Republic of Kosovo) Order, 2019

L.N. 168 of 2019

INCOME TAX ACT

(CAP. 123)

Double Taxation Relief (Taxes on Income) (The Government of the

Republic of Kosovo) Order, 2019

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 Government of the Republic of Kosovo)

Order, 2019.

ARTICLE 2

CONVENTION BETWEEN THE GOVERNMENT OF THE

REPUBLIC OF MALTA AND THE GOVERNMENT OF THE

REPUBLIC OF KOSOVO FOR THE AVOIDANCE OF DOUBLE

TAXATION AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME

The Government of the Republic of Malta and the Government

of the Republic of Kosovo, desiring to further develop their economic

relationship and to enhance their co-operation in tax matters, intending

to eliminate double taxation with respect to the taxes covered by this

agreement without creating opportunities for non-taxation or reduced

taxation through tax evasion or avoidance (including through treaty-

shopping arrangements aimed at obtaining reliefs provided in this

agreement for the indirect benefit of residents of third jurisdictions),

have agreed as follows

ARTICLE 1

Persons Covered

1. This Convention shall apply to persons who are residents of

one or both of the Contracting States.

2. For the purposes of this Convention, income derived by or

through an entity or arrangement that is treated as wholly or partly

fiscally transparent under the tax law of either Contracting State shall

be considered to be income of a resident of a Contracting State only to

the extent that the income is treated, for purposes of taxation by that

State, as the income of a resident of that State.

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.

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 Kosovo

(i)

the Personal Income Tax;

(ii)

the Corporate Income Tax;

(hereinafter referred to as “Kosovo Tax”).

It is hereby declared:-

(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

Republic of Kosovo with a view to affording relief from double

taxation in relation to the following taxes imposed by the laws of

the Republic of Kosovo

(i)

- the Personal Income Tax; and

(ii)

- the Corporate Income Tax;

(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.

It-taxxi eżistenti li dwarhom japplika dan il-Ftehim huma

partikolarment

(a)

f’ Malta

it-taxxa fuq l-income;

(hawn iżjed ’il quddiem imsejћa "it-taxxa ta’

Malta")

(b)

fil-Kosovo

(i)

it-taxxa fuq l-income personali; u

(ii)

it-taxxa fuq l-income tal-kumpaniji

(hawn iżjed ’il quddiem imsejћa "it-taxxa tal-

Kosovo").

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 that 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 "Kosovo" means the Republic of Kosovo,

including all the land territory, air space over it, over which it has

jurisdiction or sovereign rights for the purpose of exploration,

exploitation, and conservation of natural resources pursuant to

international law and its national law;

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

Contracting State" mean Malta or Kosovo, as the context

requires;

(d) the term "person" includes an individual, a collective

investment scheme, a company and any other body of persons;

(e) the term "company" means any, body corporate or

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

(f) the term “enterprise” applies to the carrying on of

any business;

(g) the terms "enterprise of a Contracting State" and

"enterprise of the other Contracting State" mean respectively an

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

enterprise carried on by a resident of the other Contracting State;

(h) the term "international traffic" means any transport

by a ship or aircraft except when the ship or aircraft is operated

solely between places in a Contracting State and the enterprise

that operates the ship or aircraft is not an enterprise of that State.

(i) the term “business” includes the performance of

professional services and of other activities of an independent

character;.

(j)

the term "competent authority" means

(i) in respect of Malta: the Minister responsible for

finance or his or her authorised representative;

(ii) in respect of Kosovo: the Minister of Finance,

or his or her authorised representative;

(k) the term "national", in relation to a Contracting State,

means

(i) any individual possessing the nationality or

citizenship of that Contracting State; and

(ii) any legal person, partnership or association

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

Contracting State.

(l)

the term “recognised pension fund” of a State means

an entity or arrangement established in that State that is treated

as a separate person under the taxation laws of that State and

(i)

that is established and operated exclusively or

almost exclusively to administer or provide retirement

benefits and ancillary or incidental benefits to individuals

and that is regulated as such by that State or one of its

political subdivisions or local authorities; or

(ii) that is established and operated exclusively or

almost exclusively to invest funds for the benefit of entities

or arrangements referred to in subdivision (i).

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 or the competent authorities agree to a

different meaning pursuant to the provisions of Article 23, 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 that person’s 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 as well as a recognised pension fund of that State. This term,

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

in respect only of income from sources in that State or capital situated

therein.

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

individual is a resident of both Contracting States, then that

individual’s status shall be determined as follows

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

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

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

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

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

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

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

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

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

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

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

which he is a national;

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

the competent authorities of the Contracting States shall settle

the question by mutual agreement.

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

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

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

effective management is situated.

ARTICLE 5

Permanent Establishment

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

establishment" means a fixed place of business through which the

business of an enterprise is wholly or partly carried on.

2. The term "permanent establishment" includes especially

(a)

a place of management;

(b)

a branch;

(c)

an office;

(d)

a factory;

(e)

a workshop; and

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

of extraction of natural resources.

3. The term “permanent establishment” also encompasses

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

project or supervisory activities in connection therewith, but

only if such site, project or activity last for more than 6 months;

(b)

the furnishing of services, including consultancy

services, by an enterprise through employees or other personnel

engaged by the enterprise for such purpose, but only is activities

of that nature continue (for the same or a connected project)

within a Contracting State for a period or periods aggregating

more than 183 days in any 12 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 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 6 applies - is acting on behalf of an enterprise and has, and

habitually exercises, in a Contracting State an authority to conclude

contracts in the name of the enterprise, that enterprise shall be deemed

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

activities which that person undertakes for the enterprise, unless the

activities of such person are limited to those mentioned in paragraph 4

which, if exercised through a fixed place of business, would not make

this fixed place of business a permanent establishment under the

provisions of that paragraph.

An enterprise shall not be deemed to have a permanent

establishment in a Contracting State merely because it carries on

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

any other agent of an independent status, provided that such persons

are acting in the ordinary course of their business.

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

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

Contracting State, or which carries on business in that other State

(whether through a permanent establishment or otherwise), shall not of

itself constitute either company a permanent establishment of the

other.

ARTICLE 6

Income From Immovable Property

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

immovable property (including income from agriculture or forestry)

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

2. The term "immovable property" shall have the meaning

which it has under the law of the Contracting State in which the

property in question is situated. The term shall in any case include

property accessory to immovable property, livestock and equipment

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

general law respecting landed property apply, usufruct of immovable

property and rights to variable or fixed payments as consideration for

the working of, or the right to work, 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. 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

that are attributable to the permanent establishment in accordance with

the provisions of paragraph 2 may be taxed in that other State.

2. For the purposes of this Article and Article 21 the profits

that are attributable in each Contracting State to the permanent

establishment referred to in paragraph 1 are the profits it might be

expected to make, in particular in its dealings with other parts of the

enterprise, if it were a separate and independent enterprise engaged in

the same or similar activities under the same or similar conditions,

taking into account the functions performed, assets used and risks

assumed by the enterprise through the permanent establishment and

through the other parts of the enterprise.

3. Where, in accordance with paragraph 2, a Contracting

State adjusts the profits that are attributable to a permanent

establishment of an enterprise of one of the Contracting States and

taxes accordingly profits of the enterprise that have been charged to

tax in the other State, the other State shall, to the extent necessary to

eliminate double taxation on these profits, make an appropriate

adjustment to the amount of the tax charged on those profits. In

determining such adjustment, the competent authorities of the

Contracting States shall if necessary consult each other.

4. 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

International Shipping And Air Transport

1. Profits of an enterprise of a Contracting State from the

operation of ships or aircraft in international traffic shall be taxable

only in that State.

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

from the participation in a pool, a joint business or an international

operating agency.

ARTICLE 9

Associated Enterprises

1. Where

(a) an enterprise of a Contracting State participates

directly or indirectly in the management, control or capital of an

enterprise of the other Contracting State, or

(b) the same persons participate directly or indirectly in

the management, control or capital of an enterprise of a

Contracting State and an enterprise of the other Contracting

State,

and in either case conditions are made or imposed between the

two enterprises in their commercial or financial relations which differ

from those which would be made between independent enterprises,

then any profits which would, but for those conditions, have accrued to

one of the enterprises, but, by reason of those conditions, have not so

accrued, may be included in the profits of that enterprise and taxed

accordingly.

2. Where a Contracting State includes in the profits of an

enterprise of that State - and taxes accordingly - profits on which an

enterprise of the other Contracting State has been charged to tax in that

other State and the profits so included are profits which would have

accrued to the enterprise of the first-mentioned State if the conditions

made between the two enterprises had been those which would have

been made between independent enterprises, then that other State shall

make an appropriate adjustment to the amount of the tax charged

therein on those profits. In determining such adjustment, due regard

shall be had to the other provisions of this Convention and the

competent authorities of the Contracting States shall if necessary

consult each other.

ARTICLE 10

Dividends

1. Dividends paid by a company which is a resident of a

Contracting State to a resident of the other Contracting State may be

taxed in that other State.

2. However, such dividends may also be taxed in the

Contracting State of which the company paying the dividends is a

resident and according to the laws of that State, but

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

resident of Kosovo to a resident of Malta who is the beneficial

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

(i) 0 per cent of the gross amount of the dividends

if the beneficial owner is a company which holds directly at

least 10 per cent of the capital of the company paying the

dividends throughout a 365 day period that includes the day

of the payment of the dividend (for the purpose of

computing that period, no account shall be taken of changes

of ownership that would directly result from a corporate

reorganization, such as a merger or a divisive

reorganization, of the company that holds the shares or that

pays the dividend);

(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 Kosovo who is the beneficial

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

shall not exceed that chargeable on the profits out of which the

dividends are paid.

This paragraph shall not affect the taxation of the company in

respect of the profits out of which the dividends are paid.

3. The term "dividends" as used in this Article means income

from shares, "jouissance" shares or "jouissance" rights, mining shares,

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

profits, as well as income from other corporate rights which is

subjected to the same taxation treatment as income from shares by the

laws of the State of which the company making the distribution is a

resident.

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

beneficial owner of the dividends, being a resident of a Contracting

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

company paying the dividends is a resident, through a permanent

establishment situated therein and the holding in respect of which the

dividends are paid is effectively connected with such permanent

establishment. In such case the provisions of Article 7 shall apply.

5. Where a company which is a resident of a Contracting State

derives profits or income from the other Contracting State, that other

State may not impose any tax on the dividends paid by the company,

except insofar as such dividends are paid to a resident of that other

State or insofar as the holding in respect of which the dividends are

paid is effectively connected with a permanent establishment situated

in that other State, nor subject the company's undistributed profits to a

tax on the company's undistributed profits, even if the dividends paid

or the undistributed profits consist wholly or partly of profits or

income arising in such other State.

ARTICLE 11

Interest

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

of the other Contracting State may be taxable 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. Notwithstanding the provisions of paragraph 2, interest

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

Contracting State who is the beneficial owner thereof shall be taxable

only in that other State to the extent that such interest is paid

(a) with respect to indebtedness arising as a consequence

of the sale on credit of any equipment, merchandise or services;

(b)

on any loan of whatever kind granted by a bank;

(c)

to a collective investment scheme;

(d) to that other State or the central bank or a local

authority thereof; or

(e)

on intercompany loans.

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 purpose 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.

Where, by reason of a special relationship between the

payer and the beneficial owner or between both of them and some

other person, the amount of the interest, having regard to the debt-

claim for which it is paid, exceeds the amount which would have been

agreed upon by the payer and the beneficial owner in the absence of

such relationship, the provisions of this Article shall apply only to the

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

shall remain taxable according to the laws of each Contracting State,

due regard being had to the other provisions of this Convention.

ARTICLE 12

Royalties

1. Royalties arising in a Contracting State and beneficially

owned by a resident of the other Contracting State shall be taxable

only in that other State.

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, any patent, trade mark, design or model, plan,

secret formula or process, or for information concerning industrial,

commercial or scientific experience.

3. 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.

4. Where, by reason of a special relationship between the

payer and the beneficial owner or between both of them and some

other person, the amount of the royalties, having regard to the use,

right or information for which they are paid, exceeds the amount

which would have been agreed upon by the payer and the beneficial

owner in the absence of such relationship, the provisions of this Article

shall apply only to the last-mentioned amount. In such case, the excess

part of the payments shall remain taxable according to the laws of each

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

Convention.

ARTICLE 13

Capital Gains

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

alienation of immovable property referred to in Article 6 and situated

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

2. Gains from the alienation of movable property forming part

of the business property of a permanent establishment which an

enterprise of a Contracting State has in the other Contracting State

including such gains from the alienation of such a permanent

establishment (alone or with the whole enterprise) may be taxed in that

other State.

3. Gains that an enterprise of a Contracting State that operates

ships or aircraft in international traffic derives from the alienation of

such ships or aircraft, or of 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 comparable interests, such as interests in a

partnership or trusts, may be taxed in the other Contracting State if, at

any time during the 365 days preceding the alienation, these shares or

comparable interests derived more than 50 per cent of their value

directly or indirectly from immovable property (as defined in Article

6), situated 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 by a resident of a Contracting State in respect of

an employment, as a member of the regular complement of a ship or

aircraft, that is exercised aboard a ship or aircraft operated solely

within the other Contracting State, shall be taxable only in the first-

mentioned State.

ARTICLE 15

Directors' Fees

1. 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.

2. Salaries, wages and other similar remuneration derived by

a resident of a Contracting State in his capacity as an official in a top-

level managerial position that provides advice to 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

Entertainers And Sportspersons

1. Notwithstanding the provisions of Article 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 sportsperson from that resident’s 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 acting as such accrues not to the

entertainer or sportsperson but to another person, that income may,

notwithstanding the provisions of Article 14 be taxed in the

Contracting State in which the activities of the entertainer or

sportsperson are exercised.

ARTICLE 17

Pensions

Subject to the provisions of paragraph 2 of Article 18 pensions

and other similar remuneration paid to a resident of a Contracting State

in consideration of past employment shall be taxable only in that State.

ARTICLE 18

Government Service

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

by a Contracting State or a political subdivision or a local authority

thereof to an individual in respect of services rendered to that State or

subdivision or authority shall be taxable only in that State.

(b) However, such salaries, wages and other similar

remuneration shall be taxable only in the other Contracting State

if the services are rendered in that State and the individual is a

resident of that State who

(i)

is a national of that State; or

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

for the purpose of rendering the services.

2. (a) Notwithstanding the provisions of paragraph 1,

pensions and other similar remuneration paid by, or out of funds

created by, a Contracting State or a political subdivision or a local

authority thereof to an individual in respect of services rendered to that

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

(b) However, such pensions and similar remuneration

shall be taxable only in the other Contracting State if the

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

3. The provisions of Articles 14, 15, 16 and 17 shall apply to

salaries, wages, pensions and other similar remuneration in respect of

services rendered in connection with a business carried on by a

Contracting State or a political subdivision or a local authority thereof.

ARTICLE 19

Students

Payments of grants or scholarships which a student or business

apprentice who is or was immediately before visiting a Contracting

State a resident of the other Contracting State and who is present in the

first-mentioned State solely for the purpose of his education or training

receives for the purpose of his maintenance, education or training shall

not be taxed in that State, provided that such payments arise from

sources outside that State.

ARTICLE 20

Other Income

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

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

Convention shall be taxable only in that State.

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

other than income from immovable property as defined in paragraph 2

of Article 6, if the recipient of such income, being a resident of a

Contracting State, carries on business in the other Contracting State

through a permanent establishment situated therein, and the right or

property in respect of which the income is paid is effectively

connected with such permanent establishment. In such case, the

provisions of Article 7 shall apply.

ARTICLE 21

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 Kosovo, the

Kosovo tax on such income shall be allowed as a credit against the

relative Malta tax payable thereon.

2. In the case of Kosovo, double taxation shall be eliminated

as follows

(a) as a deduction from the tax on the income of that

resident, an amount equal to the income tax paid in Malta;

(b) as a deduction from the tax on the capital of that

resident, an amount equal to the capital tax paid in Malta.

Such deduction in either case shall not, however, exceed that part

of the Kosovo income tax or capital tax, as computed before the

deduction is given, which is attributable, as the case may be, to the

income or the capital which may be taxed in Malta.

ARTICLE 22

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. Stateless persons who are residents of a Contracting State

shall not be subjected in either Contracting State to any taxation or any

requirement connected therewith, which is other or more burdensome

than the taxation and connected requirements to which nationals of the

State concerned in the same circumstances, in particular with respect

to residence, are or may be subjected.

3. The taxation on a permanent establishment which an

enterprise of a Contracting State has in the other Contracting State

shall not be less favourably levied in that other State than the taxation

levied on enterprises of that other State carrying on the same activities.

This provision shall not be construed as obliging a Contracting State to

grant to residents of the other Contracting State any personal

allowances, reliefs and reductions for taxation purposes on account of

civil status or family responsibilities which it grants to its own

residents.

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

paragraph 7 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. Similarly, any debts of an

enterprise of a Contracting State to a resident of the other Contracting

State shall, for the purpose of determining the taxable capital of such

enterprise, be deductible under the same conditions as if they had been

contracted to a resident of the first-mentioned State.

5. Enterprises of a Contracting State, the capital of which is

wholly or partly owned or controlled, directly or indirectly, by one or

more residents of the other Contracting State, shall not be subjected in

the first-mentioned State to any taxation or any 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.

6. The provisions of this Article shall, notwithstanding the

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

ARTICLE 23

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 either

Contracting State. 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.

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 Convention, and

(b) the competent authorities are unable to reach an

agreement to resolve that case pursuant to paragraph 2 within

two years from the date when all the information required by the

competent authorities in order to address the case has been

provided to both competent authorities,

any unresolved issues arising from the case shall be submitted to

arbitration if the person so requests in writing. 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. Unless a person directly affected by the case does not

accept the mutual agreement that implements the arbitration decision,

that decision shall be binding on both Contracting States and shall be

implemented notwithstanding any time limits in the domestic laws of

these States. The competent authorities of the Contracting States shall

by mutual agreement settle the mode of application of this paragraph.

ARTICLE 24

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.

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 of this

Article 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 25

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 26

Entitlement To Benefits

1. Notwithstanding the other provisions of this Convention, a

benefit under this Convention shall not be granted in respect of an item

of income or capital if it is reasonable to conclude, having regard to all

relevant facts and circumstances, that obtaining that benefit was one of

the principal purposes of any arrangement or transaction that results

directly or indirectly in that benefit, unless it is established that

granting that benefit in these circumstances would be in accordance

with the object and purpose of the relevant provisions of this

Convention.

2. Where a benefit under this Convention is denied to a

person under provisions of this Convention that deny all or part of the

benefits that would otherwise be provided under the Convention where

the principal purpose or one of the principal purposes of any

arrangement or transaction, or of any person concerned with an

arrangement or transaction, was to obtain those benefits, the competent

authority of the Contracting State that would otherwise have granted

this benefit shall nevertheless treat that person as being entitled to this

benefit, or to different benefits with respect to a specific item of

income or capital, if such competent authority, upon request from that

person and after consideration of the relevant facts and circumstances,

determines that such benefits would have been granted to that person

in the absence of the transaction or arrangement. The competent

authority of the Contracting State to which a request has been made

under this paragraph by a resident of the other Contracting State shall

consult with the competent authority of that other Contracting State

before rejecting the request.

ARTICLE 27

Entry Into Force

1. The Contracting States shall notify each other in writing,

through diplomatic channels, that the legal requirements for the entry

into force of this Convention have been complied with.

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

date of receipt of the later of the notifications referred to in paragraph

1. The provisions of this Convention shall have effect

(a) with regard to taxes withheld at source in respect of

amounts paid or credited on or after the first day of January

following the date upon which this Convention enters into force;

and

(b) with regard to other taxes, in respect of fiscal years

beginning on or after the first day of January following the date

upon which this Convention enters into force.

ARTICLE 28

Termination

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

Contracting State. Either Contracting State may terminate the

Convention, through diplomatic channels, by giving notice of

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

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

its entry into force.

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

(a) with regard to taxes withheld at source, in respect of

amounts paid or credited after the end of the calendar year in

which such notice is given; and

(b) with regard to other taxes in respect of fiscal years

beginning after the end of the calendar year in which such notice

is given.

IN WITNESS WHEREOF the undersigned, being duly

authorised thereto by their respective Governments, have signed this

Convention.

DONE in duplicate at Prishtina this 6 th day of March, 2019 in the

English and Albanian languages, both texts being equally authentic. In

the case of divergence between the texts, the English text shall prevail.

For the Government of the Republic of Kosovo

For the Government of the Republic of Malta

€2.07