Resolução da Assembleia da República n.º 81/2000 — Aprova, para ratificação, a Convenção entre a República Portuguesa e o Canadá para Evitar a Dupla Tributação e Prevenir…

7 - 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.

8 - 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.

III - Taxation of income

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 - 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, mineral deposits, sources and other natural resources; ships and aircraft shall not be regarded as immovable property.

3 - The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.

4 - The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise 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 deduction 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 - 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.

5 - 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.

6 - 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 or aircraft in international traffic shall be taxable only in that State.

2 - The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.

Article 9

Associated enterprises

1 - Where:

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 income which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, has not so accrued, may be included in the income of that enterprise and taxed accordingly.

2 - Where a Contracting State includes in the income of an enterprise of that State - and taxes accordingly - income on which an enterprise of the other Contracting State has been charged to tax in that other State and the income so included is income 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 tax charged therein on that income. 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.

3 - A Contracting State shall not change the income of an enterprise in the circumstances referred to in paragraph 1 after the expiry of the time limits provided in its domestic laws and, in any case, after five years from the end of the year in which the income which would be subject to such change would, but for the conditions referred to in paragraph 1, have accrued to that enterprise.

4 - The provisions of paragraphs 2 and 3 shall not apply in the case of fraud, wilful default or neglect.

Article 10

Dividend

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 if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed:

a):

ii) In the case of dividends paid by a company that is a resident of Portugal, 10% of the gross amount of the dividends if the beneficial owner is a company that is a resident of Canada and that, for an uninterrupted period of two years prior to the payment of the dividends owns at least 25% of the capital (capital social) of the company paying the dividends;

The provisions of this paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

3 - The term «dividends» as used in this article means income from shares, «jouissance» shares or «jouissance» rights, mining shares, founder'shares or other rights, not being debt-claims, participating in profits, as well as income 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 paragraph 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 undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.

6 - Notwithstanding any provision in this Convention, a Contracting State may impose on the earnings of a company attributable to permanent establishments situated in that State, or on the alienation of immovable property situated in that State by a company carrying on a trade in immovable property, tax in addition to the tax which would be chargeable on the earnings of a company that is a resident of that State, provided that the rate of such additional tax so imposed shall not exceed the 10% of the amount of such earnings which have not been subjected to such additional tax in previous taxation years. For the purpose of this provision, the term «earnings» means:

ii) All taxes chargeable in that State on such profits, other than the additional tax referred to herein;

iii) The profits reinvested in that State, provided that the amount of such deduction shall be determined in accordance with the provisions of the law of that State, as they be amended from time to time without changing the general principle hereof, regarding the computation of the allowance in respect of investment in property in that State; and

iv) 500000 Canadian dollars or its equivalent in the currency of Portugal, less any amount deducted:

A) By the company; or

B) By a person related thereto from the same or a similar business as that carried on by the company;

under this clause; for the purposes of this clause, a company is related to another company if one company directly or indirectly controls the other, or both companies are directly or indirectly controlled by the same person or persons, or if the two companies deal with each other not at arm's length.

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% of the gross amount of the interest.

3 - Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempt from tax in that State if:

ii) In the case of Portugal, the Companhia de Seguro de Créditos (COSEC).

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, as well as income which is subjected to the same taxation treatment as income from money lent by the laws of the State in which the income arises. However, the term «interest» does not include income dealt with in article 10.

5 - The provisions of paragraph 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 payer is a resident of that State. Where, however, the person paying the interest, whether the person 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, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.

7 - Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this 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 if the beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed 10% of the gross amount of the royalties.

3 - The term «royalties» as used in this article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work, any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientific equipment, and for information concerning industrial, commercial or scientific experience, and includes payments of any kind in respect of motion picture films and works on film, videotape or other means of reproduction for use in connection with television.

4 - The provisions of paragraph 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 a resident of that State. Where, however, the person paying the royalties, whether the person 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 obligation 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 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 laws of each Contracting State, due regard being had to the other provisions of this Convention.

Article 13

Capital gains

1 - Gains derived by a resident of a Contracting State from the alienation of immovable property situated in the other Contracting State may be taxed in that other State.

2 - Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State 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 a fixed base may be taxed in that other State.

3 - Gains from the alienation of ships or aircraft operated in international traffic by an enterprise of a Contracting State or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that State.

4 - Gains derived by a resident of a Contracting State from the alienation of:

may be taxed in that other State.

5 - Gains from the alienation of any property, other than that referred to in paragraphs 1, 2, 3 and 4 shall be taxable only in the Contracting State of which the alienator is a resident.

6 - The provisions of paragraph 5 shall not affect the right of a Contracting State to levy, according to its law, a tax on gains from the alienation of any property derived by an individual who is a resident of the other Contracting State if the alienator:

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 also be taxed in the other Contracting State in the following cases:

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 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:

3 - Notwithstanding the preceding provisions of this article, remuneration 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 the capacity as a member of the board of directors or supervisory board (in Portugal, conselho fiscal) or a similar organ of a company which is a resident of the other Contracting State, may be taxed in that other State.

Article 17

Artistes and sportspersons

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 sportsperson, from that resident's personal activities as such exercised in the other Contracting State, may be taxed in that other State.

2 - Where income in respect of personal activities exercised by an entertainer or a sportsperson in that individual's capacity as such accrues not to the entertainer or sportsperson personally 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 sportsperson are exercised.

3 - The provisions of paragraphs 1 and 2 shall not apply to income derived from activities performed in a Contracting State by a resident of the other Contracting State in the context of a visit in the first-mentioned State of a non-profit organization of the other State, provided the visit is principally supported by public funds.

Article 18

Pensions and annuities

1 - Pensions and annuities arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2 - Pensions arising in a Contracting State and paid to a resident of the other Contracting State may also be taxed in the State in which they arise and according to the law of that State, but in the case of periodic pension payments, the tax so charged shall not exceed the lesser of:

3 - Annuities arising in a Contracting State and paid to a resident of the other Contracting State may also be taxed in the State in which they arise and according to the laws of that State, but the tax so charged shall not exceed 15% of the portion thereof that is subject to tax in that State. However, this limitation does not apply to lump-sum payments arising on the surrender, cancellation, redemption, sale or other alienation of an annuity, or to payments of any kind under an annuity contract the cost of which was deductible, in whole or in part, in computing the income of any person who acquired the contract.

4 - Notwithstanding anything in this Convention:

Article 19

Government service

1 - a) Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting State or a political or administrative 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.

ii) Did not become a resident of that State solely for the purpose of rendering the services.

2 - The provisions of articles 15, 16 and 17 shall apply to salaries, wages and other similar remuneration in respect of services rendered in connection with a business carried on by a Contracting State or a political or administrative subdivision or a local authority thereof.

Article 20

Students

Payments which a student, apprentice or business trainee 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 that individual's education or training receives for the purpose of that individual's maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State.

Article 21

Other income

1 - Subject to the provisions of paragraph 2, 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 - However, if such income is derived by a resident of a Contracting State from sources in the other Contracting State, such income may also be taxed in the State in which it arises, and according to the law of that State. Where such income is income from a trust, other than a trust to which contributions were deductible, the tax so charged shall, provided that the income is taxable in the Contracting State in which the beneficial owner is a resident, not exceed 15% of the gross amount of the income.

IV - Methods for prevention of double taxation

Article 22

Elimination of double taxation

1 - In the case of Canada, double taxation shall be avoided as follows:

2 - In the case of Portugal, double taxation shall be avoided as follows:

3 - For the purposes of this article, profits, income or gains of a resident of a Contracting State which may be taxed in the other Contracting State in accordance with this Convention shall be deemed to arise from sources in that other State.

V - Special provisions

Article 23

Non-discrimination

1 - Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected. This provision shall, notwithstanding the provisions of article 1, also apply to persons who are not residents of one or both of the Contracting States.

2 - The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.

3 - Except where the provisions of paragraph 1 of article 9, paragraph 7 of article 11, or paragraph 6 of article 12, apply, interest, royalties or other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State.

4 - The provisions of paragraph 3 shall not affect the operation of any provision of the taxation laws of a Contracting 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, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of a third State, are or may be subjected.

6 - In this article, the term «taxation» means taxes which are the subject of this Convention.

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 that person in taxation not in accordance with the provisions of this Convention, that person may, irrespective of the remedies provided by the domestic law of those States, address to the competent authority of the Contracting State of which that person is a resident or, if that person's case comes under paragraph 1 of article 23, to that of the Contracting State of which that person is a national, an application in writing stating the grounds for claiming the revision of such taxation. To be admissible, the said application must be submitted within two years from the first notification of the action which gives rise to taxation not in accordance with the provisions of the Convention.

2 - The competent authority referred to in paragraph 1 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 not in accordance with the Convention.

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.

4 - The competent authorities of the Contracting States may communicate with each other directly for the purpose of applying the 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) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, taxes. 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:

Article 26

Members of diplomatic missions and consular posts

1 - 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.

2 - Notwithstanding article 4, an individual who is a member of a diplomatic mission, consular post or permanent mission of a Contracting State which is situated in the other Contracting State or in a third State shall be deemed for the purposes of the Convention to be a resident of the sending State if that individual is liable in the sending State to the same obligations in relation to tax on total income as are residents of that sending State.

3 - The Convention shall not apply to international organizations, to organs or officials thereof and to persons who are members of a diplomatic mission, consular post or permanent mission of a third State or group of States, being present in a Contracting State and who are not liable in either Contracting State to the same obligations in relation to tax on their total income as are residents thereof.

Article 27

Miscellaneous rules

1 - The provisions of this Convention shall not be construed to restrict in any manner any exemption, allowance, credit or other deduction accorded:

2 - Nothing in the Convention shall be construed as preventing a Contracting State from imposing a tax on amounts included in the income of a resident of that State with respect to a partnership, trust, or controlled foreign affiliate, in which that resident has an interest.

3 - Notwithstanding the provisions of article 4, a company or other entity that is entitled to income tax benefits under the legislation and other measures relating to the tax-free zones of a Contracting State, or to benefits similar to those provided with respect to such tax-free zones that are made available under any legislation or other measure adopted after the date of signature of the Convention, shall be deemed not to be a resident of that State for the purposes of the Convention. However, this paragraph shall not apply to a company or other entity deriving income from:

4 - For the purposes of paragraph 3 of article XXII («Consultation») of the General Agreement on Trade in Services, the Contracting States agree that, notwithstanding that paragraph, any dispute between them as to wheter a measure falls within the scope of this Convention may be brought before the Council for Trade in Services, as provided by that paragraph, only with the consent of both Contracting States. Any doubt as to the interpretation of this paragraph shall be resolved under paragraph 3 of article 24 or, failing agreement under that procedure, pursuant to any other procedure agreed to by both Contracting States.

VI - Final provisions

Article 28

Entry into force

1 - This Convention shall be ratified and the instruments of ratification shall be exchanged as soon as possible.

2 - The Convention shall enter into force 30 days after the exchange of instruments of ratification and its provisions shall have effect:

ii) In respect of other Canadian tax, for taxation years beginning on or after the first day of January in the calendar year next following that in which the Convention enters into force;

ii) In respect of other taxes, to income derived during any taxable period beginning on or after the first day of January in the calendar year next following that in which the Convention enters into force.

3 - Notwithstanding the provisions of paragraph 2, the provisions of article 8 and of paragraph 3 of article 13 shall have effect in respect of taxes on income arising during the 1994 taxation year and subsequent taxation year.

Article 29

Termination

This Convention shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Convention in writing and through the diplomatic channel, by giving at least six months notice before the end of any calendar year beginning from the second year following that in which the instruments of ratification are exchanged. In such event, the Convention shall cease to have effect:

ii) In respect of other Canadian tax, for taxation years beginning on or after the first day of January of the calendar year next following that mentioned in the notice of termination;

ii) In respect of other taxes, to income derived during any taxable period beginning on or after the first day of January of the calendar year next following that mentioned in the notice of termination.

In witness whereof the undersigned, duly authorized to that effect, have signed this Convention.

Done in duplicate at Ottawa this 14 day of June 1999, in the English, French and Portuguese languages, each version being equally authentic.

For the Government of the Portuguese Republic:

(ver assinatura no documento original)

For the Government of Canada:

(ver assinatura no documento original)

PROTOCOL

At the moment of signing the Convention this day concluded between Canada and the Portuguese Republic for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, the undersigned have agreed upon the following provisions which shall be an integral part of the Convention.

1 - With reference to article 3, paragraph 1, j), and articles 5 and 8, ferry-boats, deep-sea ferry-boats or other vessels devoted principally to the transportation of passengers or goods exclusively between places in a Contracting State shall, when so operated, be deemed not to be operated in international traffic; the landing site or sites situated in a Contracting State and used regularly in such operation by such boats or vessels shall constitute a permanent establishment in that State of the enterprise operating such boats or vessels.

2 - With reference to article 6, it is understood that its provisions shall also apply to income from immovable property and services which, according to the tax legislation of the Contracting State in which the property in question is situated, is assimilated to income from immovable property.

3 - With reference to article 6, paragraph 3, it is understood that its provisions shall also apply to income from the alienation of property referred to therein.

4 - With reference to article 7, paragraph 1, it is understood that the profits attributable to a permanent establishment in a Contracting State may be taxed in that State even though the permanent establishment has ceased to exist.

5 - With reference to article 7, paragraph 3, the term «expenses which are incurred for the purposes of the permanent establishment» refers to expenses directly related to the activity of the permanent establishment which are deductible under the laws of the Contracting State in which the permanent establishment is situated.

6 - With reference to article 9, paragraph 2, it is understood that the State being asked to make the adjustment to income is required to do it only if it considers that the adjustment made in the other Contracting State is justified in principle and in its amount.

7 - With reference to article 10, paragraph 3, the term «dividends» also means, in the case of Portugal, profits attributable or paid under an arrangement for participation in profits (associação em participação).

8 - With reference to article 12, it is understood that its provisions shall also apply to remuneration for technical assistance where such assistance is related to the use of, or the right to use, rights, property or information referred to in paragraph 3 of that article.

9 - With reference to paragraph 6 of article 13, it is agreed that, if the Canadian legislation concerning the taxation of former residents is amended in the sense of the Canadian announcement of December 23, 1998 (communiqué n.º 98-134), the provisions of paragraph 6 of article 13 will automatically be replaced by the following:

«6 - Where an individual who ceases to be a resident of a Contracting State, and immediately thereafter becomes a resident of the other Contracting State, is treated for the purposes of taxation in the first-mentioned State as having alienated a property and is taxed in that State by reason thereof, the individual may elect to be treated for purposes of taxation in the other State as if the individual had, immediately before becoming a resident of that State, sold and repurchased the property for an amount equal to its fair market value at that time. However, this provision shall not apply to property any gain from which, arising immediately before the individual became a resident of that other State, may be taxed in that other State nor to immovable property situated in a third State.»

10 - With reference to article 14, paragraph 1, it is understood that the profits attributable to a fixed base in a Contracting State may be taxed in that State even though the fixed base has ceased to exist.

11 - With reference to article 16, it is understood that remuneration paid by a company to a member of its boards in respect of the exercise of a continuous activity may be taxed in accordance with the provisions of article 15.

12 - With reference to article 17, paragraph 2, it is understood that its provisions shall not apply if it is established that neither the entertainer or the sportsperson nor persons related thereto, participate directly or indirectly in the profits of the person referred to in that paragraph.

13 - With reference to subparagraph a) of paragraph 1 of article 22, it is understood that the existing provisions of the law of Canada regarding the taxation of income from a foreign affiliate in force at the time of signature of the Convention shall continue to apply as long as they are not amended or terminated.

In witness whereof the undersigned, duly authorized to that effect, have signed this Protocol.

Done in duplicate at Ottawa this 14 day of June 1999, in the English, French and Portuguese languages, each version being equally authentic.

For the Government of the Portuguese Republic:

(ver assinatura no documento original)

For the Government of Canada:

(ver assinatura no documento original)

CONVENTION ENTRE LE GOUVERNEMENT DE LA RÉPUBLIQUE PORTUGAISE ET LE GOUVERNEMENT DU CANADA EN VUE D'ÉVITER LES DOUBLES IMPOSITIONS ET DE PRÉVENIR L'ÉVASION FISCALE EN MATIÈRE D'IMPÔTS SUR LE REVENU.

Le Gouvernement de la République portugaise et le Gouvernement du Canada, désireux de conclure une Convention en vue d'éviter les doubles impositions et de prévenir l'évasion fiscale en matière d'impôts sur le revenu, sont convenus des dispositions suivantes:

I - Champ d'application de la Convention

Article premier

Personnes visées

La présente Convention s'applique aux personnes qui sont des résidents d'un État contractant ou des deux États contractants.

Aricle 2

Impôts visés

1 - Les impôts actuels auxquels s'applique la Convention sont:

Les impôts sur le revenu qui sont perçus par le Gouvernement du Canada en vertu de la Loi de l'impôt sur le revenu (ci-après dénommés «impôt canadien»);

ii) L'impôt sur le revenu des personnes juridiques (imposto sobre o rendimento das pessoas colectivas - IRC);

iii) La surtaxe locale sur l'impôt sur le revenu des personnes juridiques (derrama);

(ci-après dénommés «impôt portugais»).

2 - La Convention s'applique aussi aux impôts de nature identique ou analogue qui seraient établis après la date de signature de la Convention et qui s'ajouteraient aux impôts actuels ou qui les remplaceraient. Les autorités compétentes des États contractants se communiquent les modifications importantes apportées à leurs législations fiscales respectives.

II - Définitions

Article 3

Définitions générales

1 - Au sens de la présente Convention, à moins que le contexte n'exige une interprétation différente:

ii) La mer et l'espace aérien au-dessus de la région visée au sous-alinéa i), à l'égard de toute activité poursuivie en rapport avec l'exploration ou l'exploitation des ressources naturelles qui y sont visées;

ii) En ce qui concerne le Portugal, le ministre des Finances, le directeur général des Impôts ou leurs représentants autorisés;

ii) Toute personne morale, société de personnes ou association constituées conformément à la législation en vigueur dans un État contractant;

2 - En ce qui concerne l'application de la Convention à un moment donné par un État contractant, tout terme ou expression qui n'y est pas défini devra, à moins que le contexte n'exige une interprétation différente, avoir le sens qui lui est attribué à ce moment par la législation de cet État régissant les impôts auxquels s'applique la Convention, toute interprétation en vertu de cette législation fiscale l'emportant sur celle qui résulte des autres lois de cet État.

Article 4

Résident

1 - Au sens de la présente Convention, l'expression «résident d'un État contractant» désigne:

2 - Lorsque, selon les dispositions du paragraphe 1, une personne physique est un résident des deux États contractants, sa situation est réglée de la manière suivante:

3 - Lorsque, selon les dispositions du paragraphe 1, une personne autre qu'une personne physique est un résident des deux États contractants, les autorités compétentes des États contractants s'efforcent d'un commun accord de trancher la question et de déterminer les modalités d'application de la Convention à cette persornne. À défaut d'un tel accord, cette personne n'est considérée comme un résident d'acucun des États contractants pour l'obtention des avantages prévus par la Convention.

Article 5

Établissement stable

1 - Au sens de la présente Convention, l'expression «établissement stable» désigne une installation fixe d'affaires par l'intermédiaire de laquelle une entreprise exerce tout ou partie de son activité.

2 - L'expression «établissement stable» comprend notamment:

3 - Un chantier de construction ou de montage ne constitue un établissement stable que si sa durée dépasse six mois.

4 - Nonobstant les dispositions précédentes du présent article, on considère qu'il n'y a pas «établissement stable» si:

5 - Nonobstant les dispositions des paragraphes 1 et 2, lorsqu'une personne - autre qu'un agent jouissant d'un statut indépendant auquel s'applique le paragraphe 7 - agit pour le compte d'une entreprise et dispose dans un État contractant de pouvoirs qu'elle y exerce habituellement lui permettant de conclure des contrats au nom de l'entreprise, cette entreprise est considérée comme ayant un établissement stable dans cet État pour toutes les activités que cette personne exerce pour l'entreprise, à moins que les activités de cette personne ne soient limitées à celles qui sont mentionnées au paragraphe 4 et qui, si elles étaient exercées par l'intermédiaire d'une installation fixe d'affaires, ne permettraient pas de considérer cette installation comme un établissement stable selon les dispositions de ce paragraphe.

6 - Sous réserve des dispositions des paragraphes 4, 7 et 8, une entreprise d'un État contractant qui exerce son activité dans l'autre État contractant, par l'intermédiaire de ses employés ou de tout autre personnel rendant des services substantiellement identiques, pendant une période égale ou supérieure à 120 jours durant toute période de 12 mois commençant ou se terminant durant l'année fiscale considérée, est considérée comme ayant un établissement stable dans cet autre État.

7 - Une entreprise n'est pas considérée comme ayant un établissement stable dans un État contractant du seul fait qu'elle y exerce son activité par l'entremise d'un courtier, d'un commissionnaire général ou de tout autre agent jouissant d'un statut indépendant, à condition que ces personnes agissent dans le cadre ordinaire de leur activité.

8 - Le fait qu'une société qui est un résident d'un État contractant contrôle ou est contrôlée par une société qui est un résident de l'autre État contractant ou qui y exerce son activité (que ce soit par l'intermédiaire d'un établissement stable ou non) ne suffit pas, en lui-même, à faire de l'une quelconque de ces sociétés un établissement stable de l'autre.

III - Imposition des revenus

Article 6

Revenus immobiliers

1 - Les revenus qu'un résident d'un État contractant tire de biens immobiliers (y compris les revenus des exploitations agricoles ou forestières) situés dans l'autre État contractant, sont imposables dans cet autre État.

2 - Au sens de la présente Convention, l'expression «biens immobiliers» a le sens que lui attribue le droit de l'État contractant où les biens considérés sont situés.

L'expression comprend en tous cas les accessoires, le cheptel mort ou vif des exploitations agricoles et forestières, les droits auxquels s'appliquent les dispositions du droit privé concernant la propriété foncière, l'usufruit des biens immobiliers et les droits à des paiements variables ou fixes pour l'exploitation ou la concession de l'exploitation de gisements minéraux, sources et autres ressources naturelles, les navires et aéronefs ne sont pas considérés comme des biens immobiliers.

3 - Les dispositions du paragraphe 1 s'appliquent aux revenus provenant de l'exploitation directe, de la location ou de l'affermage, ainsi que de toute autre forme d'exploitation de biens immobiliers.

4 - Les dispositions des paragraphes 1 et 3 s'appliquent également aux revenus provenant des biens immobiliers d'une entreprise ainsi qu'aux revenus des biens immobiliers servant à l'exercice d'une profession indépendante.

Article 7

Bénéfices des entreprises

1 - Les bénéfices d'une entreprise d'un État contractant ne sont imposables que dans cet État, à moins que l'entreprise n'exerce son activité dans l'autre État contractant par l'intermédiaire d'un établissement stable qui y est situé. Si l'entreprise exerce son activité d'une telle façon, les bénéfices de l'entreprise sont imposables dans l'autre État mais uniquement dans la mesure où ils sont imputables à cet établissement stable.

2 - Sous réserve des dispositions du paragraphe 3, lorsqu'une entreprise dun État contractant exerce son activité dans l'autre État contractant par l'intermédiaire d'un établissement stable qui y est situé, il est imputé, dans chaque État contractant, à cet établissement stable les bénéfices qu'il aurait pu réaliser s'il avait constitué une entreprise distincte exerçant des activités identiques ou analogues dans des conditions identiques ou analogues et traitant en toute indépendance avec l'entreprise dont il constitue un établissement stable.

3 - Pour déterminer les bénéfices d'un établissement stable, sont admises en déduction les dépenses exposées aux fins poursuivies par cet établissement stable, y compris les dépenses de direction et les frais généraux d'administration ainsi exposés, soit dans lÉtat où est situé cet établissement stable, soit ailleurs.

4 - Aucun bénéfice n'est imputé à un établissement stable du fait qu'il a simplement acheté des marchandises pour l'entreprise.

5 - Aux fins des paragraphes précédents, les bénéfices à imputer à l'établissement stable sont déterminés chaque année selon la même méthode, à moins qu'il n'existe des motifs valables et suffisants de procéder autrement.

6 - Lorsque les bénéfices comprennent des éléments de revenu traités séparément dans d'autres articles de la présente Convention, les dispositions de ces articles ne sont pas affectées par les dispositions du présent article.

Article 8

Navigation maritime et aérienne

1 - Les bénéfices qu'une entreprise d'un État contractant tire de l'exploitation, en trafic international, de navires ou d'aéronefs ne sont imposables que dans cet État.

2 - Les dispositions du paragraphe 1 s'appliquent aussi aux bénéfices provenant de la participation à un pool, une exploitation en commun ou un organisme international d'exploitation.

Article 9

Entreprises associées

1 - Lorsque:

et que, dans l'un et l'autre cas, les deux entreprises sont, dans leurs relations commerciales ou financières, liées par des conditions convenues ou imposées, qui différent de celles qui seraient convenues entre des entreprises indépendantes, les revenus qui, sans ces conditions, auraient été réalisés par l'une des entreprises mais n'ont pu l'être en fait à cause de ces conditions, peuvent être inclus dans les revenus de cette entreprise et imposés en conséquence.

2 - Lorsqu'un État contractant inclut dans les revenus d'une entreprise de cet État - et impose en conséquence - des revenus sur lesquels une entreprise de l'autre État contractant a été imposée dans cet autre État, et que les revenus ainsi inclus sont des revenus qui auraient été réalisés par l'entreprise du premier État si les conditions convenues entre les deux entreprises avaient été celles qui auraient été convenues entre des entreprises indépendantes, l'autre État procède à un ajustement approprié du montant de l'impôt qui y a été perçu sur ces revenus. Pour déterminer cet ajustement, il est tenu compte des autres dispositions de la présente Convention et, si c'est nécessaire, les autorités compétentes des États contractants se consultent.

3 - Un État contractant ne rectifiera pas les revenus d'une entreprise dans les cas visés au paragraphe 1 après l'expiration des délais prévus par son droit interne et, en tout cas, après l'expiration de cinq ans à dater de la fin de l'année au cours de laquelle les revenus qui feraient l'objet d'une telle rectification auraient, sans les conditions visées au paragraphe 1, été réalisés par cette entreprise.

4 - Les dispositions des paragraphes 2 et 3 ne s'appliquent pas en cas de fraude, d'omission volontaire ou de négligence.

Article 10

Dividendes

1 - Les dividendes payés par une société qui est un résident d'un État contractant à un résident de l'autre État contractant sont imposables dans cet autre État.

2 - Toutefois, ces dividendes sont aussi imposables dans l'État contractant dont la société qui paie les dividendes est un résident, et selon la législation de cet État, mais si le bénéficiaire effectif des dividendes est un résident de l'autre État contractant, l'impôt ainsi établi ne peut excéder:

a):

ii) Dans le cas de dividendes payés par une société qui est un résident du Portugal, 10% du montant brut des dividendes si le bénéficiaire effectíf est une société qui est un résident du Canada et qui détient, pour une période consécutive de deux ans avant le paiement des dividendes au moins 25% du capital social de la société qui paie les dividendes;

Les dispositions du présent paragraphe n'affectent pas l'imposition de la société sur les bénéfices qui servent au paiement des dividendes.

3 - Le terme «dividendes» employé dans le présent article désigne les revenus provenant d'actions, actions ou bons de jouissance, parts de mine, parts de fondateur ou autres parts bénéficiaires à l'exception des créances, ainsi que les revenus soumis au même régime fiscal que les revenus d'actions par la législation de l'État dont la société distributrice est un résident.

4 - Les dispositions du paragraphe 2 ne s'appliquent pas lorsque le bénéficiaire effectif des dividendes, résident d'un État contractant, exerce dans l'autre État contractant dont la société qui paie les dividendes est un résident, soit une activité industrielle ou commerciale par l'intermédiaire d'un établissement stable qui y est situé, soit une profession indépendante au moyen d'une base fixe qui y est située, et que la participation génératrice des dividendes s'y rattache effectivement. Dans ce cas, les dispositions de l'article 7 ou de l'article 14, suivant les cas, sont applicables.

5 - Lorsqu'une société qui est un résident d'un État contractant tire des bénéfices ou des revenus de l'autre État contractant, cet autre État ne peut percevoir aucun impôt sur les dividendes payés par la société, sauf dans la mesure où ces dividendes sont payés à un résident de cet autre État ou dans la mesure où la participation génératrice des dividendes se rattache effectivement à un établissement stable ou à une base fixe situés dans cet autre État, ni prélever aucun impôt, au titre de l'imposition des bénéfices non distribués, sur les bénéfices non distribués de la société, même si les dividendes payés ou les bénéfices non distribués consistent en tout ou en partie en bénéfices ou revenus provenant de cet autre État.

6 - Nonobstant toute disposition de la présente Convention, un État contractant peut percevoir, sur les revenus d'une société imputables aux établissements stables situé dans cet État, ou à l'égard des revenus qu'une société qui exerce une activité dans le domaine des biens immobiliers tire de l'aliénation de biens immobiliers situés dans cet État, un impôt qui s'ajoute à l'impôt qui serait applicable aux revenus d'une société qui est un résident de cet État, pourvu que le taux de cet impôt additionnel ainsi établi n'excède pas 10% du montant des revenus qui n'ont pas été assujettis audit impôt additionnel au cours des années d'imposition précédentes. Au sens de la présente disposition, le terme «revenus» désigne:

ii) Tous les impôts applicables dans cet État auxdits bénéfices, autres que l'impôt additionnel visé au présent paragraphe;