3.
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 a 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 together with the whole enterprise) or of such a fixed base may be taxed in that other Contracting State. But the tax so charged shall be reduced by on amount equal to 50% of such tax.
4.Gains from the alienation of ships or aircraft operated by an enterprise of a Contracting State in international traffic and movable property pertaining to the operation of such ships or aircraft shall be taxable only in that Contracting State.
5.Gains from the alienation of any property other than that referred to in paragraphs 1 to 4 of this Article, shall be taxable only in the Contracting State of which the alienator is a resident.
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 Contracting State unless such services are performed or were performed in the other Contracting State; and
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| a) | the income is attributable to a fixed base which the individual has or had regularly available to him in that other Contracting State; or |
| b) | such individual is present or was present in that other Contracting State for a period or periods exceeding in the aggregate 183 days in any twelve month period commencing or ending in the fiscal year concerned. |
In such a case the income attributable to the services may be taxed in that other Contracting State in accordance with principles similar to those of Article 7 for determining the amount of business profits and attributing business profits to a permanent establishment.
3.The term «professional services» includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, dentists, lawyers, engineers, architects and accountants.
Article 15
Dependent Personal Services
1.Subject to the provisions of Articles 16, 17, 18, 19, 20 and 21 of this Convention, 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 Contracting State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived there from may be taxed in that other Contracting State.
2.Notwithstanding the provisions of paragraph 1 of this Article remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned Contracting State if:
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| (a) | the recipient is present in the other Contracting State for a period or periods not exceeding in the aggregate 183 days in the fiscal year concerned, and |
| (b) | the remuneration is paid by, or on behalf of, an employer, who is not a resident of the other Contracting State, and |
| (c) | the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other Contracting State. |
3.Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic shall be taxable in the Contracting State of which the enterprise operating ship or aircraft is a resident.
4.Notwithstanding the provisions of paragraphs 1 and 2 of this Article remuneration of the ground staff of an air company of a Contracting State who are nationals of that State and who provide services connected with aircraft operation in the other Contracting State shall be taxable only in the first-mentioned Contracting State.
Article 16
Teachers and Researchers
An individual who is a resident of a Contracting State immediately before making a visit to the other Contracting State and who, at the invitation of any university, college, school or other similar educational institution or scientific research institution visits that other State for a period not exceeding three years solely for the purpose of teaching or research or both at such educational institution or scientific research institution shall be exempted from tax for a period not exceeding three years in that other State on any remuneration for such teaching or research.
Article 17
Students and trainees
1.A student or business apprentice who, immediately before visiting a Contracting State is or was a resident of the other Contracting State and who is present in the first-mentioned Contracting State for the purpose of his education or training shall be exempt from tax in that first-mentioned Contracting State on payments made to him by persons residing outside that first-mentioned Contracting State for the purpose of his maintenance, education or training.
2.An individual who is, or immediately before visiting a Contracting State was a resident of the other Contracting State, and who is temporary present in the first-mentioned Contracting State for the purpose of study, research or training as a recipient of a grant allowance or award from a scientific, educational, religious or charitable organization or under a technical assistance program entered into by the Government of a Contracting State shall, from the date of his arrival in the first-mentioned Contracting State in connection with that visit, be exempt from tax in the State, for a period not exceeding the period of the grant.
Article 18
Directors' Fees
Directors' fees and similar payment derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other Contracting State.
Article 19
Pensions and Annuities
Subject to the provisions of paragraph 2 of Article 20 pensions, annuities and other similar remuneration paid to the resident of a Contracting State in consideration of past employment shall be taxable only in that Contracting State.
Article 20
Government Services
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| 1.(a) | Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting State or a political subdivision, or 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) | Notwithstanding the provisions of sub-paragraph (a) of this paragraph, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that Contracting State and the individual is a resident of that contracting State who: |
| | | (i) | is a national of that Contracting State; or | | (ii) | did not become a resident of that Contracting State solely for the purpose of rendering the services. | |
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| 2.(a) | Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or administrative subdivision or a local authority thereof to an individual in respect of services rendered to that Contracting State or subdivision, or authority shall be taxable only in that Contracting State. |
| (b) | Notwithstanding the provisions of sub-paragraph (a) of this paragraph, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that Contracting State. |
3.The provisions of Articles 15, 18 and 19 of this Convention 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 21
Artistes and Sportsmen
1.Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as a public entertainer, such as a theatre, motion picture, radio or television artists, 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 Contracting 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 of this Convention, be taxed in the Contracting State in which the activities of the entertainer or sportsman are exercised.
3.Notwithstanding the provisions of paragraphs 1 and 2 of this Article income derived from such activities performed within the framework of cultural agreements concluded between the Contracting States are reciprocally exempted from tax only if such activities are sponsored by the Government of a Contracting State or financed by public fund of both Contracting States and the activities are not carried out for the purpose of profits.
Article 22
Other income
1.Items of income of a resident of a Contracting State, wherever arising, which are not expressly dealt with in the foregoing Articles of this Convention shall be taxable only in that Contracting State.
2.The provisions of paragraph 1 of this Article shall not apply to income, derived by a resident of a Contracting State, if this resident 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
Special Provision
Notwithstanding the provisions of Articles 5, 7, 13 and 22 of this Convention any income and profits derived by a Contracting State, its political subdivisions, local governments, or local authorities thereof, or their financial institutions arising in the other Contracting State, including gains from the alienation of movable and immovable property situated in that other State, shall be taxable only in the State of residence. The list of the above-mentioned financial institutions shall be agreed from time to time between the competent authorities of the Contracting States.
Article 24
Methods of Elimination of Double Taxation
1.In the case of Kazakhstan, double taxation shall be avoided as follows:
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| a) | Where a resident of Kazakhstan derives income which, in accordance with the provisions of this Convention, may be taxed in U.A.E., Kazakhstan shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in U.A.E. The amount of the tax to be deducted pursuant to the above provision shall not exceed the tax which would have been charged on the same income in Kazakhstan under the rates applicable therein. |
| b) | Where a resident of Kazakhstan derives income, which in accordance with the provisions of this Convention, shall be taxable only in U.A.E., Kazakhstan may include this income in the tax base but only for purposes of determining the rate of tax on such other income as is taxable in Kazakhstan. |
2.In the case of the United Arab Emirates:
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| i) | Where a resident of the United Arab Emirates derives income, which in accordance with the provisions of this Convention may be taxed in Kazakhstan, the United Arab Emirates shall allow as a deduction from tax on income of that person an amount equal to the tax on income paid in Kazakhstan. |
| ii) | Such deductions in either case shall not exceed that part of income tax, as computed before the deduction is given, which is attributable, as the case may be, to the income which may be taxed in that other Contracting State. |
| iii) | Where in accordance with any provision of the Convention income derived by a resident of a Contracting State is exempt from tax in that contracting State, such Contracting State may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income. |
| iv) | For the purposes of paragraph 1 of this Article, profits, income and capital gains owned by a resident of a Contracting State which may be taxed in the other Contracting State in accordance with this Convention shall be deemed to arise from sources in that other Contracting State. |
Article 25
Non-discrimination
1.The 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 that which the nationals of the other Contracting State in same circumstances 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 State.
2.The taxation of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favorably levied in that other Contracting State than the taxation levied on enterprises of that other Contracting State carrying on the same activities in the same circumstances and under the same methods.
3.Except where the provisions of paragraph 1 of Article 9, paragraph 6 of Article 11, or paragraph 7 of Article 12 of this Convention 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 Contracting 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 Contracting State.
4.This Article shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, relief and reductions for taxation purposes on account of civil status or family responsibility which it grants to its own residents.
5.Nothing in this Article shall be construed as imposing a legal obligation on a 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 other State or its residents by virtue of the formation of a customs union, economic union, a free trade area or by virtue of any regional or sub-regional arrangement relating wholly or mainly to taxation, to which the first-mentioned State may be a party pursuant to the practice of either Contracting State.
6.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 subject in the first-mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than that to which other similar enterprises of that first-mentioned State are subjected.
7.In this Article the term «taxation» means taxes of every kind and description which are the subject of this Convention.
Article 26
Mutual Agreement Procedure
1. [REPLACED by first sentence of paragraph 1 of Article 16 of the MLI]
Where a resident of a Contracting State 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 Convention, he may, without prejudice to the remedies provided by the national laws of those States, address to the competent authority of the Contracting State of which he is a resident an application in writing stating the grounds for claiming the revision of such taxation.
The following first sentence of paragraph 1 of Article 16 of the MLI replaces the first sentence of paragraph 1 of Article 26 of this Convention:
ARTICLE 16 - MUTUAL AGREEMENT PROCEDURE
Where a person considers that the actions of one or both of the Contracting States result or will result for that person in taxation not in accordance with the provisions of this Convention, that person may, irrespective of the remedies provided by the domestic law of those Contracting States, present the case to the competent authority of either Contracting State.
The said application may be submitted within three years from the first notification of the action resulting in taxation not in accordance with this Convention.
2.The competent authority of the Contracting State shall endeavor, if the objection appears to it to be justified and if it is not by itself able to arrive at an appropriate 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 not in accordance with this Convention. Any agreement reached shall be implemented notwithstanding any time limits in the domestic laws of the Contracting State.
3.The competent authorities of the Contracting States shall endeavor to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of this Convention. They may also consult together for elimination of double taxation in cases not provided for in this Convention.
4.The competent authorities of the Contracting States shall, when necessary, communicate with each other directly for the purpose of applying this Convention and reaching an agreement in the sense of the preceding paragraphs.
Article 27
Exchange of Information
1.The competent authorities of the Contracting States shall exchange such information as is foreseeable relevant for carrying out the provisions of this convention or to the administration or enforcement of the national laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their central or local authorities, insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Article 1 and 2.
2.Any information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as information obtained under the national laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to the taxes referred to in paragraph 1, or the oversight of the above. 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.In no case shall the provisions of paragraph 1 and 2 be construed so as to impose on a Contracting State the obligation:
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| a) | to carry out administrative measures at variance with the national laws and administrative practice of that or of the other Contracting State; |
| b) | to supply information which is not obtainable under the national laws or in the normal course of the administration of that or of the other Contracting State; |
| c) | to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (order public). |
4.If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall use its information gathering measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 but in no case shall such limitations be construed to permit a Contracting State to decline to supply information solely because it has no domestic interest in such information.
5.In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.
Article 28
Members of Diplomatic Missions and Consular Posts
Nothing in this Convention shall affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international laws or under the provisions of special agreements.
The following paragraph 1 of Article 7 of the MLI applies and supersedes the provisions of this Convention:
ARTICLE 7 - PREVENTION OF TREATY ABUSE
(Principal purpose test provision)
Notwithstanding any provisions of the Agreement, a benefit under the Agreement shall not be granted in respect of an item of income or capital if it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining that benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit in these circumstances would be in accordance with the object and purpose of the relevant provisions of the Agreement.
Article 29
Amendments
In the mutual consent of the Contracting State modifications and additions to the present Convention can be made by the protocols being the integral part of the present Convention.
Article 30
Entry into Force
1.This Convention shall be ratified and shall enter into force on the 30th day after date of the latter notification indicating that both Contracting States have complied with the domestic legal procedures required in each Contracting State for its entry into force.
2.The Convention shall apply:
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| a) | with regard to taxes withheld at the source, in respect of amounts paid or credited on or after the first day of January in the calendar year next following the year in which the Convention enters into force; and |
| b) | with regard to other taxes, in respect to taxable years beginning on or after the first day of January in the calendar year next following the year in which the Convention enters into force. |
Article 31
Termination
The present convention is concluded for indefinite period and shall remain in free until expiration of six months from the date, when one of the Contracting State directs to other Contracting state the notice in writing of the desire to cease its operation. The direction of such notice is carried out only after the expiration of the first five years period of validity of this Convention. In such event, this Convention shall cease to have effect.
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| a) | in regard to taxes withheld at source, for amounts paid or credited on or after first January in the year next following that in which the notice of termination is given; and |
| b) | in regard to other taxes, for taxable periods beginning on or after first January in the year next following that in which the notice of termination is given. |
IN WITNESS THEREOF the undersigned, being duly authorized thereto by their respective Government, have signed this Convention.
Done in duplicate at Abu Dhabi the 22 day of [December] 2008, in the Arabic, Kazakh, English and Russian languages, all texts being equally authentic. In the case of divergence of interpretation, the English text shall prevail.
Protocol
At the moment of signing the Agreement between the Government of the United Arab Emirates and the Government of the Republic of Kazakhstan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, the undersigned have agreed that the following provisions shall form an integral part of the Agreement.
1.Notwithstanding any other provisions of this convention it is understood that the taxation of natural resources including hydrocarbons exploration, extraction and exploration is the sovereign right of individual Emirate in those territory such investment is made.
2.
With reference of paragraph 7 of the Article 10:
The provision of this paragraph covers a privately owned enterprise.
3.Notwithstanding the provisions of the Convention income arising in a Contracting State including the income of charity organization and derived by a resident of the other Contracting State which was constituted the pension benefits to the employees shall be exempt from tax in that State.
IN WITNESS THEREOF the undersigned, being duly authorized thereto by their respective Government, have signed this Convention.
Done in duplicate at Abu Dhabi the 22 day of [December] 2008, in the Arabic, Kazakh, English and Russian languages, all texts being equally authentic. In the case of divergence of interpretation, the English text shall prevail.
