DOUBLE TAXATION RELIEF ON TAXES ON INCOME WITH THE SYRIAN ARAB REPUBLIC ORDER

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE SYRIAN ARAB REPUBLIC

SUBSIDIARY LEGISLATION 123.59

DOUBLE TAXATION RELIEF ON TAXES ON

INCOME WITH THE SYRIAN ARAB REPUBLIC

ORDER

16th October, 2000

LEGAL NOTICE 246 of 2001.

The title of this Order is the Double Taxation Relief on

Taxes on Income with the Syrian Arab Republic Order.

CONVENTION BETWEEN THE REPUBLIC OF MALTA

AND THE SYRIAN ARAB REPUBLIC

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 Syrian Arab

Republic, 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 its 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 employers 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 Syrian Arab Republic with a view to affording

relief from double taxation in relation to the following

taxes imposed by the laws of the Syrian Arab

Republic

(i)

the income tax on commercial, industrial and

non-commercial profits;

(ii) the income tax on salaries and wages;

(iii) the income tax on non-residents;

(iv) the income tax on revenue from movable and

immovable capital;

(v) surcharges imposed as percentages of the above

taxes or in any other form or rate;

(b)

that it is expedient that those arrangements should

have effect;

(c) that the Convention has entered into force on the 16

October, 2000.

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

(a) in the case of Malta

the income tax;

(hereinafter referred to as "Malta tax");

(b) in the case of Syria

the income tax on commercial, industrial and non-commercial profits;

the income tax on salaries and wages;

the income tax on non-residents;

the income tax on revenue from movable and immovable capital;

surcharges imposed as percentages of the above taxes or in any other

form or rate;

(hereinafter referred to as "Syrian 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

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

Malta or Syria, as the context requires;

(b) the term "Malta" means the Republic of Malta and, when used in a

geographical sense, means the Island of Malta, the Island of Gozo and

the other islands of the Maltese archipelago, including the territorial

waters thereof, and any area outside the territorial waters of Malta

which has been or may hereafter be designated, in accordance with

international law and under the law of Malta concerning the continental

shelf, as an area within which the rights of Malta with respect to the

seabed and subsoil and their natural resources may be exercised;

(c) the term "Syria" means, in its geographical sense, the territory of the

Syrian Arab Republic, including its territorial sea, its air space, the

continental shelf, the subsoil and all other areas outside the Syrian

territorial sea within which, in accordance with international law, Syria

exercises sovereign rights for the purpose of extracting and exploring

the natural, vital and mining resources and all other rights on the seabed

and its subsoil and the superjacent waters;

(d) the term "person" includes an individual, a company and any other body

of persons;

(e) the term "national" means

(i)

any individual possessing the citizenship 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;

(f)

the term "company" means any body corporate, or any entity which is

treated, for tax purposes, as a body corporate;

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

Contracting State" mean respectively an enterprise carried on by a

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

of the other Contracting State;

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

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

or aircraft is operated solely between places in the other Contracting

State;

(i)

the term "competent authority" means

(i)

in the case of Malta, the Minister responsible for finance or his

authorised representative;

(ii)

in the case of Syria, the Minister of Finance or his authorised

representative.

2. As regards the application of the Convention by a Contracting State, any

term not defined therein shall have the meaning which it has under the taxation laws

of that State to which the Convention applies, which meaning shall prevail over the

meaning provided for such term in other branches of law of that State.

Article 4

RESIDENT

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

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

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

similar nature. But this term shall not include any person who is liable to tax in that

DOUBLE TAXATION RELIEF ON TAXES ON INCOME

WITH THE SYRIAN ARAB REPUBLIC

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 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 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 of the Contracting 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 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;

(f)

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

natural resources including an offshore drilling site; and

(g) premises used as sales outlets.

3. A building site or construction or assembly project constitutes a permanent

establishment only if it lasts more than six months.

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 or display 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 or display;

(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 of a Contracting State shall not be deemed to have a

permanent establishment in the other Contracting State merely because it carries on

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

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

course of their business. However, when the activities of such an agent are devoted

wholly or almost wholly on behalf of that enterprise, he will not be considered an

agent of an independent status within the meaning of this paragraph.

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 Contacting 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 from immovable property (including income from agriculture or

forestry) may be taxed in the Contracting State in which such immovable property is

situated.

2. For the purposes of this Convention, 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; ships, boats and aircraft shall not be

regarded as immovable property.

3. The provisions of paragraph 1 shall apply to income derived from the direct

use, letting, or use in any other form of immovable property.

4. The provisions of paragraphs 1 and 3 shall also apply to the income from

immovable property of an enterprise and to income from immovable property used

for the performance of independent personal services.

5. Where a person has shares or other rights in a company, trust or comparable

institution and is thereby entitled to the enjoyment of immovable property situated in

a Contracting State and held by that company, trust or comparable institution,

income from the direct use, letting or use in any other form of that right of

enjoyment by that person may be taxed in that State notwithstanding the provisions

of Articles 7 and 14.

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

Contracting 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 or with other associated

enterprises with which it deals.

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 of this Article, 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.

The provisions of this Article shall not affect the provisions of the law of a

Contracting State regarding the taxation of profits from the business of insurance.

Article 8

SHIPPING AND AIR TRANSPORT

1. Profits of an enterprise of a Contracting State from the operation of ships or

aircraft in international traffic shall be taxable only in that State. Such profits shall

include profits derived by the enterprise from other activities, and in particular from

the use, maintenance or rental of containers used for the transport of goods or

merchandise in international traffic, provided that such activities are incidental to

the operation of ships or aircraft in international traffic by the enterprise.

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

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

3. The provisions of this Article do not include the profits realised by an

enterprise of a Contracting State through commissions on sales, in the other

Contracting State, of travel tickets of aircraft and ships belonging to other

enterprises.

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 if that other State considers the adjustment justified. 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. Dividends mentioned in paragraph 1 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. However, total Malta or Syrian tax on the profits of a company

and the dividends distributed by such company, as the case may be, shall not exceed

the maximum of the tax chargeable on the profits of the company out of which the

dividends are paid.

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

on the company’s undistributed profits, even if the dividends paid or the

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

other State.

Article 11

INTEREST

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

Contracting State may be taxed in that other State.

2. However, such interest may also be taxed in the Contracting State in which

it arises and according to the laws of that State, but if the beneficial owner of the

interest is a resident of the other Contracting State the tax so charged shall not

exceed 10 percent of the gross amount of the interest.

3. Notwithstanding the provisions of paragraph 2, any such interest as is

mentioned in paragraph 1 shall be taxable only in the Contracting State of which the

recipient is a resident, if the beneficial owner of the interest is a resident of that

State, and if one of the following conditions is fulfilled

(a) such recipient is a Contracting State, or one of its local authorities, or a

statutory body of either, including the central bank of that State; or such

interest is paid by a Contracting State, or by its local authorities, or a

statutory body of either; or

(b) such interest is paid in respect of any debt-claim or loan guaranteed,

insured or supported by a Contracting State or another person acting on

behalf of a Contracting State.

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 and 2 shall not apply if the beneficial owner

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

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

establishment situated therein, 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.

6. Interest shall be deemed to arise in a Contracting State when the person

paying the interest, whether he is a resident of a Contracting State or not, has in a

Contracting State a permanent establishment or a fixed base in connection with

which the indebtedness on which the interest is paid was incurred, and such interest

is borne by such permanent establishment or fixed base.

7. Where, by reason of a special relationship between the payer and the

beneficial owner or between both of them and some other person, the amount of the

interest, having regard to the debt-claim for which it is paid, exceeds the amount

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

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

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

taxable according to the laws of each Contracting State, due regard being had to the

other provisions of this Convention.

Article 12

ROYALTIES

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

Contracting State may be taxed in that other State.

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

they arise and according to the laws of that State, but the tax so charged shall not

exceed 18 percent of the gross amount of the royalties referred to in paragraph 3 of

this Article. The competent authorities of the Contracting States shall by mutual

agreement settle the mode of application of these limitations.

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

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

literary, artistic or scientific work including cinematograph films, or tapes for

television or radio broadcasting, any patent, trade mark, design or model, plan, or

any industrial or scientific equipment, or for information concerning industrial or

scientific experience.

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

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

other Contracting State in which the royalties arise, through a permanent

establishment situated therein, 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.

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

that Contracting State itself, a local authority or a resident of that Contracting State.

Where, however, the person paying the royalties, whether he is a resident of a

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

fixed base in connection with which the liability to pay the royalties was incurred,

and such royalties are borne by such permanent establishment or fixed base, then

such royalties shall be deemed to arise in the Contracting State in which the

permanent establishment or fixed base is situated.

6. Where, by reason of a special relationship between the payer and the

beneficial owner or between both of them and some other person, the amount of the

royalties, having regard to the use, right or information for which they are paid,

exceeds the amount which would have been agreed upon by the payer and the

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

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

payments shall remain taxable according to the law of each Contracting State, due

regard being had to the other provisions of this Convention.

Article 13

CAPITAL GAINS

1. Gains derived from the alienation of immovable property may be taxed in

the Contracting State where such immovable property is situated.

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

the assets of which consist wholly or principally of immovable property, may be

taxed in the Contracting State in which the assets or the principal assets of the

company are situated.

3. 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 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 from the alienation of property forming part of the business property

of an enterprise of a Contracting State and consisting of ships or aircraft operated by

such enterprise in international traffic or movable property pertaining to the

operation of such ships or aircraft shall be taxable only in that Contracting 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

INDEPENDENT PERSONAL SERVICES

1. 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 all the

following conditions are fulfilled

(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;

(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 or a fixed

base which the employer has in the other State.

3. Notwithstanding the preceding provisions of this Article, remuneration

derived in respect of an employment exercised aboard a ship or aircraft operated in

international traffic by an enterprise of a Contracting State may be taxed in that

State.

Article 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, whether a resident of a Contracting State or not, 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. Notwithstanding the provisions of paragraphs 1 and 2, income derived by a

resident of a Contracting State as an entertainer or sportsman from his personal

activities as such exercised in the other Contracting State shall be taxable only in the

first-mentioned State if those activities in the other State are supported mainly by

public funds of the first-mentioned State or its local authorities.

Article 18

PENSIONS

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

similar remuneration paid to a resident of a Contracting State in consideration of

past employment shall be taxable only in that State.

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

under the social security legislation of a Contracting State shall be taxable only in

that State.

3. Nothing contained in paragraphs 1 and 2 shall affect the provisions of the

law of a Contracting State concerning the exemption of pensions from tax.

Article 19

GOVERNMENT SERVICE

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

paid by a Contracting State or a local authority thereof to an individual

in respect of services rendered to that State 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) Any pension paid by, or out of funds created by, a Contracting State or a

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

that State 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 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 local authority

thereof.

4. Nothing contained in paragraph 2 shall affect the provisions of the law of a

Contracting State concerning the exemption of pensions from tax.

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 taxable in that State, provided that such payments arise from sources outside that

State.

Article 21

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 beneficial

owner 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 22

ELIMINATION OF DOUBLE TAXATION

1. Where a resident of a Contracting State derives income which, in accordance

with the provisions of this Convention, may be taxed in the other Contracting State,

then the first Contracting State shall allow as a deduction from the tax on the income

of that resident an amount equal to the income tax paid in the other Contracting

State; such deduction shall not, however, exceed that part of the income tax, as

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

may be taxed in the other Contracting State.

2. Where, in accordance with any provision of this Convention, income derived

by a resident of a Contracting State is exempt from tax in that State, such State may

nevertheless, in calculating the amount of tax on the remaining income of such

resident, take into account the exempted income.

Article 23

NON-DISCRIMINATION

1. Nationals of a Contracting State shall not be subjected in the other

Contracting State to any taxation or any requirement connected therewith, which is

other or more burdensome than the taxation and connected requirements to which

nationals of that other State in the same circumstances, in particular with respect to

residence, are or may be subjected.

2. The taxation of a permanent establishment which an enterprise of a

Contracting State has in the other Contracting State shall not be less favourably

levied in that other State than the taxation levied on enterprises of that other State

carrying on the same activities. This provision shall not be construed as obliging a

Contracting State to grant to residents of the other Contracting State any personal

allowances, reliefs and reductions for taxation purposes on account of civil status or

family responsibilities which it grants to its own residents.

3. Except where the provisions of paragraph 1 of Article 9, paragraph 7 of

Article 11, or paragraph 6 of Article 12 apply, interest, royalties and other

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

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

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

resident of the first-mentioned State.

4. Enterprises of a Contracting State, the capital of which is wholly or partly

owned or controlled, directly or indirectly, by one or more residents of the other

Contracting State, shall not be subjected in the first-mentioned State to any taxation

or any requirement connected therewith which is other or more burdensome than the

taxation and connected requirements to which other similar enterprises of the first-

mentioned State are or may be subjected.

Article 24

MUTUAL AGREEMENT PROCEDURE

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

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

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

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

State of which he is a resident or, if his case comes under paragraph 1 of Article 23,

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

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

accordance with the provisions of the Convention.

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

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

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

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

Convention. Any agreement reached shall be implemented notwithstanding any time

limits in the domestic law of the Contracting States.

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

resolve by mutual agreement any difficulties or doubts arising as to the

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

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

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

each other directly for the purpose of reaching an agreement in the sense of the

preceding paragraphs of this Article. When it seems advisable in order to reach

agreement to have an oral exchange of opinions, such exchange may take place

through a commission consisting of the competent authorities of the Contracting

States.

5. The competent authorities of the Contracting States may by mutual

agreement settle the mode of application of this Convention.

Article 25

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 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) involved in 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 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).

Article 26

MEMBERS OF DIPLOMATIC MISSIONS OR CONSULAR POSTS

Nothing in this Convention shall affect the fiscal privileges of members of

diplomatic missions or consular posts under the general rules of international law or

under the provisions of special agreements.

Article 27

ENTRY INTO FORCE

1. The Contracting States shall notify each other, through diplomatic channels,

that the legal requirements for the entry into force of this Convention have been

complied with. This Convention shall enter into force thirty days after the date of

the later of these notifications.

2. The provisions of the Convention shall have effect 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 28

TERMINATION

1. This Convention shall remain in force indefinitely unless it is terminated by

a Contracting State. After a period of five years from the date on which the

Convention enters into force, either Contracting State may terminate it by giving

notice of termination, through diplomatic channels, at least six months before the

end of any calendar year.

2. In such event the Convention shall cease to have effect in respect of taxes on

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

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

which the notice is given.

IN WITNESS WHEREOF, the undersigned, duly authorized thereto, have signed

this Convention.

DONE at Damascus, this 22nd day of February, 1999 in the English language.

Guido de Marco

M. Khaled Al Mahayni

Vice Premier

Minister of Finance

and Minister of Foreign Affairs

For the Government of

For the Government of

the Republic of Malta

the Syrian Arab Republic