Double Taxation Relief (Taxes on Income)

L.N. 193 of 2018

INCOME TAX ACT

(CAP. 123)

Double Taxation Relief (Taxes on Income)

(The Republic of Botswana) Order, 2018

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 is the Double Taxation Relief (Taxes

on Income) (The Republic of Botswana) Order, 2018.

Article 2

AGREEMENT BETWEEN THE GOVERNMENT OF THE

REPUBLIC OF MALTA AND THE GOVERNMENT OF THE

REPUBLIC OF BOTSWANA FOR THE AVOIDANCE OF DOUBLE

TAXATION AND THE PREVENTION OF FISCAL EVASION WITH

RESPECT TO TAXES ON INCOME

Preamble

The Government of the Republic of Malta and the Government of the

Republic of Botswana desiring to conclude an agreement 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 Agreement shall apply to persons who are residents of one or

both of the Contracting States.

Article 2

TAXES COVERED

1. This Agreement 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:-

(a) that the arrangements specified in the Agreement set

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

Agreement") have been made with the Government of the

Republic of Botswana with a view to affording relief from

double taxation in relation to the following taxes imposed by the

laws of the Republic of Botswana

-

the tax on income.

(b) that it is expedient that those arrangements should

have effect following the entry into force of the Agreement and

in accordance with the relevant provisions of the Agreement;

(c) that the Agreement shall enter into force on such date

as may be announced by notice in the Gazette.

The existing taxes to which this Agreement shall apply are in

particular

(a) in Botswana

the income tax

(hereinafter referred to as "Botswana tax"); and

(b)

in Malta

the income tax

(hereinafter referred to as "Malta tax").

The Agreement shall apply also to any identical or

substantially similar taxes which are imposed after the date of signature

of the Agreement in addition to, or in place of, the existing taxes. The

competent authorities of the Contracting States shall notify each other of

any significant changes which have been made in their respective

taxation laws.

Article 3

GENERAL DEFINITIONS

1. For the purpose of this Agreement, unless the context

otherwise requires

(a) the term "Botswana" means the Republic of Botswana;

(b) the term "Malta" means the Republic of Malta and,

when used in a geographical sense, means the Island of Malta,

the Island of Gozo and the other islands of the Maltese

archipelago including the territorial waters thereof, as well as

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

column adjacent to the territorial waters, wherein Malta

exercises sovereign rights, jurisdiction, or control in accordance

with international law and its national law, including its

legislation relating to the exploration of the continental shelf and

exploitation of its natural resources;

(c) the terms "a Contracting State" and "the other

Contracting State" mean Botswana or Malta as the context

requires;

(d) the term "company" means any body corporate or any

entity that is treated as a body corporate for tax purposes;

(e)

the term "competent authority" means

(i) in Botswana, the Minister responsible for

finance, represented by the Commissioner General of the

Botswana Unified Revenue Service or an authorized

representative of the Commissioner General; and

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

his authorized representative;

(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 "national", in relation to a Contracting State,

means

(i) any individual possessing the nationality of a

Contracting State;

(ii) any legal person, partnership or association

deriving its status as such from the laws in force in that

Contracting State;

(i) the term "person" includes an individual, an estate of

a deceased person, a trust, a collective investment scheme, a

company and any other body of persons; and

(j) the term "business" includes the performance of

professional services and of other activities of an independent

character.

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

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

otherwise requires, have the meaning which it has at that time under the

law of that State for the purposes of the taxes to which this Agreement

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 Agreement, the term "resident of a

Contracting State" means any person who, under the laws of that State,

is liable to tax therein by reason of his domicile, residence, place of

management or any other criterion of a similar nature, and also includes

that State and any political subdivision or local authority thereof. This

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

State in respect only of income from sources in that State.

2. Where by reason of the provisions of paragraph 1 an

individual is a resident of both Contracting States, then his status shall

be determined as follows

(a) he shall be deemed to be a resident only of the State

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

permanent home available to him in both States, he shall be

deemed to be a resident only of the State with which his personal

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

(b) if the State in which he has his centre of vital interests

cannot be determined, or if he has not a permanent home

available to him in either State, he shall be deemed to be a

resident only of the State in which he has an habitual abode;

(c) if he has an habitual abode in both States or in neither

of them, he shall be deemed to be a resident only of the State of

which he is a national;

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

the competent authorities of the Contracting States shall settle

the question by mutual agreement.

3. Where by reason of the provisions of paragraph 1 a person

other than an individual is a resident of both Contracting States, then it

shall be deemed to be a resident only of the State in which its place of

effective management is situated. If the place of effective management

cannot be determined, the competent authorities of the Contracting

States shall settle the question by mutual agreement.

Article 5

PERMANENT ESTABLISHMENT

1. For the purposes of this Agreement, the term "permanent

establishment" means a fixed place of business through which the

business of an enterprise is wholly or partly carried on.

2. The term "permanent establishment" includes especially

(a)

a place of management;

(b)

a branch;

(c)

an office;

(d)

a factory;

(e)

a workshop;

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

of extraction or exploitation of natural resources; and

(g) an installation or structure used for the exploration of

natural resources provided that the installation or structure

continues for a period of more than six months within any

twelve-month period.

3. The term "permanent establishment" likewise encompasses

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

installation project or any supervisory activity in connection with

such site or project, but only where such site, project or activity

continues for a period of more than six months within any

twelve-month period;

(b) the furnishing of services, including consultancy

services, by an enterprise through employees or other personnel

engaged by an enterprise for such purpose, but only where

activities of that nature continue (for the same or a connected

project) within the Contracting State for a period or periods

aggregating more than six months within any twelve-month

period; and

(c) the performance of professional services or other

activities of an independent character by an individual, but only

where those services or activities continue within a Contracting

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

in any twelve-month period commencing or ending in the fiscal

year concerned.

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 processing

by another enterprise;

(c) the maintenance of stock of goods or merchandise

belonging to the enterprise solely for the purpose of storage,

display or delivery;

(d) the maintenance of a fixed place of business solely

for the purpose of purchasing goods or merchandise, or for

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; and

(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.

Notwithstanding the preceding provisions of this Article, an

insurance enterprise of a Contracting State shall, except in regard to

reinsurance, be deemed to have a permanent establishment in the other

Contracting State if it insures risks in the territory of that State and

collects premiums in respect of those risks through an employee or

through a person other than an agent of an independent status to whom

paragraph 6 applies.

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.

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 are attributed 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 business 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.

However, no such deduction shall be allowed in respect of amounts, if

any, paid (otherwise than towards reimbursement of actual expenses) by

the permanent establishment to the head office of the enterprise or any

of its other offices, by way of royalties, fees or other similar payments in

return for the use of patents or other rights, or by way of commission, for

specific services performed or for management, or, except in the case of

a banking enterprise, by way of interest on moneys lent to the permanent

establishment. Likewise, no account shall be taken, in the determination

of the profits of a permanent establishment, for amounts charged

(otherwise than towards reimbursement of actual expenses) by the

permanent establishment to the head office of the enterprise or any of its

other offices, by way of royalties, fees or other similar payments in

return for use of patents or other rights, or by way of commission for

specific services performed or for management, or except in the case of

a banking enterprise by way of interest on moneys lent to the head office

of the enterprise or any of its other offices.

4. In so far 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 Agreement, then the provisions of

those Articles shall not be affected by the provisions of this Article.

INTERNATIONAL 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 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 the other

profits described in paragraph 1 of this Article.

3. Profits of an enterprise of a Contracting State from the use or

rental of containers used for the transport in international traffic of goods

or merchandise shall be taxable only in that State.

4. 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 Agreement 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 Botswana to a resident of Malta who is the beneficial

owner thereof, the tax so charged in Botswana shall not exceed

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

if the beneficial owner is a company which holds at least 25

per cent of the capital of the company paying dividends; or

(ii) 6 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 Botswana who is the beneficial

owner thereof, Malta tax on the gross amount of the dividends

shall not exceed

(i) the tax chargeable on the profits out of which

the dividends are paid; or

(ii) 15 per cent on the profits out of which the

dividends are paid, if the dividends are paid out of gains or

profits earned in any year in respect of which the company

is in receipt of any tax benefit under provisions regulating

aids to industries in Malta, and the shareholder submits

returns and accounts to the taxation authorities of Malta in

respect of his income liable to Malta tax for the relative

year of assessment. This provision shall apply for a period

of ten years from the date of entry into force of this

Agreement. The Contracting States may mutually agree

that this provision be renewed for a further period.

This paragraph shall not affect taxation of the company in respect

of the profits out of which the dividends were distributed.

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

Contracting 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 in so far 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 State in

which it arises and according to the laws of that State, but if the recipient

is the beneficial owner of the interest, the tax so charged shall not exceed

8.5 per cent of the gross amount of the interest.

3. Notwithstanding the provisions of paragraph 2, interest

mentioned in paragraph 1 shall not be taxable in the Contracting State

where the interest arises if

(a) the recipient thereof is the government of the other

Contracting State or a local authority thereof or any agency

wholly owned and controlled by that government or authority;

and

(b) the interest is paid in respect of a loan granted or

guaranteed by a financial institution of a public character with

the objective of promoting exports and development, if the credit

granted or guaranteed contains an element of subsidy.

4. 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 purposes of this Article.

5. The provisions of paragraphs 1, 2 and 3 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.

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. 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 Agreement.

ROYALTIES

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

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

2. However, such royalties may also be taxed in the Contracting

State in which they arise, and according to the laws of that State, but if

the recipient is the beneficial owner of the royalties, the tax so charged

shall not exceed

(a) 5 per cent of the gross amount of the royalties in

respect of the use of or the right to use industrial, commercial or

scientific equipment; and

(b) 7.5 per cent of the gross amount of the royalties in all

other cases.

2. 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, tapes or discs for radio or television

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.

3. 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.

4. 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 he is a resident of a Contracting State or

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

with which the right or property in respect of which the royalties are

paid is effectively connected, 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.

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 Agreement.

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 percent 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.

6. Notwithstanding the provisions of paragraph 5, gains from

the alienation of shares or other corporate rights of a company which is a

resident of one of the Contracting States derived by an individual who

was a resident of that State and who after acquiring such shares or rights

has become a resident of the other Contracting State, may be taxed in the

first-mentioned State if the alienation of the shares or other corporate

rights occur at any time during the five years next following the date on

which the individual has ceased to be a resident of that first-mentioned

State.

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 Contracting 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.

ENTERTAINERS AND SPORTSPERSONS

1. Notwithstanding the provisions of Articles 7 and 14, income

derived by a resident of a Contracting State as an entertainer such as a

theater, motion picture, radio or television artiste, or a musician, or as a

sportsperson, from his personal activities as such exercised in the other

Contracting State, may be taxed in that other State.

2. Where income in respect of personal activities exercised by

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

entertainer or sportsperson himself but to another person, that income

may, notwithstanding the provisions of Articles 7 and 14, be taxed in the

Contracting State in which the activities of the entertainer or

sportsperson are exercised.

3. Income derived by a resident of a Contracting State from

activities exercised in the other Contracting State as envisaged in

paragraphs 1 and 2, shall be exempt from tax in that other State if the

visit to that other State is supported wholly or mainly by public funds of

the first-mentioned Contracting State, or a local authority thereof, or

takes place under a cultural agreement or arrangement between the

Governments of the Contracting States.

Article 17

PENSIONS AND ANNUITIES

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

pensions and other similar remuneration in consideration of past

employment, and annuities, arising in a Contracting State and paid to a

resident of the other Contracting State, may be taxed in the first-

mentioned Contracting State

2. The term "annuity" means a stated sum payable periodically

at stated times during life or during a specified or ascertainable period of

time under an obligation to make the payments in return for adequate

and full consideration in money or money’s worth.

3. Notwithstanding the provisions of paragraph 1, pensions

paid and other similar payments made under a public scheme which is

part of the social security system of a Contracting State or a local

authority thereof shall be taxable only in that State.

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(a),

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 similar remunerations

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, APPRENTICES AND BUSINESS TRAINEES

A student, apprentice or business trainee who is present in a

Contracting State solely for the purpose of his education or training and

who is, or immediately before being so present was, a resident of the

other Contracting State, shall be exempt from tax in the first mentioned

State on payments received from outside that first-mentioned State for

the purposes of his maintenance, education or training.

TECHNICAL FEES

1. Technical fees arising in a Contracting State which are

derived by a resident of the other Contracting State may be taxed in that

other State.

2. However, such technical fees may also be taxed in the

Contracting State in which they arise, and according to the law of that

State; but where such technical fees are derived by a resident of the other

Contracting State who is subject to tax in that State in respect thereof,

the tax charged in the Contracting State in which the technical fees arise

shall not exceed 7.5 percent of the gross amount of such fees.

3. The term "technical fees" as used in this Article means

payments of any kind to any person, other than to an employee of the

person making the payments, in consideration for any services of an

administrative, technical, managerial or consultancy nature.

4. The provisions of paragraphs 1 and 2 of this Article shall not

apply if the beneficial owner of the technical fees, being a resident of a

Contracting State, carries on business in the other Contracting State in

which the technical fees arise, through a permanent establishment

situated therein and the technical fees are effectively connected with

such permanent establishment. In such case, the provisions of Article 7

shall apply.

5. Technical fees shall be deemed to arise in a Contracting State

when the payer is that State, a political subdivision, a local authority or a

resident of that State. Where, however, the person paying the technical

fees, whether he is 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 technical fees was incurred, and such technical

fees are borne by that permanent establishment, then such technical fees

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 technical fees paid exceeds, for whatever

reason, 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 law of each Contracting State, due regard being had to

the other provisions of this Agreement.

OTHER INCOME

1. Items of income of a resident of a Contracting State,

wherever arising, not dealt with in the foregoing Articles of this

Agreement 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.

Article 22

ELIMINATION OF DOUBLE TAXATION

Double taxation shall be eliminated as follows

(a) In Botswana, subject to the provisions of the laws of

Botswana regarding the allowance of a credit against Botswana

tax of tax payable under the laws of a country outside Botswana,

Malta tax payable under the laws of Malta and in accordance

with this Agreement, whether directly or by deduction, on profits

or income liable to tax in Malta shall be allowed as a credit

against any Botswana tax payable in respect of the same profits

or income by reference to which the Malta tax is computed.

However, the amount of such credit shall not exceed the amount

of the Botswana tax payable on that income in accordance with

the laws of Botswana;

(b) 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 credit against Malta tax in

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

of this Agreement, there is included in a Malta assessment

income from sources within Botswana, the Botswana tax on such

income shall be allowed as a credit against the relative Malta tax

payable thereon.

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. 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 that first-

mentioned State are or may be subjected.

4. Except where the provisions of paragraph 1 of Article 9,

paragraph 7 of Article 11, paragraph 6 of Article 12 and paragraph 6 of

Article 20 apply, interest, royalties, technical fees and other

disbursements paid by an enterprise of a Contracting State to a resident

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

taxable profits of such enterprise, be deductible under the same

conditions as if they had been paid to a resident of the first-mentioned

State.

5. The provisions of this Article shall, notwithstanding the

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

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 Agreement, he may, irrespective

of the remedies provided by the domestic laws 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 this

Agreement.

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 Agreement.

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 this Agreement. They

may also consult together for the elimination of double taxation in cases

not provided for in this Agreement.

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.

5. Where,

(a) under paragraph 1, a person has presented a case to

the competent authority of a Contracting State on the basis that

the actions of one or both of the Contracting States have resulted

for that person in taxation not in accordance with the provisions

of this Agreement, and

(b) the competent authorities are unable to reach an

agreement to resolve that case pursuant to paragraph 2 within

three years from the presentation of the case to the competent

authority of the other Contracting State,

any unresolved issues arising from the case shall be submitted to

arbitration if either competent authority so requests. The person who has

presented the case shall be notified of the request. These unresolved

issues shall not, however, be submitted to arbitration if a decision on

these issues has already been rendered by a court or administrative

tribunal of either State. The arbitration decision shall be binding on both

States and shall be implemented notwithstanding any time limits in the

domestic laws of these States unless both competent authorities agree on

a different solution within six months after the decision has been

communicated to them or unless a person directly affected by the case

does not accept the mutual agreement that implements the arbitration

decision. The competent authorities of the Contracting States shall by

mutual agreement settle the mode of application of this paragraph.

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 Agreement 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, in so far as the taxation thereunder is

not contrary to the Agreement. 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. Notwithstanding the

foregoing, information received by a Contracting State may be used for

other purposes when such information may be used for such other

purposes under the laws of both States and the competent authority of

the supplying State authorises such use.

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

ASSISTANCE IN COLLECTION

1. The Contracting States shall to the extent permitted by their

respective domestic law, lend assistance to each other in order to collect

the taxes referred to in Article 2 as well as interest and penalties with

regard to such taxes, provided that reasonable steps to recover such taxes

have been taken by the Contracting State requesting such assistance.

2. Claims which are the subject of requests for assistance shall

not have priority over taxes owing in the Contracting State rendering

assistance and the provisions of paragraph 1 of Article 25 shall also

apply to any information which, by virtue of this Article is supplied to

the competent authority of a Contracting State.

3. The competent authorities of the Contracting States shall by

mutual agreement settle the mode of application of the provisions of this

Article.

MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

Nothing in this Agreement shall affect the fiscal privileges of

members of diplomatic missions or consular posts under the general

rules of international law or under the provisions of special agreements.

Article 28

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 Agreement have been complied with. This Agreement shall enter

into force on the date of receipt of the latter of these notifications.

2. The provisions of the Agreement shall apply

(a) in Malta, in respect of taxes on income derived during

any calendar year or accounting period, as the case may be,

beginning on or after the first day of January immediately

following the date on which the Agreement enters into force.

(b)

in Botswana,

(i) in respect of taxes withheld at source, for any

amounts paid or credited on or after the thirtieth day

following the date upon which the Agreement enters into

force; and

(ii) in respect of other taxes, for any year of

assessment beginning on or after the first day of July next

following the year in which the Agreement enters in force.

Article 29

TERMINATION

1. This Agreement shall remain in force until terminated by a

Contracting State. Either Contracting State may terminate the

Agreement, through diplomatic channels, by giving notice of

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

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

its entry into force.

2. In such event, the Agreement shall cease to have effect

(a) in Malta, in respect of taxes on income derived during

any calendar year or accounting period, as the case may be,

beginning on or after the first day of January immediately

following the date on which the notice of termination is given.

(b)

in Botswana,

(i) in respect of taxes withheld at source, for any

amounts paid or credited on or after the thirtieth day

following the date upon which the notice of termination is

given; and

(ii) in respect of other taxes, for any year of

assessment beginning on or after the first day of July next

following the year in which the notice of termination is

given.

IN WITNESS WHEREOF the undersigned, being duly authorized

thereto by the respective Governments, have signed this Agreement.

Done and signed at ………………..…, this ……… day of

…………………… 20....... in duplicate, in the English language only.

For the Government of Malta

For the Government of the

Republic of Botswana

The Hon. Carmelo Abela

The Hon. Dr. Pelonomi Venson-

Minister for Foregin Affairs and

Moitoi

Trade Promotion

Minister of International Affairs and

Cooperation

€2.43