DTC agreement between Czech Republic and Italy

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TAX TREATY BETWEEN THE ITALIAN REPUBLIC AND THE CZECHOSLOVAK SOCIALIST REPUBLIC, FOR THE AVOIDANCE OF DOUBLE TAXATION IN THE FIELD OF TAXES ON INCOME AND THE PREVENTION OF TAX EVASION 5 MAY 1981 1 The Italian Republic and the Czechoslovak Socialist Republic, Desiring to conclude a Convention for the avoidance of double taxation in the field of taxes on income and the prevention of tax evasion, have agreed upon the following provisions: Article 1 - Personal scope This Convention shall apply to pe
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   1 TAX TREATY BETWEENTHE ITALIAN REPUBLIC ANDTHE CZECHOSLOVAK SOCIALIST REPUBLIC,FOR THE AVOIDANCE OF DOUBLE TAXATION IN THE FIELD OF TAXES ONINCOME AND THE PREVENTION OF TAX EVASION5 MAY 1981 1  The Italian Republic and the Czechoslovak Socialist Republic,Desiring to conclude a Convention for the avoidance of double taxation in the field of taxes onincome and the prevention of tax evasion, have agreed upon the following provisions:Article 1 - Personal scope  This Convention shall apply to persons who are residents of one or both of the Contracting States.Article 2 - Taxes covered   1. This Convention shall apply to taxes on income on behalf of each of the Contracting States, of itspolitical subdivisions or local entities, irrespective of the manner in which they are levied.2. There shall be regarded as taxes on income taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property, taxes onthe total amount of wages and of salaries paid by enterprises, as well as taxes on capitalappreciation.3. The existing taxes to which the Convention applies are:a) in the case of Czechoslovakia:1) the levy and the tax on profit (odvod ze zisku a dan ze zisku);2) the wages tax (dan ze mzdy);3) the tax on income from literary and artistic activities (dan z pr¡jmu z liter rni a umeleck‚cinnosti);4) the tax on agriculture (dan zemedelsk );5) the tax on the income of the inhabitants (dan z pr¡jmu obyvatelstva);6) the house tax (dan domovn¡);including the taxes withheld at the source, the deductions (prècomptes) and advance tax levied(hereinafter referred to as Czechoslovak tax );b) in the case of Italy:1) the individual income tax (l'imposta sul reddito delle persone fisiche);2) the tax on the income of legal entities (l'imposta sul reddito delle persone giuridiche);3) the local income tax (l'imposta locale sui redditi)even if withheld at the source(hereinafter referred to as Italian tax ). 1 Ratified in Italy with Law 2 maggio 1983, n. 303 (G.U. 27 June 1983, n. 174, S.O.). Exchange of ratificationinstruments: 26 June 1984. Entry into force: 26 June 1984 (G.U. 16 July 1984, n. 194). The Czechoslovak SocialistRepublic dissoved on 31 December 1992. The new Chech Republic and the Slovac Republic declared their intention tohonour all bi-lateral and multi-lateral agreements entered into by the Czechoslovak Socialist Republic as from 1 Jauary1993.   24. The Convention shall apply also to any identical or substantially similar taxes which enter intoforce after the date of signature of this Convention in addition to, or in place of, the existing taxes.The competent authorities of the Contracting States shall notify each other of the essentialmodifications with regard to their respective taxation laws.Article 3 - General definitions  1. For the purposes of this Convention, unless the context otherwise requires:a) the term Czechoslovakia means the Czechoslovak Socialist Republic;b) the term Italy means the Italian Republic;c) the term Contracting State and the other Contracting State mean Czechoslovakia or Italyas the case requires;d) the term person comprises individuals, companies and all other bodies of persons;e) the term company means any legal entity or any other body which is treated as a legal entityfor tax purposes;f) the terms enterprise of a Contracting State and enterprise of the other Contracting State mean respectively an enterprise carried on by a resident of a Contracting State and an enterprisecarried on by a resident of the other Contracting State;g) the term international traffic means any transport by a ship or aircraft operated by anenterprise which has its place of effective management in a Contracting State, except when theship or aircraft is operated solely between places in the other Contracting State;h) the term nationals means:1) individuals possessing the nationality of a Contracting State;2) legal entities, partnerships and associations constituted under the laws in force in aContracting State;i) the term competent authority means:1) in the case of Italy, the Ministry of Finance;2) in the case of Czechoslovakia, the Minister of Finance of the Czechoslovak SocialistRepublic or his authorised representative.2. As regards the application of the Convention by a Contracting State any term not defined thereinshall, unless the context otherwise requires, have the meaning which it has under the law of thatState concerning the taxes to which the Convention applies.Article 4 -  Resident   1. For the purposes of this Convention, the term resident of a Contracting State means any personwho, under the laws of that State, is liable to tax therein by reason of his domicile, residence, placeof management or any other criterion of a similar nature. But this term does not include any personwho is liable to tax in that State in respect only of income from sources in that State.   32. Where by reason of the provisions of paragraph 1 an individual is a resident of both ContractingStates, then his status shall be determined as follows:a) he shall be deemed to be a resident of the State in which he has a permanent home available tohim; if he has a permanent home available to him in both States, he shall be deemed to be aresident of the State with which his personal and economic relations are closer (centre of vitalinterests);b) if the State in which he has his centre of vital interests cannot be determined, or if he has not apermanent home available to him in either State, he shall be deemed to be a resident of the Statein which he has an habitual abode;c) if he has an habitual abode in both States or in neither of them, he shall be deemed to be aresident of the State of which he is a national;d) if he is a national of both States or of neither of them, the competent authorities of theContracting States shall settle the question by mutual agreement.3. Where by reason of the provisions of paragraph 1 a person other than an individual is a residentof both Contracting States, then it shall be deemed to be a resident of the State in which its place of effective management is situated.Article 5 - Permanent establishment  1. For the purposes of this Convention, the term permanent establishment means a fixed place of business through which the business of an enterprise is wholly or partly carried on.2. The term permanent establishment includes especially:a) a place of management;b) a branch;c) an office;d) a factory;e) a workshop;f) a mine, a quarry or any other place of extraction of natural resources;g) a building site or construction project if it lasts more than twelve months.3. The term permanent establishment shall not be deemed to include:a) the use of facilities solely for the purpose of storage, display or delivery of merchandisebelonging to the enterprise;b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for thepurpose of storage, display or delivery;c) the maintenance of a stock of merchandise belonging to the enterprise solely for the purposeof processing by another enterprise;   4d) the maintenance of a fixed place of business solely for the purpose of purchasing merchandiseor of collecting information, for the enterprise;e) the maintenance of a fixed place of business by an enterprise solely for the purpose of publicity, of providing information, of scientific research, and of similar activities of apreparatory or auxiliary character;4. A person other than an agent of an independent status to whom paragraph 5 applies, acting in aContracting State on behalf of an enterprise of the other Contracting State, is deemed to be apermanent establishment in the first-mentioned State if he has, and habitually exercises in thatState, an authority to conclude contracts in the name of the enterprise, unless the activities of thisperson are limited to the purchase of merchandise for the enterprise.5. An enterprise shall not be deemed to have a permanent establishment in a Contracting Statemerely because it carries on business in that State through a broker, general commission agent orany other agent of an independent status, provided that such persons are acting in the ordinarycourse of their business.6. The fact that a company which is a resident of a Contracting State controls or is controlled by acompany which is a resident of the other Contracting State, or which carries on business in thatother State (whether through a permanent establishment or otherwise), shall not of itself constituteeither company a permanent establishment of the other.Article 6 - Income from immovable property  1. Income derived from immovable property, including income from agriculture or forestry, may betaxed in the Contracting State in which this property is situated.2. The term immovable property shall have the meaning which it has under the law of theContracting State in which the property in question is situated. The term shall in any case includeproperty accessory to immovable property, livestock and equipment used in agriculture andforestry, rights to which the provisions of general law respecting landed property apply. Alsodeemed immovable property are the right of usufruct of immovable property and rights to variableor fixed payments as consideration for the working of, or the right to work, mineral deposits,sources and other natural resources. Ships, boats and aircraft shall not be regarded as immovableproperty.3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use inany 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 independentpersonal services.Article 7 -  Business profits  1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless theenterprise carries on business in the other Contracting State through a permanent establishmentsituated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise maybe taxed in the other State but only so much of them as is attributable to that permanentestablishment.
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