term shall in any case include property accessory to immovable property,

livestock and equipment used in agriculture and forestry, rights to which the

provisions of general law respecting landed property apply, usufruct of immovable

property and rights to variable or fixed payments as consideration for the working

of, or the right to work, mineral deposits, sources and other natural resources; ships

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. 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 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.

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

so charged in Russia 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 and this holding amounts to at least 100,000 Euro;

(ii) 10 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 Russia who is the beneficial owner thereof, Malta

tax on the gross amount of the dividends shall not exceed that chargeable on

the profits out of which the dividends are paid.

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

profits out of which the dividends are paid.

3. Notwithstanding the provisions of paragraphs 1 and 2, dividends shall

not be taxed in the Contracting State of which the company paying the dividends is

a resident if the beneficial owner of the dividends is a pension fund that is a

resident of the other Contracting State, provided that such dividends are derived

from the investments which is made out of assets of this pension fund.

4. The term "dividends" as used in this Article means income from 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, as well as income -even paid in the form of interest- which is

subjected to the same taxation treatment as income from shares by the tax legislation of

the State of which the paying company is a resident. This term also means any

payments on units of the mutual investment funds or similar collective investment

vehicles or schemes.

5. 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.

6. 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.

7. Reduced tax rates provided for in the paragraphs 2 and 3 of this Article

shall not apply to dividends arising in a Contracting State and paid to the

permanent establishment of an enterprise of the other Contracting State, situated in

the third State.

8. The provision of this Article shall not apply if it was the main purpose

or one of the main purposes of any person concerned with the creation or

assignment of the shares or other rights in respect of which the dividend is paid to

take advantage of this Article by means of that creation or assignment.

Article 11

INTEREST

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

Contracting State, who is the beneficial owner of such interest, 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 5 per cent of the gross amount of the interest.

3. The term "interest" as used in this Article means income from debt-

claims of every kind, whether or not secured by mortgage and whether or not

carrying a right to participate in the debtor's profits, and in particular, income from

government securities and income from bonds or debentures, including premiums

and prizes attaching to such securities, bonds or debentures. Penalty charges for

late payment shall not be regarded as interest for the purpose of this Article.

However, the term "interest" shall not include for the purpose of this Article

interest regarded as dividends under paragraph 4 of Article 10.

4. The provisions of paragraph 1 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. 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.

6. 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.

7. The reduced tax rate provided for in paragraph 2 of this Article shall not

apply to interest arising in a Contracting State and paid to the permanent

establishment of an enterprise of the other Contracting State, situated in the third

State.

8. The provision of this Article shall not apply if it was the main purpose

or one of the main purposes of any person concerned with the creation or

assignment of the debt-claim in respect of which the interest is paid to take

advantage of this Article by means of that creation or assignment.

Article 12

ROYALTIES

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

other Contracting State, who is the beneficial owner of such royalties, 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 beneficial owner

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

not exceed 5 per cent of the gross amount of the royalties.

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

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

literary, artistic or scientific work including cinematograph films, any patent, trade

mark, design or model, plan, secret formula or process, or for information

concerning industrial, commercial or scientific experience.

4. The provisions of paragraph 1 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. 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.

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

is a resident of that Contracting 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 in connection with which the liability

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.

7. The reduced tax rate provided for in paragraph 2 of this Article shall not

apply to royalties arising in a Contracting State and paid to the permanent

establishment of an enterprise of the other Contracting State, situated in the third

State.

8. The provisions of this Article shall not apply if it was the main purpose

or one of the main purposes of any person concerned with the creation or

assignment of the rights in respect of which the royalties are paid to take advantage

of this Article by means of that creation or assignment.

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 or other rights 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.

Notwithstanding the provisions of paragraphs 1 and 2, income

3. derived from such activities as are referred to in paragraph 1 performed

under a 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 or government funds of either Contracting State.

Article 17

PENSIONS

1. 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.

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

similar payments made by the Government of a Contracting State or a political

subdivision or a local authority thereof under a public welfare scheme of the social

security system of that State 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 remuneation 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 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

PROFESSORS, TEACHERS AND RESEARCHERS

An individual who visits a Contracting State at the invitation of that State or

of a university, college, school, museum or other cultural institution of that State or

under an official programme of scientific, research or cultural exchange for a

period not exceeding two years for the purpose of teaching, giving lectures or

carrying out research at such institution and who is, or was immediately before that

visit, a resident of the other Contracting State shall be exempt from tax in the first-

mentioned State on his remuneration for such activity, provided that such

remuneration is derived by him from the other Contracting State.

Article 20

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 21

OTHER INCOME

Items of income of a resident of a Contracting State, arising in the other

Contracting State, and not dealt with in the foregoing Articles of this Convention

may be taxed in that other State.

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 Russia, the Russian tax on such income shall be allowed as a

credit against the relative Malta tax payable thereon.

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

Where a resident of Russia derives income from Malta, the amount of tax on that

income payable in Malta in accordance with the provisions of this Convention may

be credited against the Russian tax imposed on that resident. The amount of credit,

however, shall not exceed the amount of the Russian tax on that income computed

in accordance with the taxation laws and regulations of Russia.

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 4 of

Article 11, or paragraph 4 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.

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 22, 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.

Article 27

LIMITATION OF BENEFITS

1. Notwithstanding the provisions of any other Article of this Convention,

a resident of a Contracting State shall not receive the benefit of any reduction in or

exemption from tax provided for in the Convention by the other Contracting State

if the main purpose or one of the main purposes of such resident or a person

connected to such resident was to obtain the benefits of the Convention.

2. The foregoing provision shall not apply where a company is engaged in

substantive business operations in Contracting State of which it is a resident and

the relief from the taxation claimed from the other Contracting State is with respect

to income that is connected to such operations.

Article 28

ENTRY INTO FORCE

Both Contracting States shall notify each other through diplomatic channels

that they have completed the internal legal procedures necessary for the entry into

force of this Convention. This Convention shall enter into force on the thirtieth day

upon the receipt of the latter notification. This Convention shall be applicable in

respect of income derived during the taxable years beginning on or after the first

day of January next following that in which this Convention enters into force.

Article 29

TERMINATION

This Convention shall continue in effect indefinitely but either of the

Contracting States may, on or before the thirtieth day of June in any calendar year

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

into force, give written notice of termination to the other Contracting State through

diplomatic channels. In such event this Convention shall cease to have effect as

respects income derived during the taxable years beginning on or after the first day

of January in the calendar year next 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 at Moscow this 24 th day of April, 2013 in duplicate in the English and

Russian languages both texts being equally authentic.

Raymond Sarsero

Sergey Dmitrievich Shatalov

FOR THE GOVERNMENT OF MALTA

FOR THE GOVERNMENT OF THE

RUSSIAN FEDERATION

PROTOCOL

TO THE CONVENTION

BETWEEN THE GOVERNMENT OF MALTA

AND

THE GOVERNMENT OF THE RUSSIAN FEDERATION

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME

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

the Government of the Russian Federation for the Avoidance of Double Taxation and

the Prevention of Fiscal Evasion with respect to Taxes on Income (hereinafter referred

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

which shall form an integral part of the Convention.

1. The term "political subdivisions" in this Convention means, with respect to

the Russian Federation, subjects of the Russian Federation, defined as such according

to its legislation.

2. Notwithstanding any provision of Article 23 "Non-Discrimination" of this

Convention it is not prohibited to a Contracting State to apply the provisions of its

national tax laws concerning thin «capitalisation rules» or «controlled foreign

company rules».

3. Any document received under Article 25 "Exchange of Information" of

this Convention or a certificate of residence issued by the competent authority of a

Contracting State or its authorised representative shall not require legalisation or

apostille for the purposes of application in the other Contracting State, including

its use in the courts and administrative bodies.

IN WITNESS WHEREOF, the undersigned, being duly authorized thereto, by

their respective Governments, have signed this Protocol.

DONE at Moscow this 24 th day of April, 2013 in duplicate in the English and

Russian languages both texts being equally authentic.

Raymond Sarsero

Sergey Dmitrievich Shatalov

FOR THE GOVERNMENT OF MALTA

FOR THE GOVERNMENT OF THE

RUSSIAN FEDERATION

€1.98