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Artigo 29.º — Denúncia

Vigente desde: 08/03/2002

A presente Convenção permanecerá em vigor enquanto não for denunciada por um Estado Contratante. Qualquer dos Estados Contratantes pode denunciar a Convenção por via diplomática, mediante um aviso prévio mínimo de seis meses antes do fim de qualquer ano civil. Nesse caso, a Convenção deixará de se aplicarem ambos os Estados Contratantes:

  1. a)Em relação aos impostos devidos na fonte, cujo facto gerador surja em ou depois de 1 de Janeiro imediatamente seguinte à data em que expira o prazo especificado no referido aviso de denúncia;
  2. b)Em relação aos demais impostos, relativamente aos rendimentos produzidos ou ao capital possuído no ano fiscal com início em ou depois de 1 de Janeiro imediatamente seguinte à data em que expira o prazo especificado no referido aviso de denúncia.

    Em testemunho do qual os signatários, devidamente autorizados para o efeito, assinaram a presente Convenção.

    Feito em duplicado, em Lisboa, aos 2 dias do mês de Agosto de 1999, nas línguas portuguesa, islandesa e inglesa, sendo os três textos igualmente autênticos. No caso de interpretação divergente, prevalecerá o texto inglês.

    Pela República Portuguesa:

    (ver assinatura no documento original)

    Pela República da Islândia:

    (ver assinatura no documento original)

    PROTOCOLO

    No momento da assinatura da Convenção para Evitar a Dupla Tributação e Prevenir a Evasão Fiscal em Matéria de Impostos sobre o Rendimento e o Capital, celebrada nesta data entre a República Portuguesa e a República da Islândia, os signatários acordaram nas seguintes disposições adicionais, que fazem parte integrante da Convenção:

    Ad artigo 2.º

    No caso de Portugal introduzir um imposto idêntico ao imposto sobre o património líquido da Islândia, os Estados Contratantes consultar-se-ão no sentido de chegarem a acordo sobre o alargamento ou não do âmbito de aplicação da Convenção de forma a incluir esse imposto. Se Portugal se declarar impossibilitado de incluir esse imposto no âmbito de aplicação da Convenção, a Islândia pode, imediatamente e através de comunicação feita por via diplomática, fazer cessar os subparágrafos (ii) e (iii) do n.º 3, alínea a), do artigo 2.º, estipulando que a Convenção deixará de produzir efeito relativamente ao imposto islandês sobre o património líquido a partir da data da introdução do novo imposto português.

    Ad artigo 10.º

  3. 1 -Não obstante o disposto no n.º 2, alínea a), no caso de alteração do nível da fiscalidade portuguesa no quadro do direito fiscal da Comunidade Europeia, as autoridades competentes consultar-se-ão a fim de rever a taxa de imposto estabelecida no n.º 2, alínea a), na condição, porém, de que a taxa aplicável não seja inferior a 5%.
  4. 2 -No caso de Portugal, considera-se que a expressão «dividendos» inclui os rendimentos obtidos nos termos de um acordo de participação nos lucros (associação em participação), tal como previsto pela legislação portuguesa.

    Em testemunho do qual os signatários, devidamente autorizados para o efeito, assinaram o presente Protocolo.

    Feito em duplicado, em Lisboa, aos 2 dias do mês de Agosto de 1999, nas línguas portuguesa, islandesa e inglesa, sendo os três textos igualmente autênticos. No caso de interpretação divergente, prevalecerá o texto inglês.

    Pela República Portuguesa:

    (ver assinatura no documento original)

    Pela República da Islândia:

    (ver assinatura no documento original)

    (ver texto em língua islandesa no documento original)

    CONVENTION BETWEEN THE PORTUGUESE REPUBLIC AND THE REPUBLIC OF ICELAND FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL.

    The Portuguese Republic and the Republic of Iceland, desiring to conclude a Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital, have agreed as follows:

    Article 1

    Persons covered

    This Convention shall apply to persons who are residents of one or both of the Contracting States.

    Article 2

    Taxes covered

  5. 1 -This Convention shall apply to taxes on income and on capital imposed on behalf of a Contracting State or of its political or administrative subdivisions or local authorities, irrespective of the manner in which they are levied.
  6. 2 -There shall be regarded as taxes on income and on capital all taxes imposed on total income, on total capital, or on elements of income or capital, including taxes on gains from the alienation of movable or immovable property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.
  7. 3 -The existing taxes to which the Convention shall apply are, in particular:
    1. a)In the case of Iceland:
      1. i)The national income tax (tekjuskattur);
      2. ii)The net wealth tax (eignarskattur);
      3. iii)The extraordinary net wealth tax (sérstakur eignarskattur);
      4. iv)The municipal income tax (útsvar); and
      5. v)The tax levied on the income and capital of banking institutions (tekju og eignarskattur lánastofnana);

        (hereinafter referred to as «icelandic tax»);

    2. b)In the case of Portugal:
      1. i)The personal income tax (imposto sobre o rendimento das pessoas singulares - IRS);
      2. ii)The corporate income tax (imposto sobre o rendimento das pessoas colectivas - IRC); and
      3. iii)The local surtax on corporate income tax (derrama);

        (hereinafter referred to as «portuguese tax»).

  8. 4 -The Convention shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other at the end of each year of any substantial changes which have been made in their respective taxation laws.

    Article 3

    General definitions

  9. 1 -For the purposes of this Convention, unless the context otherwise requires:
    1. a)The term «Iceland» means the Republic of Iceland and, when used in a geographical sense, means the territory of the Republic of Iceland, including its territorial sea, and any area beyond the territorial sea within which Iceland, in accordance with international law, exercises jurisdiction or sovereign rights with respect to the sea bed, its subsoil and its superjacent waters, and their natural resources;
    2. b)The term «Portugal» means the territory of the Portuguese Republic situated in the European Continent, the archipelagos of Azores and Madeira, the respective territorial sea and any other zone in which, in accordance with the laws of Portugal and international law, the Portuguese Republic has its jurisdiction or sovereign rights with respect to the exploration and exploitation of the natural resources of the sea bed and subsoil, and of the superjacent waters;
    3. c)The term «person» includes an individual, a company and any other body of persons;
    4. d)The term «company» means any body corporate or any entity which is treated as a body corporate for tax purposes;
    5. e)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 enterprise carried on by a resident of the other Contracting State;
    6. f)The terms «a Contracting State» and «the other Contracting State» mean Iceland or Portugal as the context requires;
    7. g)The term «international traffic» means any transport by a ship or aircraft operated by an enterprise which has its place of effective management in a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;
    8. h)The term «competent authority» means:
      1. i)In the case of Iceland, the Minister of Finance or his authorised representative;
      2. ii)In the case of Portugal, the Minister of Finance, the Director General of Taxation (director-geral dos Impostos) or their authorised representative;
    9. i)The term «national» means:
      1. i)Any individual possessing the nationality of a Contracting State;
      2. ii)Any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State.
  10. 2 -As regards the application of the Convention at any time by a Contracting State any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Convention applies, any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State.

    Article 4

    Resident

  11. 1 -For the purposes of this Convention, 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, and also includes that State and any political or administrative subdivision or local authority thereof. This 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 or capital situated therein.
  12. 2 -Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:
    1. a)He shall be deemed to be a resident only of the State in which he has a permanent home available to him, if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his personal and economic relations are closer (centre of vital interests);
    2. b)If the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident only of the State in which he has an habitual abode;
    3. c)If he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national;
    4. d)If he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.
  13. 3 -Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident only of the State in which its place of effective management is situated.

    Article 5

    Permanent establishment

  14. 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.
  15. 2 -The term «permanent establishment» includes especially:
    1. a)A place of management;
    2. b)A branch;
    3. c)An office;
    4. d)A factory;
    5. e)A workshop; and
    6. f)A mine, an oil or gas well, a quarry or any other place of extraction of natural resources.
  16. 3 -A building site or construction or installation project constitutes a «permanent establishment» only if it lasts more than twelve months.
  17. 4 -Notwithstanding the preceding provisions of this article, the term «permanent establishment» shall be deemed not to include:
    1. a)The use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;
    2. b)The maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;
    3. c)The maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;
    4. d)The maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise;
    5. e)The maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character;
    6. f)The maintenance of a fixed place of business solely for any combination of activities mentioned in subparagraphs a) to e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.
  18. 5 -Notwithstanding the provisions of paragraphs 1 and 2, where a person - other than an agent of an independent status to whom paragraph 6 applies - is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 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.
  19. 6 -An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that 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.
  20. 7 -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 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

  21. 1 -Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.
  22. 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, boats and aircraft shall not be regarded as immovable property.
  23. 3 -The provisions of paragraph 1 shall apply to income derived from the direct use, letting or use in any other form of immovable property.
  24. 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 independent personal services.
  25. 5 -The foregoing provisions shall also apply to income from movable property, or income derived from services connected with the use or the right to use the immovable property, which, under the taxation law of the Contracting State in which the property in question is situated, is assimilated to income from immovable property.

    Article 7

    Business profits

  26. 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 is attributable to that permanent establishment.
  27. 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.
  28. 3 -In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere.
  29. 4 -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.
  30. 5 -No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.
  31. 6 -For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.
  32. 7 -Where profits include items of income which are dealt with separately in other articles of this Convention, then the provisions of those articles shall not be affected by the provisions of this article.

    Article 8

    Shipping and air transport

  33. 1 -Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
  34. 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 harbour of the ship is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship is a resident.
  35. 3 -The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency. Paragraph 1 shall also apply to such part of the profits of a consortium as corresponds to the participation held in that consortium by an enterprise the place of effective management of which is situated in a Contracting State.

    Article 9

    Associated enterprises

  36. 1 -Where:
    1. 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
    2. 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.

  37. 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 Contraction 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, where that other State considers, the adjustment justified. In determining such adjustment, due regard shall be had to the other provisions of this Convention and the competent authorities of the Contraction States shall if necessary consult each other.

    Article 10

    Dividends

  38. 1 -Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.
  39. 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:
    1. a)10 per cent of the gross amount of the dividends paid if the beneficial owner is a company that, for an uninterrupted period of two years prior to the payment of the dividend, or if the company paying the dividends has existed for less than two years, during the lifetime of the company, holds directly at least 25 per cent of the capital (capital social) of the company paying the dividends; or
    2. b)15 per cent of the gross amount of the dividends.

      The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of the limitations.

      This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

  40. 3 -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.
  41. 4 -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.
  42. 5 -Where a company which is a resident of a Contracting State derives profit 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.

    Article 11

    Interest

  43. 1 -Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
  44. 2 -However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the interest. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation.
  45. 3 -Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempted from tax in that State:
    1. a)If the debtor of such interest is the Government of that State, a political or administrative subdivision or a local authority thereof; or
    2. b)If interest is paid to the Government of the other Contracting State, a political or administrative subdivision or a local authority thereof or an institution or body (including a financial institution) in connection with any financing granted by them under an agreement between the Governments of the Contracting States; or
    3. c)In respect of loans or credit made by the Central Banks of the Contracting States and any other financial institution controlled by the State and financing external business which may be agreed upon between the competent authorities of the Contracting States.
  46. 4 -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.
  47. 5 -The provisions of paragraphs 1 and 2 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 debtclaim 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.
  48. 6 -Interest shall be deemed to arise in a Contracting State when the payer is 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.
  49. 7 -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 Convention.

    Article 12

    Royalties

  50. 1 -Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
  51. 2 -However, such royalties may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the beneficial owner of the royalties is a resident of that State, the tax so charged shall not exceed 10 per cent of the gross amount of the royalties. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation.
  52. 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 and films, tapes or discs for radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience.
  53. 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.
  54. 5 -Royalties shall be deemed to arise in a Contracting State when the payer is 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 obligation to pay the royalties was incurred, and such royalties are borne by that 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.
  55. 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 Convention.

    Article 13

    Capital gains

  56. 1 -Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in article 6 and situated in the other Contracting State may be taxed in that other State.
  57. 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.
  58. 3 -Gains from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
  59. 4 -Gains from the alienation of any property other than that referred to in paragraphs 1, 2 and 3, shall be taxable only in the Contracting State of which the alienator is a resident.

    Article 14

    Independent personal services

  60. 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 State but only so much of it as is attributable to that fixed base.
  61. 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

  62. 1 -Subject to the provisions of articles 16, 18 and 19, 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.
  63. 2 -Notwithstanding the provisions of paragraph 1, 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 State if:
    1. a)The recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve month period commencing or ending in the fiscal year concerned; and
    2. b)The remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and
    3. c)The remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.
  64. 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, may be taxed in the Contracting State in which the place of effective management of the enterprise is situated.

    Article 16

    Directors' fees

    Directors' fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors, supervisory body or any similar organ of a company which is a resident of the other Contracting State may be taxed in that other State.

    Article 17

    Artistes and sportsmen

  65. 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.
  66. 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.

    Article 18

    Pensions

    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 shall be taxable only in that State.

    Article 19

    Government service

  67. 1 -a) Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting State or a political or administrative 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.
    1. 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:
      1. i)Is a national of that State; or
      2. ii)Did not become a resident of that State solely for the purpose of rendering the services.
  68. 2 -a) Any pension paid by, or out of funds created by, a Contracting State or a political or administrative 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.
    1. 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.
  69. 3 -The provisions of articles 15, 16, 17 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 or administrative subdivision or a local authority thereof.

    Article 20

    Students

    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.

    Article 21

    Other income

  70. 1 -Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing articles of this Convention shall be taxable only in that State.
  71. 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 22

    Capital

  72. 1 -Capital represented by immovable property referred to in article 6, owned by a resident of a Contracting State and situated in the other Contracting State, may be taxed in that other State.
  73. 2 -Capital represented by 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 by 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, may be taxed in that other State.
  74. 3 -Capital represented by ships and aircraft operated in international traffic and by movable property pertaining to the operation of such ships and aircraft, shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
  75. 4 -All other elements of capital of a resident of a Contracting State shall be taxable only in that State.

    Article 23

    Elimination of double taxation

  76. 1 -Where a resident of a Contracting State derives income or owns capital which, in accordance with the provisions of this Convention, may be taxed in the other Contracting State, the first-mentioned State shall allow:
    1. a)As a deduction from the tax on the income of that resident, an amount equal to the income tax paid in that other State;
    2. b)As a deduction from the tax on the capital of that resident, an amount equal to the capital tax paid in that other State.

      Such deduction in either case shall not, however, exceed that part of the income tax or capital tax, as computed before the deduction is given, which is attributable, as the case may be, to the income or the capital which may be taxed in that other State.

  77. 2 -Where in accordance with any provision of the Convention income derived or capital owned by a resident of a Contracting State is exempt from tax in that State, such State may nevertheless, in calculating the amount of tax on the remaining income or capital of such resident, take into account the exempted income or capital.

    Article 24

    Non-discrimination

  78. 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.
  79. 2 -Stateless persons who are residents of a Contracting State shall not be subjected in either 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 the State concerned in the same circumstances are or may be subjected.
  80. 3 -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 State than the taxation levied on enterprises of that other State carrying on the same activities. 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.
  81. 4 -Except where the provisions of paragraph 1 of article 9, paragraph 7 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.
  82. 5 -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 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 of the first-mentioned State are or may be subjected.
  83. 6 -The provisions of this article shall, notwithstanding the provisions of article 2, apply to taxes of every kind and description.

    Article 25

    Mutual agreement procedure

  84. 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 Convention, 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 24, 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 the Convention.
  85. 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 the Convention.
  86. 3 -The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention.
  87. 4 -The competent authorities of the Contracting States may communicate with each other directly, including through a joint commission consisting of themselves or their representatives, for the purpose of reaching an agreement in the sense of the preceding paragraphs.

    Article 26

    Exchange of information

  88. 1 -The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention. 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) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the Convention. 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.
  89. 2 -In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation:
    1. a)To carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;
    2. b)To supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;
    3. 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 (ordre public).

      Article 27

      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 law or under the provisions of special agreements.

      Article 28

      Entry into force

  90. 1 -The Governments of the Contracting States shall notify each other that the constitutional requirements for the entry into force of this Convention have been complied with.
  91. 2 -The Convention shall enter into force thirty days after the date of the later of the notifications referred to in paragraph 1 and its provisions shall have effect in both Contracting States:
    1. a)In respect of taxes withheld at source, the fact giving rise to them appearing on or after the first day of January of the year next following the year in which the Convention enters into force;
    2. b)In respect of other taxes, as to income arising or capital owned in any fiscal year beginning on or after the first day of January in the year next following the year in which the Convention enters into force.

      Article 29

      Termination

      This Convention shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Convention, through diplomatic channels, by giving notice of termination in writing at least six months before the end of any calendar year. In such event, the Convention shall cease to have effect in both Contracting States:

    3. a)In respect of taxes withheld at source, the fact giving rise to them appearing on or after the first day of January next following the date on which the period specified in the said notice of termination expires;
    4. b)In respect of other taxes, as to income arising or capital owned in the fiscal year beginning on or after the first day of January next following the date on which the period specified in the said notice of termination expires.

      In witness whereof the undersigned, duly authorised thereto, have signed this Convention.

      Done in duplicate at Lisbon on this 2nd day of August 1999 in the Portuguese, Icelandic and English languages, the three texts being equally authentic. In the case there is any divergence of interpretation, the English text shall prevail.

      For the Portuguese Republic:

      (ver assinatura no documento original)

      For the Republic of Iceland:

      (ver assinatura no documento original)

      PROTOCOL

      At the moment of signature of the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital concluded this day between the Portuguese Republic and the Republic of Iceland, the undersigned have agreed upon the following additional provisions, which form an integral part of the Convention:

      Ad Article 2

      Should Portugal introduce a tax comparable to the Icelandic net wealth tax, the Contracting States shall consult each other to reach an agreement on whether or not to extend the scope of the Convention to include this tax. If Portugal declares itself unable to include this tax in the scope of the Convention, Iceland may, without delay and by way of a communication to be sent through diplomatic channels, terminate subparagraphs (ii) and (iii) of paragraph 3, a), of article 2, stipulating that with effect from the date of introduction of the new Portuguese tax the Convention shall cease to have effect in respect of the Icelandic net wealth.

      Ad Article 10

  92. 1 -Notwithstanding the provisions of paragraph 2, a), in case of modification of the level of Portuguese taxation in the framework of the European Community tax law, the competent authorities shall consult with each other in order to revise the tax rate laid down in paragraph 2, a), provided, however, that the applicable rate shall not be less than 5 per cent.
  93. 2 -In the case of Portugal, the term «dividends» shall be understood to include any income derived under an arrangement for participation in profit (associação em participação) as laid down by the Portuguese law.

    In witness whereof, the undersigned duly authorised thereto have signed this Protocol.

    Done in duplicate at Lisbon on this 2nd day of August 1999 in the Portuguese, Icelandic and English languages, the three texts being equally authentic. In the case there is any divergence of interpretation, the English text shall prevail.

    For the Portuguese Republic:

    (ver assinatura no documento original)

    For the Republic of Iceland:

    (ver assinatura no documento original)

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