The Saeima has adopted and the President promulgated the following laws: For the Republic of Latvia and the Republic of Bulgaria to the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to income taxes article 1. 2003 December 4, signed by the Republic of Latvia and the Republic of Bulgaria to the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (hereinafter referred to as the Convention) with this law is accepted and approved. 2. article. The Convention shall enter into force on the 28th for the period specified in article and in order, and the Ministry of Foreign Affairs shall notify the newspaper "journal". 3. article. The law shall enter into force on the day following its promulgation. To put the Convention by law Latvian and English. The Parliament adopted the law of 20 May 2004. The President of the Parliament instead of the President i. Otter in Riga on 4 June 2004, the Republic of LATVIA and the Republic of Bulgaria to the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to income taxes of the Republic of Latvia and the Republic of Bulgaria, people's willingness to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, to promote and strengthen the economic relations between the two countries, agree to the following : Chapter I scope of the Convention article 1 persons covered this Convention the CONVENTION applies to persons who have one or both of the Contracting States residents. Article 2 taxes covered by the CONVENTION (1) this Convention shall apply to taxes that are imposed on the Contracting State or of its local authorities, irrespective of the good this kind of taxation. 2. income taxes deemed all taxes imposed on total income, or part of the income, including taxes on the capital gains of the moveable and immovable property of the seizures. 3. The existing taxes to which this Convention applies, in particular, is: (a)): (i) corporate income tax; (ii) the individual income tax; (hereinafter referred to as the Latvian tax); b) Bulgaria: (i) corporate income tax; (ii) the individual income tax; (iii) the definitive duty; (hereinafter referred to as the Bulgarian taxes). 4. this Convention shall also apply to the substantially similar taxes which, supplementing or replacing the existing taxes will be introduced after the date of signature of this Convention. Both the competent authorities of the Contracting States inform each other of any significant amendments to this country in the relevant tax legislation. Chapter II definitions article 3 General definitions 1. If the context does not otherwise specified, then this risk‐adjusted Convention: a) the term "Latvia" means the Republic of Latvia, and, used in a geographical sense, it represents the territory of the Republic of Latvia and any other Latvian territorial waters adjacent to the territories in which, in accordance with the laws of Latvia and international law can be implemented in Latvia of rights on land and sea depths and natural resources contained therein; (b)), the term "Bulgaria" means the Republic of Bulgaria, and used in a geographical sense, it represents the area and territorial sea for which it exercises its sovereignty, as well as the continental shelf and the exclusive economic zone for which it exercises sovereign rights and jurisdiction in accordance with international law; (c) the terms "a Contracting State)" and "the other Contracting State" mean depending on the context of Latvia or Bulgaria; (d)) the term "person" means a natural person, company, or any other Association of persons; e the term "company") means any association or any corporate entity for taxation purposes is considered a corporate Association; (f) the terms ") of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise company, run by a resident of a Contracting State and the company, run by a resident of the other Contracting State; (g)) the term "international traffic" means any carriage by sea, air or road transport vehicles, by contracting a public company, except for the cases when the vehicles move only in the other Contracting State; h) the term "competent authority" means: (i) in Latvia, the Ministry of finance or its authorised representative; (ii) in Bulgaria: the Finance Minister or the authorized representative; I) the term "national" means: (i) any natural person who has the nationality of a Contracting State; (ii) any legal person, partnership or association whose status stems from the existing Contracting State legislation. 2. a Contracting State at any time pursuant to this Convention, all terms not defined therein shall have the meaning which they State Contracting laws at that time used due to the taxes covered by the Convention, unless the context is otherwise, and the risk‐adjusted State the relevant tax legislation meaning prevails over other laws of this state the intended meaning. Article 4 resident 1. In this Convention, the term "resident of a Contracting State" means any person who, under the laws of this country are taxed based on their place of domicile, residence, place of incorporation, leadership, location, or any other similar criteria, and also includes the State and any of its municipalities. However, this term does not include those individuals in that State taxes are imposed only in respect of their income from this country to the existing sources of profit. 2. Where, in accordance with the provisions of part 1 an individual is a resident of both Contracting States, its status would be as follows: (a)) will be considered as the person only as a resident of the State in which they habitually resident; If you are habitually resident in two countries, this person will be considered only for residents of the State, with which it has closer personal and economic relations (Centre of vital interests); (b)) if it is not possible to determine the country in which that person is a vibrant centre of interests, or if it is not a permanent residence in one of the two countries, that person will be considered a resident of the country only, which is its usual home; c) if that person normally home in both countries or none of them, it will be considered only for residents of the country, of which this person; (d)) if that person is a national of both States or no citizen of this country, the competent authorities of the Contracting States shall settle the question by mutual agreement. 3. Where, in accordance with the provisions of part 1 of the public of both Contracting States, then it is considered to be a resident only of the State in accordance with the resident's rules which it is created. 4. Where, in accordance with the provisions of part 1 a person who is not a natural person or a company is a resident of both Contracting States, the competent authorities of the Contracting States shall endeavour to resolve the matter by mutual agreement, to determine the type of application of the Convention to such person. In the absence of such agreement, the application of this Convention, that person will not be entitled to claim any relief granted in accordance with this Convention. Article 5 permanent establishment 1. In this Convention, the term "permanent establishment" means a fixed place of business of the company, which is wholly or partly carried on business. 2. The term "permanent establishment" includes: (a) the management of the company); b) branch; c) Office; (d) a factory;) e) workshop; and (f)) mine shaft, oil or gas extraction sites, quarries or any other natural resource exploration or mining site. 3. The term "permanent establishment" likewise encompasses: a a building site, construction), Assembly or installation project if these work or the project is going on for more than nine months; (b) Contracting State) shelf area takes in activities linked to this country's existing natural resource exploration and extraction from the depths of sea and land, if such activities exceeds the period or periods in General 90 days in any twelve-month period. 4. Notwithstanding the preceding provisions of this article, the term "permanent establishment" shall not include: (a) the use of buildings and equipment) only and exclusively the goods belonging to, or for the storage of the products demonstrated or supplies; (b) goods belonging to the company) or article items intended solely for storage, demonstration or delivery; (c) the goods belonging to the company) or article items intended exclusively for processing in the other company. (d) the specific site) designed exclusively for the purchase of goods or products or information collection needs; e) specific action site intended solely to carry out the business of any other preparatory or ancillary activities; f) specific action site intended solely to deal with (a) to (e))) the following, in any combination thereof, if the combination of the action are generally preparatory or auxiliary character. 5. Notwithstanding paragraph 1 and 2 of the regulations, if a person who is not referred to in part 6 status of independent agent works for your business and It has empowered the State to enter into contracts on behalf of the company, and it constantly uses this power, then in all activities carried out by such person for your business, it is considered that the company has a permanent establishment in the country concerned, unless such person has carried out only part 4 for actions that you perform certain actions in place, this particular site in accordance with the said part is not considered permanent representation. 6. it will be considered that the company does not have permanent representation in the Contracting State where the undertaking is established in that country, using only the broker, agent or any other agent of an independent status, provided that such persons perform their normal business activities. 7. the fact that the company is a resident of a Contracting State-controlled company, which is a resident of the other Contracting State, or which carries on business in that other State (via the permanent representations, or in any other way), or is subject to the control of such undertaking in itself does not mean that any of these companies is the second permanent representation of society. Chapter III taxation of income article 6 INCOME from real property 1. income which 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 taxes. 2. The term "immovable property" have the meaning it has its laws and regulations of a Contracting State in which the property concerned is located. In any case, this term covers property which belongs to real estate property, livestock and equipment used in agriculture and forestry, rights to which the land property the General rules for the use of real property and rights to variable or fixed payments as consideration for the mineral deposits, natural ore and other natural resources, or the right to use them, the right to property (data or information obtained from the findings of research, natural resources) that can be created by sea and land natural resources deep exploration and mining. Sea and air vehicles will not be regarded as immovable property. 3. the provisions of part 1 shall be applied in respect of income from real estate direct use, letting or use in any other way. 4.1 and part 3 will be applied to the rules relating to income from the company's real estate, as well as income from real property used for independent individual services. Article 7 business profits 1. Contracting State company profits will be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent representation of the existing there. If the enterprise carries on business in that way, the company's profits may impose taxes in the other country, but only to the profit, which can be attributed to the permanent establishment. 2. in accordance with the provisions of part 3, if the Contracting State is established in the other Contracting State through a permanent establishment there, existing in each Contracting State to the permanent representations should the profit amount as it would if it had been separated and independent company that performs the same or similar business activities under the same or similar conditions and independently carry out transactions with the company that it is a permanent establishment. 3. in determining the profits of a permanent representation in that Contracting State, will be 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. However, deductions are not allowed for those expenses that would not be deductible if the permanent establishment in the other Contracting State should be in a separate company. 4. where a Contracting State the profits attributable to the permanent establishment shall be determined by dividing the company's total profit in proportion between its divisions, part 2 does not prohibit Contracting State as usual after this principle to determine the profit for tax purposes; However, the method of distribution must be such that the result matches the principles contained in this article. 5. On the permanent representation will not be applied the earnings just because it has purchased the goods or products for the company, which is the permanent representation. 6. for the purposes of applying the provisions of the preceding paragraph, the profits attributed to the permanent establishment shall be determined each year by the same method, except if there is sufficient reason to do otherwise. 7. If the profit is included in the other articles of this Convention see income separately, this article shall not affect the other provisions of this article. Article 8 international traffic 1. Contracting State company profits gained from the sea, air or road vehicles in international traffic, the use of taxable only in that State. 2. the provisions of part 1 shall also apply to profits from the participation in a pool, joint business or international traffic transport agency. Article 9 ASSOCIATED enterprises 1. If: (a) the Contracting State) directly or indirectly participating in the other Contracting State, the company's management or control or it owns part of the company's capital; or (b)) the same persons directly or indirectly participating in the enterprise of a Contracting State in the other Contracting State and the company's management or control or they own part of the company's capital, and in any of these cases, these two companies in commercial or financial relations are created or established by rules different from those provisions that the force between two independent companies , then any profits which would, but for one of the companies affected by the above provisions did not have, can be included in the company's profits, and it may be appropriate to impose taxes. 2. where a Contracting State includes in the profits of an enterprise of that State and taxes accordingly profits on it, in respect of which no other country in the other Contracting State, the company has been taxed, and this included the profit is the profit that would have been the first company of a Contracting State, if the relationship between the two companies would have been as exist between two independent companies, the other country may make appropriate adjustments for the size of the tax What are the gains of the other country. In determining this adjustment, take into consideration other provisions of this Convention and, if necessary, the competent authorities of the Contracting States for consultations. Article 10 dividends 1. Dividends by the company — a resident of a Contracting State in the other Contracting State, the cost of the resident may be taxed in that other State taxes. 2. However, such dividends may also impose taxes under the national laws of the Contracting State of which the resident is a company that pays dividends, but if this true owner of dividends is resident of the other Contracting State, the tax shall not exceed: a 5 per cent of the dividend) total, if real owner of dividends is a company (other than a partnership) which directly manages at least 25 percent of the company capital that paid dividends; (b) 10 per cent of the dividend) total in all other cases. This paragraph shall not affect the taxation of company profits from which dividends. 3. The term "dividends" in this article means income from shares or other rights to participate in profits, not claims, as well as income from other rights which, in accordance with the laws of the State of which the resident is a company that performs the distribution of profits, subject to the same taxation treatment as income from shares. 4. parts 1 and 2 shall not apply if the rightful owner of dividends, who is a resident of a Contracting State, carries on business in the other Contracting State of which the dividends is resident in the firm's costly using existing permanent representation there, or give independent personal services in the other State through a permanent base located there, and where participation, which is paid out in dividends, is actually related to the permanent representations, or permanent base. In this case, depending on the circumstances, apply article 7 or 14. 5. If the company — a resident of a Contracting State derives profits or income in the other Contracting State, that other State may not impose any taxes or these companies paid dividends, except where the dividends are paid to a resident of the other State, or if the participation of which is paid out in dividends, is actually related to the permanent representation or permanent base in another country; nor does it impose a duty of retained earnings retained earnings of the company, even if the dividends paid or retained earnings consists in whole or in part from the other country of profit or income. Article 11 interest 1. Percent, which arise in a Contracting State and paid to a resident of the other Contracting State, may be taxed in that other State taxes. 2. However, such interest may also impose taxes according to relevant national laws in the Contracting State in which they arise, but, if the interest owner is implemented on the territory of the other Contracting State, a resident of the tax must not exceed 5 percent of the total amount of interest. 3. Notwithstanding the provisions of part 2, interest arising in a Contracting State, the implementation of which owner is the other Contracting Governments, including local governments, the central bank or any financial institution wholly owned by that Government, or interest payments on the loans, which guarantee given this Government the first in the country will be exempt from taxation. 4. for the purposes of this article, the term "interest" means income from debt claims of every kind, whether or not secured by mortgage and whether or not they have 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, which belong to these securities, bonds or debentures. The term "interest" does not include income, which according to the provisions of article 10 are considered dividends. Interest received on payments made during, not be regarded as interest for the application of the provisions of this article. 5.1, 2 and 3 shall not be applied, if the true owner of the interest, which is a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent representation of the existing there, or give independent individual services in that other State through a permanent base located there, and if the claims on the basis of which the interest is paid is effectively connected with such permanent establishment or fixed base. In this case, depending on the circumstances, apply article 7 or 14. 6. If the payer of the interest is a resident of a Contracting State, it will be deemed that the interest generated in this country. If, however, the person paying the interest, whether that person is a resident of a Contracting State or not, used in the Contracting State of the existing permanent representation or permanent base located there, which incurred debt obligations, on which the interest is paid, and if such interest is paid (bear) permanent establishment or fixed base, will be considered that the interest incurred in the State in which the permanent establishment or fixed base. 7. If, on the basis of the special relationship between the payer and the interest percentage implemented owner or between both of them and some other person, the amount of interest that relate to debt claims, for which it is paid, exceeds the amount that would have been able to agree to the interest payer and the interest owner will, if implemented, they would not have this special relationship, then the provisions of this article shall be applied only to the last-mentioned amount. In this case, the payment of the part which exceeds this amount, taxes are levied according to each Contracting State laws and regulations, taking into consideration other provisions of this Convention. Article 12 ROYALTIES (1) Royalties arising in a Contracting State and paid to a resident of the other Contracting State, may be taxed in that other State taxes. 2. However, such royalties may also impose taxes according to national regulations of the Contracting State in which it arises, but if the true owner of the royalties is a resident of the other Contracting State, the tax shall not exceed: (a) the percentage of the royalties) 7 total for motion pictures and film or record the radio or television broadcasting, any patent, trademark, design or model, plan, secret formula or process, or the right to use them; b) 5 percent of the total of the royalties in all other cases. 3. The term "royalties" in this article means payments of any kind received as a compensation for the use of any copyright or rights to use any copyright on literary, artistic or scientific work, including cinematograph films and films or recordings for radio and television broadcasting, any patent, trademark, design or model, plan, secret formula or process, or for the production, commercial, or scientific equipment, or for the right to use them , or for information concerning industrial, commercial or scientific experience. 4. parts 1 and 2 shall not be applied, if the true owner of the royalties, which is a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent representation of the existing there, or give independent individual services in that other State through a permanent base located there, and if the right or property for which the royalties are paid is effectively connected with such permanent establishment or fixed base. In this case, depending on the circumstances, apply article 7 or 14. 5. If the payer of the royalties is a resident of a Contracting State, it will be considered that the royalties arise in the country. If, however, the person paying the royalties, whether or not that person is a resident of a Contracting State or not, used in the Contracting State of the existing permanent representation or permanent base located there, which is actually related to the right or property in respect of which the royalties are paid, and if the payment of the royalties (bear) the Permanent Mission or permanent base, will be deemed to arise in the State in royalties in which the permanent establishment or fixed base. 6. If, on the basis of the special relationship between the payer of royalties and royalties shall implement the owner or between both of them and some other person, the amount of the royalties relating to the use, right or information for which it is paid, exceeds the amount of royalties that would have been able to implement a single payer and the owner if they would not have this special relationship, then the provisions of this article shall be applied only to the last-mentioned amount. In this case, the portion of the payment that exceeds this amount, you will be taxed according to each Contracting State laws and regulations, taking into consideration other provisions of this Convention. Article 13 capital gains 1. income or capital gains which a resident of a Contracting State derives, the disposal referred to in article 6, in the other Contracting State the existing real estate or shares of which assets consist mainly of such property, may be taxed in that other State taxes. 2. Capital gains that accrued, disposing of property, which is part of the company of a Contracting State to the permanent representation in business property in the other Contracting State, or disposing of property that belongs to a resident of a Contracting State a permanent base in the other Contracting State, which created the independent personal services, including capital gains from such permanent missions (alone or with the whole enterprise) or of such a permanent disposal base disposal can impose taxes in the other Contracting State. 3. Capital gains by the public company, which uses the sea or air or road vehicles in international traffic, shall forfeit the use in international traffic, maritime, air or road vehicles or disposes of property that belongs to the use of such vehicles shall be taxable only in that State. 4. Capital gains generated by the disposal of any property that is not 1, 2, and 3. the property referred to in part, will be taxable only in the Contracting State of which the resident is the seizure of property. Article 14 independent personal services 1. Contracting State residents — physical persons income earned by providing professional services or other independent activities, will be taxed only in the country, except if that person needs their activities using it regularly available permanent base in the other State. If you are using the following permanent base, income can be taxing in the other country, but only to the extent that they apply to this permanent base. The application of this article, if a resident of a Contracting State: a natural person resident in the other Contracting State for a period or periods exceeding in the aggregate 183 that days in any 12-month period that begins or ends in the tax year concerned, shall be considered that this person uses regular access to permanent base in the other Contracting State and the income that accrued on the second country made the above actions will be applied to this permanent base. 2. The term "professional services" includes independent scientific, literary, artistic, educational or teaching activities as well as doctors, lawyers, engineers, architects, dentists and accountants of independent operation. Article 15 INCOME from employment 1. Under 16, 18, 19 and 20 article, the payment of wages and other remuneration, similar to that of a resident of a Contracting State receives for paid employment, be taxable only in that State unless the paid work is not performed in the other Contracting State. If the salaried work is performed in the other Contracting State, the remuneration received for it can impose taxes in the other country. 2. Notwithstanding the provisions of part 1 the consideration that a resident of a Contracting State receives for paid work that is performed in the other Contracting State, be taxable only in the first mentioned State if: (a) the beneficiary) is found 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 taxation year; and (b) the remuneration is paid) an employer who is not a resident of the other State, or the name of the employer; and (c) the remuneration is not paid) (bear) permanent representation or permanent base that the employer uses the second in the country. 3. Notwithstanding the previous paragraph of this article, the rules of remuneration received for paid work that is being done to a company of a Contracting State in international traffic using maritime, air or road vehicles, can impose taxes in the country. Article 16 DIRECTORS ' fees directors ' fees and other similar remuneration received by a resident of a Contracting State as the Board of directors or other similar institutions in society, which is a member of the other Contracting State, a resident may be taxed in that other State taxes. Article 17 artists and athletes 1. articles 14 and 15 of the regulations to the income of a resident of a Contracting State as izpildītājmāksliniek, as theatre, film, radio or television artist, musician, or as an athlete on their individual activities in the other Contracting State may be taxed in that other State taxes. 2. If izpildītājmāksliniek or athlete's income on his individual activity in the area in question is paid rather than izpildītājmāksliniek or athlete himself but to another person, to the following income regardless of the 7, 14 and 15 the provisions of article 1 may be subject to taxes in the Contracting State in which the activity or sports izpildītājmāksliniek. Article 18 pensions and annual fees 1. in accordance with article 19 of part 2 of the regulations for pensions and other similar remuneration received by a resident of a Contracting State for previous paid employment, and the annual charges received by such resident, be taxable only in that State. 2. Notwithstanding the provisions of part 1 the Contracting State pensions paid and other similar payments made by a Contracting State under a public scheme which is part of the social security system, will be taxed only in the country. 3. The term "annual fees" means a specified amount charged periodically by certain deadlines throughout the lifetime of a certain or determinable period of time under an obligation to make payments against previously received adequate and full consideration in money or money's worth of stuff. Article 19 government service 1 a) for salaries, fees and other similar remuneration, other than a pension, and a natural person the cost of Contracting State or a local government for this country or services provided to the municipality will be taxable only in that State. (b) However, such salaries), fees and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the individual is a resident of that State who: (i) is a national of that State; or (ii) did not become a resident of that State solely to provide these services. 2. (a) to any pension to which) of the natural person the cost of Contracting State or of its local authorities or who are paid out of the funds set up for services provided by that person in that State or municipality will be taxable only in that State. (b) However, such pension) will be taxable only in the other Contracting State if the individual is a resident of that other State and the citizen. 3.15, 16, 17, and article 18 shall apply to salaries, wages, other remuneration and pensions similar to that paid for services provided in respect of the Contracting State or the municipality's business. Article 20 students payments which a residence, study or internship needs receives a student, apprentice or trainee who is, or immediately before the arrival of the State was the territory of the other Contracting State and who was the first resident in that country have come only for the purpose of study or internship, this country will not be taxed if such payments are from sources that are not in the country. Article 21 teachers and researchers 1. income, on teaching or research work shall receive physical person entering Contracting State with a view to teach or engage in research at a University, college or other recognized that Contracting State educational or scientific institution and who just before the arrival of the Contracting State is or was a resident of the other Contracting State, shall not be taxed in the State in the first two years of the date on When this first came to that purpose. 2. the provisions of part 1 will apply to income from research if such research is undertaken not in the public interest but primarily a private person or persons of interest. Article 22 other income 1. Other previous articles of this Convention for the Contracting State not specified income of residents, regardless of their sources will be taxable only in that State. 2. the provisions of part 1 does not apply to income, other than income from article 6 defined in part 2 of the real property, if the income beneficiary who is a resident of a Contracting State, carries on business in the other Contracting State through a permanent representation of the existing there, or give independent personal services in the other State through a permanent base located there, and if the rights or property of which you receive this income is actually related to the permanent representations, or permanent base. In this case, depending on the circumstances of this Convention article 7 or 14. Chapter IV PREVENTION of double taxation article 23 methods for the avoidance of double taxation with respect to Latvia 1, double taxation will be avoided as follows: (a) where a resident of Latvia) derives income which, in accordance with this Convention may impose taxes in Bulgaria, then, unless the domestic law of Latvia is more favourable provisions, reduce the resident's permit Latvia income tax for an amount equal to the income tax paid in Bulgaria. These reductions, however, exceed that part of the income tax, which is calculated in Latvia before and where the application of this reduction is attributable to the income which may be taxed taxes in Bulgaria; (b)) (a) (a) for the application of this paragraph, if the company) — a resident of Latvia receives a dividend from a company resident in Bulgaria, in which it owns at least 10 percent of shares with full voting rights, the tax paid in Bulgaria to be included not only the tax paid on the dividend, but also the appropriate portion of the tax paid on the profits of the company out of which the dividend was paid. 2. in the case of Bulgaria, double taxation shall be avoided as follows: (a) where a resident of Bulgaria) derives income which, in accordance with the provisions of this Convention may impose taxes in Latvia, then part of Bulgaria under this subparagraph (b)), and (c)) released the following income from taxes; (b) where a resident of Bulgaria) derives dividends, interest or royalties which, in accordance to the Convention 10, 11 or 12 of the provisions of article 1 may be subject to taxes in Latvia, then a resident of Bulgaria permits that dividends, interest or royalties in the amount of tax cut for an amount equal to the tax paid in Latvia. Such a reduction may not, however, exceed that part of the tax, which is calculated before the reduction and the application of which can be attributed to lessons learned in Latvia, dividends, interest or royalties; (c)) If, in accordance with any conditions of this Convention a resident of Bulgaria earned income is exempt from tax in Bulgaria, Bulgaria, however this may be, in calculating the amount of tax a resident about residual income, take into account the exempted income from taxation. Chapter v special provisions article 24 non-discrimination 1. Prevention To citizens of a Contracting State in the other Contracting State shall not be subject to taxation or related requirements that are more burdensome than the taxation or the related requirements which, in the same circumstances, in particular in the context of residence applies or may apply to other citizens of this country. This provision shall, notwithstanding the provisions of article 1, also apply to persons who are not party to one or both of the Contracting States of the residents. 2. stateless persons — residents of a Contracting State in one of the Contracting States shall not be subject to taxation or to related requirements that are more burdensome than the taxation or the related requirements which, in the same circumstances, in particular with respect to residence, applies or may apply to citizens of the country concerned. 3. Taxation the company of a Contracting State to the permanent representation the other Contracting State may not be less favourable than those of other taxation public companies which perform the same operation. This provision should not be interpreted that it imposes on the Contracting State the obligation to grant the other Contracting State any personal relief to residents, discount and reduction in relation to taxation, which this country give its residents, in the light of their civil status or family responsibilities. 4. Except where the applicable part 1 of article 9, article 11 part 7 or article 12 part 6 rules, interest, royalties and other payments made by the enterprise of a Contracting State in the other Contracting State the cost of the resident, in determining the taxable profit of the company is to report by the same rules as if they are paid to a resident of the first mentioned State. 5. the Contracting State whose capital, in whole or in part, directly or indirectly, belongs to one or more residents of the other Contracting State or in full or in part, directly or indirectly control these residents, the first State may not be subject to any taxation or any requirements associated with it, which is different from the taxation and related requirements, which are or may be exposed to similar to the former State enterprises or which is more burdensome for them. 6. The provisions of this article independently of the provisions of article 2, apply to taxes of every kind and name. 25. Article 1 mutual consultation procedures. If a person believes that one or both of the Contracting State party to a national action in relation to this person causes or will cause the taxation which does not comply with the provisions of this Convention, that person may, irrespective of the country's domestic legislation that remedies to submit complaints to the competent authority of the country of which the person is resident, or if the complaint relates to article 24, part 1 — the competent authority of the country of which that person is. The complaint shall be submitted for review within three years of the first notification of the action which led to the provisions of this Convention do not appropriate taxation. 2. If the competent authority deems the complaint to be justified and even fail to reach a satisfactory solution, it will endeavour to agree with the other competent authority of a Contracting State to this Convention shall not prevent the adequate taxation. Any such agreement is reached is due irrespective of the Contracting State of the domestic laws and the established time limits. 3. the national competent authorities should seek mutual agreement resolve any difficulties or eliminate doubts which may arise out of the interpretation or application of this Convention. They may also consult to avoid double taxation in cases not provided for in the Convention. 4. in order to reach agreement on these issues in the preceding subparagraph, the competent authorities of the Contracting States may communicate directly with one another. Article 26 exchange of information 1. The competent authorities of the Contracting States shall exchange the information necessary for the carrying out of the provisions of this Convention or of the domestic laws of any type and name of the taxes imposed on the Contracting State or of its local authorities, completion, in so far as these regulations do not conflict with the provisions of this Convention. 1 and 2, of the Convention article does not limit the exchange of information. Any information received by a Contracting State, should 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) which are involved specified in the first sentence, for the calculation of tax collection, the use of coercive measures, trials or appeals related to these taxes. Such persons or authorities, this information must be used only for the purposes mentioned above. They may disclose the information in public hearings or in judgements. 2. the provisions of part 1 should not be explained so that they bind the Contracting State the obligation: a to carry out administrative measures), which does not comply with one or other of the contracting national legislation and administrative practice; (b)) to provide information that is not available under one or the 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). Article 27 diplomatic missions and consular staff nothing in this Convention shall affect the diplomatic missions or consular posts personnel fiscal privileges which international law granted the General provisions or special agreements. Chapter VI final provisions article 28 entry into force 1. The Contracting States shall notify each other that the procedures provided for by law, necessary for the Convention to enter into force have been met. Convention shall enter into force on the date of receipt of the last notification. 2. The provisions of the Convention in two Contracting States shall apply: (a)) in respect of taxes withheld at the time, costs, income accruing on the first day of January or after that date in the calendar year following the year in which this Convention enters into force; (b)) in the case of other income taxes — the taxes to be paid in any taxation year that begins on the first day of January or after that date in the calendar year following the year in which this Convention enters into force. Article 29 termination 1. this Convention is in force indefinitely but either Contracting State may terminate this Convention shall be submitted to the diplomatic channels to the other Contracting State written notice of termination not later than 30 June, before any of the end of the calendar year following that in which the five-year period beginning with the date of entry into force of the Convention. 2. In this case, the two countries will end the application of the Convention: (a)) in respect of taxes withheld at the time the costs — from income accruing on the first day of January or after that date in the calendar year following the year in which the notice of termination; (b)) in the case of other income taxes — the taxes to be paid in any taxation year that begins on the first day of January or after that date in the calendar year following the year in which the notice of termination. In witness thereof, the undersigned, being duly authorised, have signed this Convention. The Convention is drawn up in two copies in the Sofia 4 December 2003 in Latvian, Bulgarian and English, in addition, all texts being equally authentic. Different case is decisive for the interpretation of the text in the English language in the Republic of Latvia, the Republic of Bulgaria is a Velčev Ainārs shlesers Milena CONVENTION BETWEEN the REPUBLIC OF Latvia AND the REPUBLIC OF Bulgaria FOR the avoidance OF double TAXATION AND the PREVENTION OF FISCAL EVASION WITH RESPECT TO taxes ON income-the Republic of Latvia and the Republic of Bulgaria, to conclud a Convention (menu Rngton Line4) for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income in the order to promote and strengthen the economic relations between the two countries, have agreed as follows: Chapter I scope OF the CONVENTION 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 1. This Convention shall apply to taxes on income imposed on behalf of a Contracting State or of its local authorities, irrespectiv of the manner in which they are levied. 2. There shall be regarded as taxes on income all taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovabl property. 3. The existing taxes to which the Convention shall apply in particular to: (a)) in the United Kingdom: (i) the enterprise income tax (income tax of enterprises); (ii) the personal income tax (will tax revenue); (hereinafter referred to as "Latvian tax"); (b)) in Bulgaria: (i) the corporate income tax; (ii) the personal income tax; (iii) the final tax; (hereinafter referred to as "Bulgarian tax"). 4. The Convention shall apply also to any substantially similar taxes that 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 the other of any each significant changes that have been made in their taxation laws of respectiv. Chapter II DEFINITION of article 3 GENERAL DEFINITION 1. For the purpose of this Convention, unless the context otherwise requires: a the term) "Corporation" means-the Republic of Latvia and, when used in the sense of location, means the territory of the Republic of Latvia and any other area adjacent to the territorial waters of the Republic of Latvia within which under the law of Latvia and in accordanc with international law, the rights of Latvia may be exercised with respect to the sea bed and its sub soil and their-natural resources; (b)), the term "Bulgaria" means the Republic of Bulgaria and when used in a location sense means the territory and the territorial sea, over which it exercises sovereignty, its State as well as the continental shelf and the exclusive economic zone over which it exercises sovereign rights and jurisdiction in conformity with international law; (c)) the terms "a Contracting State" and "the other Contracting State" mean Latvia or Bulgaria, as the context requires; (d) the term "person") includes an individual, a company and any other body of persons; e the term "company") means any body corporate or any entity that is treated as a body corporate for tax purpose; (f) the term ") 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; g) the term "international traffic" means any transport by a ship, aircraft or road vehicle operated by the transport an enterprise of a Contracting State, except when the mentioned means of transport are operated solely between places in the other Contracting State; h) the term "competent authority" means: (i) in Latvia, the Ministry of finance or its authorised representative; (ii) in Bulgaria, the Minister of finance or an authorised representative. (I) the term "national") means: (i) any individual possessing the nationality of a Contracting State; (ii) any legal person, partnership or association deriving its status as such from the law in force in a Contracting State. 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 purpose 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 1. For the purpose of this Convention, 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, place of management or any other criterion of a similar nature, and also includes that State and any local authority thereof. This term, however, does not include any person who is liabl to tax in that State in respect only of income from sources in that State. 2. Where by reason of the provision of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows: 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); (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; c if he has an habitual) abode in both States or in ither of them, he shall be deemed to be a resident only of the State of which he is a national; (d) if he is a national) of both States or of ither of them not, the competent authorities of the Contracting States shall settle the the question by mutual agreement. 3. Where by reason of the provision of paragraph 1 a company is a resident of both Contracting States, then it shall be deemed to be a resident solely of the State under the law of which it has been created. 4. Where by reason of the provision of paragraph 1 a person other than an individual or a company is a resident of both Contracting States, the competent authorities of the Contracting States shall endeavour to the settle the question by their mutual agreement and determin the mode of application of the Convention to such person. In the absence of such agreement, for the purpose of the Convention, the person shall not be entitled to claim any benefits provided by this Convention. Article 5 permanent establishment 1. For the purpose 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. 2. The term "permanent establishment" includes especially: a a place of management); (b)) a branch; c) an Office; (d) a factory;) e) a workshop; (f) a mine, an oil) or gas well, a quarry or any other place of exploration or extraction of natural resources. 3. The term permanent establishment: (a) encompass the likewis) a building site, a construction, assembly or installation project only if such site or project lasts for a period of more than nine months; b) activities carried on offshore in a Contracting State in connection with the exploration or extraction from the sea bed and sub-soil of the natural resources situated in that State, if such activities are carried on for a period or periods exceeding in the aggregate 90 days in any twelve month period. 4. Notwithstanding the preceding provision of this article, the term "permanent establishment" shall be deemed not to include: a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise; (b)) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery; (c)) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; (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; e) the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a features or auxiliary character; f) the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (e))), provided that the overall activity of the fixed place of business resulting from this combination is of a features or auxiliary character. 5. Notwithstanding the provision of paragraph 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 conclud-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 undertak-for the enterprise , unless the activities of such person with limited it 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 provision of that paragraph. 6. An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it to one business in the carr a 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. 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 carr to one business in that other State (whethers through a permanent establishment or otherwise), shall not of itself either company a permanent constitut establishment of the other. Chapter III TAXATION OF income article 6 income FROM IMMOVABL PROPERTY 1. Income derived by a resident of a Contracting State from immovabl property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State. 2. The term "immovabl 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 immovabl property, livestock and equipment used in agriculture and forestry, rights to which the provision of general law respecting landed property apply, usufruc of immovabl property and rights to variable or fixed payments as considerations for the working of, or the right to work, mineral deposits, sources and other natural resources , rights to assets (data or information obtained from the exploration, extracted natural resources) to be produced by the exploration or extraction of natural resources from the sea bed and sub-soil. Ships and aircraft shall not be regarded as immovabl property. 3. The provision of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovabl property. 4. The provision of paragraphs 1 and 3 shall also apply to the income from the immovabl property of an enterprise and to income from the immovabl property used for the performance of independent personal services. Article 7 business profits 1. The profits of an enterprise of a Contracting State shall be only in the taxabl that State unless the enterprise to one business in carr the other Contracting State through a permanent establishment situated therein. If the enterprise on business as aforesaid to carr, the profits of the enterprise may be taxed in the other State but only so much of them as is attributabl to that permanent establishment. 2. Subject to the provision of paragraph 3, where an enterprise of a Contracting State to one business in carr 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. 3. In determining the profits of a permanent establishment in a Contracting State, 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. However, from the Marbles is allowabl in respect of the expense, which would not be deductibl if the permanent establishment were a separate enterprise of that Contracting State. 4. Insofar as it has been customary in a Contracting State to determin the profits to be attributed to a permanent establishment on the basis of an apportionmen of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclud that Contracting State from determining the profits to be taxed by such an apportionmen as may be customary; the method of apportionmen, however, the adopted shall be such that the result shall be in accordanc with the principles led in this article. 5. From the 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. 6. For the purpose 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. 7. Where profits include items of income which the deal with separately in other articles of this Convention, then the provision of those articles shall not be affected by the provision of this article. Article 8 INTERNATIONAL TRAFFIC 1. Profits of an enterprise of a Contracting State from the operation of ships, aircraft or road vehicles in international transport traffic shall be only in the taxabl you state. 2. The provision of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency. Article 9 ASSOCIATED enterprises 1. Where (a) an enterprise of a Contracting) State of directly or indirectly participat in the management, control or capital of an enterprise of the other Contracting State, or b) the same persons directly or indirectly the participat 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. 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 Contracting 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 may make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provision of this Convention and the competent authorities of the Contracting States shall if the cessary not consult each other. Article 10 DIVIDENDS 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. 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 law 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 (a) 12:5 per cent) of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 25 per cent of the capital of the company paying the dividend; b) 10 per cent of the gross amount of the dividends in all other cases. This paragraph shall not be affec the taxation of the company in respect of the profits out of which the dividend is paid with. 3. The term "dividends" as used in this article means income from shares or other rights, not being debt-claims, participating in profits, as well as income from other 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. 4. The provision of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carr to one business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or perform in that other State independent personal services from a fixed base situated therein , and the holding in respect of which the dividend is paid is effectively connected with such permanent establishment or with a fixed base. In such case the provision of article 7 or 14, as the case may be, shall apply. 5. Where a company which is a resident of a Contracting State or of deriv profits income from the other Contracting State, that other State may not impost any tax on the dividends paid by the company, except insofar as such dividends to be paid to a resident of that other State or insofar as the holding in respect of which the dividend is paid is effectively connected with a permanent establishment or a fixed base situated in the a to get 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 wholly or partly be consis of profits or income arising in such other State. Article 11 interest 1-interest arising in a Contracting. The State and paid to a resident of the other Contracting State may be taxed in that other State. 2. However, such interest may also be taxed in the Contracting State in which it «arise and according to the law 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 exceeds 100 5 per cent of the gross amount of the interest. 3. Notwithstanding the provision of paragraph 2, interest arising in a Contracting State, derived and beneficially owned by the 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 by that Government shall be main from tax in the first-mentioned State. 4. The term "interest" as used in this article means income from debt-claims of every kind, whethers or not secured by mortgage and whethers or not carrying a right to participat in the debtor's profits, and in particular, income from government securities and income from bonds or debentur, including premium and prizes attaching to such securities, bonds or debentur. The term "interest" shall not include any income which is treated as a dividend under the provision of article 10. Penalty charges for late payment shall not be regarded as interest for the purpose of this article. 5. The provision of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carr to one business in the other Contracting State in which the interest «arise, through a permanent establishment situated therein, or perform in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed Base In such case the provision of article 7 or 14, as the case may be, shall apply. 6. Interest shall be deemed the «arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the interest, whethers 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 indebtednes 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 the «arise in the State in which the permanent establishment or fixed base is situated. 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 100 for the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship , the provision of this article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain the taxabl according to the law of each Contracting State, due regard being had to the other provision of this Convention. Article 12 to 1 to ROYALT Royalt arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2. However, such may be taxed in royalt also in the Contracting State in which they «arise and according to the law of that State, but if the beneficial owner of the royalt to is a resident of the other Contracting State, the tax so charged shall not: (a) 12) 7 per cent of the gross amount of the paid for the USA to royalt of, or the right to use, cinematograph films and films or tapes for radio or television broad-casting , any patent, trade mark, design or model, plan, secret formula or process; (b) 5 per cent) of the gross amount of the stay in all other cases royalt. (c)) 3. The term "royalt" as used in this article means payments of any kind received as a considerations for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films and films or tapes for radio or television broad-casting, 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. 4. The provision of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalt, being a resident of a Contracting State, carr to one business in the other Contracting State in which the royalt «arise, through to a permanent establishment situated therein, or perform in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalt paid is effectively connected with such permanent establishment or with fixed base. In such case the provision of article 7 or 14, as the case may be, shall apply. 5. you shall be deemed the Royalt «arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the whethers royalt, 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 right or property in respect of which the royalt paid is effectively connected with, and such is borne by royalt with such permanent establishment or fixed base , then such shall be deemed to be the royalt «arise in the State in which the permanent establishment or fixed base is situated. 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 royalt, having regard to the use, right or information for which they are paid, exceeds 100 for the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship , the provision of this article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain the taxabl according to the law of each Contracting State, due regard being had to the other provision of this Convention. Article 13 CAPITAL gains 1. Income or gains derived by a resident of a Contracting State from the alienation of property referred to immovabl in article 6 and situated in the other Contracting State or shares in a company the assets of which mainly of such property be consis may be taxed in that other State. 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. 3. Gains derived by an enterprise of a Contracting State operating ships or aircraft or road vehicles in international transport traffic from the alienation of ships, aircraft or road transport vehicle operated in international traffic or movable property pertaining to the operation of such means of transport, shall be only in the taxabl you state. 4. Gains from the alienation of any property other than that referred to in paragraphs 1, 2 and 3, shall be only in the taxabl Contracting State of which the alienator is a resident. Article 14 independent PERSONAL services 1-income derived by an individual. who is a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxabl 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 attributabl to that fixed base. For this purpose, where an individual who is a resident of a Contracting State stay in the other State for a period or Contracting period exceeding in the aggregate 183 days in any twelve month period commencing in or ending in the fiscal year concerned, he shall be deemed to have a fixed base regularly available to him in that other State and the income that is derived from his activities referred to above that are performed in that other State shall be attributabl to that fixed base. 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 income FROM employment 1. Subject to the provision of articles 16, 18, 19 and 20, salar, WAGs and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxabl 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. 2. Notwithstanding the provision 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 the taxabl only in the first-mentioned State if: a the recipient is present) in the other State for a period or periods not exceeding in the aggregate 183 days in the in any twelve month period commencing or ending in the fiscal year concerned , and b the remuneration is paid by), or on behalf of, an employer who is not a resident of the other State, and c the remuneration is not) borne by a permanent establishment or a fixed base which the employer has in the other State. 3. Notwithstanding the preceding provision of this article, remuneration derived in respect of an employment exercised aboard a ship, aircraft or road transport vehicle operated in international traffic by an enterprise of a Contracting State may be taxed in that State. Article 16 directors ' fees directors ' fees and other similar remuneration derived by a resident of a Contracting State in his capacity as a member of the board of directors or any other similar organ of a company which is a resident of the other Contracting State may be taxed in that other State. Article 17 ENTERTAINER AND SPORTSMEN 1. Notwithstanding the provision 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's, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State. 2. Where income in respect of personal activities exercised by an entertainer or a sportsman's in his capacity as such notes to the accru entertainer or sportsman's himself but to another person, that income may, notwithstanding the provision of articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or sportsman's are exercised. Article 18 PENSION AND to subject the ANNUIT 1. the provision of paragraph 2 of article 19, and other similar remuneration paid pension to a resident of a Contracting State in considerations of past employment, and that it paid to annuit resident, shall be only in the taxabl you state. 2. Notwithstanding the provision of paragraph 1, the pension paid and others similar payments made by a Contracting State under a public scheme which is part of its social security system shall be only in the taxabl you state. 3. The term "annuity" means a stated sum payable periodically at stated times during life or during a specified period of time or ascertainabl is under an obligation to make the payments in return for adequat and full considerations in money or money's worth. Article 19 government service 1 a) and others of the Salar, WAGs similar remuneration, other than a pension, paid by a Contracting State or a local authority thereof to an individual in respect of services rendered to that State or authority shall be only in the taxabl you state. (b) However, such, salar) WAGs and other similar remuneration shall be taxabl only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who: (i) is a national of that State; or (ii) did not become a resident of that State solely for the purpose of rendering the services. 2. a Any pension paid by, or) out of funds created by, a Contracting State or a local authority thereof to an individual in respect of services rendered to that State or authority shall be only in the taxabl you state. (b) However, such pension shall be) taxabl only in the other Contracting State if the individual is a resident of, and a national of, that State. 3. The provision of articles 15, 16, 17, and 18 shall apply to salar, and other similar remuneration, WAGs and their pension, in respect of services rendered in connection with a business carried on by a Contracting State or a local authority thereof. Article 20 students payments which a student, an apprentice or a trainee 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 receive 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 teachers AND RESEARCHER. An individual who visits a Contracting State generally for the purpose of teaching or carrying out research at a university, college or other recognised educational or scientific institution in that Contracting State and who is or was immediately before that visit a resident of the other Contracting State, shall be exempted from taxation in the first-mentioned Contracting State on remuneration for such teaching or research for a period not exceeding two years from the date of his first visit for that purpose. 2. The provision of paragraph 1 shall not apply to income from research if such research is undertaken not in the public interest but primarily for the private benefit of a specific person or persons. Article 22 OTHER income 1-items of income. of a resident of a Contracting State, wherever arising, not deal with in the foregoing articles of this Convention shall be only in the taxabl you state. 2. The provision of paragraph 1 shall not apply to income, other than income from property immovabl as defined in paragraph 2 of article 6, if the recipient of such income, being a resident of a Contracting State, carr to one business in the other Contracting State through a permanent establishment situated therein, or perform 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 provision of article 7 or 14, as the case may be, shall apply. Chapter IV methods FOR ELIMINATION OF double TAXATION article 23 ELIMINATION OF double TAXATION 1. In the case of Latvia, double taxation shall be avoided as follows: (a)) where a resident of Latvia's income which, deriv in accordanc with this Convention, may be taxed in Bulgaria, unless a more favourabl treatment is provided in its domestic law, Latvia shall allow as a deduction in "from the tax on the income of that resident, an amount equal to the income tax paid thereon in Bulgaria. Such notes shall, however, exceeds 100 Marbles that part of the income tax in Latvia, as computed before the deduction in "is given, which is attributabl to the income which may be taxed in Bulgaria. (b)) For the purpose of sub-paragraph (a)), where a company that is a resident of Latvia receive a dividend from a company that is a resident of Bulgaria in which it will own at least 10 per cent of its shares having full voting rights, the tax paid in Bulgaria shall include not only the tax paid on the dividend, but also the appropriate portions of the tax paid on the underlying profits of the company out of which the dividend was paid. 2. In the case of Bulgaria shall be avoided double taxation as follows: (a)) where a resident of Bulgaria's income which deriv in accordanc with the provision of this Convention may be taxed in Latvia, Bulgaria shall, subject to the provision of subparagraph (b)) and (c)) of this paragraph, the main such income from tax; b) where a resident of Bulgaria of dividend, interest deriv or royalt to which in accordanc with the provision of articles 10, 11 or 12 of this Convention may be taxed in Latvia, Bulgaria shall allow as a deduction in "from the tax on the dividend, interest or to a resident of the royalt an amount equal to the tax paid in Latvia. Such notes shall, however, exceeds 100 Marbles that about of the tax, as computed before the deduction in "is given, which is attributabl to such dividend, interest or derived from Latvia to royalt; (c)) where in accordanc with any provision of this Convention income derived by a resident of Bulgaria is main from tax in Bulgaria, Bulgaria may not vertheles, in calculating the amount of the tax on the remaining income of such resident, take into account the exempted income Chapter V the SPECIAL PROVISION of article 24 NON-DISCRIMINATION 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 more burdensom than the taxation and connected requirements to which nationals of that other State in the same, in particular with circumstanc respect their residence, may be subjected to or. This provision shall, notwithstanding the provision of article 1, also apply to persons who are not residents of one or both of the Contracting States. 2. a person who with Stateles of residents of a Contracting State shall not be subjected in either Contracting State to any taxation or any requirement connected therewith, which is more burdensom than the taxation and connected requirements to which nationals of the State concerned in the same, in particular with circumstanc respect their residence, may be subjected to or. 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 the 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 allowance, relief and reduction for taxation purpose on account of civil status or family responsibilities which it grants to its own residents. 4. Except where the provision of paragraph 1 of article 9, paragraph 7 of article 11, or paragraph 6 of article 12, apply, interest, and other disbursement royalt paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxabl profits of such enterprise, be-deductibl under the same conditions as if they had been paid to a resident of the first-mentioned State. 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 more burdensom than the taxation and connected requirements to which other similar enterprises of the first-mentioned State may be subjected to or. 6. The provision of this article shall, notwithstanding the provision of article 2, apply to taxes of every kind and description. Article 25 MUTUAL agreement procedure 1-where a person consider. that the actions of one or both of the Contracting States result or will result for him in taxation not in accordanc with the provision of this Convention, he may, irrespectiv 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 accordanc with the provision of the Convention. 2. The competent authority shall endeavour, if the objection to it appear 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 accordanc with the Convention. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States. 3. The competent authorities of the Contracting States shall endeavour to the their resolve by mutual agreement any doubt arising as to the difficult or is it the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention. 4. The competent authorities of the Contracting States the may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. Article 26 Exchange OF INFORMATION 1. The competent authorities of the Contracting the States shall exchange such information as is not cessary for carrying out the provision of this Convention or of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or local authorities, insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by articles 1 and 2. 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 appeal in relations to the taxes referred to in the first line. 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. 2. In no case shall the provision of of paragraph 1 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 (ordre public). Article 27 members OF DIPLOMATIC missions AND CONSULAR posts Nothing in this Convention shall be affec the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provision of special agreements. Chapter VI FINAL PROVISION article 28 ENTRY into force 1. The Contracting States shall notify each other of the completion of the procedures required by their law for the entry into force of this Convention. The Convention shall enter into force on the date of the receipt of the later notification. 2. The provision of the Convention shall apply in both Contracting States: a in respect of taxes) withheld at source, on income derived on or after the first day of January in the calendar year next following the year in which the Convention enter into force; (b)) in respect of other taxes on income, for taxes for any fiscal year beginning chargeabl on or after the first day of January in the calendar year next following the year in which the Convention enter into force. Article 29 TERMINATION this Convention shall remain 1 in force indefinitely but either of the Contracting States may terminate the Convention through diplomatic channels, by giving to the other Contracting State written notice of termination not later than 30 June of any calendar year commencing five years after the year in which the Convention entered into force. 2. In such event the Convention shall cease to be the to apply in both Contracting States: a in respect of taxes) withheld at source, on income derived on or after the first day of January in the calendar year next following the year in which the notice has been given; (b)) in respect of other taxes on income, for taxes for any fiscal year beginning chargeabl on or after the first day of January in the calendar year next following the year in which the notice has been given. In witness whereof, the undersigned, being duly authorised the theret, have signed this Convention. Done in duplicate at Sofia this 4th day of December 2003, in the Latvian, Bulgarian and English languages, all texts being equally authentic. In the case of the divergenc of interpretation the English text shall prevails.

For the Republic of Latvia For the Republic of Bulgaria of shlesers Ainārs Milena Velchev