Treaty Between The Czech Republic And The United States Of America On The

Original Language Title: o Smlouvě mezi Českou republikou a Spojenými státy americkými o

Read the untranslated law here: https://portal.gov.cz/app/zakony/download?idBiblio=41665&nr=32~2F1994~20Sb.&ft=txt

32/1994 Coll.



The COMMUNICATION FROM the



Ministry of Foreign Affairs



Change: 370/1999 Coll.



Ministry of Foreign Affairs says that the 16 June. September 1993 was in

Prague signed an agreement between the Czech Republic and the United States

of America for the avoidance of double taxation and the prevention of fiscal evasion

with respect to taxes on income and property.



With the Treaty, its assent, Parliament of the Czech Republic and the President of the

the Republic has ratified it. The instruments of ratification were exchanged in the

Washington, 23 February 2005. December 1993.



Treaty has entered into force, pursuant to article 29, paragraph 1. 2 day

on December 23, 1993.



The Czech version of the Treaty shall be designated at the same time.



CONTRACT



between the Czech Republic and the United States of America on the Elimination of double

taxation and the prevention of fiscal evasion with respect to taxes on income and capital



The Czech Republic and the United States desiring to further extend and

to facilitate the mutual economic relations have decided to conclude a contract of

avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on

income and assets, and have agreed as follows:



Article 1



The person to which the contract relates



1. this Agreement shall apply to persons who are resident or established in

one or both of the Contracting States (the residents), if the contract is not

unless otherwise provided for.



2. the contract shall in any way restrict any exception

exemption, deduction, credit, or other relief now or later

provided by:



and) under the laws of one or the other Contracting State; or



(b) by any other agreement) between the Contracting States.



3. A Contracting State may tax its residents [as defined in

Article 4 (Resident)] and its citizens, including the former citizens under the laws

of that State, as if the contract was not in effect.



4. The provisions of paragraph 3 shall not apply to:



and the advantages granted by the Contracting State) pursuant to paragraph 2 of article 9

(Associated enterprises), in accordance with paragraphs 1



(b)) and 4 of article 18 (Pensions, annuities, alimony and child benefits) and

articles 24 (Elimination of double taxation), 25 (prohibition of discrimination) and 26

(Resolving cases by agreement); and



b) advantages accorded by a Contracting State in accordance with articles 20 (public office),

21, (students, trainees, teachers and researchers) and 28 (Diplomats

and consular officials) for individuals who are neither citizens nor

legal permanent residents in this State.



Article 2



The tax, to which the contract relates



1. Current taxes to which this agreement applies are:



and) in the United States: the federal income taxes imposed on the basis of the

Internal Revenue Code (but excluding taxes on accumulated profit tax,

personal holding company tax and social security) and

excise duty levied in connection with the investment income of private

the Foundation (hereinafter referred to as "United States tax");



(b)) in the Czech Republic: the income tax imposed on the basis of the law on taxes

income and real estate tax (hereinafter referred to as "Czech tax").



2. this Agreement shall also apply to any identical or

similar taxes that are imposed after the signature of this agreement, in addition to

current taxes or instead of them. The competent authorities of the Contracting States

they will inform each other of any significant changes that will be

made in their respective taxation laws, and officially

published materials related to the application of the Treaty, including

the explanatory notes, tax regulations, or court decisions.



Article 3



General definitions



1. for the purposes of this agreement, unless the context requires a different interpretation:



and) the term "Contracting State" refers to the United States or the Czech Republic

Depending on what matters;



(b)) the term "United States" refers to the United States, however,

does not include Puerto Rico, the Virgin Islands, Guam or any other

u.s. possession or territory. In a geographical sense, the term "United

States "includes the territorial waters and the seabed and subsoil adjacent

the areas to which they may be exercised by the United States, in accordance

with international law, and on which, in the effectiveness of the laws relating to the

taxes of the United States;



(c)) the term "person" refers to the natural person's estate, fiduciary,

personal company, a company and any other Association of persons;



(d)) the term "company" refers to any legal entity or bearer

rights, considered for the purposes of taxation for legal persons;



(e)) the terms "enterprise of a Contracting State" and "enterprise of the other Contracting

State "means the enterprise carried on by a resident under the circumstances of one

of a Contracting State and an enterprise carried on by a resident of the other Contracting

State;



f) the term "international traffic" means any transport by boat or

by air, except when such carriage is operated only between

places lying in the other Contracting State;



(g)) the term "competent authority" means:



(i) in the United States Secretary of the Treasury or his

authorised representative;



(ii) in the Czech Republic the Minister of Finance of the Czech Republic or its

authorized representative.



2. each term that is not defined in the contract, it will have for her

the application by a Contracting State the importance of it under the law of that

of a Contracting State relating to the taxes which are the subject of this agreement,

unless the context requires a different interpretation or the competent authorities of

agree on a common interpretation in accordance with the provisions of article 26 (Solution

cases by agreement).



Article 4



A resident of the



1. the term "resident of a Contracting State" means within the meaning of this

of the Treaty, any person who, under the law of that State, subject to the

that State taxation because of their place of residence, permanent residence place

management, place of establishment, or any other similar criteria.



2.



and) However, the term "resident of a Contracting State" does not include a person

that is subjected to taxation in that State only on income from sources in this

State or property located there;



(b)) in the case of revenue, that receives or pays personal company

estate, or fiduciary, this term shall apply only in such

the extent to which income deriving such personal company, estate

or entrusted assets are subject to tax in that State as the income

of a resident, either in its hands or in the hands of its partners or actual

beneficiaries; and



c) Czech Republic will treat the United States citizen or a foreigner

having lawful permanent residence ("green card" holder)

a resident of the United States, only if that person has a substantial

presence, permanent home or habitual residence in the United States.



3. the term "resident of a Contracting State" includes:



and this State is less) Administrative Department or local authority of that State, or

any agency or authority of that State, a lower administrative department

or the Office; and



(b)) pension trust or any other organization, which is based and

operated exclusively for the purpose of providing pensions, or for religious,

charitable, scientific, artistic, cultural or educational purposes and that

is a resident of that State in accordance with the laws of that State, regardless of

the fact that the whole income or part of its income may be exempt from

taxation in accordance with the domestic laws of that State.



4. If the individual is under the provisions of paragraph 1, a resident in the

both of the Contracting States, the position of the specified as follows:



and it is assumed that) this person is resident in the State in which the

He has a permanent home; If he has a permanent home in both States, it is assumed that

It is resident in the State, which has a strong personal and economic

relations (Centre of vital interests);



(b)) if it cannot be determined by the State in which he has his Centre

their vital interests, or if it does not have a permanent home in any State

It is assumed that it is resident in the State in which it is usually

resides;



(c)) If this person usually resides in both States, or in any

of them, it is assumed that it is resident in the State of which he is a

National;



d) if that person is a national of both States or of any

of them, the competent authorities of the Contracting States shall adjust the question by mutual

by the agreement.



5. If the company is in accordance with the provisions of paragraph 1 a resident in both

Contracting States, then if it is established under the law of a Contracting

State or its lower administrative unit, it is assumed that it is

resident in that Contracting State.



6. If a person other than an individual or a company is referred to in

the provisions of paragraph 1, a resident of both Contracting States, the competent

authorities of the Contracting States shall by mutual agreement this question and identify the

the method of application of the Treaty for that person.



Article 5



Permanent establishment



1. the term "permanent establishment" within the meaning of this Treaty indicates the Permanent

device for business, through which the undertaking carries out completely

or part of their activities.



2. the term "permanent establishment" includes especially:



and instead of keeping);



(b)) race;



(c));



(d) a factory;)



e) a workshop; and



f) mine, the site of diesel or gas, a quarry or any other place where the benefits

natural resources.



3. the term "permanent establishment" also includes:



a building site or construction) or Setup project or drilling rig

or ship used for the exploration or mining of natural resources,


only if the last more than twelve months; and



(b)) the provision of services, including consultancy services provided by the undertaking

through employees or other personnel, but only where

activities such as to insist on the same or related (

the project) on the territory of the State for a period or periods exceeding in the aggregate

more than 9 months in any 12-month period.

A permanent establishment does not arise in any tax year in which the activity

as described in subparagraphs a) or b) of this paragraph takes over one or

more period not exceeding in the aggregate 30 days in this tax year.



4. Notwithstanding the preceding provisions of this article, the term "permanent

establishment "does not include:



and) device that is used only for storage, display or delivery

goods belonging to the enterprise;



(b)) the supply of goods belonging to the enterprise solely for the purpose

storage, display or delivery;



(c)) the supply of goods belonging to the enterprise solely for the purpose

the processing of another undertaking;



d) durable equipment for the business, which is used only for the purpose of

purchase of goods, or collecting information for the enterprise;



e) durable equipment for the business, which is solely for the purpose

engaging in any other activity that has for undertaking the preparatory or

auxiliary character;



f) durable equipment for the business, which is kept only for any

the combination of activities mentioned in subparagraphs a) to (e)).



5. Notwithstanding the provisions of paragraphs 1 and 2, where a person (other than the

an independent representative, to whom paragraph 6 applies) acting on behalf of

of the enterprise and has, and usually uses the power of Attorney, which allows her to enter into

the contract on behalf of the company, it will be deemed that the company has a permanent

place of business in that State in respect of all the activities which that person

performed for the enterprise, if such activities are not confined to persons

the activities referred to in paragraph 4, and which, if they are performed

standing places for business, done by the Permanent

instead of a permanent establishment under the provisions of this paragraph.



6. Not considered that the enterprise has a permanent establishment in a Contracting

the State just because it carries out its activities through

a broker, General Commission agent or any other agent of an independent,

If these persons are acting within their proper operation.



7. the fact that a company which is resident in a Contracting

State, controlled by the company or is controlled by a company which is

a resident of the other Contracting State, or which carries on there

activity (whether through a permanent establishment or otherwise), will not make itself

about myself from any of this company a permanent establishment of the other

the company.



Article 6



Income from immovable property



1. the income accruing to a resident of a Contracting State from immovable

property (including income from agriculture or forestry) situated in the second

a Contracting State may be taxed in that other State.



2. the term "immovable property" shall be defined in accordance with the law of

the Contracting State in which such property is located. This expression includes the

in any case, accessories of immovable property, the living and the dead

inventory used in agriculture and forestry, rights to which it applies

the provisions of civil law relating to property, the right to the enjoyment of

of immovable property and rights to variable or fixed salaries for unfair advantage

or consent to the mining of mineral deposits, sources and other

natural resources; ships, boats and aircraft shall not be regarded as immovable

asset.



3. The provisions of paragraph 1 shall apply to income from the direct use, letting, or

any other manner of use of immovable property.



4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property

the assets of the company and to income from immovable property used for the performance of

an independent profession.



5. A resident of a Contracting State who is subject to taxation in the second

Contracting State income from immovable property situated in that other

State may calculate tax on this income from the net basis, such as

If such income was attributed to a permanent establishment in that other State.

In the case of taxes of the United States will be the choice of the application of the preceding sentence

binding for the tax year in which the election was made, and for all

the following tax years, if the competent authorities of the United States will not be

agree with the completion of this election.



Article 7



The profits of enterprises



1. The profits of an enterprise of a Contracting State shall be taxable only in that

State if the undertaking does not or has not performed its activities in the second

Contracting State through a permanent establishment that is located there.

If the enterprise carries on or has pursued its activities in this way,

profits of the enterprise may be taxed in that other State, but only to the

to such an extent that can be attributed to that permanent establishment.



2. If an enterprise of a Contracting State, carries on or pursued

its activities in the other Contracting State through a permanent establishment,

that is placed there, attributing is subject to the provisions of paragraph 3 in the

Each Contracting State such permanent establishment profits which could

so if she was as a distinct and independent enterprise engaged

the same or similar activities under the same or similar conditions.



3. when calculating the profits of a permanent establishment shall be allowed to deduct the costs of

the company spent on the objectives pursued by the permanent establishment, including

a reasonable amount of expenditure on research and development, interest, and other similar

costs and expenses management and General and administrative expenses, whether incurred in the

State in which the permanent establishment is situated or elsewhere.



4. no permanent establishment of nepřičtou profits from a business based on the

the fact that only goods for the company.



5. the business profits to be attributed to the permanent establishment shall be for

the purpose of this contract include only gains from property or

activities of the permanent establishment and will be fixed each year for the same

method, if there are sufficient grounds for a different procedure.



6. Nothing in this article shall affect the application of the laws of each Contracting

State relating to the determination of the tax liability of a person in cases where the

the information that the competent authorities of that State are not available

appropriate for determining the profits attributable to a permanent establishment, for

provided that, on the basis of available information is the determination of the profits of the Permanent

the establishment, in accordance with the principles laid down in this article.



7. the term "profits" means, for the purposes of this agreement, income

of any commercial or industrial activity. Includes, for example, profits from the

production, trade, fishing, transport, communication or

mining operations and the provision of services to another person, including

in cases where the company provides the services of its employees. This expression

does not include the income of a natural person for the provision of services, whether

as an employee or in an independent profession.



8. If the profits of the enterprise include income dealt with separately

in the other articles of this agreement, the provisions of those articles shall not affect the

the provisions of this article.



Article 8



Shipping and air transport



1. The profits of an enterprise of a Contracting State from the operation of ships or

aircraft in international traffic shall be taxable only in that State.



2. the term "profits from the operation of ships or aircraft in international traffic"

includes, for the purposes of this article, profits derived from the rental of ships or

aircraft including the crew at a specific time or a path. Also includes the

profits arising from the rental of ships or aircraft without crew, which performs

Enterprise operating ships or aircraft in international traffic if

such leases are incidental in relation to the activities described in paragraph

1.



3. Profits of an enterprise of a Contracting State from the use, maintenance, or

rental of containers (including trailers, towing boats and related

device for the transport of containers) used in international traffic

shall be taxable only in that State.



4. The provisions of paragraph 1 shall also apply to profit from participation in the

the pool, in a joint venture or an international operating agency.



Article 9



Associated enterprises



1. If:



and the company) of a Contracting State participates directly or indirectly in the

management, control or capital of an undertaking of the other Contracting State; or



(b)) the same persons participate directly or indirectly in the management, control or

the assets of the enterprise of a Contracting State and enterprise of the other Contracting

State,

and if in these cases are both enterprises in their commercial or

bound by the terms of the financial relations which differ from those which

would have been agreed upon between undertakings, any gains that may

, but for those conditions, have accrued to one of the businesses, but because

These conditions were not achieved, be included in the profits of this business

and then taxed.



2. where a Contracting State includes in the profits of the enterprise of that State and

then tax the profits from which the enterprise of the other Contracting State

taxed in that other State and the profits following profits which are included

would have been achieved by the undertaking first-mentioned State if the conditions


negotiated between the companies were for what would have been agreed upon between the

independent enterprises, the second State shall adjust the amount of tax saved from appropriately

such profits in that State. In determining such adjustment, due

into account the other provisions of this agreement and, if necessary, the appropriate

the authorities of the Contracting States shall to this end consult each other.



3. The provisions of paragraph 2 shall not apply in the case of fraud, gross

negligence or wilful neglect.



Article 10



Dividends



1. dividends paid by a company which is resident in the same

Contracting State, to a person who is resident in the other Contracting State,

may be taxed in that other State.



2. However, such dividends may also be taxed in the Contracting State in

which is a company that is paid, a resident, and according to the laws

the laws of this State, but if the recipient who is the real

the owner of the dividends is a resident of the other Contracting State, the tax so

provided for shall not exceed:



and 5% of the gross amount) of the dividends if the beneficial owner is

the company, which owns at least 10% of the voting shares of the

the company paying the dividends;



b) 15% of the gross amount of the dividends in all other cases.

This paragraph shall not affect the taxation of the profits of the company, from which they are

dividends are paid.



3. Paragraph a) of paragraph 2 shall not apply in the case of dividends

be paid to United State Regulated Investment Company or Real Estate

Investment Trust. Subparagraph (b)) paragraph 2 shall apply in the case of

dividends paid by Regulated Investment Company. In

the case of dividends paid by Real Estate Investment Trust

with subparagraph (b)), paragraph 2 apply if the beneficial owner of

the dividend is the natural person owning less than 10% of the participation in the company

Real Estate Investment Trust; otherwise, apply the rate of withholding tax

According to national legislation.



4. the term "dividends" as used in this article means income from shares,

or other rights, with the exception of receivables, with a share of the profits, as well as

income from other rights to companies which are subjected to the same

taxation as income from shares by the tax legislation of the State in which it is

the company that rozdílí profit, a resident. The term dividends also

includes the income from accounts payable, including promissory notes bearing right

share of the profit to the extent as provided for under the laws,

the laws of the Contracting State in which the income arises.



5. The provisions of paragraph 2 shall not apply if the beneficial owner

of the dividends, being a resident in a Contracting State, carries on or

exercised in the other Contracting State in which it is a resident company

paying the dividends, industrial or commercial activity

through a permanent establishment situated therein, or performs

exercise an independent profession or in a permanent base located there, and

If the dividends can be attributed to that permanent establishment or that fixed

the base. In such a case, the provisions of article 7 (Profits

enterprises) or article 14 (independent professions), depending on which case

it comes.



6. a company which is resident in a Contracting State may, in addition to

taxation in accordance with the other provisions of this agreement will be subject to yet another

Dani. This tax, however, cannot exceed 5% of the revenue of the company, that can be

attributable to a permanent establishment in that other State, or subject to

taxation on a net basis in that other State in accordance with article 6 (income from

immovable property) or under article 13 (gains from the alienation of property)

deduction of taxes from the profits of these receipts are stored in that other State and

After editing with respect to an increase or decrease in the assets, after taking into account

the company's obligations in relation to the permanent establishment or business, or

industrial activities. Such a tax may be used only if such

stores the tax under the legislation of the second Member State income

any permanent establishment, which is kept in that other State

the company, which is not resident in that other State.



7. Where a company which is a resident of a Contracting State,

achieves profits or income from the other Contracting State, that

the second State to tax dividends paid by the company, unless such

dividends are paid to a resident of that other State or to participate,

for which the dividends are paid, form part of the business property of a permanent

establishment or fixed base situated in that other State, even if the

paid dividends consisting wholly or partly of profits or

income realised in that other State.



Article 11



Interest



1. interest arising in a Contracting State and which is actually

own a resident of the other Contracting State shall be taxable only in the

that other State.



2. the United States may, notwithstanding the provisions of paragraph 1, tax

amount exceeding the residual interest in a Real Estate Mortgage Investment

Conduit in accordance with national legislation.



3. The term "interest" as used in this article means income from debt-claims

any kind, secured and not secured the right to

real estate, and subject to paragraph 4 of article 10 (dividends)

to provide or not provide the 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 related to these valuable

securities, bonds or debentures, as well as any other income,

that is according to the tax laws of the Contracting State in which the income arises,

considered income from borrowed money.



4. The provisions of paragraph 1 shall not apply if the beneficial owner

interest, which is resident in a Contracting State, carries out or

performed in the other Contracting State in which they have interest, source

industrial or commercial activity through a fixed establishment there

located, or exercised or performed in that other State independent

the profession of a permanent base located there and if interest can be attributed to

such permanent establishment or fixed base. In this case,

provisions of article 7 (business Profits) or article 14 (independent

profession), depending on what matters.



5. It is assumed that interest rates have a source in a Contracting State,

If the payer is a resident of that State. If, 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, and such interest shall be charged to such

permanent establishment or fixed base, then such interest will be a source of

considered to be the State in which the permanent establishment or fixed base

located.



6. If the amount of interest that are applicable to the claim from which they are

paid exceeds the due to the special relationship between the

the payer and the beneficial owner of the interest, or that one or the other keeps the

with a third party, the amount which would have been had given the payer with the actual

owner, if it wasn't for such a relationship, the provisions of this

article just on this latter amount. The amount of the salaries that it

exceeds, in this case, will be taxed in accordance with the legislation of each

a Contracting State with regard to the other provisions of this Treaty.



Article 12



License fees



1. license fees arising in a Contracting State, that

a resident of the other Contracting State, may be taxed in that

the second State.



2. the royalties and licence fees referred to in subparagraph (a)) of paragraph 3, which

actually own a resident of a Contracting State, may be taxed

only in that State. Royalties and licence fees referred to in subparagraph (b))

paragraph 3 may also be taxed in the Contracting State in which the

their source, and in accordance with the legislation of that State, but if the

the recipient who is the beneficial owner of the royalties is a resident

of the other Contracting State, the tax amount thus determined may not exceed 10% of the

the gross amount of the royalties.



3. the term "royalties" as used in this agreement indicates the payment

of any kind received as a consideration for the use of, or the right to

use:



and) copyright in the literary, artistic or scientific

including cinematograph films, or films or tapes or any other

means of image or sound reproduction;



b) patent, trade mark, design or model, plan, secret formula

or manufacturing process or other similar rights or property, or

industrial, commercial or scientific equipment, or for information,

that applies to experience acquired in the field of industrial, commercial

or scientific.

The term "royalties" also includes payments resulting from the sale

such rights or assets that are tied to productivity,

use or resale.



4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of

of the royalties, being a resident in a Contracting State,

performs or performed in the other Contracting State in which they have

source license fees, industrial or commercial activity

through a permanent establishment situated therein, or performs

or performed in that other State independent profession in the Permanent


the base located there, and if these license fees can be attributed to

such permanent establishment or fixed base. In this case, shall apply

the provisions of article 7 (business Profits) or article 14 (independent professions)

Depending on what matters.



5. If the amount of the license fees that are related to the use,

law or information for which they are paid, exceeds the due

the special relationship between the payer and the beneficial owner or

that one and the other keeps with the third party, for any reason,

the amount you would have been had given the Bill-to customer is the beneficial owner, if

There was no such relationship, the provisions of this article shall apply only to that

latter amount. The amount of salaries, which will be in excess

this case taxed pursuant to the legislation of each Contracting State to the

reference to the other provisions of this agreement.



6. for the purposes of this article:



and with the license fees) will be treated as having a source in

a Contracting State when the payer is that Contracting State itself or its

lower administrative department or local authority of that State or a person who is

resident for tax purposes by that State. If, however, the person paying

license fees, whether he is or is not a resident in any Contracting

State, has in a Contracting State a permanent establishment or a fixed base in

connection with which the obligation to pay license fees was that go to

borne by that permanent establishment or fixed base, it is considered that these

license fees are to arise in the State in which the permanent establishment is

or fixed base is situated.



(b)) if it cannot be referred to in subparagraph a) dispose of the royalties as a

with the fees having a source in a Contracting State, it will be with the license

the fees paid for the use of, or the right to use in a Contracting

State any assets or rights described in paragraph 3, and usage

as with the fees having a source in that State.



Article 13



Gains from the alienation of property



1. The gains to a resident of a Contracting State from the alienation of

immovable property situated in the other Contracting State may be

taxed in that other State.



2. for the purposes of this article, the term "immovable property located in the second

Contracting State "includes immovable property referred to in article 6, which is

situated in that other State. Also includes shares in the company,

capital is made up of at least 50% of the immovable property located in

the other Contracting State, and also participation in partnerships, given

property or estate if their assets consists of real estate

the assets located in that other State.



3. Gains from the alienation of movable property that can be attributed to the Permanent

the establishment, which has or had an enterprise of a Contracting State in the other

Contracting State, or which can be attributed to a permanent base, which has had

a resident of a Contracting State in the other Contracting State for the performance of

an independent profession, and gains from the alienation of such a permanent establishment

(alone or together with the whole enterprise) or a permanent base, can be

taxed in that other State.



4. Gains enterprise of a Contracting State from the alienation of ships or

aircraft used in international traffic shall be taxable only in that

State.



5. the payments described in paragraph 3 of article 12 (royalties) shall be subject to

taxation only under the provisions of article 12.



6. Gains from the alienation of property, other than that referred to in paragraphs 1

up to 5, shall be taxable only in the Contracting State in which the alienator

resident.



Article 14



An independent profession



1. Income derived by a resident of a Contracting State receives from

a separate independent profession, shall be taxable only in that State,

If such activity is not or has not been exercised in the other Contracting

State and:



and income not attributable to permanent) base, already has this natural person

regularly available in that other State for the purposes of this

activity; in this case, the income that is attributable to that permanent

base, may be taxed in that other State; or



(b) a natural person is not present) in the other Contracting State for a period or

more periods exceeding in the aggregate 183 days in any 12-month

period.



2. the term "independent profession" includes especially independent activity

scientific, literary, artistic, educational or teaching, as well as

separate the activities of physicians, lawyers, engineers, architects, dentists and

accounting experts.



Article 15



Dependent of the profession



1. a salaries, wages and other similar remuneration derived by a resident of a Contracting

the State is receiving due to employment, shall, subject to the provisions of

articles 16 (directors ' fees), 19 (Pensions, annuities, alimony and family allowances for children),

20 (public office) and 21 (students, trainees, teachers and researchers

workers) taxable only in that State unless the employment is exercised

in the other Contracting State. If the employment is exercised, there may be

such fees received for them taxed in that other State.



2. remuneration which a resident of a Contracting State is receiving because of the

employment exercised in the other Contracting State, shall be subject to whatever

the provisions of paragraph 1, taxable only in the first-mentioned State if



and the recipient is resident in) other State for a period or multiple periods

shall not exceed in the aggregate 183 days in any 12-month period;



(b)) the rewards are paid by the employer, or an employer who

is not a resident of the other State; and



(c) the remuneration is not borne by) a permanent establishment or a fixed base, which has

employer in the other State.



3. Notwithstanding the preceding provisions of this article may be rewards

received because of employment exercised as a member of the proper crew boats

or aircraft, which are operated by the enterprise of a Contracting State in

international transport, taxed only in that Contracting State.



Article 16



Royalties



Directors ' fees and other similar remuneration, which a resident of a Contracting State

he receives for services rendered in the other Contracting State as a member of the Board

the Council of the company or of another similar organ of a company that is

a resident of the other Contracting State, may be taxed in that other

State.



Article 17



Limitation of benefits



1. a person who is a resident of a Contracting State and derives income from the

of the other Contracting State, it will be entitled to a remission under this agreement from

taxation in the other Contracting State, only if that person is:



a) a natural person;



(b) the State party or lower), the Administrative Department or local authority of that

State;



(c)) involved in the active implementation of commercial or industrial activities in

the first-mentioned State (other than in the area of implementation or management

the investment, if it's not about the activities in the banking or insurance business

by a bank or insurance company) and the income arising from the second

Contracting State is obtained on the basis of the commercial or industrial

activities or in connection with it;



(d)), the company, whose principal class of shares is materially the scale and

regularly traded on a stock exchange recognised securities or that is

wholly owned, directly or indirectly, a resident of a Contracting State,

the principal class of shares is the substantial scale and regularly traded

on a stock exchange recognised securities;



(e)), a body which is a non-profit organisation (including pension fund

or private foundation) and that, on the basis of this position, it is generally

exempt from taxation in the Contracting State in which he is a resident of,

provided that more than half of the actual beneficiaries, members or

attendees, if you are like that, they are in such an organization in

This article, the advantages arising from this agreement; or



f) person who meets both of the following conditions:



(i) more than 50% of the actual market share of such person (or in the case of

the company, more than 50% of the number of shares of each type of shares of the company)

is owned, directly or indirectly, by persons who are entitled to

benefits arising from this agreement pursuant to subparagraphs a), b), (d) or (e)));

and



(ii) not more than 50% of the gross income of such persons is used directly

or indirectly, on the fulfilment of obligations (including obligations for interest or royalty

fees) to persons who are not entitled to the benefits under this

the contract pursuant to subparagraphs a), b), (d) or (e)).)



2. A person who is not entitled to benefits pursuant to the provisions of this agreement,

paragraph 1 may be granted, however, the benefits of this Treaty,

If the competent authority of the State in which the income source shall designate.



3. For the purposes of subparagraph d) of paragraph 1, the expression means "change of recognized

securities ":



and NASDAQ) system owned by the National Association of

Securities Dealers, Inc. (National Association of securities dealers,

Inc.) and any stock exchange registered with the Securities and Exchange

Commission (Commission of securities and stock exchanges) as a National Securities Exchange

securities for the purposes of the Act on the stock exchanges of 1934;



(b)) the Czech stock exchange (stock exchange Prague a.s.) and any other

a stock exchange recognised by the public authorities; and



(c) any other stock exchange), on which the competent authorities shall agree.




4. For the purposes of subparagraph (f)) (ii) of paragraph 1, the term "gross receipts"

means the gross income, or where an undertaking engaged in industrial and

commercial activities involving the processing or production of the goods, the gross proceeds

less the direct cost of labor and material that can be attributed to the

such processing or production and that are or may be paid from the

These revenues.



Article 18



Artists and athletes



1. Income derived by a resident of a Contracting State as to the

public entertainer, such as a theatre, film,

radio or television artist, or a musician, or as an athlete of the

their personally executing activities in the other Contracting State, may be

Notwithstanding the provisions of articles 14 (independent professions) and 15 (Dependent

profession) are taxed in that other State, except when the amount

gross income accruing to the artists or athletes, including expenses,

him or on his behalf were paid out of such activities,

shall not exceed twenty thousand United States dollars (USD 20,000) or their

the equivalent in Czech Crowns for the applicable tax year. Such a tax may

be imposed on the whole amount of the deduction of all gross proceeds

such artists or athletes at any period during the relevant

tax year, assuming that the artist or athlete is entitled to

You may receive a refund of such taxes when the tax liability is incurred in the

the relevant tax year under the provisions of this agreement.



2. If the income from the activities carried out personally by the artist or

athlete accrues not to that artists or athletes, but to another person,

This revenue may be the other person, notwithstanding the provisions of article 7

(Profits) and 14 (an independent profession) taxed in the Contracting State in

which are the activities of the artist or athlete are exercised, unless

found that not even an artist or an athlete or other person, they may have to

relationship, do not participate directly or indirectly in the profits of that other person

in any way, including the receipt of deferred remuneration, bonuses, fees,

dividends, profit distribution partnerships or other partitioned

profits.



3. the income accruing to a resident of a Contracting State as artists or

athletes will, notwithstanding the provisions of paragraphs 1 and 2 shall be exempt from

the taxation of the second Contracting State, if the visit to that other State

is substantially paid from public funds for the first-mentioned State

or its lower administrative subdivision or a local authority or

exercised on the basis of a specific agreement between the Governments of the Contracting States.



Article 19



Pensions, annuities, alimony and child benefits



1. subject to the provisions of article 20 (public service):



a) pensions and other similar remuneration for the previous employment arising

a resident of a Contracting State, that is their actual

by the owner or other person who is resident in the same Contracting State,

shall be taxable only in that State; and



(b) social insurance contributions) and other public pensions paid by one

a Contracting State to a resident of the other Contracting State, or the citizens of the United

States shall be taxable only in the first-mentioned State.



2. Rents accruing to a resident of a Contracting State, which is their

beneficial owner, it shall be taxable only in that State. The expression

"annuity" as used in this paragraph indicates a set amount paid

repeatedly at specified dates after the specified number of years on the basis of the commitment

to make the payments in return for adequate performance entirely (other than

the provision of services).



3. Alimony paid to a resident of a Contracting State shall be taxable

only in that State. The term "alimony" as used in this paragraph indicates

recurring payments made under a written contract about a breakup, or

According to the Decree of divorce, separate nutrition or compulsory support,

and that are taxable for the recipient according to the laws of the State of which he is

resident.



4. Non-deductible alimony and recurring payments for the purpose of child support

carried out under a written contract about a breakup, or by decision of the

divorce, separation pay, or compulsory support, paid

a resident of a Contracting State to a resident of the other Contracting State,

are not subject to tax in that other State.



Article 20



Public function



Remuneration, including pensions, paid out of public funds of a Contracting

State or lower administrative department or local authority of that State

citizens of this State for services rendered in the functions of Government in nature

shall be taxable only in that State. However, the provisions of article 14 of

(An independent profession), article 15 (Dependent profession) or article 18 of the

(Artists or athletes), as the case may be applied and shall not be used

the previous sentence remuneration paid out of public funds of a Contracting

the State Department or the local sub-district administrative authority of that State for

services rendered in connection with the industrial or commercial activities

by any Contracting State, a political subdivision, or

local authority of that State.



Article 21



Students, trainees, teachers and researchers



1.



a) a natural person who is a resident in a Contracting State to the

the beginning of his visits the other Contracting State and who is temporarily staying

in that other State for the primary purpose of:



(i) at a university or other officially recognised educational Institute

in that other Contracting State, or



(ii) ensure the training required to qualify by profession

or professional specialization, or



(iii) study or conduct research as a recipient of the cash gifts,

contributions and awards from governmental, religious, charitable, scientific,

literary or educational organisations,

will be exempt from taxation by the other Contracting State of any and all amounts

described in subparagraph (b)) of this paragraph for a period not exceeding five

years from the date of their arrival at that other Contracting State.



(b)) the amounts referred to in paragraph) of this paragraph are:



(i) of the remittance from abroad, other than remuneration for personal services, for the purpose of

nutrition, education, study, research or training;



(ii) the monetary donation, contribution or award; and



(iii) income from personal services performed in that other State in the

Summary of not more than 5000 dollars in the United States (5000 USD)

or its equivalent in Czech Crowns for any tax year.



2. A natural person who is a resident of a Contracting State to the

the beginning of his visits the other Contracting State and who is temporarily staying

in that other Contracting State as an employee of a resident of the first-

the said Contracting State or has a contract with him, for the primary purpose of:



and to obtain technical, professional) or business experience from the

a person other than a resident of the first-mentioned Contracting State thereof,

or



(b)), at a university or other officially recognised educational Institute

in that other Contracting State,

will be exempt from taxation by the other Contracting State for a period of 12

consecutive months of their income from personal services in summary

amount not exceeding 8000 United States dollars ($ 8000) or its

equivalent in Czech Crowns.



3. A natural person who is a resident of a Contracting State in

the time, when it starts to bother temporarily in the other Contracting State, and which

temporarily resides in that other State for a period not exceeding 1 year,

as a participant in the Government-funded program of the other Contracting

the State for the primary purpose of the training, research or study, will be exempt

This second State from taxation of its income from personal services

undertaken in connection with such training, research or study in

the latter Contracting State in aggregate amount not exceeding 10 000

United States dollars (US $ 10,000) or its equivalent in the Czech

Crowns.



4. the competent authorities of the Contracting States may agree to amend the amounts

referred to in paragraphs 1 (b) (iii), 2 (b) and 3 of this article, in order to

taken into account the significant changes in price levels.



5. An individual who visits a Contracting State for the primary purpose of

teaching or carrying out research at a University, College, school or

Another officially recognised educational or Research Institute in this contractual

State and who is or was immediately before such visit

a resident of the other Contracting State, shall be exempt from taxation in the first-

that State for a period not exceeding two years from the remuneration for such

teaching or research. The benefits provided in this paragraph will not be granted

a natural person who, during the immediately preceding period

benefit from one of the preceding paragraphs of this article.

A natural person shall be entitled to the benefits of this paragraph only once.



6. This article shall not apply to income from research if such

research is carried out in the public interest but primarily for the private

benefit of a specific person or persons.



Article 22



Other income



1. the income of a person who is resident in a Contracting State, whether they arise

Anyway, which are not dealt with in the foregoing articles of this agreement,

shall be taxable only in that 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 (income from

immovable property), if the beneficial owner of such income, which is

a resident of a Contracting State, carries out or carry out industrial and

business activity in the other Contracting State through a permanent

establishment located there, or exercised or performed in this second

State independent of the profession of a permanent base located there, and this revenue

are attributable to such permanent establishment or fixed base. In such a

the case will apply the provisions of article 7 (business Profits) or article 14 of

(An independent profession), depending on what matters.



Article 23



Property



1. Capital represented by immovable property referred to in article 6 (Income

of the immovable property), owned by the resident of a Contracting State, and

located in the other Contracting State may be taxed in that other

State.



2. Capital represented by movable property that forms part of the operating

the property of a permanent establishment which an enterprise of a Contracting State in the

the other Contracting State or of movable property relating to permanent

the base, which is a resident of a Contracting State in the other Contracting

State in order to exercise an independent profession, may be taxed in that

the second State.



3. Capital represented by ships, aircraft and containers that custom

a resident of a Contracting State and which operates in the international

transport and movable property pertaining to the operation of such ships,

and aircraft, are subject to tax only in that State.



4. any other part of the property of a resident of a Contracting State

shall be taxable only in that State.



Article 24



Elimination of double taxation



1. in accordance with the provisions and subject to the limitations of the legislation

The United States (which may be amended from time to time without

have changed their general principles), a resident of the United States shall permit or

citizens of the United States as a credit on the income tax of the United States tax

income paid in the Czech Republic to a resident or a citizen of the

or on its behalf.



2. In the Czech Republic, double taxation will be avoided in the following

follows:



Czech Republic may, when depositing taxes its residents included in the

base from which to impose such a tax, the revenue that can be

According to the provisions of this Treaty also taxed in the United States, however,

enables to reduce the amount of tax calculated on the basis of the amount of such

equal to the tax paid in the United States (other than only to

the basis of citizenship). Such a reduction shall not exceed that part of the Czech taxes

calculated before the reduction, that fairly falls on revenue

may be taxed under the provisions of this agreement in the United States

(other than on the basis of citizenship).



3. in the case of a natural person who is a citizen of the United States and

a resident of the United States, it is considered that the income that may be

taxed in the United States solely because of citizenship in accordance with the

paragraph 3 of article 1 (the person to which the contract applies), has a source in the

The Czech Republic, to the extent necessary to avoid double taxation,

provided that in no event will the duty paid to the United States

less than the tax that would have been payable if a natural person has not been

citizen of the United States.



Article 25



Prohibition of discrimination



1. nationals of a Contracting State shall not be subjected in the

the other Contracting State to any taxation or duties associated with him,

which is other or more burdensome than the taxation and connected requirements

which are or may be subjected by nationals of this second

State who are in the same situation. This provision will apply

as well as to persons who are not residents of one or both of the Contracting States.

However, for the purposes of United States taxation, citizens of the United

States who are subject to taxation on the basis of the worldwide profits, are not

in the same situation as Czech nationals, who are not residents

Of the United States.



2. the term "nationals" means:



and all the natural persons) which are nationals of any of the

Contracting State;



(b)) to any legal person, partnership and association which have been

constituted under the law in force in a Contracting State.



3. the taxation on a permanent establishment which an enterprise of a Contracting State has in the

the other Contracting State, that other State will not be less favourable than

taxation of enterprises of that other State carrying out the same activity.

This provision shall not be construed as an obligation of a Contracting State,

admitting to residents of the other Contracting State personal credits, deductions and

reduction for tax purposes for reasons of status or family

the commitments which it grants to its residents.



4. nothing in this article shall be construed as preventing one of the

the States parties, save tax, as described in paragraph 6 of article 10

(Dividends).



5. Except where the provisions of paragraph 1 shall apply to article 9

(Associated enterprises), paragraph 4 of article 11 (interest) or paragraph 5 of article

12 (royalties), interest, royalties and other remuneration paid

a resident of a Contracting State to a resident of the other Contracting State

for the purposes of determining the taxable profits of a resident of the first-mentioned

deductible under the same conditions as if they had been paid to a resident of the

the first-mentioned State. Similarly, any debts that has a resident

of a Contracting State to a resident of the other Contracting State, shall be

to determine the taxable assets of former resident of deductible

under the same conditions as if they had been contracted to a resident of the first-

of that State.



6. enterprises of a Contracting State, the capital of which is wholly or partly,

directly or indirectly owned or controlled by a person or persons,

that are resident in the other Contracting State, shall not be subjected in the first-

mentioned State to any taxation or duties associated with him that

is other or more burdensome than the taxation and connected requirements to which

are or may be subjected to other similar businesses for the first time

of that State.



7. The provisions of this article shall, notwithstanding the provisions of article 2 (taxes,

to which the contract applies) will apply to taxes of every kind

and character imposed by one of the Contracting States, or of his lower

Administrative Department or local authority of that State.



Article 26



Resolving cases by agreement



1. where a person considers that the actions of one or both of the Contracting

States lead or lead it to taxation not in accordance with the

the provisions of this Treaty, may, notwithstanding the remedies that

provides the right of those States, present his case to the competent authority

the Contracting State of which he is a resident or national. Case

must be presented within three years from the first notification of the action of the head of

to taxation not in accordance with the provisions of this agreement.



2. the competent authority will try if the objection for

justified and if it is not itself able to find a satisfactory solution, to resolve the

the case of the agreement with the competent authority of the other Contracting State, so that the

avoid taxation which is not in conformity with this agreement. Achieved

the agreement will be made without regard to any time or other

the procedural restriction contained in national legislation

Contracting State.



3. the competent authorities of the Contracting States shall endeavour to resolve by agreement

any difficulties or concerns that may arise in the interpretation of

or application of this agreement. They may also consult together for the prevention of

double taxation in cases where the contract is not.



4. the competent authorities of the Contracting States may come in direct contact with a view to

reaching an agreement in the sense of the preceding paragraphs.



Article 27



The exchange of information and assistance in the field of management



1. the competent authorities of the Contracting States shall exchange the information necessary

for the application the provisions of this agreement or of national laws

regulations of the Contracting States shall apply to the taxes which are the subject

of this agreement, provided that such taxation is not contrary to this agreement.

Exchange of information is not restricted by article 1 (scope of the contract

covered). Any information received by a Contracting State shall be maintained

in the secret in the same manner as information received under

national law of that State and shall be disclosed only to

to persons or authorities (including courts and administrative bodies) concerned with

charge of the assessment, collection or enforcement, or the management of the criminal

prosecution in the matter of taxes, or deciding on appeals in

relation to the taxes covered by this agreement. Such persons or authorities

They shall apply these information only for those purposes. This information can

disclose in public hearings or in judicial

decisions.



2. The provisions of paragraph 1 shall not be in any way interpreted as

store the Contracting State the obligation:



and management measures) to conduct that would violate the law or

the administrative practice of that or of the other Contracting State;




(b)) to divulge information that could not be obtained on the basis of the legal

regulations or in a normal administrative procedure of this or of the other Contracting

State;



(c)) to divulge information which would reveal a trade, business,

industrial, commercial or professional secret or trade process, or

information whose communication would be contrary to public policy.



3. If in accordance with this article, the requested information one

Contracting State, gets the second Contracting State information, which is

covered by the requirement, in the same manner and to the same extent as if the

the tax for the first-mentioned State were the tax of that other State and has been saved

This second State. On special request of the competent authority of one

a Contracting State shall provide to the competent authority of the other Contracting State

information under this article in the form of depositions of witnesses and verified

copies of unpublished original documents (including books,

documents, statements, records, accounts and manuscripts in the same the extent to which

such statements and documents obtained under the laws and

administrative practices of that other State with respect to its own taxes.



4. Notwithstanding the provisions of article 2 (taxes covered)

with this agreement for the purposes of this article shall apply to the taxes of all kinds,

imposed by a Contracting State.



Article 28



Diplomats and consular officials



Nothing in this Agreement shall affect the fiscal privileges of diplomatic or consular

officials under the General rules of international law or on the basis of

the provisions of special agreements.



Article 29



Entry into force



1. this Treaty is subject to ratification in accordance with the procedures

applicable to each of the Contracting States, and ratification shall be

exchanged in Washington, D.C., as soon as possible.



2. the contract shall enter into force by the exchange of instruments of ratification and its

the provisions will take effect:



and) with regard to taxes withheld at source, on amounts paid or

attributed to the first day, or after the first day of the second month following

After the date on which the Agreement enters into force;



(b)) in respect of other taxes, for taxation years beginning on the first day

or after the first day of January of the year in which the Agreement enters into force.



Article 30



Notice of termination



1. this Agreement shall remain in force until denounced by one

Contracting State. Each State party may terminate the contract at any time after

5 years from the date when the Treaty enters into force, provided that the

at least six months before the termination of the diplomatic note was passed to the

along the way. In this case the Treaty cease to apply:



and) with regard to taxes withheld at source, on amounts paid or

attributed to the first day, or after the first day of January following the

the expiration of the six-month period;



(b)) in respect of other taxes, for taxation years beginning on the first day

or after the first day of January next following the expiration of six months.



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



Given in duplicate in Prague, in Czech and English languages, each

both texts are equally authentic, on July 16. September 1993.



For the Czech Republic:



Ivan Kočárník, v.r.



For the United States:



Adrian Basora v.r.