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1 If at any time after the signing of this Convention, a Contracting State:
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a) reduces the general statutory rate of its corporate income tax or company tax, respectively,
that applies with respect to substantially all of the income of resident companies
with the result that such rate falls below 9 per cent;
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b) provides an exemption from taxation to resident companies for substantially all foreign
source income (including interest and royalties); or
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c) is placed on annex I of the EU list of non-cooperative tax jurisdictions in taxation
matters,
the Contracting States shall consult with a view to amending this Convention to restore
an appropriate allocation of taxing rights between the Contracting States. If such
consultations do not progress, the other State may notify the first-mentioned State
through diplomatic channels that it shall cease to apply the provisions of Articles 10, 11, 12, paragraph 5 of Article 13 and Article 20. In such case, the provisions of such Articles shall cease to have effect in both
Contracting States with respect to items of income derived by resident companies six
months after the date that the other Contracting State issues a written public notification
stating that it shall cease to apply the provisions of these Articles.
It is understood that, if the competent authorities of the Contracting States have,
by mutual agreement, reached a solution within the context of the Convention for cases
in which:
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a) the application of paragraph 2 of Article 3 with respect to the interpretation of a term not defined in the Convention; or
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b) differences in qualification (for example of an element of income or of a person)
would result in double taxation or double exemption, this solution, after publication
thereof by both competent authorities, shall also be binding for the application of
the provisions of the Convention in other similar cases.
It is understood that in the case of an individual living aboard a ship “any other
criterion of a similar nature” shall include the home harbour of that ship.
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1 Notwithstanding the provisions of paragraphs 1, 2 and 3, and subject to the provisions
of paragraph 6 of Article 5 of the Convention, an enterprise of a Contracting State which carries on activities
in the territorial sea of the other Contracting State or in any area beyond and adjacent
to its territorial sea within which that other Contracting State, in accordance with
international law, exercises jurisdiction or sovereign rights, shall be deemed to
carry on, in respect of those activities, business in that other State through a permanent
establishment situated therein, unless the activities in question are carried on in
the other State for a period or periods of less than in the aggregate 30 days in any
twelve month period.
It is understood that rights to the exploration and exploitation of natural resources
shall be regarded as immovable property located in the Contracting State to whose
territorial sea and any area beyond and adjacent to its territorial sea within which
that State, in accordance with international law, exercises jurisdiction or sovereign
rights, including the seabed – and subsoil thereof, these rights apply, and that these
rights are regarded as assets of a permanent establishment in that State. Furthermore,
it is understood that the aforementioned rights include rights to interests in, or
benefits from assets that arise from, that exploration or exploitation.
In the case of the Netherlands, it is understood that income received in connection
with the (partial) liquidation of a company or a purchase of own shares by a company
is treated as income from shares.
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1 The Netherlands shall not be prevented from taxing income with respect to an interest
in a tax exempt investment institution (“vrijgestelde beleggingsinstelling”) according
to its domestic law, but if the beneficial owner of such income is a resident of Andorra,
the tax so charged shall not exceed 15 per cent of the gross amount of the income.
The provisions of paragraphs 1 and 2 of Article 16 shall only apply where the gross amount of such income derived by that resident from
these activities exercised during a fiscal year of the other Contracting State exceeds
an amount of 10.000 Euros.
In the case of annuities arising in the Netherlands, the term “annuity” means an annuity
as mentioned in the Netherlands Income Tax Act 2001 (“Wet inkomstenbelasting 2001”),
or any subsequent identical or substantially similar laws or regulations replacing
this Act, the benefits of which are part of taxable income from employment and dwellings
(“belastbaar inkomen uit werk en woning”).
XII. On the assistance in the collection of taxes
In the event that pursuant to an Agreement or Convention for the avoidance of Double
Taxation concluded with another country after the date of the signature of this Convention,
Andorra agrees to include an article similar to Article 27 of the OECD Model in such
an Agreement or Convention, then the same provisions will apply to the assistance
in the collection of Taxes between the Contracting States of this Convention.
XIII. On income related regulations
The provisions of Article 26 and, if applicable, an article on the assistance in collection of taxes shall apply
accordingly to the income related regulations of both Contracting States.
