DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE KINGDOM OF DENMARK ORDER

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE KINGDOM OF DENMARK

SUBSIDIARY LEGISLATION 123.47

DOUBLE TAXATION RELIEF ON TAXES ON

INCOME WITH THE KINGDOM OF DENMARK

ORDER

30th December, 1998

LEGAL NOTICE 124 of 1999, as modified by S.L.123.183.

The title of this Order is Double Taxation Relief on Taxes

on Income with the Kingdom of Denmark Order.

CONVENTION

BETWEEN

THE GOVERNMENT OF THE KINGDOM OF DENMARK

AND

THE GOVERNMENT OF THE REPUBLIC OF MALTA

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME

The Government of the Kingdom of Denmark and the Government of the Republic

of Malta, desiring to conclude a Convention for the Avoidance of Double Taxation

and the Prevention of Fiscal Evasion with Respect to Taxes on Income, have agreed

as follows

ARTICLE 1

Personal Scope

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

Contracting States.

ARTICLE 2

Taxes Covered

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

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

the manner in which they are levied.

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

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

movable or immovable property, taxes on the total amounts of wages or salaries paid

by enterprises, as well as taxes on capital appreciation.

It is hereby declared -

(a) that the arrangements specified in the Convention set

out in the Schedule to this Order have been made with

the Government of the Kingdom of Denmark with a

view to affording relief from double taxation in

relation to the following taxes imposed by the laws of

the Kingdom of Denmark

(i)

the income tax to the State;

(ii)

the income tax to the municipalities;

(iii)

the income tax to the county municipalities;

(iv)

taxes imposed under the Hydrocarbon Tax Act;

(b) that it is expedient that those arrangements should

have effect.

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

(a) in Denmark~

(i) the income tax to the State (indkomsskatten tit staten);

(ii) the income tax to the municipalities (den kommunale

indkomstskat);

(iii) the income tax to the county municipalities (den amtskommunale

indkomstskat);

(iv) taxes imposed under the Hydrocarbon Tax Act (skatter i henhold

til kulbrinteskatteloven);

(hereinafter referred to as "Danish tax").

(b) in Malta

the income tax;

(hereinafter referred to as "Malta tax").

The Convention shall apply also to any identical or substantially similar

taxes which are imposed after the date of signature of the Convention in addition to,

or in place of, the existing taxes. The competent authorities of the Contracting States

shall notify each other of substantial changes which have been made in their

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respective taxation laws.

ARTICLE 3

General Definitions

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

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

Denmark or Malta, as the context requires;

(b) the term "Denmark" means the Kingdom of Denmark including any area

outside the territorial sea of Denmark which in accordance with international law has

been or may hereafter be designated under Danish laws as an area within which

Denmark may exercise sovereign rights with respect to the exploration and

exploitation of the natural resources of the sea-bed or its subsoil and the superjacent

waters and with respect to other activities for the exploration and economic

exploitation of the area; the term does not comprise the Faroe Islands and Greenland;

(c) 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 the Republic of Malta exercices 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;

(d)

the term "person" includes an body of persons;

(e) the term "company" means any body corporate or any entity that is treated as

a body corporate for tax purposes;

(f)

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

Contracting State" mean respectively an enterprise carried on by a resident of a

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

State;

(g) the term "international traffic" means any transport by a ship or aircraft,

operated by an entexprise of a Contracting State, except when the ship or aircraft is

operated solely between places in the other Contracting State;

(h)

the term "competent authority" means

(i)

in Denmark

the Minister for Taxation or his authorised representative;

(ii) in Malta

the Minister responsible for fmance or his authorised representative;

(i)

the term "national" means

(i)

any individual possessing the nationality of a Contracting State;

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

from the laws in force in a Contracting State.

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

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

the meaning that it has at that time under the law of that State for the purposes of the

taxes to which the Convention applies, any meaning under the applicable tax laws of

that State prevailing over a meaning given to the term under other laws of that State.

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ARTICLE 4

Resident

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

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

reason of his domicile, residence, place of management or any other criterion of a

similar nature, 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 of the State

with which his personal and economic relations are closer (centre of

vital interests);

(b) if the State in which he has his centre of vital interests cannot be

determined, or if he has not a permanent home available to him in either

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

has an habitual abode;

(c) if he has an habitual abode in both States or in neither of them, he shall

be deemed to be a resident only of the State of which he is a national;

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

authorities of the Contracting States shall settle the question by mutual

agreement.

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

individual is a resident of both Contracting States, then it shall be deemed to be a

resident only of the State in which its place of effective management is situated.

ARTICLE 5

Permanent Establishment

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

means a fixed place of business through which the business of an enterprise is

wholly or partly carried on.

2. The term "permanent establishment" includes especially

(a) a place of management;

(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop; and

(f)

a mine, an oil or gas well, a quarry or any other place of extraction of

natural resources.

3. The term "permanent establishment" likewise encompasses a building site, a

construction, assembly or installation project or supervisory activities in connection

therewith, but only where such site, project or activities continue for a period of

more than six months.

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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 purpese 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, or to explore for, mineral deposits, sources and other natural resources;

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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 and to income from immovable property used

for the performance of independent personal services.

ARTICLE 7

Business Profits

1. The profits of an enterprise of a Contracting State shall be taxable only in

that State unless the enterprise carries on business in the other Contracting State

through a permanent establishment situated therein. If the enterprise carries on

business as aforesaid, the profits of the enterprise may be taxed in the other State but

only so much of them as is attributable to that permanent establishment.

2. Subject to the provisions of paragraph 3, where an enterprise of a

Contracting State carries on business in the other Contracting State through a

permanent establishment situated therein, there shall in each Contracting State be

attributed to that permanent establishment the profits which it might be expected to

make if it were a distinct and separate enterprise engaged in the same or similar

activities under the same or similar conditions and dealing wholly independently

with the enterprise of which it is a permanent establishment.

3. In determining the profits of a permanent establishment, there shall be

allowed as deductions expenses which are incurred for the purposes of the

permanent establishment, including executive and general administrative expenses

so incurred, whether in the State in which the permanent establishment is situated or

elsewhere.

4. Insofar as it has been customary in a Contracting State to determine the

profits to be attributed to a permanent establishment on the basis of an

apportionment of the total profits of the enterprise to its various parts, nothing in

paragraph 2 shall preclude that Contracting State from determining the profits to be

taxed by such an apportionment as may be customary; the method of apportionment

adopted shall, however, be such that the result shall be in accordance with the

principles contained in this Article.

5. No profits shall be attributed to a permanent establishment by reason of the

mere purchase by that permanent establishment of goods or merchandise for the

enterprise.

6. For the purposes of the preceding paragraphs, the profits to be attributed to

the permanent establishment shall be determined by the same method year by year

unless there is good and sufficient reason to the contrary.

7. Where profits include items of income which are dealt with separately in

other Articles of this Convention, then the provisions of those Articles shall not be

affected by the provisions of this Article.

ARTICLE 8

Shipping and Air Transport

1. Profits derived by an enterprise of a Contracting State from the operation of

ships and aircraft in international traffic shall be taxable only in that State.

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2. Profits derived by an enterprise of a Contracting State from the use,

demurrage, or rental of containers (including trailers, barges and related equipment

for the transport of containers) used for the transport of goods or merchandise shall

be taxable only in that State, except where such containers, trailers, barges and

related equipment are used for transport solely between places within the other

Contracting State.

3. The provisions of paragraph 1 shall also apply to profits from the

participation in a pool, a joint business or an international operating agency.

4. With respect to profits derived by the Danish, Norwegian and Swedish air

transport consortium, the Scandinavian Airlines System (SAS), the provisions of

paragraphs 1 and 3 shall apply only to such proportion of the profits as corresponds

to the participation held in that consortium by SAS Denmark A/S, the Danish partner

of Scandinavian Airlines System.

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

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Denmark to a resident of Malta which is the beneficial owner thereof,

the Danish tax so charged shall not exceed

(i)

0 per cent of the gross amount of the dividends if the beneficial

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

has held directly at least 25 per cent of the capital of the company

paying the dividends for a twelve month period prior to the date

the dividends are declared;

(ii) 15 per cent of the gross amount of the dividends in all other cases;

(b) where the dividends are paid by a company which is a resident of Malta

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

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

the profits out of which the dividends are paid.

The competent authorities of the Contracting States shall by mutual agreement

settle the mode of application of these limitations.

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

profits out of which the dividends are paid.

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

other rights, not being debt-claims, participating in profits, as well as income from

other corporate rights which is subjected to the same taxation treatment as income

from shares by the laws of the State of which the company making the distribution is

a resident.

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

of the dividends, being a resident of a Contracting State, carries on business in the

other Contracting State of which the company paying the dividends is a resident,

through a permanent establishment situated therein, or performs in that other State

independent personal services from a fixed base situated therein, and the holding in

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

establishment or fixed base. In such case the provisions of Article 7 or Article 14, as

the case may be, shall apply.

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

or income from the other Contracting State, that other State may not impose any tax

on the dividends paid by the company, except insofar as such dividends are paid to a

resident of that other State or insofar as the holding in respect of which the dividends

are paid is effectively connected with a permanent establishment or a fixed base

situated in that other State, nor subject the company’s undistributed profits to a tax

o n t h e c om pa n y’s u n d i s t r ib u t e d p r o f it s , e v e n i f t h e d i v i de n ds pa i d o r t he

undistributed profits consist wholly or partly of profits or income arising in such

other State.

6. Where a Contracting State has levied the tax at the source in excess of the

amount of tax chargeable under the provisions of this Convention, application for the

refund of the excess amount must be lodged with the competent authority of that

State within a period of four years after the expiration of the calendar year in which

the tax was levied. The refund shall be given within a six month period from the date

on which the application was submitted to the competent authority. The six month

period may be extended if both of the Contracting States agree that the necessary

documentation has not been presented to the competent authority of the first-

mentioned State.

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

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

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

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of this Article by means of that creation or assignment.

In the event that a resident of a Contracting State is denied relief from taxation in

the other Contracting State by reason of the provisions of the first sentence of this

paragraph, the competent authority of that other State shall notify the competent

authority of the first-mentioned State.

ARTICLE 11

Interest

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

Contracting State shall be taxable only in that other State if such resident is the

beneficial owner of the interest.

2. 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.

3. The provisions of paragraph 1 shall not apply if the beneficial owner of the

interest, being a resident of a Contracting State, carries on business in the other

Contracting State in which the interest arises, through a permanent establishment

situated therein, or performs in that other State independent personal services from a

fixed base situated therein, and the debt-claim in respect of which the interest is paid

is effectively connected with such permanent establishment or fixed base. In such

case the provisions of Article 7 or Article 14, as the case may be, shall apply.

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

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.

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

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

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

Article by means of that creation or assignment.

In the event that a resident of a Contracting State is denied relief from taxation in

the other Contracting State by reason of the provisions of the first sentence of this

paragraph, the competent authority of that other State shall notify the competent

authority of the first-mentioned State.

ARTICLE 12

Royalties

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

Contracting State shall be taxable only in that other State if such resident is the

beneficial owner of the royalties.

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

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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, or performs in that other State independent personal services from a

fixed base situated therein, and the right or property in respect of which the royalties

are paid is effectively connected with such permanent establishment or fixed base. In

such case the provisions of Article 7 or Article 14, as the case may be, shall apply.

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.

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

one of the main purposes of any person connected with the creation or assignment of

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

by means of that creation or assignment.

In the event that a resident of a Contracting State is denied relief from taxation in

the other Contracting State by reason of the provisions of the first sentence of this

paragraph, the competent authority of that other State shall notify the competent

authority of the first-mentioned State.

ARTICLE 13

Capital Gains

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

immovable property referred to in Article 6 and situated in the other Contracting

State may be taxed in that other State.

2. Gains from the alienation of shares or comparable interests in a company the

assets of which consist directly or indirectly principally of immovable property

situated in a Contracting State may be taxed in that State.

3. Gains from the alienation of movable properly forming part of the business

property of a permanent establishment which an enterprise of a Contracting State has

in the other Contracting State or of movable property pertaining to a fixed base

available to a resident of a Contracting State in the other Contracting State for the

purpose of performing independent personal services, including such gains from the

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

of such fixed base, may be taxed in that other State.

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

ships or aircraft operated in international traffic or movable property pertaining to

the operation of such ships or aircraft, shall be taxable only in that State.

5. Gains derived by an enterprise of a Contracting State from the alienation of

containers (including trailers, barges and related equipment for the transport of

containers) used for the transport of goods and merchandise shall be taxable only in

that State, except where such containers, trailers, barges and related equipment are

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used for transport solely between places within the other Contracting State.

6. Gains from the alienation of any property other than that referred to in

paragraphs 1, 2, 3, 4 and 5 shall be taxable only in the Contracting State of which the

alienator is a resident.

7. With respect to gains derived by the Danish, Norwegian and Swedish air

transport consortium, the Scandinavian Airlines System (SAS), the provisions of

paragraph 4 shall apply only to such proportion of the gains as corresponds to the

participation held in that consortium by SAS Denmark A/S, the Danish partner of

Scandinavian Airlines System.

ARTICLE 14

Independent Personal Services

I .

Income derived by a resident of a Contracting State in respect of

professional services or other activities of an independent character shall be taxable

only in that State. However, such income may be taxed in the other Contracting State

in the following circumstances

(a) if he has a fixed base regularly available to him in the other Contracting

State for the purpose of performing his activities; in that case, only so

much of the income as is attributable to that fixed base may be taxed in

that other Contracting State; or

(b) if his stay in the other Contracting State is for a period or periods

amounting to or exceeding in the aggregate 183 days in any twelve

month period commencing or ending in the fiscal year concerned; in

that case, only so much of the income as is derived from the activity

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

2. The term "professional services" includes especially independent scientific,

literary, artistic, educational or teaching activities as well as the independent

activities of physicians, lawyers, engineers, architects, dentists and accountants.

ARTICLE 15

Dependent Personal Services

1. Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other

similar remuneration derived by a resident of a Contracting State in respect of an

employment shall be taxable only in that State unless the employment is exercised in

the other Contracting State. If the employment is so exercised, such remuneration as

is derived therefrom may be taxed in that other State.

2. Notwithstanding the provisions of paragraph 1, remuneration derived by a

resident of a Contracting State in respect of an employment exercised in the other

Contracting State shall be taxable only in the first-mentioned State if

(a) the recipient is present in the other State for a period or periods not

exceeding in the aggregate 183 days in any twelve month period

commencing or ending in the fiscal year concerned, and

(b) the remuneration is paid by, or on behalf of, an employer who is a

resident of the first-mentioned State, and

(c) the remuneration is not borne by a permanent establishment or a fixed

base which the employer has in the other State.

3. Notwithstanding the preceding provisions of this Article, remuneration

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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 the

Contracting State of which the enterprise operating the ship or aircraft is a resident

provided that such remuneration is subject to tax in that Contracting State.

Where a resident of Denmark derives remuneration in respect of an employment

exercised aboard an aircraft operated in international traffic by the consortium

Scandinavian Airlines System (SAS), such remuneration shall be taxable only in

Denmark.

ARTICLE 16

Directors’ Fees

Directors’ fees and other similar payments derived by a resident of a Contracting

State in his capacity as a member of the board of directors of a company which is a

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

ARTICLE 17

Artistes and Sportsmen

1. Notwithstanding the provisions of Articles 14 and 15, income derived by a

resident of a Contracting State as an entertainer, such as a theatre, motion picture,

radio or television artiste, or a musician, or as a sportsman, from his personal

activities as such exercised in the other Contracting State, may be taxed in that other

State.

2. Where income in respect of personal activities exercised by an entertainer or

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

himself but to another person, that income may, notwithstanding the provisions of

Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the

entertainer or sportsman are exercised.

3. The provisions of paragraphs 1 and 2 shall not apply to income derived from

activities performed in a Contracting State by artistes or sportsmen if the visit to that

State is substantially supported by public funds of the other Contracting State or a

political subdivision or a local authority thereof.

ARTICLE 18

Pensions and Similar Payments

1. Subject to the provisions of paragraph 2 of Article 19, pensions, annuities

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

taxable only in that State.

2. Notwithstanding the provisions of paragraph 1, payments received by an

individual, being a resident of a Contracting State, under the social security

legislation of the other Contracting State, or under any other scheme out of funds

created by that other State or a political subdivision or a local authority thereof, shall

be taxable only in that other State.

3. In the case of an individual who was a resident of a Contracting State and

has become a residnet of the other Contracting State, the provisions of paragraph 1

shall not affect the right of the first-mentioned State under its national laws to tax

pensions, annuities and other similar remuneration accruing to such individual from

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sources within that State.

4. The term ''annuities'' means stated sums 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.

ARTICLE 19

Government Service

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

paid by a Contracting State or a political subdivision or a local authority thereof to

an individidual 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 renedered 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) Any pension paid by, or out of funds created by, a Contracting State or a

political subdivision or a local authority thereof to an individual in respect of

services rendered to that State or subdivision or authority shall be taxable only in

that State.

(b) However, such pension 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 15, 16, 17 and 18 shall apply to salaries, wages

and other similar remuneration, and to pensions, in respect of services rendered in

connection with a business carried on by a Contracting State or a political

subdivision or a local authority thereof.

ARTICLE 20

Students

Payments which a student or business apprentice who is or was immediately

before visiting a Contracting State a resident of the other Contracting State and who

is present in the first-mentioned State solely for the purpose of his education or

training receives for the purpose of his maintenance, education or training shall not

be taxed in that State, provided that such payments arise from sources outside that

State

ARTICLE 21

Activities in connection with Preliminary Surveys, Exploration or Extraction of

Hydrocarbons

1. Notwithstanding the provisions of Articles 5 and 14, a resident of a

Contracting State who carries on activities in connection with preliminary surveys,

exploration or extraction of hydrocarbons situated in the other Contracting State

shall be deemed to be carrying on in respect of such activities a business in that other

State through a permanent establishment or to be performing independent personal

services from a fixed base situated therein.

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2. The provisions of paragraph 1 shall not apply where the activities are carried

on for a period or periods not exceeding 30 days in the aggregate in any twelve

month period. However, for the purpose of this paragraph, activities carried on by an

enterprise associated with another enterprise within the meaning of Article 9 shall be

deemed to be carried on by the enterprise with which it is associated if the activities

in question are substantially the same as those carried on by the last-mentioned

enterprise.

3. Notwithstanding the provisions of paragraphs 1 and 2, drilling rig activities

carried on offshore shall constitute a permanent establishment only if the activities

are carried on for a period or periods exceeding 183 days in the aggregate in any

twelve month period. However, for the purpose of this paragraph, activities carried

on by an enterprise associated with another enterprise within the meaning of Article

9 shall be deemed to be carried on by the enterprise with which it is associated if the

activities in question are substantially the same as those carried on by the last-

mentioned enterprise.

4. Notwithstanding the provisions of Article 13, capital gains on drilling rigs

used for activities, as mentioned in paragraph 3, which are deemed to be derived by

a resident of a Contracting State when the activities cease to be subject to tax in the

other Contracting State, shall be exempt from tax in that other State. For the purpose

of this paragraph, the term "capital gains" means the amount by which the market

value at the moment of transfer exceeds the residual value at that moment, as

increased by any depreciation taken.

ARTICLE 22

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, or performs in

that other State independent personal services from a fixed base situated therein, and

the right or property in respect of which the income is paid is effectively connected

with such permanent establishment or fixed base. In such case the provisions of

Article 7 or Article 14, as the case may be, shall apply.

ARTICLE 23

Elimination of Double Taxation

Double taxation shall be avoided as follows

1. in the case of Denmark

(a) subject to the provisions of sub-paragraph (c), where a resident of

Denmark derives income which, in accordance with the provisions of

this Convention, may be taxed in Malta, Denmark shall allow as a

deduction from the tax on the income of that resident, an amount equal

to the income tax paid in Malta;

(b) such deduction shall not, however, exceed that part of the income tax, as

computed before the deduction is given, which is attributable to the

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income which may be taxed in Malta;

(c) where a resident of Denmark derives income which, in accordance with

the provisions of this Convention, shall be taxable only in Malta,

Denmark may include this income in the tax base, but shall allow as a

deduction from the income tax that part of the income tax which is

attributable to the income derived from Malta.

2. in the case of Malta

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 Denmark, the Danish tax on such income shall be allowed as a credit against

the relative Malta tax payable thereon.

ARTICLE 24

Limitation of Relief

1. Where under any provision of this Convention any income is relieved from

tax in a Contracting State and, under the law in force in the other Contracting State,

a person, in respect of that income, is subject to tax by reference to the amount

thereof which is remitted to or received in that other Contracting State and not by

reference to the full amount thereof, then the relief to be allowed under this

Convention in the first-mentioned State shall apply only to so much of the income as

is taxed in the other Contracting State.

2. The provisions of this Convention shall not apply to persons entitled to any

special tax benefits under

(a) a law of either one of the Contracting States which has been identified

in an Exchange of Notes between the Contracting States; or

(b) any substantially similar law subsequently enacted.

ARTICLE 25

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

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family responsibilities which it grants to its own residents.

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

Article 11, or paragraph 4 of Article 12 apply, interest, royalties and other

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

Contracting State shall, for the purpose of determining the taxable profits of such

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

resident of the first-mentioned State.

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 apply to the taxes which are the subject

of this Convention.

ARTICLE 26

Mutual Agreement Procedure

1. Where a person considers that the actions of one or both of the Contracting

States result or will result for him in taxation not in accordance with the provisions

of this Convention, he may, irrespective of the remedies provided by the domestic

law of those States, present his case to the competent authority of the Contracting

State of which he is a resident or, if his case comes under paragraph 1 of Article 25,

to that of the Contracting State of which he is a national. The case must be presented

within three years from the first notification of the action resulting in taxation not in

accordance with the provisions of the Convention.

2. The competent authority shall endeavour, if the objection appears to it to be

justified and if it is not itself able to arrive at a satisfactory solution, to resolve the

case by mutual agreement with the competent authority of the other Contracting

State, with a view to the avoidance of taxation which is not in accordance with the

Convention. Any agreement reached shall be implemented notwithstanding any time

limits in the domestic law of the Contracting States.

3. The competent authorities of the Contracting States shall endeavour to

r e s o l v e b y m u t u a l a g r e e m e n t a n y d i ff i c u l t i e s o r d o u b t s a r i s i n g a s t o t h e

interpretation or application of the Convention. They may also consult together for

the elimination of double taxation in cases not provided for in the Convention.

4. The competent authorities of the Contracting States may communicate with

each other directly, including through a joint commission consisting of themselves or

their representatives, for the purpose of reaching an agreement in the sense of the

preceding paragraphs.

ARTICLE 27

Exchange of Information

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

information as is necessary for carrying out the provisions of this Convention or of

the domestic laws of the Contracting States concerning taxes covered by the

Convention insofar as the taxation thereunder is not contrary to the Convention. The

exchange of information is not restricted by Article 1. Any information received by a

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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, or the

determination of appeals in relation to, the taxes covered by the Convention. Such

persons or authorities shall use the information only for such purposes. They may

disclose the information in public court proceedings or in judicial decisions.

2. In no case shall the provisions of paragraph 1 be construed so as to impose

on a Contracting State the obligation

(a) to carry out administrative measures at variance with the laws and

administrative practice of that or of the other Contcacting State;

(b) to supply information which is not obtainable under the laws or in the

normal course of the administration of that or of the other Contracting

State;

(c) to supply information which would disclose any trade, business,

industrial, commercial or professional secret or trade process, or

information, the disclosure of which would be contrary to public policy

(ordre public).

ARTICLE 28

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 29

Territorial Extension

1. This Convention may be extended, either in its entirety or with any

necessary modifications, to any part of the territory of Denmark which is specifically

excluded from the application of the Convention and which imposes taxes

substantially similar in character to those to which the Convention applies. Any such

extension shall take effect from such date and subject to such modifications and

conditions, including conditions as to termination, as may be specified and agreed

between the Contracting States in notes to be exchanged through diplomatic

channels.

2. Unless otherwise agreed by both Contracting States, the termination of the

Convention by one of them under Article 31 shall also terminate, in the manner

provided for in that Article, the application of the Convention to any territory to

which it has been extended under this Article.

ARTICLE 30

Entry into Force

1. The Governments of the Contracting States shall notify to each other,

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 on the date of the later of the

notifications referred to in paragraph 1 and its provisions shall have effect

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(a) in Denmark

in respect of taxes for the income year immediately following that in

which the Convention enters into force and subsequent income years;

(b) in Malta

in respect of taxes on income derived during any calendar year or

accounting period, as the case may be, beginning on or after the first

day of January immediately following the date on which the Convention

enters into force.

ARTICLE 31

Termination

This Convention shall remain in force until terminated by a Contracting State.

Either Contracting State may terminate the Convention, through diplomatic

channels, by giving notice of termination at least six months before the end of any

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

its entry into force. In such event, the Convention shall cease to have effect

(a) in Denmark

in respect of taxes for the income year immediately following that in

which the notice of termination is given and subsequent income years;

(b) in Malta

in respect of taxes on income recived during any calendar year or

accounting period, as the case may be, beginning on or after the first

day of January immediately following the date on which the notice is

given.

IN WITNESS WHEREOF the undersigned, duly authorised thereto by their

respective Governments, have signed this Convention.

Done in duplicate at Brussels this thirteenth day of July 1998, in the English

OLE PHILIPSON

VICTOR CAMILLERI

FOR THE GOVERNMENT OF

FOR THE GOVERNMENT OF

THE KINGDOM OF DENMARK

THE REPUBLIC OF MALTA

PROTOCOL

At the signing of the Convention between the Government of the Kingdom of

Denmark and the Government of the Republic of Malta for the avoidance of double

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

undersigned have agreed that the following provision shall form an integral part of

the Convention

Concerning paragraph 4 of Article 13 it is understood that capital gains as

mentioned in that provision can only be taxed in the State where the owner is a

resident, even where the ship or aircraft is operated by a resident of a third state.

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IN WITNESS WHEREOF the undersigned, duly authorised thereto by their

respective Governments have signed this Protocol.

Done in duplicate at Brussels this thirteenth day of July 1998, in the English

language.

OLE PHILIPSON

VICTOR CAMILLERI

FOR THE GOVERNMENT OF

FOR THE GOVERNMENT OF

THE KINGDOM OF DENMARK

THE REPUBLIC OF MALTA