The Government of the Kingdom of the Netherlands
and
the Government of the State of Kuwait,
Desiring to promote their mutual economic relations through the conclusion between
the Kingdom of the Netherlands and the State of Kuwait of an agreement for the avoidance
of double taxation and the prevention of fiscal evasion with respect to taxes on income;
Have agreed as follows:
Article 1. Personal scope
This Agreement shall apply to persons who are residents of one or both of the Contracting
States.
-
2 There shall be regarded as taxes on income all taxes imposed on total income, or
on elements of income, including taxes on gains from the alienation of movable or
immovable property, taxes on the total amounts of wages or salaries, as well as taxes
on capital appreciation.
-
4 This Agreement shall apply also to any identical or substantially similar taxes,
which are imposed after the date of signature of this Agreement in addition to, or
in place of, the existing taxes. The competent authorities of the Contracting States
shall notify each other of any substantial changes, which have been made in their
respective taxation laws.
Article 3. General definitions
-
2 As regards the application of this Agreement by a Contracting State any term not
defined therein shall, unless the context otherwise requires, have the meaning which
it has under the law of that Contracting State concerning the taxes to which this
Agreement applies.
-
1 For the purposes of this Agreement, the term “resident of a Contracting State” means
any person who, under the laws of that State, is liable to tax therein by reason of
his domicile, residence, place of management or any other criterion of a similar nature.
The term, however, does not include any person who is liable to tax in that State
in respect only of income from sources in that State.
Article 5. Permanent establishment
-
3 A building site or a construction, assembly or installation project or a supervisory
activity in connection therewith constitutes a permanent establishment only if such
site, project or activity continues for a period of more than six months.
-
4 The furnishing of services, including consultancy services, by an enterprise of a
Contracting State in the other Contracting State constitutes a permanent establishment
only if such activities continue in that other Contracting State for the same project
or a connected project for a period or periods aggregating more than six months within
any twelve-month period.
-
5 An enterprise of a Contracting State shall be deemed to have a permanent establishment
in the other Contracting State and to carry on business through that permanent establishment
if substantial equipment is being used in that Contracting State for more than six
months within any twelve-month period by, for or under contract with the enterprise
in exploration for, or the exploitation of, natural resources, or in activities connected
with such exploration or exploitation.
-
7 Notwithstanding the provisions of paragraphs 1 and 2, where a person – other than
an agent of an independent status to whom paragraph 8 applies – is acting in a Contracting
State on behalf of an enterprise of the other Contracting State, that enterprise shall
be deemed to have a permanent establishment in the first-mentioned Contracting State,
in respect of any activities which that person undertakes for the enterprise, if
-
a) he has and habitually exercises in the first-mentioned Contracting State a general
authority to conclude contracts in the name of such enterprise, unless the activities
of such person are limited to those mentioned in paragraph 6 which, if exercised through
a fixed place of business, would not make this fixed place of business a permanent
establishment under the provisions of that paragraph; or
-
b) he has no such authority, but habitually maintains in the first-mentioned Contracting
State a stock of goods or merchandise belonging to such enterprise from which he regularly
delivers goods or merchandise on behalf of such enterprise.
-
8 An enterprise of a Contracting State shall not be deemed to have a permanent establishment
in the other Contracting State merely because it carries on business in that other
Contracting State through a broker, general commission agent or any other agent of
an independent status, provided that such persons are acting in the ordinary course
of their business. However, when the activities of such an agent are devoted wholly
or almost wholly on behalf of that enterprise, he will not be considered an agent
of an independent status within the meaning of this paragraph.
-
9 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 Contracting State (whether through a permanent establishment
or otherwise), shall not of itself constitute either company a permanent establishment
of the other.
Article 6. Income from immovable property
-
2 The term “immovable property” shall have the meaning which it has under the law of
the Contracting State in which the property in question is situated. The term shall
in any case include property accessory to immovable property, livestock and equipment
used in agriculture and forestry, rights to which the provisions of general law respecting
landed property apply, usufruct of immovable property and rights to variable or fixed
payments as consideration for the working of, or the right to work, mineral deposits,
sources and other natural resources; ships and aircraft shall not be regarded as immovable
property.
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 are attributable to that permanent establishment.
-
2 Subject to the provisions of paragraph 3, where an enterprise of a Contracting State
carries on business in the other Contracting State through a permanent establishment
situated therein, there shall in each Contracting State be attributed to that permanent
establishment the profits which it might be expected to make if it were a distinct
and separate enterprise engaged in the same or similar activities under the same or
similar conditions and dealing wholly independently with the enterprise of which it
is a permanent establishment.
-
3 In determining the profits of a permanent establishment, there shall be allowed as
deductions those deductible expenses which are incurred for the purposes of the permanent
establishment, including executive and general administrative expenses so incurred,
whether in the Contracting State in which the permanent establishment is situated
or elsewhere. However, no such deduction shall be allowed in respect of amounts, if
any, paid (otherwise than towards reimbursement of actual expenses) by the permanent
establishment to the head office of the enterprise or any of its other offices, by
way of royalties, fees or other similar payments in return for the use of patents
or other rights, or by way of commission, for specific services performed or for management,
or, except in the case of a banking enterprise, by way of interest on moneys lent
to the permanent establishment. Likewise, no account shall be taken, in the determination
of the profits of a permanent establishment, for amounts charged (otherwise than towards
reimbursement of actual expenses), by the permanent establishment to the head office
of the enterprise or any of its other offices, by way of royalties, fees or other
similar payments in return for the use of patents or other rights, or by way of commission
for specific services performed or for management, or, except in the case of a banking
enterprise, by way of interest on moneys lent to the head office or any of its other
offices.
-
5 Insofar as it has been customary in a Contracting State to determine the profits
to be attributed to a permanent establishment on the basis of an apportionment of
the total profits of the enterprise to its various parts, nothing in paragraph 2 shall
preclude that Contracting State from determining the profits to be taxed by such an
apportionment as may be customary; the method of apportionment adopted shall, however,
be such that the result shall be in accordance with the principles contained in this
Article.
-
6 If the information available is inadequate to determine profits to be attributed
to the permanent establishment, nothing in this Article shall affect the application
of any law or regulations of a Contracting State relating to the determination of
the tax liability of a person by making of an estimate, provided that the result shall
be in accordance with the principles contained in this Article.
Article 8. Shipping and air transport
-
2 If the place of effective management of a shipping enterprise is aboard a ship, then
it shall be deemed to be situated in the Contracting State in which the home harbor
of the ship is situated, or, if there is no such home harbor, in the Contracting State
of which the operator of the ship is a resident.
-
3 For the purposes of this Article, profits derived from the operation in international
traffic of ships and aircraft include profits derived from the rental on a bareboat
basis of ships and aircraft if operated in international traffic if such rental profits
are incidental to the profits described in paragraph 1.
Article 9. Associated enterprises
-
1 Where
-
a) an enterprise of a Contracting State participates directly or indirectly in the management,
control or capital of an enterprise of the other Contracting State,
or
-
b) the same persons participate directly or indirectly in the management, control or
capital of an enterprise of a Contracting State and an enterprise of the other Contracting
State,
and in either case conditions are made or imposed between the two enterprises in their
commercial or financial relations which differ from those which would be made between
independent enterprises, then any profits which would, but for those conditions, have
accrued to one of the enterprises, but, by reason of those conditions, have not so
accrued, may be included in the profits of that enterprise and taxed accordingly.
It is understood, however, that the fact that associated enterprises have concluded
arrangements, such as costsharing arrangements or general services agreements, for
or based on the allocation of executive, general administrative, technical and commercial
expenses, research and development expenses and other similar expenses, is not in
itself a condition as meant in the preceding sentence.
-
2 Where a Contracting State includes in the profits of an enterprise of that State
– and taxes accordingly – profits on which an enterprise of the other Contracting
State has been charged to tax in that other State and the profits so included are
profits which would have accrued to the enterprise of the first-mentioned State if
the conditions made between the two enterprises had been those which would have been
made between independent enterprises, then that other State shall make an appropriate
adjustment to the amount of the tax charged therein on those profits. In determining
such adjustment, due regard shall be had to the other provisions of this Agreement
and the competent authorities of the Contracting States shall if necessary consult
each other.
-
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) zero per cent of the gross amount of the dividends if the beneficial owner is a company
which holds directly at least 10% (ten per cent) of the capital of the company paying
the dividends;
-
b) 10% (ten per cent) of the gross amount of the dividends in all other cases.
-
4 The term “dividends” as used in this Article means income from shares, “jouissance”
shares or “jouissance” rights, mining shares, founders' shares or other rights, not
being debt-claims, participating in profits, as well as income from other corporate
rights which is subjected to the same taxation treatment as income from shares by
the laws of the State of which the company making the distribution is a resident.
-
5 The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the
dividends, being a resident of a Contracting State, carries on business in the other
Contracting State of which the company paying the dividends is a resident, through
a permanent establishment situated therein, or performs in that other State independent
personal services from a fixed base situated therein, and the holding in respect of
which the dividends are paid is effectively connected with such permanent establishment
or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.
-
6 Where a company which is a resident of a Contracting State derives profits or income
from the other Contracting State, that other State may not impose any tax on the dividends
paid by the company, except insofar as such dividends are paid to a resident of that
other State or insofar as the holding in respect of which the dividends are paid is
effectively connected with a permanent establishment or a fixed base situated in that
other State, nor subject the company's undistributed profits to a tax on the company's
undistributed profits, even if the dividends paid or the undistributed profits consist
wholly or partly of profits or income arising in such other State.
-
2 The term “interest” as used in this Article means income from debt-claims of every
kind, whether or not secured by mortgage and whether or not carrying a right to participate
in the debtor's profits, and in particular income from government securities and income
from bonds or debentures, including premiums and prizes attaching to such securities,
bonds or debentures.
-
3 The provisions of paragraph 1 shall not apply if the beneficial owner of the interest,
being a resident of a Contracting State, carries on business in the other Contracting
State in which the interest arises, through a permanent establishment situated therein,
or performs in that other State independent personal services from a fixed base situated
therein and the debt-claim in respect of which the interest is paid is effectively
connected with such permanent establishment or fixed base. In such case the provisions
of Article 7 or Article 14, as the case may be, shall apply.
-
4 Interest shall be deemed to arise in a Contracting State when the payer is that State
itself, a political subdivision, a local authority or a resident of that State. Where,
however, the person paying the interest, whether he is a resident of a Contracting
State or not, has in a Contracting State a permanent establishment or a fixed base
in connection with which the indebtedness on which the interest is paid was incurred,
and such interest is borne by such permanent establishment or fixed base, then such
interest shall be deemed to arise in the State in which the permanent establishment
or fixed base is situated.
-
5 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 Agreement.
-
2 However, such royalties may also be taxed in the Contracting State in which they
arise, and according to the laws of that Contracting State, but if the beneficial
owner of the royalties is a resident of the other Contracting State, the tax so charged
shall not exceed 5% (five per cent) of the gross amount of such 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, including cinematography films, or films or tapes used
for television or radio broadcasting, any patent, trade mark, design or model, plan,
secret formula or process, or for information concerning industrial, commercial or
scientific experience.
-
4 The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the
royalties, being a resident of a Contracting State, carries on business in the other
Contracting State in which the royalties arise, through a permanent establishment
situated therein, or performs in that other State independent personal services from
a fixed base situated therein, and the right or property in respect of which the royalties
are paid is effectively connected with such permanent establishment or fixed base.
In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.
-
5 Royalties shall be deemed to arise in a Contracting State when the payer is that
State itself, a political subdivision, a local authority or a resident of that State.
Where, however, the person paying the royalties, whether he is a resident of a Contracting
State or not, has in a Contracting State a permanent establishment or a fixed base
in connection with which the liability to pay the royalties was incurred, and such
royalties are borne by such permanent establishment or fixed base, then such royalties
shall be deemed to arise in the 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 Agreement.
Article 13. Capital gains
-
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
fixed base, may be taxed in that other State.
-
5 Notwithstanding the provisions of paragraph 4, a Contracting State may, in accordance
with its own laws, including the interpretation of the term “alienation”, levy tax
on gains derived by an individual who is a resident of the other Contracting State
from the alienation of shares in, “jouissance” rights or debt-claims on a company
whose capital is divided into shares and which, under the laws of the first-mentioned
Contracting State, is a resident of that State, and from the alienation of part of
the rights attached to the said shares, “jouissance” shares or debt-claims, if that
individual – either alone or with his or her spouse – or one of their relations by
blood or marriage in the direct line directly or indirectly holds at least 5 per cent
of the issued capital of a particular class of shares in that company. This provision
shall apply only if the individual who derives the gains has been a resident of the
first-mentioned State in the course of the last ten years preceding the year in which
the gains are derived and provided that, at the time he became a resident of the other
Contracting State, the above-mentioned conditions regarding share ownership in the
said company were satisfied.
In cases where, under the domestic laws of the first-mentioned State, an assessment
has been issued to the individual in respect of the alienation of the aforesaid shares
deemed to have taken place at the time of his emigration from the first-mentioned
State, the above shall apply only in so far as part of the assessment is still outstanding.
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,
unless he has a fixed base regularly available to him in the other Contracting State
for the purpose of performing his activities. If he has such a fixed base, the income
may be taxed in the other Contracting State but only so much of it as is attributable
to that fixed base.
-
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, 19 and 20, salaries, wages and other similar remuneration derived by a resident of a Contracting
State in respect of an employment shall be taxable only in that State unless the employment
is exercised in the other Contracting State. If the employment is so exercised, such
remuneration as is derived therefrom may be taxed in that other State.
-
3 Notwithstanding the preceding provisions of this Article, remuneration derived by
a resident of a Contracting State in respect of an employment exercised aboard a ship
or aircraft operated in international traffic, shall be taxable only in that State.
Article 16. Directors' fees
Directors' fees and other similar remuneration derived by a resident of a Contracting
State in his capacity as a member of the board of directors or, in the case of the
Netherlands a “bestuurder” or a “commissaris”, or other similar organ of a company
which is a resident of the other Contracting State may be taxed in the first-mentioned
Contracting State.
However, such fees or remuneration may be taxed in the Contracting State of which
the aforementioned company is a resident, but the tax charged shall not exceed 25%
(twenty-five per cent) of the gross amount of such fees or other remuneration.
Article 17. Artistes and sportsmen
-
1 Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a
theatre, motion picture, radio or television artiste, or a musician, or as a sportsman,
from his personal activities as such exercised in the other Contracting State, may
be taxed in that other State.
-
2 Where income in respect of personal activities exercised by an entertainer or a sportsman
in his capacity as such accrues not to the entertainer or sportsman himself but to
another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or
sportsman are exercised.
-
3 The provisions of paragraphs 1 and 2 shall not apply to remuneration or profits,
salaries, wages and similar income derived by entertainers or sportsmen who are residents
of a Contracting State from activities in the other Contracting State if their visit
to that Contracting State is substantially supported from the public funds of the
other Contracting State, including those of any political subdivision, a local authority
or statutory body thereof, nor to income derived by a non-profit making organization
in respect of such activities provided no part of its income is payable to, or is
otherwise available for the personal benefit of its proprietors, founders or members.
Article 18. Pensions, annuities and social security payments
-
1 Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a Contracting State
in consideration of past employment, as well as annuities paid to a resident of a
Contracting State, shall be taxable only in that State. Any pension and other payment
paid out under the provisions of a social security system of a Contracting State to
a resident of the other Contracting State shall be taxable only in that other State.
-
2 Notwithstanding the provisions of paragraph 1, a pension or other similar remuneration,
annuity, or any pension and other payment paid out under the provisions of a social
security system of a Contracting State, may also be taxed in the Contracting State
from which it is derived, in accordance with the laws of that State:
-
a) if and in so far as the entitlement to this pension or other similar remuneration
or annuity in the Contracting State from which it is derived is exempt from tax, or
the contributions associated with the pension or other similar remuneration or annuity
made to the pension scheme or insurance company were deducted in the past when calculating
taxable income in that State or qualified for other tax relief in that State; and
-
b) if and in so far as this pension or other similar remuneration or annuity is in the
Contracting State of which the recipient thereof is a resident not taxed at the generally
applicable rate for income derived from dependent personal services, or less than
90 per cent of the gross amount of the pension or other similar remuneration or annuity
is taxed; and
-
c) if the total gross amount to the pensions and other similar remuneration and annuities,
and any pension and other payment paid out under the provisions of a social security
system of a Contracting State, in any calendar year exceeds the sum of 20,000 Euro.
-
3 Notwithstanding the provisions of paragraphs 1 and 2, if this pension or other similar
remuneration is not periodic in nature, is paid in respect of past employment in the
other Contracting State and is paid out before the date on which the pension commences,
or if a lump-sum payment is made in lieu of the right to an annuity before the date
on which the annuity commences, the payment or this lump-sum may also be taxed in
the Contracting State from which it is derived.
-
4 A pension or other similar remuneration or annuity is deemed to be derived from a
Contracting State if and insofar as the contributions or payments associated with
the pension or other similar remuneration or annuity, or the entitlements received
from it qualified for tax relief in the State. The transfer of a pension from a pension
fund or an insurance company in a Contracting State to a pension fund or an insurance
company in another State will not restrict in any way the taxing rights of the first-mentioned
State under this Article.
-
5 The competent authorities of the Contracting States shall by mutual agreement settle
the mode of application of paragraph 2. They shall also decide what details the resident
of a Contracting State must submit for the purpose of the proper application of the
Agreement in the other Contracting State, in particular so that it can be established
whether the conditions referred in subparagraphs (a), (b) and (c) of paragraph 2 have
been met.
-
7 Whether and to what extent a pension or similar remuneration falls under this Article
or under Article 19 is determined by the nature of the past employment, as private or governmental, during
which the entitlement to that part of the pension or similar remuneration was built
up.
Article 19. Government service
-
1
-
a) Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting
State or a political subdivision or a local authority thereof to an individual in
respect of services rendered to that State or subdivision or authority shall be taxable
only in that State.
-
b) However, such salaries, wages and other similar remuneration shall be taxable only
in the other Contracting State if the services are rendered in that State and the
individual is a resident of that State who:
-
2
-
a) Any pension paid by, or out of funds created by, a Contracting State or a political
subdivision or a local authority thereof to an individual in respect of services rendered
to that State or subdivision or authority shall be taxable only in that State.
-
b) However, such pension shall be taxable only in the other Contracting State if the
individual is a resident of, and a national of, that State.
-
3 The provisions of Articles 15, 16 and 18 shall apply to salaries, wages and other similar remuneration and to pensions in
respect of services rendered in connection with a business carried on by a Contracting
State or a political subdivision or a local authority thereof.
Article 20. Professors and teachers
An individual who is or was immediately before visiting a Contracting State a resident
of the other Contracting State and who, at the invitation of the Government of the
first-mentioned Contracting State or of a university, college, school, museum or other
cultural institution in that first-mentioned Contracting State or under an official
programmed of cultural exchange, is present in that Contracting State for a period
not exceeding two consecutive years solely for the purpose of teaching, giving lectures
or carrying out research at such institution shall be exempt from tax in that Contracting
State on his remuneration for such activity, provided that the payment of such remuneration
is derived by him from outside that Contracting State.
-
1 Payments which a student or business apprentice who is or was immediately before
visiting a Contracting State a resident of the other Contracting State and who is
present in the first-mentioned State solely for the purpose of his education or training
receives for the purpose of his maintenance, education or training shall not be taxed
in that State, provided that such payments arise from sources outside that State.
-
2 In respect of grants, scholarships and remuneration from employment in a Contracting
State not covered by paragraph 1, a student or business apprentice described in paragraph
1 shall, in the case he is a resident of that State, be entitled during such education
or training to the same exemptions, relief's or reductions in respect of taxes available
to residents of that Contracting State.
-
2 The provisions of paragraph 1 shall not apply to income, other than income from immovable
property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries
on business in the other Contracting State through a permanent establishment situated
therein, or performs in that other State independent personal services from a fixed
base situated therein, and the right or property in respect of which the income is
paid is effectively connected with such permanent establishment or fixed base. In
such case the provisions of Article 7 or Article 14, as the case may be, shall apply.
Article 23. Elimination of double taxation
-
2 In the case of Kuwait, double taxation shall be avoided as follows: Where a resident
of Kuwait derives income which, in accordance with the provisions of this Agreement,
may be taxed in both the Netherlands and Kuwait, Kuwait shall allow as a deduction
from the tax on the income of that resident, an amount equal to the tax on income
paid in the Netherlands. Such deduction shall not, however, exceed that part of the
tax on income, as computed before the deduction is given, which is attributable to
the income which may be taxed in the Netherlands.
Article 24. Offshore activities
-
1 The provisions of this Article shall apply notwithstanding any other provisions of
this Agreement. However, this Article shall not apply where offshore activities of
a person constitute for that person a permanent establishment under the provisions
of Article 5 or a fixed base under the provisions of Article 14.
-
3 An enterprise of a Contracting State which carries on offshore activities in the
other Contracting State shall, subject to paragraph 4 of this Article, be deemed to
be carrying on, in respect of those activities, business in that other State through
a permanent establishment situated therein, unless the offshore activities in question
are carried on in the other State for a period or periods not exceeding in the aggregate
30 days in any period of 12 months in the aggregate 30 days in any period of 12 months.
For the purposes of this paragraph:
-
a) where an enterprise carrying on offshore activities in the other Contracting State
is associated with another enterprise and that other enterprise continues, as part
of the same project, the same offshore activities that are or were being carried on
by the first-mentioned enterprise, and the afore-mentioned activities carried on by
both enterprises – when added together – exceed a period of 30 days, then each enterprise
shall be deemed to be carrying on its activities for a period exceeding 30 days in
a 12 months-period;
-
b) an enterprise shall be regarded as associated with another enterprise if one holds
directly or indirectly at least one third of the capital of the other enterprise or
if a person holds directly or indirectly at least one third of the capital of both
enterprises.
-
5 A resident of a Contracting State who carries on offshore activities in the other
Contracting State, which consist of professional services or other activities of an
independent character, shall be deemed to be performing those activities from a fixed
base in the other Contracting State if the offshore activities in question last for
a continuous period of 30 days or more.
-
6 Salaries, wages and other similar remuneration derived by a resident of a Contracting
State in respect of an employment connected with offshore activities carried on through
a permanent establishment in the other Contracting State may, to the extent that the
employment is exercised offshore in that other State, be taxed in that other State.
-
7 Where documentary evidence is produced that tax has been paid in Kuwait on the items
of income which may be taxed in Kuwait according to Article 7 and Article 14 in connection with respectively paragraph 3 and paragraph 5 of this Article, and
to paragraph 6 of this Article, the Netherlands shall allow a reduction of its tax
which shall be computed in conformity with the rules laid down in subparagraph b) of paragraph 1 of Article 23.
Article 25. Non-discrimination
-
1 Nationals of a Contracting State shall not be subjected in the other Contracting
State to any taxation or any requirement connected therewith, which is other or more
burdensome than the taxation and connected requirements to which nationals of that
other State in the same circumstances, in particular with respect to residence, are
or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States.
-
2 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
Contracting State than the taxation levied on enterprises of third states, carrying
on the same activities in the same circumstances. 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 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 Contracting 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 the capital
of which is wholly or partly owned or controlled directly or indirectly by one or
more residents of any third state are or may be subjected.
-
4 Nothing in this Article shall be interpreted as imposing a legal obligation on either
Contracting State to extend to the residents of the other Contracting State, the benefit
of any treatment, preference or privilege which may be accorded to any third state
or its residents by virtue of the formation of a customs union, economic union, a
free trade area or any regional or sub-regional arrangement relating wholly or mainly
to taxation or movement of capital to which such the first-mentioned Contracting State
may be a party.
-
5 Except where the provisions of paragraph 1 of Article 9, paragraph 5 of Article 11, or paragraph 6 of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting
State to a resident of the other Contracting State shall, for the purpose of determining
the taxable profits of such enterprise, be deductible under the same conditions as
if they had been paid to a resident of the first-mentioned State. Similarly, any debts
of an enterprise of a Contracting State to a resident of the other Contracting State
shall, for the purpose of determining the taxable capital of such enterprise, be deductible
under the same conditions as if they had been contracted to a resident of the first-mentioned
State.
-
6 Contributions paid by, or on behalf of, an individual who is a resident of a Contracting
State to a pension plan that is recognized for tax purposes in the other Contracting
State will be treated in the same way for tax purposes in the first-mentioned State
as a contribution paid to a pension plan that is recognized for tax purposes in that
first-mentioned State, provided that
-
a) such individual was contributing to such pension plan before he became a resident
of the first-mentioned State; and
-
b) the competent authority of the first-mentioned State agrees that the pension plan
corresponds to a pension plan recognized for tax purposes by that State.
For the purpose of this paragraph, “pension plan” includes a pension plan created
under a public social security system.
Article 26. Mutual agreement procedure
-
1 Where a person considers that the actions of one or both of the Contracting States
result or will result for him in taxation not in accordance with the provisions of
this Agreement, he may, irrespective of the remedies provided by the domestic law
of those States, present his case to the competent authority of the Contracting State
of which he is a resident or, if his case comes under paragraph 1 of Article 25, to that of the Contracting State of which he is a national. The case must be presented
within three years from the first notification of the action resulting in taxation
not in accordance with the provisions of this Agreement.
-
2 The competent authority shall endeavour, if the objection appears to it to be justified
and if it is not itself able to arrive at a satisfactory solution, to resolve the
case by mutual agreement with the competent authority of the other Contracting State,
with a view to the avoidance of taxation which is not in accordance with this Agreement.
Any agreement reached shall be implemented notwithstanding any time limits in the
domestic law of the Contracting States.
-
5 If any difficulty or doubt arising as to the interpretation or application of this
Agreement cannot be resolved by the competent authorities of the Contracting States
in a mutual agreement procedure pursuant to the previous paragraphs of this Article
within a period of two years after the question was raised, the case may, at the request
of either Contracting State, be submitted for arbitration on a case by case basis,
unless the competent authorities agree on an alternative settlement procedure and
provided the taxpayer or taxpayers involved agree in writing to be bound by the decision
of the arbitration panel. The decision of the arbitration panel in a particular case
shall be binding on both Contracting States and the taxpayer or taxpayers involved
with respect to that case.
Article 27. Exchange of information
-
1 The competent authorities of the Contracting States shall exchange such information
as is necessary for carrying out the provisions of this Agreement or of the domestic
laws of the Contracting States concerning taxes covered by this Agreement insofar
as the taxation thereunder is not contrary to this Agreement. The exchange of information
is not restricted by Article 1. Any information received by a Contracting State shall be treated as secret in the
same manner as information obtained under the domestic laws of that State and shall
be disclosed only to persons or authorities (including courts and administrative bodies)
involved in the assessment or collection of, the enforcement or prosecution in respect
of, or the determination of appeals in relation to, the taxes covered by this Agreement.
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.
-
3 The Contracting States may release to the arbitration panel, established under the
provisions of paragraph 5 of Article 26, such information as is necessary for carrying out the arbitration procedures. Such
release of information shall be subject to the provisions of paragraph 2 of this Article.
The members of the arbitration panel shall be subject to the limitations on disclosure
described in paragraph 1 of this Article with respect to any information so released.
Article 28. Miscellaneous rules
-
1 The provisions of this Agreement shall not be construed to restrict in any manner
any exclusion, exemption, deduction, credit or other allowance now or hereafter accorded
by any other special arrangement on taxation in connection with the economic or technical
cooperation between the Contracting States.
Article 29. Diplomatic and consular privileges
-
2 For the purposes of this Agreement an individual, who is a member of a diplomatic
or consular mission of a Contracting State in the other Contracting State or in a
third State and who is a national of the sending State, shall be deemed to be a resident
of the sending State if he is submitted therein to the same obligations in respect
of taxes on income as are residents of that State.
-
3 This Agreement shall not apply to international organisations, organs and officials
thereof and members of a diplomatic or consular mission of a third State, being present
in a Contracting State, if they are not subjected therein to the same obligations
in respect of taxes on income as are residents of that State.
Article 30. Entry into force
-
1 This Agreement shall enter into force on the thirtieth day after the latter of the
dates on which the respective Governments have notified each other in writing that
the formalities constitutionally required in their respective States have been complied
with, and its provisions shall have effect in both Contracting States:
-
a) in respect of taxes withheld at source, for amounts paid or credited on or after the
thirtieth day after the date on which this Agreement has entered into force;
-
b) in respect of other taxes, for taxable periods beginning on or after the first day
of January of the calendar year following that in which this Agreement has entered
into force.
This Agreement shall remain in force for a period of five years and shall continue
in force thereafter for a similar period or periods unless either Contracting State
notifies the other in writing, six months before the expiry of the initial or any
subsequent period, of its intention to terminate this Agreement. In such event, this
Agreement shall cease to have effect in both Contracting States:
-
a) in respect of taxes withheld at source, for amounts paid or credited on or after the
first day of January of the calendar year next following that in which the notice
of termination is given; and
-
b) in respect of other taxes, for taxable periods beginning on or after the first day
of January of the calendar year next following that in which the notice of termination
is given.
