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a) the term “recognized stock exchange” means:
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(i) any stock exchange established and regulated as such under the laws of either Contracting
State; and
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(ii) any other stock exchange agreed upon by the competent authorities of the Contracting
States;
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b) with respect to entities that are not companies, the term “shares” means interests
that are comparable to shares;
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c) the term “principal class of shares” means the class or classes of shares of a company
which represents the majority of the aggregate vote and value of the company or the
class or classes of beneficial interests of an entity which represents in the aggregate
a majority of the aggregate vote and value of the entity;
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d) two persons shall be “connected persons” if one owns, directly or indirectly, at least
50 per cent of the beneficial interest in the other (or, in the case of a company,
at least 50 per cent of the aggregate vote and value of the company's shares) or another
person owns, directly or indirectly, at least 50 per cent of the beneficial interest
(or, in the case of a company, at least 50 per cent of the aggregate vote and value
of the company's shares) in each person. In any case, a person shall be connected
to another if, based on all the relevant facts and circumstances, one has control
of the other or both are under the control of the same person or persons;
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e) the term “equivalent beneficiary” means any person who would be entitled to benefits
with respect to an item of income accorded by a Contracting State under the domestic
law of that Contracting State, this Convention or any other international agreement
which are equivalent to, or more favourable than, benefits to be accorded to that
item of income under this Convention. For the purposes of determining whether a person
is an equivalent beneficiary with respect to dividends received by a company, the
person shall be deemed to be a company and to hold the same capital of the company
paying the dividends as such capital the company claiming the benefit with respect
to the dividends holds;
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f) the term “disproportionate class of shares” means any class of shares of a company
or entity resident in one of the Contracting States that entitles the shareholder
to disproportionately higher participation, through dividends, redemption payments
or otherwise, in the earnings generated in the other Contracting State by particular
assets or activities of the company;
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g) a company’s or entity’s “primary place of management and control” is in the Contracting
State of which it is a resident only if:
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(i) the executive officers and senior management employees of the company or entity exercise
day-to-day responsibility for more of the strategic, financial and operational policy
decision making for the company or entity and its direct and indirect subsidiaries,
and the staff of such persons conduct more of the day-to-day activities necessary
for preparing and making those decisions, in that Contracting State than in any other
State; and
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(ii) such executive officers and senior management employees exercise day-to-day responsibility
for more of the strategic, financial and operational policy decision-making for the
company or entity and its direct and indirect subsidiaries, and the staff of such
persons conduct more of the day-to-day activities necessary for preparing and making
those decisions, than the officers or employees of any other company or entity;
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h) the term “qualifying intermediate owner” means an intermediate owner that is either:
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(i) a resident of a State that has in effect with the Contracting State from which a benefit
under this Convention is being sought a comprehensive convention for the avoidance
of double taxation; or
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(ii) a resident of the same Contracting State as the company applying the test under subparagraph
d) of paragraph 2 or paragraph 4 to determine whether it is eligible for benefits
under the Convention;
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i) the term “tested group” means the resident of a Contracting State that is applying
the test under subparagraph d) of paragraph 2 of this Article or under paragraph 4
or 5 of this Article to determine whether it is eligible for benefits under the Convention
(the “tested resident”), and any company or permanent establishment that:
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(i) participates as a member with the tested resident in a tax consolidation, fiscal unity
or similar regime that requires members of the group to share profits or losses; or
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(ii) shares losses with the tested resident pursuant to a group relief or other loss sharing
regime in the relevant taxable period;
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j) the term “gross income” means gross receipts as determined in the person’s Contracting
State of residence for the taxable period that includes the time when the benefit
would be accorded, except that where a person is engaged in a business that includes
the manufacture, production or sale of goods, “gross income” means such gross receipts
reduced by the cost of goods sold, and where a person is engaged in a business of
providing non-financial services, “gross income” means such gross receipts reduced
by the direct costs of generating such receipts, provided that:
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(i) except when relevant for determining benefits under Article 10 of this Convention, gross income shall not include the portion of any dividends that
are effectively exempt from tax in the person’s Contracting State of residence, whether
through deductions or otherwise; and
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(ii) except with respect to the portion of any dividend that is taxable, a tested group’s
gross income shall not take into account transactions between companies within the
tested group.
