On The Protocol Amending The Republic Of Latvia And The Government Of The People's Republic Of China Government's Agreement On The Avoidance Of Double Taxation And The Prevention Of Fiscal Evasion With Respect To Taxes On Income And Capital

Original Language Title: Par Protokolu, ar ko groza Latvijas Republikas valdības un Ķīnas Tautas Republikas valdības līgumu par nodokļu dubultās uzlikšanas un nodokļu nemaksāšanas novēršanu attiecībā uz ienākuma un kapitāla nodokļiem

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Read the untranslated law here: https://www.vestnesis.lv/ta/id/242018

The Saeima has adopted and the President promulgated the following laws: on the Protocol amending the Government of the Republic of Latvia and the Government of the people's Republic of China on the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital article 1. august 24, 2011 in the signed Protocol amending the Republic of Latvia and the Government of the people's Republic of China Government's agreement on the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital (hereinafter referred to as the Protocol), with this law is adopted and approved.
2. article. Fulfilment of the obligations provided for in the Protocol are coordinated by the Ministry of finance.
3. article. This Protocol shall enter into force on its article 13 and the period specified in the order, and the Ministry of Foreign Affairs shall notify the newspaper "journal".
4. article. The law shall enter into force on the day following its promulgation. With the law put the Protocol in English and Latvian.
The Parliament adopted the law in 2011 on 22 December.
The President a. Smith in Riga in 2011 December 29, Protocol amending the Republic of LATVIA and the Government of the people's Republic of CHINA Government's agreement on the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital the Government of the Republic of Latvia and the Government of the people's Republic of China, desiring to conclude a Protocol amending 7 June 1996 in Riga, Latvia signed the Government of the Republic of China and the Government of the people's Republic of the agreement on the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital (hereinafter referred to as The contract), the future agreed.
Article 1 article 2 of the contract (taxes, to which the Treaty applies) paragraph 3 is turned off and replaced with the following: "3. The existing taxes to which the agreement relates, in particular: (a)) in the people's Republic of China: (i) the individual income tax;
(ii) the corporate income tax;
(hereinafter referred to as Chinese tax);
(b)) in the Republic of Latvia: (i) the corporate income tax;
(ii) the individual income tax;
(iii) tax on immovable property;
(hereinafter referred to as the Latvian tax). "
Article 2 of the Treaty, article 3 (General definitions) of point 1 (i)) is turned off and replaced with the following: "(i)) the term" international traffic "means any transport by a ship, aircraft or railway transportation, by the company of a Contracting State, except for the cases when the vessel, aircraft or railway vehicle moves only in the other Contracting State;"
Article 3 of the Treaty, article 4, paragraph 1 (residents) is switched off and replaced with the following: "1. for the purposes of this Agreement, the term" resident of a Contracting State "means any person who, under the laws of this State is subject to taxation on the basis of the place of domicile, residence, place of incorporation (registration), the actual location of management or any other criterion of a similar nature. But this term does not include any person who is taxed in that State in respect only of the income of this country to the existing sources of profit or capital deployed. "
Article 4 of the Treaty, article 7 (business profits), paragraph 3 is turned off and replaced with the following: "3. in determining the profits of the permanent representation are allowed to deduct the expenses incurred for the purposes of the standing representative offices located in the country or elsewhere, including operational and general administrative costs."
Article 5 of the Treaty, article 8 (shipping and air transport) name and code are switched off and replaced with the following: ' article 8 international traffic 1. Contracting State company profits from the ship, aircraft or railway vehicles in international traffic, the use of taxable only in that State. "
Article 6 of the Treaty, article 11 (interest), paragraph 3 is turned off and replaced with the following: "3. Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State and which is the true owner of the Government of the other Contracting State, including local governments, the central bank or any financial institution wholly owned by that Government, or interest derived on loans guaranteed by that Government or insure this, including its municipal , the central bank or any financial institution wholly owned by the Government, is exempt from taxation in the first State. "
Article 7 of the Treaty, article 12 (royalties) (2) is switched off and replaced with the following: "2. However, royalties may impose taxes according to the Contracting State concerned laws and regulations of the Contracting State in which it arises, but if the recipient is the royalty of the true owner of the royalties the tax must not exceed 7 per cent of the total royalties."
Article 8 of the Treaty, article 13 (capital gains), paragraphs 3 and 4 are eliminated and replaced with the following: "3. Capital increase by the company of a Contracting State in international traffic, which uses the ships or aircraft or railway means of transport of such vessels or aircraft or railway vehicle, or from the disposition of property that belongs to such vessel, aircraft or railway transport features , seizures, are taxable only in the Contracting State.
4. Capital gains, by a resident of a Contracting State derives, disposes of shares or comparable interests of any company or other entity in which more than 50 percent of the value of directly or indirectly derives from article 6 of the second Contracting State to an existing real estate, taxes may be imposed in that other country. "
Article 9 of the Treaty, article 15 (dependent personal services) in paragraph 3, shall be excluded and replaced by the following: "3. Notwithstanding the preceding provisions of this article remuneration received for paid work that is being done to a company of a Contracting State in international traffic used the ship, aircraft or railway vehicles, impose taxes in this State."
Article 10 of the Treaty, article 24, paragraph 3 (the capital) is switched off and replaced with the following: "3. Capital represented by ships, aircraft or rail transport that Contracting State company used for international traffic, as well as movable property belonging to the ship, aircraft or railway vehicles, are taxable only in the Contracting State."
11. Article 25 of the agreement (the method of double taxation), paragraph 1 (b)) is turned off and replaced with the following: "(b)) If the income is gained from Latvia dividends to society-Chinese resident paid the company resident in Latvia, where the Chinese company owns at least 20 percent of the shares, setting the amount of the reduction, it is necessary to take into account the tax that in Latvia on earned income for a company that has paid dividends."
12. Article 28 of the Treaty article (information sharing) is switched off and replaced with the following: "article 28 exchange of information 1. The competent authorities of the Contracting States shall exchange information that is expected in this important Treaty provisions or national regulations for the execution of all the type and name of the taxes that are imposed on the Contracting State or of its local authorities, administration or use of coercive measures, in so far as these regulations not inconsistent with this agreement. 1 and 2 of the Treaty, article does not limit the exchange of information.
2. Any information under paragraph 1 shall receive the Contracting State, shall be considered as sensitive as information that is obtained in accordance with the laws of this State, and may be disclosed only to persons or authorities (including courts and administrative authorities) that are involved specified in paragraph 1, for the calculation of tax collection, the use of coercive measures, trials or appeals related to these taxes. Such persons or authorities uses this information only for the purposes mentioned above. They may disclose the information in public hearings or in judgements.
3.1 and paragraph 2 shall not be used so that they bind the Contracting State the obligation: a to carry out administrative measures), which do not conform to this or other national legislation and administrative practice;
(b)) to provide information that is not available under this or other national legislation or administrative practice generally applicable;
(c)) to provide information that can reveal any trade, business, industrial, commercial or professional secret or process technology, or to provide information, the disclosure of which would be contrary to the public interest (ordre public).

4. If a Contracting State in accordance with this article shall be required to provide the information to the other Contracting State the required information you must use their own means of obtaining information, even if the requested information to the other country does not need your taxation needs. The obligation contained in the preceding sentence is subject to the restrictions laid down in paragraph 3, however, these restrictions must not be explained so that they allow the Contracting State refuse to provide information only in that Contracting State does not need such information for its own tax purposes.
5. paragraph 3 should not be interpreted as meaning that they permit the Contracting State refuse to provide information solely because the information is the holder of a bank, another financial institution or a person acting for the trustee or trustee, or because it relates to ownership interests in a person. "
Article 13 the two Contracting States through diplomatic channels in writing notify each other that the domestic legal procedures necessary for the entry into force of this Protocol. This Protocol, which forms an integral part of the agreement, shall enter into force on the 30th day following receipt of the last notification and shall apply with respect to income earned on the first day of January in the calendar year or after following the year in which this Protocol enters into force.
In witness thereof, the undersigned, being duly authorised, have signed this Protocol.
The Protocol is drawn up in two copies in the 24 august 2011 in Latvian, Chinese and English, in addition, all texts being equally authentic. Different case is decisive for the interpretation of the text in English.
On behalf of the Republic of Latvia, the people's Republic of China (signature) on behalf of Andrew Wolf (signature) Xiao Jie Protocol amending the agreement between the Government of the Republic of Latvia and the Government of the people's Republic of China for the avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income and on Capital the Government of the Republic of Latvia and the Government of the people's Republic of China to conclud a Protocol (menu Rngton Line4), to amend the agreement between the Government of the Republic of Latvia and the Government of the people's Republic of China for the avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income and Capital (hereinafter referred to as "the agreement"), signed at Riga on 7th of June 1996, have agreed as follows : article 1 Paragraph 3 of article 2 (taxes Covered) shall be deleted and replaced by the following: "3. The existing taxes to which the agreement shall apply in particular to: (a)) in the people's Republic of China: (i) the individual income tax;
 (ii) the enterprise income tax;
 (hereinafter referred to as "Chinese tax");
(b)) in the Republic of Latvia: (i) the enterprise income tax (income tax of enterprises);
(ii) the personal income tax (will tax revenue);
(iii) the immovabl property tax (tax on immovable property);
 (hereinafter referred to as "Latvian tax"). "
Article 2 Subparagraph (i)) of paragraph 1 of article 3 (General Definition) shall be deleted and replaced by the following: "(i) the term" international traffic) "means any transport by a ship, aircraft, or railway vehicle operated by an enterprise of a Contracting State, except when the ship, aircraft or railway vehicle is operated solely between places in the other Contracting State;"
Article 3 Paragraph 1 of article 4 shall be deleted (resident) and replaced by the following: "1. For the purpose of this agreement, the term" resident of a Contracting State "means any person who, under the law of that State, is liabl to tax therein by reason of his domicile, residence, place of incorporation or place of effective management or any other criterion of a similar nature. But this term does not include any person who is liabl to tax in that State in respect only of income from sources in that State or capital situated therein. "
Article 4 Paragraph 3 of article 7 (business profits) shall be deleted and replaced by the following: "3. In determining the profits of a permanent establishment, there shall be allowed as a deduction in" of which the expense incurred for the purpose of the permanent establishment, including Executive and general administrative expense so incurred, whethers of in the State in which the permanent establishment is situated or elsewher. "
Article 5 the title and paragraph 1 of article 8 (Shipping and Air transport) shall be deleted and replaced by the following: ' article 8 INTERNATIONAL TRAFFIC 1. Profits of an enterprise of a Contracting State from the operation of ships, aircraft or railway vehicles in international traffic shall be taxabl only in that State. "
Article 6 Paragraph 3 of article 11 (interest) shall be deleted and replaced by the following: "3. Notwithstanding the provision of paragraph 2, interest arising in a Contracting State and beneficially owned by the derived and Government of the other Contracting State, including local authorities, though the Central Bank or any financial institution wholly owned by that Government, or interest derived on loans guaranteed or insured by that Government , including its local authorities, the Central Bank or any financial institution wholly owned by that Government, shall be exempted from tax in the first-mentioned Contracting State. "
Article 7 Paragraph 2 of article 12 shall be deleted (Royalt) and replaced by the following: "2. However, such may be taxed in royalt also in the Contracting State in which they «arise, and according to the law of that Contracting State, but if the recipient is the beneficial owner of the royalt, the tax so charged shall not exceeds 100 7 per cent of the gross amount of the royalt."
Article 8 paragraphs 3 and 4 of article 13 (Capital gains) shall be deleted and replaced by the following: "3. Gains derived by an enterprise of a Contracting State operating ships or aircraft, or railway vehicles in international traffic from the alienation of such ships, aircraft or railway vehicles or movable property pertaining to the operation of such ships or aircraft or railway vehicles shall be only in the taxabl you state.
4. Gains derived by a resident of a Contracting State from the alienation of shares or interests of any kind in comparabl in a company or other entity deriving more than 50 per cent of their value directly or indirectly from immovabl property situated in the other Contracting State may be taxed in that other State. "
Article 9 Paragraph 3 of article 15 (dependent Personal services) shall be deleted and replaced by the following: "3. Notwithstanding the preceding provision of this article, remuneration derived in respect of an employment exercised aboard a ship, aircraft or railway vehicle operated in international traffic by an enterprise of a Contracting State may be taxed in that State."
Article 10 Paragraph 3 of article 24 shall be deleted (Capital) and replaced by the following: "3. Capital represented by ships, aircraft and railway vehicles operated in international traffic by an enterprise of a Contracting State and by movable property pertaining to the operation of such ships, aircraft and railway vehicles, shall be only in the taxabl a State."
Article 11 paragraph 1 of Subparagraph (b)) of article 25 (methods for Elimination of Double Taxation) shall be deleted and replaced by the following: "(b)) where the income derived from Latvia is a dividend paid by a company which is a resident of Latvia to a company which is a resident of China and which own not less than 20 per cent of the shares of the company paying the dividend , the credit shall take into account the tax paid by the Corporation the company paying the dividend in respect of its income. "
Article 12 article 28 (Exchange of Information) shall be deleted and replaced by the following: "article 28 exchange of Information 1. The competent authorities of the Contracting the States shall exchange such information as is foreseeably relevant for carrying out the provision of this agreement or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their local authorities, insofar as the taxation thereunder is not contrary to the agreement. The exchange of information is not restricted by articles 1 and 2. Any information received under paragraph 2 1 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, the determination of the appeal in relations to the taxes referred to in paragraph 1, or the oversigh of the above. Such persons or authorities shall use the information only for such purpose. They may be published by the information in disclos court proceedings or in judicial decisions.
3. In no case shall the provision of of paragraphs 1 and 2 be construed so as to impost on a Contracting State the obligation: a to carry out administrative) measure the at variance with the laws and administrative practice of that or of the other Contracting State;
(b) to supply information which is not) obtainabl is under the laws or in the normal course of the administration of that or of the other Contracting State;
(c) to supply information which would disclos) any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (order public).

4. If information is requested by a Contracting State in accordanc with this article, the other Contracting State shall use its information gathering "to obtain the requested information, even though that other State may not need such information for its own tax purpose. The obligation in the preceding line led is subject to the limitations of paragraph 3 but in no case shall such limitations from be construed to permit a Contracting State to supply information to declin solely because it has from the domestic interest in such information.
5. In no case shall the provision of of paragraph 3 be construed to permit a Contracting State to supply information solely to declin because the information is held by a bank, other financial institution, or a person acting in nomine an agency or a fiduciary capacity or because it relate to ownership interests in a person. "
Article 13 Both Contracting States shall notify each other through diplomatic channels that they have completed the internal legal procedure not cessary for the entry into force of this Protocol. This Protocol, which shall form an integral part of the agreement, shall enter into force on the thirtieth day upon the receipt of the latter notification and shall be applicable in respect of income derived during the year beginning of the taxabl on or after the first day of January next following that in which this Protocol enter into force.
In witness whereof the undersigned, duly authorized, have signed the theret this Protocol.
Done at Riga on the 24th day of August, 2011, in duplicate in the Latvian, Chinese and English languages, all texts being equally authentic. In the case of divergenc in interpretation, the English text shall prevails.
For the Government of the Republic of Latvia For the Government of the people's Republic of China (signature) (signature) Andris Vilks Xiao Jie