S.L. 123.10 ст. 2Arrangements to have effect. an agreement for with respect to or both of the imposed on authorities, all taxes imposed capital, including taxes on the taxes on capital in particular: whether made similar in addition to, shall notify their respective reference to the Agreement in the remitted to or (

It is hereby declared -

(a) that the arrangements specified in the Agreement set out in the Schedule to this Order have been made with the Government of the Kingdom of the Netherlands with a view to affording relief from double taxation and preventing fiscal evasion in relation to the following taxes imposed by the laws of the Kingdom of the Netherlands:

(i) income tax (de inkomstenbelasting);

(ii) wages tax (de loonbelasting);

(iii) company tax (de vennootschapsbelasting);

(iv) dividend tax (de dividendbelasting); and

(v) capital tax (de vermogensbelasting);

(b) that it is expedient that those arrangements should have effect. AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL

Malta and the Kingdom of the Netherlands, desiring to conclude the avoidance of double taxation and the prevention of fiscal evasion taxes on income and on capital, have agreed as follows:

CHAPTER I

Scope of the Agreement

ARTICLE 1

Personal Scope

This Agreement shall apply to persons who are residents of one States.

ARTICLE 2

Taxes Covered

(1) This Agreement shall apply to taxes on income and on capital behalf of each of the States or of its political subdivisions or local irrespective of the manner in which they are levied.

(2) There shall be regarded as taxes on income and on capital on total income, on total capital, or on elements of income or of taxes on gains from the alienation of movable or immovable property, total amounts of wages or salaries paid by enterprises, as well as appreciation.

(3) The existing taxes to which this Agreement shall apply are,

(a) in the case of the Netherlands: - income tax (de inkomstenbelasting); - wages tax (de loonbelasting); - company tax (de vennootschapsbelasting); - dividend tax (de dividendbelasting); - capital tax (de vermogensbelasting); (hereinafter referred to as "Netherlands tax");

(b) in the case of Malta: the income tax and surtax, including prepayments of tax by deduction at source or otherwise, (hereinafter referred to as "Malta tax").

(4) This Agreement shall also apply to any identical or substantially taxes which are imposed after the date of signature of this Agreement or in place of, the existing taxes. The competent authorities of the States to each other any substantial changes which have been made in taxation laws. full amount thereof, then the relief to be allowed under this first-mentioned State shall apply to so much of the income as is received in the other State.

CHAPTER II

Definitions

ARTICLE 3

General Definitions Agreement, unless the context otherwise requires: "State" means the Netherlands or Malta, as the context requires; the means the Netherlands and Malta; "the Netherlands" comprises the part of the Kingdom of the is situated in Europe and the part of the sea-bed and its subsoil North-Sea, over which the Kingdom of the Netherlands has sovereign accordance with international law;

"Malta" means the Republic of Malta, and, when used in a sense, means the Island of Malta, the Island of Gozo and the other Maltese archipelago, including the territorial waters thereof, and any territorial sea of Malta which, in accordance with international law, hereafter be designated, under the laws of Malta concerning the Shelf, as an area within which the rights of Malta with respect to the sea-and their natural resources may be exercised; "person" comprises an individual, a company and any other body of

"company" means any body corporate or any entity which is treated corporate for tax purposes; "enterprise of one of the States" and "enterprise of the other State" respectively an enterprise carried on by a resident of one of the States and an on by a resident of the other State;

"national" means: respect of the Netherlands, any individual possessing the nationality the Netherlands and any legal person, partnership or association deriving its status as such from the law in force in the Netherlands; respect of Malta, any citizen of Malta as provided for in Chapter III the Constitution of Malta and in the Maltese Citizenship Act, and any person, partnership or association deriving its status as such from law in force in Malta;

"international traffic" means any transport by a ship or aircraft enterprise which has its place of effective management in one of the when the ship or aircraft is operated solely between places in the other

"competent authority" means:

(2) As regards the application of this Agreement by either of term not otherwise defined shall, unless the context otherwise requires, meaning which it has under the laws of that State relating to the taxes subject of this Agreement.

ARTICLE 4

Fiscal Domicile

(1) For the purposes of this Agreement, the term "resident of means any person who, under the law of that State, is liable to taxation reason of his domicile, residence, place of management or any other similar nature. The term does not include any person who is liable to in respect only of income from sources therein or capital situated in

(2) For the purposes of this Agreement an individual, who is diplomatic or consular mission of one of the States in the other State State and who is a national of the sending State, shall be deemed to the sending State if he is submitted therein to the same obligations in on income and capital as are residents of that State.

(3) Where by reason of the provisions of paragraph (1) an resident of both States, then his status shall be determined as follows:

(a) he shall be deemed to be a resident of the State in permanent home available to him. If he has a permanent to him in both States, he shall be deemed to be a resident with which his personal and economic relations are vital interests);

(b) if the State in which he has his centre of vital interests determined, or if he has not a permanent home available State, he shall be deemed to be a resident of the State in habitual abode;

(c) if he has an habitual abode in both States or in neither be deemed to be a resident of the State of which he is a

(d) if he is a national of both States or of neither of them authorities of the States shall settle the question by mutual

(4) Where by reason of the provisions of paragraph (1), a person individual is a resident of both States, then it shall be deemed to be State in which its place of effective management is situated.

ARTICLE 5

Permanent Establishment

(1) For the purposes of this Agreement, the term "permanent means a fixed place of business in which the business of the enterprise partly carried on.

(2) The term "permanent establishment" shall include especially:

(a) a place of management; workshop; mine, quarry or other place of extraction of natural resources; building site or construction or assembly project or supervisory activities in connection therewith, where such site, project or activity continues for more than twelve months.

"permanent establishment" shall not be deemed to include: use of facilities solely for the purpose of storage, display or delivery goods or merchandise belonging to the enterprise; maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery; maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise; maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or for similar activities which have a preparatory or auxiliary character, for the enterprise.

acting in one of the States on behalf of an enterprise of the other an agent of an independent status to whom paragraph (5) applies -to be a permanent establishment in the first-mentioned State if he habitually exercises in that State, an authority to conclude contracts in the enterprise, unless his activities are limited to the purchase of goods or the enterprise. enterprise of one of the States shall not be deemed to have a permanent the other State merely because it carries on business in that other a broker, general commission agent or any other agent of an status, where such persons are acting in the ordinary course of their that a company which is a resident of one of the States controls or is company which is a resident of the other State, or which curries on other State (whether through a permanent establishment or not of itself constitute either company a permanent establishment

CHAPTER III

(1) Income from immovable property may be taxed in the State property is situated.

(2) The term "immovable property" shall be defined in accordance of the State in which the property in question is situated. The term include property accessory to immovable property, rights to which general law respecting landed property apply, usufruct of immovable rights to variable or fixed payments as consideration for the working to work, mineral deposits, sources and other natural resources; ships shall not be regarded as immovable property.

(3) The provisions of paragraph (1) shall apply to income direct use, letting, or use in any other form of immovable property.

(4) The provisions of paragraphs (1) and (2) shall also apply to immovable property of an enterprise and to income from immovable for the performance of professional services.

ARTICLE 7

Business Profits

(1) The profits of an enterprise of one of the States shall be taxable State unless the enterprise carries on business in the other State through establishment situated therein. If the enterprise carries on business profits of the enterprise may be taxed in the other State but only so is attributable to that permanent establishment.

(2) Subject to the provisions of paragraph (3), where an enterprise States carries on business in the other State through a permanent situated therein, there shall in each State be attributed to establishment the profits which it might be expected to make if it were separate enterprise engaged in the same or similar activities under similar conditions and dealing wholly independently with the enterprise is a permanent establishment.

(3) In the determination of the profits of a permanent establishment, be allowed as deductions expenses which are incurred for the permanent establishment including executive and general administrative incurred, whether in the State in which the permanent establishment elsewhere.

(4) Insofar as it has been customary in one of the States to determine to be attributed to a permanent establishment on the basis of an apportionment total profits of the enterprise to its various parts, nothing in paragraph preclude that State from determining the profits to be ta apportionment as may be customary; the method of apportionment however, be such that the result shall be in accordance with the principles in this Article.

(5) No profits shall be attributed to a permanent establishment mere purchase by that permanent establishment of goods or merchandise enterprise. this Agreement, then the provisions of those Articles shall not be provisions of this Article.

ARTICLE 8

Shipping and Air Transport from the operation of ships or aircraft in international traffic shall be the State in which the place of effective management of the situated. place of effective management of a shipping enterprise is aboard a be deemed to be situated in the State in which the home harbour of situated, or, if there is no such home harbour, in the State of which the ship is a resident.

provisions of paragraph (1) shall also apply to profits derived from the a pool, a joint business or in an international operating agency.

ARTICLE 9

Associated Enterprises -enterprise of one of the States participates directly or indirectly in the management, control or capital of an enterprise of the other State, or same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the States and an enterprise the other State, case conditions are made or imposed between the two enterprises in or financial relations which differ from those which would be made independent enterprises, then any profits which would, but for those accrued to one of the enterprises, but, by reason of those conditions, accrued, may be included in the profits of that enterprise and taxed profits on which an enterprise of one of the States has been charged State are also included in the profits of an enterprise of the other State accordingly and the profits so included are profits which would have enterprise of the other State if the conditions made between the been those which would have been made between independent the first mentioned State shall make an appropriate adjustment to tax charged on those profits in the first-mentioned State. In an adjustment due regard shall be had to the other provisions of in relation to the nature of the income, and for this purpose the authorities of the States shall if necessary consult each other.

ARTICLE 10 resident of Malta may also be taxed in the Netherlands, and according law, but, if the recipient is the beneficial owner of the dividends, the shall not exceed:

(a) 5 per cent of the gross amount of the dividends if company which holds directly at least 25 per cent of company paying the dividends;

(b) 15 per cent of the gross amount of the dividends, in all This paragraph shall not affect the taxation of the company profits out of which the dividends are paid.

(3) Dividends paid by a company which is a resident of Malta the Netherlands who is the beneficial owner thereof shall be exempt Malta which is chargeable on dividends in addition to the tax chargeable of the profits of the company. Furthermore, Malta tax chargeable distributed profits of the company shall not exceed 15 per cent of thereof, if the distributed profits consist of gains or profits earned respect of which that company is in receipt of any benefit under regulating aids to industries in Malta, and the profits are distributed which is a resident of the Netherlands and which is not charged company tax with respect to such profits: provided that the receiving submits returns and accounts to the taxation authorities of Malta income liable to Malta tax for the relative year of assessment. This paragraph shall not affect the taxation of the company profits out of which distributions are made, but the recipient of profits shall be entitled to any refund which may be available under on account of the tax paid by the company, if the tax so paid is chargeable on the distributed profits in accordance with the provisions paragraph or of the law of Malta.

(4) The term "dividends" as used in this Article means income "jouissance" shares or "jouissance" rights, mining shares, founders' rights participating in profits, as well as income from other corporate subjected to the same taxation treatment as income from shares by of the State of which the company making the distribution is a resident.

(5) The provisions of paragraphs (1), (2) and (3) shall not apply of the dividends, being a resident of one of the States, carries on other State of which the company paying the dividends is a resident, permanent establishment situated therein, or performs in professional services from a fixed base situated therein, and the holding which the dividends are paid is effectively connected with establishment or fixed base. In such a case, the provisions of Article as the case may be, shall apply.

(6) Where a company which is a resident of one of the States income from the other State, that other State may not impose dividends paid by the company, except insofar as such dividends resident of that other State or insofar as the holding in respect of which are paid is effectively connected with a permanent establishment situated in that other State, nor subject the company's undistributed Interest arising in one of the States and paid to a resident of the other State that other State. such interest may be taxed in the State in which it arises and law of that State, but if the recipient is the beneficial owner of the so charged shall not exceed 10 per cent of the gross amount of the

Notwithstanding the provisions of paragraph (2): interest arising in Malta and paid to the Netherlands Government, the Central Bank of the Netherlands, the Nederlandse Financieringsmaatschappij voor Ontwikkelingslanden N.V. (Netherlands finance company for developing countries), and the Nederlandse Investeringsbank voor Ontwikkelingslanden N.V. (Netherlands investment bank for developing countries) shall be exempt Malta tax; interest arising in the Netherlands and paid to the Malta Government, Central Bank of Malta or the Malta Development Corporation shall exempt from Netherlands tax; exemptions granted by this paragraph shall also apply to any other statutory body of one of the States if such body possesses a distinct personality. "interest" as used in this Article means income from Government income from bonds or debentures, whether or not secured by mortgage a right to participate in profits, and income from debt-claims of whether or not secured by mortgage, as well as all other income income from money lent by the taxation law of the State in which the provisions of paragraphs (1) and (2) shall not apply if the recipient of being a resident of one of the States, carries on business in the other the interest arises, through a permanent establishment situated performs in that other State professional services from a fixed base and the debt-claim in respect of which the interest is paid is connected with such permanent establishment or fixed base. In such a provisions of Article 7 or Article 15, as the case may be, shall apply. shall be deemed to arise in one of the States when the payer is that political subdivision, a local authority or a resident of that State. the person paving the interest, whether he is a resident of one of the in one of the States a permanent establishment in connection with indebtedness on which the interest is paid was incurred and such interest is permanent establishment, then such interest shall be deemed to arise which the permanent establishment is situated. owing to a special relationship between the payer and the recipient of them and some other person, the amount of the interest paid, to the debt-claim for which it is paid, exceeds the amount which ARTICLE 12

Royalties

(1) Royalties arising in one of the States and paid to a resident shall be taxable only in that other State if such resident is the beneficial royalties and the royalties consist of payments of any kind received for the use of, or the right to use, any copyright of literary, artistic or

(2) Royalties arising in one of the States and paid to a resident may be taxed in that other State if the royalties consist of payments received as a consideration for the use of, or the right to use, cinematographic or tapes for television or broadcasting, any patent, trade mark, design, secret formula or process, industrial, commercial or scientific information concerning industrial, commercial or scientific experience. such royalties may also be taxed in the State in which they arise, the law of that State, but if the recipient is the beneficial owner of tax so charged shall not exceed 10 per cent of the gross amount of

(3) The provisions of paragraphs (1) and (2) shall not apply if the royalties, being a resident of one of the States, carries on business State in which the royalties arise, through a permanent establishment therein, or performs in that other State professional services from situated therein, and the right or property in respect of which the royalties effectively connected with such permanent establishment or fixed case, the provisions of Article 7 or Article 15, as the case may be, shall

(4) Royalties shall be deemed to arise in one of the States when State itself, a political subdivision, a local authority or a resident Where, however, the person paying the royalties, whether he is a resident the States or not, has in one of the States a permanent establishment with which the liability to pay the royalties was incurred, and such borne by such permanent establishment, then such royalties shall be in the State in which the permanent establishment is situated.

(5) Where, owing to a special relationship between the payer or between both of them and some other person, the amount of the having regard to the use, right or information for which they are amount which would have been agreed upon by the payer and the absence of such relationship, the provisions of this Article shall last-mentioned amount. In that case, the excess part of the payments taxable according to the law of each State, due regard being provisions of this Agreement.

ARTICLE 13

Limitation of Articles 10, 11 and 12 International organizations, organs and officials thereof and diplomatic or consular mission of a third State, being present in one not entitled, in the other State, to the reductions or exemptions from in Articles 10, 11 and 12 in respect of the items of income dealt Capital Gains from the alienation of immovable property, as defined in paragraph may be taxed in the State in which such property is situated. from the alienation of movable property forming part of the business permanent establishment which an enterprise of one of the States has in or of movable property pertaining to a fixed base available to a of the States in the other State for the purpose of performing services, including such gains from the alienation of such a permanent (alone or together with the whole enterprise) or of such a fixed base, the other State.

Notwithstanding the provisions of paragraph (2), gains from the alienation aircraft operated in international traffic or of movable property operation of such ships and aircraft, shall be taxable only in the the place of effective management of the enterprise is situated. For this paragraph the provisions of paragraph (2) of Article 8 shall from the alienation of any property other than those mentioned in

(2) and (3), shall be taxed only in the State of which the alienator is a provisions of paragraph (4) shall not affect the right of each of the according to its own law a tax on gains from the alienation of shares or rights in a company which is a resident of that State, derived by an is a resident of the other State but has been a resident of the first-in the course of the last five years preceding the alienation of the "jouissance" rights.

ARTICLE 15

Independent Personal Services derived by a resident of one of the States in respect of professional independent activities of a similar character shall be taxable only in he has a fixed base regularly available to him in the other State for performing his activities. If he has such a fixed base, the income may other State but only so much of it as is attributable to that fixed base. one of the States performing such professional services or other activities in the other State shall be deemed to have such a fixed base in that other State if he is present in that other State for a period or exceeding in the aggregate 183 days in the calendar year concerned.

"professional services" includes especially independent scientific, educational or teaching activities as well as the independent physicians, lawyers, engineers, architects, dentists and accountants.

ARTICLE 16 the other State. If the employment is so exercised, such remuneration therefrom may be taxed in that other State.

(2) Notwithstanding the provisions of paragraph (1), remuneration resident of one of the States in respect of an employment exercised shall be taxable only in the first-mentioned State if -

(a) the recipient is present in the other State for a period exceeding in the aggregate 183 days in the calendar year

(b) the remuneration is paid by, or on behalf of, an employer resident of the other State; and

(c) the remuneration is not borne by a permanent establishment base which the employer has in the other State.

(3) Notwithstanding the preceding provisions of this Article derived by a resident of one of the States in respect of an employment aboard a ship or aircraft in international traffic shall be taxable only

ARTICLE 17

Directors’ Fees

(1) Directors’ fees and similar payments derived by a Netherlands in his capacity as a member of the board of directors which is a resident of Malta may be taxed in Malta.

(2) Remuneration and other payments derived by a resident capacity as a "bestuurder" or a "commissaris" of a company which the Netherlands may be taxed in the Netherlands.

ARTICLE 18

Artistes and Athletes

(1) Notwithstanding the provisions of Articles 15 and 16, income entertainers, such as theatre, motion picture, radio or television musicians, and by athletes, from their personal activities as such, may State in which these activities are exercised.

(2) Where income in respect of personal activities as such of athlete accrues not to that entertainer or athlete himself but to another income may, notwithstanding the provisions of Articles 7, 15 and 16, State in which the activities of the entertainer or athlete are exercised.

ARTICLE 19

Pensions, Annuities and Social Security Payments

(1) Subject to the provisions of paragraph (2) of Article 20, pensions similar remuneration paid to a resident of one of the States in consideration employment and any annuity shall be taxable only in that State.

(2) However, where such remuneration is not of a periodical paid in consideration of past employment exercised in the other first-mentioned State.

term, "annuity" means a stated sum paid periodically at stated times during a specified or ascertainable period of time under an obligation payments in return for adequate and full consideration in money or

ARTICLE 20

Government Service Remuneration, other than a pension, paid by one of the States or a subdivision or a local authority thereof to any individual in respect of to that State or subdivision or local authority thereof may be taxed

However, such remuneration shall be taxable only in the other State if rendered in that State and the recipient is a resident of that other national of that State; or not become a resident of that State solely for the purpose of performing the services. Any pension paid by, or out of funds created by, one of the States or a subdivision or a local authority thereof to any individual in respect of to that State or subdivision or local authority thereof may be taxed

However, such pension shall be taxable only in the other State if the national of and a resident of that State.

provisions of Articles 16, 17 and 19 shall apply to remuneration or respect of services rendered in connection with any trade or business of the States or a political subdivision or a local authority thereof.

ARTICLE 21

Professors and Teachers which a professor or teacher who is a resident of one of the States present in the other State for the purpose of teaching or scientific maximum period of two years in a university, college or other teaching or scientific research in that other State, receives for such research, shall be taxable only in the first-mentioned State.

Article shall not apply to income from research if such research is in the public interest but primarily for the private benefit of a specific persons. visiting the other State and is temporarily present in that other student at a university, college, school or other similar educational other State or as a business apprentice shall, from the date of his first other State in connection with that visit, be exempt from tax in that

(a) on all remittances from abroad for purposes of education or training; and

(b) for a period not exceeding in the aggregate five remuneration not exceeding 5000 guilders, or the equivalent currency, for each calendar year for personal services other State with a view to supplementing the resources for such purposes.

(2) An individual who was a resident of one of the States immediately visiting the other State and is temporarily present in that other State purpose of study, research or training as a recipient of a grant, allowance from a scientific, educational, religious or charitable organisation technical assistance programme entered into by the Government of shall, from the date of his first arrival in that other State in connection be exempt from tax in that other State -

(a) on the amount of such grant, allowance or award, and

(b) on all remittances from abroad for the purposes of education or training.

ARTICLE 23

Other Income

(1) Items of income of a resident of one of the States, wherever dealt with in the foregoing Articles of this Agreement shall be taxable State.

(2) The provisions of paragraph (1) shall not apply if the income, being a resident of one of the States, carries on business through a permanent establishment situated therein, or performs in professional services from a fixed base situated therein, and the right respect of which the income is paid is effectively connected with establishment or fixed base. In such a case, the provisions of Article as the case may be, shall apply.

CHAPTER IV

Taxation and Capital

ARTICLE 24

Capital

(1) Capital represented by immovable property, as defined in Article 6, may be taxed in the State in which such property is situated.

(2) Capital represented by movable property forming part traffic and movable property pertaining to the operation of such shall be taxable only in the State in which the place of effective the enterprise is situated. For the purposes of this paragraph the paragraph (2) of Article 8 shall apply.

elements of capital of a resident of one of the States shall be that State.

CHAPTER V

Elimination of Double Taxation

ARTICLE 25

Elimination of Double Taxation Netherlands, when imposing tax on its residents, may include in the which such taxes are imposed the items of income or capital which, provisions of this Agreement, may be taxed in Malta. prejudice to the application of the provisions concerning the losses in the unilateral regulations for the avoidance of double Netherlands shall allow a deduction from the amount of tax computed with paragraph (1) of this Article equal to such part of that tax which proportion to the aforesaid tax, as the part of the income or capital in the basis referred to in paragraph (1) of this Article and may be according to Articles 6 and 7, paragraph (5) of Article 10, paragraph paragraph (3) of Article 12, paragraphs (1) and (2) of Article 14, paragraph (1) of Article 16, paragraph (3) of Article 19, Article 20, of Article 23, and paragraphs (1) and (2) of Article 24 of this to the total income or capital which forms the basis referred to in this Article.

the Netherlands shall allow a deduction from the tax computed in the preceding paragraphs of this Article with respect to the items of may be taxed in Malta according to paragraph (2) of Article 11, Article 12, paragraph (1) of Article 17, Article 18 and paragraph (2) are included in the basis referred to in paragraph (1) of this Article.

this deduction shall be the lesser of the following amounts: amount equal to the Malta tax; amount of the Netherlands tax which bears the same proportion to amount of tax computed in conformity with paragraph (1) of this Article, as the amount of the said items of income bears to the amount income which forms the basis referred to in paragraph (1) of this Article. Notwithstanding the provisions of paragraph (2), the Netherlands shall allow the tax computed in accordance with the preceding paragraphs of respect to income which may be taxed in Malta according to Article is subject in Malta to a special regime as meant in Article 30. Article, as the amount of the said items of income bears of income which forms the basis referred to in paragraph Article.

(5) Where, by reason of special incentive measures designed economic development in Malta, the Malta tax actually levied royalties (other than royalties in respect of cinematographic films television and broadcasting) arising in Malta is lower than the tax according to paragraph (2) of Article 11 and paragraph (2) respectively, then the amount equal to the Malta tax referred to in of paragraph (3) on such interest and royalties shall be deemed to the gross amount thereof.

(6) Subject to the provisions of the law of Malta regarding the credit against Malta tax in respect of foreign tax (which shall not principle hereof) and saving the provisions of paragraph (7), where in a Malta assessment income or capital which, in accordance with this Agreement, may be taxed in the Netherlands, the Netherlands income or capital, as the case may be, shall be allowed as a credit against Malta tax payable thereon.

(7) Where a resident of one of the States derives gains which the other State in accordance with paragraph (5) of Article 14, that allow a deduction from its tax on such gains to an amount equal to the first-mentioned State on the said gains.

CHAPTER VI

Special Provisions

ARTICLE 26

Non-discrimination

(1) The nationals of one of the States, whether they are residents not, shall not be subjected in the other State to any taxation or connected therewith which is other or more burdensome than connected requirements to which nationals of that other State circumstances are or may be subjected.

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

(3) Except where the provisions of paragraph (1) of Article 9, Article 11, or paragraph (5) of Article 12, apply, interest, royalties disbursements paid by an enterprise of one of the States to a resident State shall, for the purpose of determining the taxable profits of such deductible under the same conditions as if they had been paid to Enterprises of one of the States, the capital of which is wholly or partly controlled, directly or indirectly, by one or more residents of the other be subjected in the first-mentioned State to any taxation or any connected therewith which is other or more burdensome than the connected requirements to which other similar enterprises of that first-are or may be subjected. Article the term "taxation" means taxes of every kind and description.

ARTICLE 27

Mutual Agreement Procedure a resident of one of the States considers that the actions of one or result or will result for him in taxation not in accordance with this may, notwithstanding the remedies provided by the national laws of present his case to the competent authority of the State of which he is a any case referred to in paragraph (1) of Article 26, to that of the State a national. This case must be presented within three years from the of the action giving rise to taxation not in accordance with the competent authority shall endeavour, if the objection appears to it to be it is not itself able to arrive at an appropriate solution, to resolve the agreement with the competent authority of the other State, with a avoidance of taxation not in accordance with the Agreement. Any reached shall be implemented notwithstanding any time limits in the the States. competent authorities of the States shall endeavour to resolve by mutual difficulties or doubts arising as to the interpretation or application of They may also consult together for the elimination of double not provided for in the Agreement.

competent authorities of the States may communicate with each other purpose of reaching an agreement in the sense of the preceding

ARTICLE 28

Exchange of Information competent authorities of the States shall exchange such information as the carrying out of this Agreement or of the domestic laws of the taxes covered by this Agreement insofar as the taxation thereunder to this Agreement. The exchange of information is not restricted by information received by one of the States shall be treated as secret in as information obtained under the domestic laws of that State and only to persons or authorities (including courts and administrative in the assessment or collection of, the enforcement or prosecution the determination of appeals in relation to, the taxes which are the Agreement. Such persons or authorities shall use the information only purposes. These persons or authorities may disclose the information in administrative practice of that or of the other State;

(b) to supply particulars which are not obtainable under the normal course of the administration of that or of the other

(c) to supply information which would disclose any industrial, commercial, or professional secret or trade information, the disclosure of which would be contrary

ARTICLE 29

Diplomatic and Consular Officials

Nothing in this Agreement shall affect the fiscal privileges consular officials under the general rules of international law or under of special agreements.

ARTICLE 30

Exclusion of Certain Companies or Other Persons

(1) This Agreement is not applicable to companies or other persons wholly or partly exempted from tax by a special regime under the laws of the States. It is also not applicable to income from such companies persons derived by a resident of the other State, nor to shares, ''jouissance'' interests in such companies or other persons.

(2) The provisions of paragraph (1) of this Article are also applicable company or other person is treated under the administrative practice the same or similar way as a company or person as meant in that paragraph.

(3) The competent authorities of the States shall by mutual which special regime is meant in the provisions of paragraph (1) of The provisions of paragraph (1) are also applicable to any substantially similar legislation in addition to or replacing such enacted after 1 January 1993 unless the competent authorities of otherwise by mutual agreement.

ARTICLE 31

Regulations

(1) The competent authorities of the States shall by mutual agreement mode of application of paragraphs (2) and (3) of Article 10, of paragraphs of Article 11, and of paragraphs (1) and (2) of Article 12.

(2) The competent authorities of each of the States, in accordance practices of that State, may prescribe regulations necessary to carry provisions of this Agreement.

ARTICLE 32

Territorial extension and conditions, including conditions as to termination, as may be agreed in notes to be exchanged through diplomatic channels.

otherwise agreed the termination of the Agreement shall not of itself any extension of the Agreement to the Netherlands Antilles, or Aruba.

CHAPTER VII

Final Provisions

ARTICLE 33

Entry into Force Governments of the States shall notify to each other that the requirements for the entry into force of this Agreement have been

Agreement shall enter into force thirty days after the date of the later of referred to in paragraph (1) and its provisions shall have effect -respect of taxes on income derived on or after the first day of January, 1976; respect of taxes on capital levied as from the first day of January, 1976.

ARTICLE 34

Termination Agreement shall remain in force until terminated by the Government of one Either State may terminate the Agreement through diplomatic giving notice of termination at least six months before the end of any after the year 1981. In such event the Agreement shall cease to have respect of taxes on income derived on or after the first day of January following the year during which notice of termination has been given. respect of taxes on capital levied as from the first day of January next following the year during which notice of termination has been given.

WHEREOF the undersigned, duly authorized thereto, have signed

Hague this 18th day of May, 1977, in duplicate, in the Netherlands NETHERLANDS,

(sd.) G. AGIUS (sd.) M. VAN DER

PROTOCOL

At the moment of signing the Agreement for the avoidance of double the prevention of fiscal evasion with respect to taxes on income and day concluded between the Kingdom of the Netherlands and the Republic the undersigned have agreed that the following provisions shall form of the Agreement.

I. AD ARTICLE 4 An individual living aboard a ship without having a permanent the States shall be deemed to be a resident of the State in which the harbour.

II. AD ARTICLES 5 AND 7 Except with regard to re-insurance, the provisions of Articles Agreement shall not affect the provisions of the law of either State taxation of profits from the business of insurance

III. AD ARTICLES 8, 14 AND 24

(1) Notwithstanding the provisions of Article 8, profits from ships in international traffic derived by a company which is a resident be taxed in the Netherlands, unless the company proves that such relieved from Malta tax under the provisions of the Merchant Shipping any identical or similar provision. The foregoing sentence, however, if the company proves that not more than 25 per cent of its capital is or indirectly, by persons who are not residents of Malta.

(2) The provisions of paragraph (1) shall apply accordingly referred to in paragraph (3) of Article 14 and to capital referred to of Article 24.

IV. AD ARTICLE 10

(1) The provisions of sub-paragraph (a) of paragraph (2) of Article apply if the relation between the two companies has been arranged primarily with the intention of securing this reduction.

(2) It is understood that the reference in the second sentence of Article 10 to the provisions of the Netherlands law to the effect that company is not charged to Netherlands company tax in respect distributed by a Malta company, is to the application of the so privilege" in the Netherlands Company Tax Act. Subject to the provisions Act and to future amendments thereto, this "holding privilege" leads a company which is a resident of the Netherlands can leave out of computation of its taxable profits, dividends it receives from a company for the repayment of tax levied contrary to the provisions of Articles have to be lodged with the competent authority of the State, which has within a period of three years after the expiration of the calendar year has been levied.

ARTICLES 24 AND 25 on the taxation of capital in Article 24 and the provisions with elimination of double taxation with respect to capital in paragraph (2) the Agreement will not apply as long as Malta does not levy a tax on

ARTICLE 25

understood that, insofar as the Netherlands income tax or company tax is basis referred to in paragraph (1) of Article 25 is the "onzuivere "winst" in terms of the Netherlands Income Tax Law or Company Tax respectively.

ARTICLE 25 Notwithstanding Article 34 of the Agreement the provision of paragraph (5) of cease to have effect after the last day of December, 1997, unless the authorities decide otherwise in mutual agreement.

ARTICLES 28 AND 30 understood that provisions on confidentiality in a special regime as 30 or such provisions in any identical or substantially similar addition to or replacing this special regime, shall not impose any the exchange of information as meant in Article 28 of the Agreement where the Maltese competent authority and the relative authority administration of such special regime agree that sufficient evidence criminal proceedings.

understood that provisions in legislation enacted after 1 January, confidentiality, identical to or replacing provisions on confidentiality in the as meant in Article 30 of the Agreement, shall not impose any the exchange of information as meant in Article 28 of the Agreement suspicion of tax avoidance or tax evasion.

WHEREOF the undersigned, duly authorized thereto, have signed

Hague this 18th day of May, 1977, in duplicate, in the Netherlands NETHERLANDS, (SD.) G. AGIUS (SD.) M. VAN DER