The Saeima has adopted and the President promulgated the following laws: For the Government of the Republic of Latvia and the United Kingdom of Great Britain and Northern Ireland the Government Convention on the avoidance of double taxation and the prevention of fiscal evasion with respect to income and capital gains taxes article 1. 8 may, 1996 in London signed by the Government of the Republic of Latvia and the United Kingdom of Great Britain and Northern Ireland Government Convention on the avoidance of double taxation and the prevention of fiscal evasion with respect to income and capital gains taxes and the 8 May 1996 signed agreements in additional notes (hereinafter referred to as the Convention) with this law is adopted and approved. 2. article. The law shall enter into force on the date of its promulgation. To put the Convention by law Latvian and English. 3. article. The Convention shall enter into force on the 30th for the period specified in article and in order, and shall notify the Ministry of Foreign Affairs Gazette "journal". The Parliament adopted the law of 6 November 1996. The President g. Ulmanis in Riga in 1996 on November 20, the Government of the Republic of LATVIA and the United Kingdom of Great Britain and Northern Ireland Government in the Convention on the avoidance of double taxation and the prevention of fiscal evasion with respect to income and capital gains taxes, the Government of the Republic of Latvia and the United Kingdom of Great Britain and Northern Ireland Government; Reaffirming the desire to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to income and capital gains taxes; Agree: article 1 scope of the Convention this Convention shall apply to persons who have one or both of the Contracting States residents. Article 2 taxes covered by this Convention, this Convention 1 will apply in respect of income and capital gains tax, which is imposed on the Contracting State or of its political or administrative unit, a local authority in good regardless of the manner in which this taxation occurs. 2. On the income and capital gains taxes will be considered any tax that taxed the total income or income element, including tax, which taxed increases (capital) of the moveable and immovable property of the seizures. 3. this Convention shall be applied in relation to existing taxes, which are: (a)) in the United Kingdom: (i) the income tax; (ii) corporate tax; (iii) the capital gains tax; (hereinafter referred to as the United Kingdom taxes); (b)): (i) corporate income tax; (ii) the individual income tax; (hereinafter referred to as the Latvian tax). 4. the Convention shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of this Convention, supplementing or replacing the existing taxes. One Contracting State, the competent authorities must be notified to the other Contracting State, the competent authorities of any substantial amendments that have been made in this country in the relevant tax laws. Article 3 General definitions 1. If it is not apparent from the context, then the other in this Convention: (a)) the term "United Kingdom" means the United Kingdom of Great Britain and Northern Ireland, including any area outside the territorial waters of the United Kingdom, in accordance with international law has been or will be further recognized as the area in which, in accordance with the legislation of the United Kingdom concerning the continental shelf, the United Kingdom may exercise their rights to the land and sea depths and natural resources contained therein; (b)) the term "Latvia" means the Republic of Latvia and, used in a geographical sense, represents the territory of the Republic of Latvia and any other Latvian territorial waters adjacent to the territories in which, in accordance with the legislation of Latvia and international law can be implemented in Latvia of rights on land and sea depths and natural resources contained therein; (c)) the concept of "citizen" means: (i) in the case of the United Kingdom, any British citizen, or any British population that does not have any other Commonwealth country or territory, provided that he is entitled to live in the United Kingdom; and any legal person, partnership, association or other entity that determines the status of the United Kingdom legislation in force; (ii) in the case of Latvia all natural persons who are nationals of the Republic of Latvia; and any legal person, partnership or association, which is determined by the status of the Republic of Latvia, the existing legislation; (d) the term "Contracting State)" and "the other Contracting State" mean depending on the context the United Kingdom or Latvia; e) concept of "person" means an individual, a company and any person, but other than that provided for in paragraph 2 of article case, this term does not include a partnership; (f) the term "company") means any thing or any United body for the purposes of taxation is considered as a United entity; (g)) the concepts of "Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise run by a resident of a Contracting State and the company, run by a resident of the other Contracting State; h) the term "international traffic" means any carriage by sea or air, by a company of a Contracting State, except for the cases when the sea or air transport to move only between the sites of the other Contracting State; I) the term "competent authority" means: (i) United Kingdom: the Inland Revenue Service proxies or their authorised representative; and (ii) in Latvia, the Minister of finance or his authorised representative; 2. A limited partnership whose status stems from the law of Latvia and which is considered to be the unit that is tax deductible in accordance with Latvian law, will be treated as a person for the purposes of this Convention. 3. for the application of this Convention, a Contracting State, any term not defined, will be used only in the sense that these national tax legislation has been applied to taxes covered by this Convention, unless the context requires otherwise, the use of this concept. Article 4 resident 1. In this Convention, the term "resident of a Contracting State" means any person who, in accordance with the national legislation is subject to taxation on the basis on her permanent place of residence, residence, location of the actual management, incorporation or by any criteria in nature; This term does not include any person who is taxed in that Contracting State solely on its income from existing sources in that State or on capital situated in that State. 2. If, after the provisions of paragraph 1, a person is a resident of both Contracting States, then its status will be determined in the following manner: (a)) this person will be considered a resident of the Contracting State in which the permanent place of residence; If they have a permanent home in both Contracting States, the person shall be deemed to be a resident of the Contracting State with which it has a deeper personal and economic relations (Centre of vital interests); (b) the vital interests of the Center), or if it does not have a permanent place of residence in one of the two Contracting States, that person will be considered a resident of the Contracting State where it is normally home; c) if that person normally home in both Contracting States or of neither of them, then it will be considered a resident of the Contracting State of which that person is; (d)) if that person is a national of both Contracting States, or is not one of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. 3. Where, in accordance with paragraph 1 of this article the provisions a person who is not a natural person, is a resident of both Contracting States, then the competent contracting authorities must resolve the matter by mutual agreement. In the absence of such agreement, the application of this Convention, that person will not be entitled to claim any tax relief or exemption from taxes granted by this Convention. Article 5 permanent establishment 1. In this Convention, the term "permanent establishment" means a fixed place of business of 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 a workshop, and f)) mine shaft, oil or gas extraction sites, quarries or any other place of extraction of natural resources. 3. A building site, a construction, Assembly or Assembly project will be considered a permanent establishment only if the building or project takes longer than six months. 4. Notwithstanding the preceding paragraphs of this article, the provisions of the concept of "permanent establishment" is not included in the following: (a) buildings and equipment) use exclusively the goods belonging to the company or product storage, viewing and supplies; (b)) the goods owned by the business or stock of products intended solely for storage, viewing and supplies; (c) the goods belonging to the company) or article items intended exclusively for processing in the other company. (d) the permanent place of business), which is intended exclusively for the purchase of goods or products or company collecting the information you need; e) permanent site designed solely to make the company the necessary preparatory or ancillary jobs; f) permanent site dedicated solely to deal with (a)) — e) activities referred to in any combination thereof, provided that the overall activity is preparatory or ancillary activities. 5. Notwithstanding paragraph 1 and the provisions of paragraph 2, where a person, which is not the subject of this article in the independent agent status, running the business and is empowered to enter into contracts on behalf of a Contracting State, and it usually uses its powers, it is considered that this company uses the permanent representation in that Contracting State in respect of any activities carried out by that person in the name of the company except when he is carrying out the activities referred to in paragraph 4, which, in the event of a permanent place of business cannot be considered permanent representation in accordance with paragraph 4 of this article. 6. Will be considered that the company does not have permanent representation in the Contracting State where the undertaking is established in that country with REALTORS, sales agent or any other agent of an independent status, in addition, provided that such persons perform their normal business activities. However, when the activities of such an agent is completely or almost completely in favour of this company, he cannot be considered independent of the status of the agents in the sense referred to in this paragraph. 7. The fact that the company — a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (via the permanent representations, or in any other way), by itself, does not turn into one of those companies on the other company's permanent representation. Article 6 Income from real property 1. Income for the resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State, may be taxing in the second country. 2. The term "immovable property" is to be used in the sense that it is the legislation of a Contracting State in which the property is located. In any case, this concept will include property which belongs to real estate property, especially buildings, livestock and equipment used in agriculture and forestry, rights to which the general law is attributable to property which is located on the ground, especially any real estate purchase sales rights or other similar rights, the right to acquire real estate, uzufrukt real estate and rights to variable or fixed payments for the right to use valid minerals , sources and other natural resources or their use. For real estate will not be considered to be vessels and aircraft. 3. paragraph 1 of this article, the rules will apply to income derived from the property direct use, letting or use in any other way. 4. If the company's shares or other corporate rights give the holder the right to public use of the property, the income from the direct use, letting or use in any other way can be subject to the tax in the Contracting State in which the immovable property is situated. 5. the following article 1, 3, and 4. the provisions of paragraph 1 is also to be applied to income from real property of the company, and to income from immovable property, which is used for independent individual services. Article 7 business profits 1. Contracting State company profits will be taxed only in the country, except when such an undertaking is established in the second Contracting State using the existing permanent representation there. If the enterprise carries on business in that way, the company can profit to tax in the other country, but only about the profit that can be attributed to the permanent establishment. 2. in accordance with paragraph 3 of this article, when a company of a Contracting State carries on business in the other Contracting State through a permanent representation located there, in each Contracting State to the permanent representations to be subject to the profit that it would, if it were clearly separate undertaking carrying out the same or a similar business in the same or similar conditions, and operate completely independent from this company. 3. in determining the profits of the permanent representation will be made permanent representation expense deduction from amounts taxable. These expenses may be representations of operational and general administrative expenses incurred in the Contracting State in which the permanent establishment or elsewhere. 4. the permanent representation will not be applied to profit only because it has purchased your business goods or articles. 5. Enforcement of the provisions of the above paragraph, the profits attributed to the permanent representation of each year should be determined using the same method, except when it is sufficiently justified the need to act. 6. where profits are included in the income or capital gains which are dealt with in other articles of this Convention, then the provisions of this article shall not affect the other provisions of this article. Article 8 of sea and air transport, 1. Contracting State company profits from the sea and air transport, the use of the resources of the international traffic will be taxed only in the country. 2. for the purposes of this article, profits from the sea and air transport for use in international traffic shall include: (a)) or profit from aircraft leasing, hiring them without crew and supply (bērboutčarter); b) profits from the use, maintenance of containers or letting (including trailers and related equipment for the transport of containers), transport of goods or products; in cases where such use, maintenance or rental or leasing company additionally takes marine or air transport for use in international traffic. 3.1 and 2 of this article, the provisions of the paragraph also refers to the profits gained by participation in Pula, the overall business or international transportation company, but they will be applied only to the part of the total profit commensurate with the interests of the members of the total business. Article 9 Associated enterprises 1.) when: (a) the Contracting State Enterprise directly or indirectly participating in the other Contracting State, the company's management, control or it owns part of the company's capital, or b) the same persons directly or indirectly participating in the management, control, or they belong to the company's capital, which is located in a Contracting State and the other company at the second Contracting State, and in each case between the two enterprises in their commercial or financial relations are created or established rules that differ from the provisions, which operates between two independent (non-related) companies, then any profit, which created one of the companies, but the above provisions do not affect the established, can be included in the company's earnings and taxed accordingly. 2. where a Contracting State includes in the profits of an enterprise of that State (and accordingly taxable) profit on the territory of the other Contracting State of which the company must pay taxes, and this included a profit is a profit, which would have been the first company of a Contracting State, if the relationship between the two enterprises had been those which would have been between two totally independent companies, then the other countries have to make the appropriate amendments in relation to the size of the tax that is taxed in the country of this profit second. The amendments necessary to take into account the other provisions of this Convention; If necessary the competent authorities of the Contracting States shall consult. Article 10 dividends 1. Dividends that the company — a resident of a Contracting State in the other Contracting State the cost of the resident may be subject to tax in the other country. 2. However, in accordance with national legislation, these dividends can also be taxing in the Contracting State where the resident is a company that pays dividends, but if the recipient is the true owner of the dividends, the tax imposed must not exceed: (a) 5% of the dividend) gross amount, if the true owner is a company which controls directly at least 25% of the voting rights in the company, which pays dividends; b) 15% of the gross amount of the dividends in all other cases. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividend is paid. 3. The term "dividends" in this article means income from shares or other rights, not debt obligations to participate in profits, as well as income from other corporate rights which is subjected to the same taxation as income from shares in accordance with the law of the State where the resident is a company that carries out the distribution of profits; This term shall also include any other costs which, in accordance with the Contracting State whose resident is a company that pays dividends, legislative acts are considered public dividends or profit-sharing. 4. the following article 1 and paragraph 2 shall not be applied where the real owner of the dividends, being a resident of a Contracting State engaged in business in the second Contracting State through a permanent establishment situated there, or take the other country independent personal services through a permanent base located there, where the company that pays dividends, is a resident of this State and the second where participation, due to which the dividend is paid, is practically related to the permanent establishment or permanent base. In this case, depending on the circumstances, have to apply article 7 of this Convention or of the provisions of article 14. 5. when the company, which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not be taxing any tax the dividends paid, except when the dividends are paid to a resident of that other State, or if the holding in respect of which the dividends are paid, is practically related to the permanent representation or permanent base in another country; as well as not to put the company's undistributed profits to a tax on retained earnings even if the dividends paid or retained earnings composed wholly or partly of profits or income arising in the second country. Article 11 interest 1. Percent, formed a Contracting State and paid to a resident of the other Contracting State, may be taxed in that other State. 2. However, in accordance with national legislation, that percentage may be taxed in the Contracting State in which they are formed, but if the recipient of the interest is the true owner of the interest, the tax may not exceed 10% of the gross amount of the interest. 3. Notwithstanding the provisions of paragraph 2 interest, formed a Contracting State and paid to a resident of the other Contracting State, be taxed only in that other State if such resident is the rightful owner of such interest and: (a) the interest payer or payee) is the Government of a Contracting State, a political or administrative unit of local government, or any Government or local government authority or its executive body; or (b)) the interest is paid in respect of a loan that is guaranteed or insured by, lent, or regarding any other debts or loans, which has guaranteed or insured by the United Kingdom's export credits guarantee Department or a public joint stock company "Latvijas eksportkredīt", or any similar organization that nature has created a Contracting State after the date of signature of this Convention (Contracting States competent authorities mutually agreed way to set the whether this organisation is similar in nature); or c) the interest is paid on the loan, which has lent or guaranteed by the Bank of England or insure the Bank of Latvia. 4. for the purposes of this article, the term "interest" means income from any type of debt obligations regardless of their security with the security, and in the case of the United Kingdom irrespective of whether or not they have the right to participate in the debtor's profits; the concept also includes income from government securities, income from bonds and debt securities, including bonuses and prizes, which belong to these securities, bonds or debentures. In the case of Latvia, received the fine for not paying out interest, pursuant to the provisions of this article will not be considered. The term "interest" does not include income that is treated as a distribution of profits in accordance with article 10 of this Convention. 5. the following article 1, paragraph 2 and 3 shall not be applied if the true owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment located there, or provide in this second country independent personal services through a permanent base located there, and shows a commitment on the basis of which the interest is paid in practice is related to the permanent representations, or permanent base. In this case, depending on the circumstances, have to apply the Convention's article 7 or article 14. 6. interest will be deemed to arise in a Contracting State when the payer is that State, its political-administrative unit, a local authority or a resident of that State. If, however, the person paying the interest, whether he is a resident of a Contracting State or not, used in the Contracting State of the permanent representation hosted, or permanent basis in respect of which the debt obligations arisen for which the interest is paid, and the interest is paid from the permanent missions or permanent base, will then be considered that these interest formed in the State in which the permanent establishment or fixed base. 7. If the special relationship between the payer and the interest percentage implemented owner or between both of them and any third party, for any reason, the interest amount exceeds the amount which would have been agreed between the payer and the interest of the owners implemented in the absence of this special relationship, then the provisions of this article shall be applied only to the last-mentioned amount. In this case, the remaining part of the payment is taxed in accordance with the national provisions, provided that you comply with the other provisions of this Convention. 8. This article shall not be applied, if any, with the transfer of the debt obligation or, for which the interest is paid to related parties the main purpose, or one of the main objectives has been to use the advantage of this article by creating these debt obligations or transfer of rights. Article 12 Royalties (1) royalties arising in a Contracting State and is paid the second resident of a Contracting State, may be taxing in the second country. 2. However, in accordance with national legislation, royalties may be subject to taxation in the Contracting State in which they arise. If the beneficiary is the royalties royalties put owner, tax may not exceed: (a) 5% of the royalties) gross amount, which is paid for the production, commercial or scientific equipment; b) 10% of the gross amount of the royalties in all other cases not referred to in subparagraph (a)). 3. The term "royalties" in the context of this article means payments of any kind received as a compensation for the use of any copyright or rights to use the copyright in the literary, scientific or artistic works, including motion pictures, films and recordings, television and radio broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for the right to use industrial, commercial or scientific equipment, or for their use or for information (know-how) concerning industrial, commercial or scientific experience. 4. the following article 1 and 2 of the terms will not be applied when implementing the owner, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent representation there, or in the second country independent personal services through a permanent base located there, and if the rights or property of, subject to royalty payments, a practice associated with the permanent representation or permanent base. In these cases, depending on the circumstances, have to apply the Convention's article 7 or article 14. 5. royalties are deemed to arise in the Contracting State where the payer is that State, its political-administrative unit, a local authority or a resident of that State. However, the person shall pay royalties whether or not that person is a resident of a Contracting State or not, used in the Contracting State of the permanent representation located or permanent basis in respect of which the obligations have been created to pay royalties and royalties is paid from the permanent missions or permanent base, will then be considered that the royalties arise in the State in which the permanent establishment or fixed base. 6. If the special relationship between the payer and the royalty owner or implemented between them and any other third party for any reason for more than the royalties royalties the amount by which the taxable person should have been able to agree and implement owner if they would not have such a special relationship, the provisions of this article will apply only to the last-mentioned amount of royalties. In such cases, the payment of the part that exceeds this amount will be taxed in accordance with the legislation of a Contracting State, provided that you comply with the other provisions of this Convention. 7. This article shall not be applied, if any, with the transfer of rights or the establishment of a legal relationship, on the basis of which the royalties are paid to related parties the main purpose, or one of the main objectives has been to use the advantage of this article by creating these legal relations or the transfer of rights. Article 13 capital gains 1. Capital gains received by a resident of a Contracting State to this Convention, referred to in article 6 of the real estate, who is in the second Contracting State forfeiture, can be taxing in the second country. 2. a resident of a Contracting State, the capital gains received a forfeit: a) shares, other than shares in a stock exchange recognised by the quota, which is, or the highest value part, directly or indirectly from immovable property situated in the other Contracting State, or (b) the participation in the partnership or trust), the property of which consist mainly of the second Contracting State to an existing property or from the type of shares as mentioned in subparagraph (a)), can be taxing in the second country. 3. Increase (capital) gained on the property, which is an enterprise of a Contracting State in the second permanent representation in Contracting State a portion of the disposal of commercial units, or on property that belongs to a resident of a Contracting State to the permanent base of the second Contracting State established independent personal services, including disposal gains (capital) of the following permanent missions (alone or with the whole enterprise) or of such a permanent disposal base disposal can be taxing the second Contracting State. 4. Capital increase the company of a Contracting State for that company's use in international traffic, maritime and air transport, or disposal of these sea and air vehicles belonging to the forfeiture of the property, will be subject to tax only in that Contracting State. 5. Capital gains earned on the disposal of any property that differs from the 1, 2, 3, and 4 above, will be subject to tax only in the Contracting State of which the resident is the seizure of property. 6. This article shall not affect the right of a Contracting State, in accordance with its legislation, taxing capital gains taxes capital gains earned on the disposal of any property and received an individual who is a resident of the other Contracting State and has been a former resident of a Contracting State at any time during the five years period immediately preceding this expropriation. Article 14 independent personal services 1. Contracting State resident income received for professional services or other independent services will be taxed only in the country, except if the resident uses regular access to a permanent base the second Contracting State. If you are using such a permanent base, the income may be taxing the second Contracting State but only to the extent they apply to the permanent base. Will be considered a resident of a Contracting State uses regular access to a permanent base the second Contracting State if he is resident in the other Contracting State for a period or periods exceeding in the aggregate 183 days in any 12-month period that begins or ends in any tax year, and income from the above the second Contracting State the actions that should be attributed to that permanent base. 2. The term "professional services" includes independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants profession. Article 15 dependent personal services (1). In accordance with this Convention, 16, 18, 19, 20 and 21 the provisions of article wage and other wage types like it received by a resident of a Contracting State for your work will be taxed only in the country, except for the paid work is carried out in the second Contracting State. In such cases the remuneration received can be taxing in the second country. 2. Notwithstanding the provisions of paragraph 1, remuneration which a resident of a Contracting State receives for paid work that is being done in the second Contracting State, be taxed in the first only in that country, if: (a) the remuneration of the receiver is found) in the second country no more than 183 days in any 12-month period that begins or ends in the tax year concerned, and b the remuneration is paid), the employer that is not a resident of the other State, or another person on behalf of the employer, and c the remuneration is not paid) from the Permanent Mission or permanent base, used by the employer in the second country. 3. Notwithstanding the preceding provisions of this article remuneration received for work that is being done to a company of a Contracting State the sea or air transport, who works in international traffic, may be taxing in the country. Article 16 Directors ' fees directors ' fees and other similar charges which are residents of a Contracting State receives as a member of the Board of Directors, or as any other similar societies — the second resident of a Contracting State, the authorities of the Member States, may be subject to tax in the other country. Article 17 artists and athletes 1. Notwithstanding article 14 of the Convention and the provisions of article 15, the income received by a resident of a Contracting State as izpildītājmāksliniek, such as a theatre, film, radio or television actor or a musician, or as an athlete on their individual activities in the area carried out the second Contracting State can be taxing in the second country. 2. in cases where the artist or athlete's income on his individual activity in this area, are not paid the same artist or athlete but to another person, that income independently of the Convention, articles 14 and 15 of the regulations may be subject to tax in the Contracting State in which the activity or sports izpildītājmāksliniek. 3. paragraphs 1 and 2 shall not be applied in respect of income earned for the action taken by a Contracting State or a izpildītājmāksliniek athlete, if they visit this country completely or primarily funded from the other Contracting State or of its political or administrative unit, a local authority public funds. In such cases, the income will be taxed taxes only in the Contracting State of which the resident is izpildītājmāksliniek, or athlete. Article 18 pensions 1. in accordance with article 19 of the Convention, paragraph 2 of the pensions and other similar remuneration for the previous paid employment, as well as annual fees received by a resident of a Contracting State will be taxed only in the country. 2. The term "annual fees" means a specified amount charged periodically by a natural person in specific terms throughout their lives, or specific, 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) rewards other than pensions and the cost of that natural person contracting State or of its political or administrative unit of local government or authority, or this country, political and administrative unit or to a local government-owned organization completely for this country, unit, municipality, or the authority for the services provided, the Organization will be subject to tax only in the country. (b)) (a) of this paragraph) the remuneration provisions will be subject to tax only in the second 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 for the purposes of providing the services. 2. a pension by) any natural person the cost of Contracting State or of its political or administrative unit of local government or authority, or this country, political and administrative unit or to a local government-owned organization completely, or if the pension is paid from this country, unit, municipalities, institutions or organizations funds set up for this country, unit, municipality, or the authority for the services provided, the Organization will be taxed only in the country. (b)) (a) of this paragraph) that the provisions of the pension will be taxed only in the other Contracting State if the individual is a resident of this State and the citizen. 3. This Convention 15, 16 and article 18, rules must be applied to the remuneration and pensions which are paid for services provided in respect of the Contracting State or of its political or administrative unit, a local authority, or authorities, or this country, entity or municipality wholly-owned business of the organization. Article 20 students payments which a student or trainee receives, or apprentice who is, or immediately before the entry to the State was the second resident of a Contracting State and situated in the first mentioned State solely for the purpose of study or placement period, so he keep himself, study or internship will not be taxed in the first State provided that such payments arise outside that State. Article 21 professors and researchers 1. Natural persons who come to the State, with the aim to train or to engage in research at a University, college or other recognized educational institution in that Contracting State, and who is, or was immediately before the arrival of the other Contracting State, a resident of income that accrued on this training or research, will be exempt from taxation in the first country within a period not exceeding two years from the date the person first arrived in these purposes in this country. 2. The provisions of this article shall be applied only to natural persons income on research carried out in the public interest and not for the research work carried out mainly by a private person or persons. Article 22 other income 1. residents of a Contracting State other income not referred to in the preceding articles of the present Convention and implementing this owner is a resident, and not the income that the cost of a trust or which are paid out of the property of the deceased in respect of its administration, regardless of their place of generation will be taxed only in the country. 2. the first paragraph of this article shall not apply to income, other than income from immovable property referred to in article 6 of this Convention, in paragraph 2, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent representation located there, or in the second State independent personal services from a permanent base located there, and, if the rights or property of what you receive this income is reasonably related to the permanent establishment or permanent base. In this case, depending on the circumstances are applicable to article 7 or article 14. 3. If the special relationship between the person referred to in paragraph 1 and of any other person, or between these two persons, and a third person, referred to in paragraph 1 exceeds the amount of income the amount that had been agreed between the parties in the absence of this special relationship, then the provisions of this article shall be applied only to the last-mentioned amount. In this case, the rest of the income will be taxed in accordance with the legislation of a Contracting State, taking into account all other applicable provisions of this Convention. 4. This article shall not be applied in the case of any person who is related to the transfer of rights or the establishment of a legal relationship, on the basis of which the income is received, the main purpose, or one of the main objectives has been to use the benefits of this article by creating these legal relations or the transfer of rights. Article 23 avoidance of double taxation 1. in accordance with the legislation of the United Kingdom in the provisions relating to tax, which is paid in a territory outside the United Kingdom, credit against United Kingdom tax (without affecting the underlying principle of these regulations): a) the Latvian taxes which is paid in accordance with Latvian law and with this Convention, regardless of whether they are paid, or deducted directly from profit income or taxable capital gain, the territory of Latvia (except for dividends, tax, which taxed profits from which dividends are paid) will be allowed to credit against any United Kingdom tax computed in respect of the same profits, income or a taxable capital gain in respect of which the tax is calculated in Latvia; (b)) in relation to dividends paid to a company which is a resident of Latvia, and to which the recipient is a company which is a resident of the United Kingdom and which controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividend, the credit shall take into account in the calculation (in addition to any tax in Latvia, which allowed to credit under this paragraph (a))) tax paid in Latvia, which taxed the company's profit from which the dividend is paid. 2. a) in the case where a resident of Latvia receives income or capital gains which, in accordance with this Convention, may be taxed in the United Kingdom tax unless its internal legislation does not provide for more favourable terms, Latvia should be permitted to deduct from this income tax residents of size equal to the tax paid in the United Kingdom; These reductions, however, in no case, exceed the Latvian part of the tax, which is calculated before the application of this reduction, which is attributable to the income or capital gains which may be taxed in the United Kingdom tax. (b)) (a) of this paragraph), when the application of a company which is a resident of Latvia receives a dividend from a company that is a resident of the United Kingdom, in which it owns at least 10% of shares with full voting rights, the tax paid in the United Kingdom were included not only tax that taxed dividends, but also tax, which taxed the company's profits from which dividends are paid. 3.1 and 2 of this article, the application of the profit of a resident of a Contracting State, income and capital gains, which, in accordance with this Convention, may be taxed in the other Contracting State taxes, will be treated as such, formed in the second Contracting State. 24. Article 1 of the limitation of benefits in the case where, in accordance with the provisions of this Convention any Contracting State any kind of income is exempt from tax, or taxed at a reduced rate and the other Contracting State in accordance with the legislation in force there for this income is taxed instead of all this income amount, but this amount of income has been transferred to the other Contracting State and received the second Contracting State then in the first Contracting State tax relief that may be granted under this Convention shall be applied only for the portion of the income is taxed in the other Contracting State. 2. Notwithstanding any other provisions of this article of the Convention in Contracting State a resident of the income or capital gains which in accordance with the domestic law are applied to tax incentives to attract foreign investments and which result in the relief that a Contracting State is not subject to taxation or taxed at a reduced rate, will not be suitable for the purposes of this Convention, any reduction in or exemption, if the resident or the resident persons linked with the main objective of the , or one of the main objectives has been to use the advantages of this Convention. Article 25 in the case of a limited partnership in accordance with any provisions of this Convention to a limited partnership as a Latvian resident is exempted from any income or capital gains tax in the United Kingdom, this exemption may not be regarded as restricting the right of the United Kingdom of taxing any association member who is a resident of the United Kingdom, due to their income or capital gains; any such income or capital gains in this Convention for the application of article 23 will be considered as income or capital gains generated in Latvia. 26. Article 1 of the prevention of Discrimination. Nationals of a Contracting State shall not be subjected in the other Contracting State to taxation or any requirements associated with them that is different or is more burdensome than the taxation or related requirements, which may be or are exposed to the other citizens of the country in the same circumstances, in particular with respect to residence. 2. Stateless persons who are residents of a Contracting State, any of the Contracting States shall not be subject to taxation or any requirements associated with them that is different or is more burdensome than the taxation and connected requirements to which are or may be exposed to nationals in the same circumstances. 3. the State company's permanent representation in that it uses the second Contracting State, may be taxed in that other State to any taxation which is less favourable than the taxes that are taxed in the other State companies that perform similar actions. 4. except where applicable to article 9 of this Convention, paragraph 1 of article 11, paragraph 7 and 8, article 12, paragraph 6 and 7 or article 22, paragraph 3 and 4 of the regulations, interest, royalties and other payments made by the enterprise of a Contracting State in favour of the other Contracting State, a resident of determining the taxable profits of the company, must be deducted from the profit on the same conditions as if they are paid to a resident of the first mentioned State. 5. enterprises of a Contracting State, the capital of which is wholly or partly belongs to one or more of the other Contracting State or the resident or residents-residents directly or indirectly controlled by the company, the first in that country may not be subject to taxation or any related requirements that differ or are more burdensome on taxes and related requirements, which are or may be exposed to similar companies in the first country. 6. None of the provisions of this article shall not be interpreted as obliging a Contracting State the obligation to apply to natural persons who are not residents of this State, any personal discounts, exemptions or tax reductions, as it applied to natural persons — residents of that State. 7. The provisions of this article must be applied to taxes to which this Convention applies. Article 27 mutual conciliation procedure 1. If a resident of a Contracting State considers that one or both of the Contracting States or might cause the taxation not in accordance with the provisions of this Convention, then, regardless of the internal legislation of these countries the rules governing taxation to prevent this, he can submit your question to the competent authorities of the country of which he is a resident or, if the matter relates to article 26 of this Convention 1. of the Member State competent authorities, that the citizen is resident. 2. the competent authorities are obliged to strive, if it appears that the complaint is justified, and if the same fail to reach a satisfactory solution, to resolve the matter by mutual agreement with the other Contracting State, the competent authorities in order to prevent this Convention without the appropriate taxation. 3. the national competent authorities should seek mutual consent in the course of resolving any problems or concerns that may arise in the interpretation or application of this Convention. 4. The competent authorities of the Contracting States may communicate directly with one another in order to reach agreement on the question referred to in the previous paragraphs. Article 28 exchange of information 1. National authorities should exchange information, which is necessary for the carrying out of the provisions of this Convention or in the internal law of the Contracting States, the requirements relating to the taxes to which this Convention applies, the completion, to the extent these laws are not contrary to this Convention, in particular, to prevent fraud and ensure the statutory provisions relating to the avoidance of tax legally. Article 1 of the Convention does not restrict the exchange of information. Any information received by a Contracting State, should be treated as confidential and may be disclosed only to persons or authorities (including courts and administrative bodies) involved in the taxes to which this Convention applies, in the calculation of the collection, in the application of coercive measures, trials or appeals. Such persons or authorities must use this information only for the purposes mentioned above. They may disclose the information in lawsuits or judgments. 2. in no case shall the provisions of paragraph 1 of article may not be interpreted as imposing any of the Contracting States the obligation: a to carry out administrative measures), which does not match with the one or the other national legislation or administrative practice; (b)) to provide information that is not available under one or the other national legislation or administrative practice; (c)) to provide information that may disclose any trade, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy. Article 29 diplomatic and consular missions, permanent staff nothing in this Convention shall not affect the standing of diplomatic, consular personnel and fiscal privileges that apply to them in accordance with international law, the General provisions or special agreements. Article 30 entry into force for each Contracting State Government a diplomatic way must notify the other Government that the legislation provided for in the procedures necessary for the entry into force of this Convention have been complied with. This Convention shall enter into force on the date of the last statement, and the rules will be applied: (a)) in the United Kingdom: (i) in respect of income and capital gains tax: starting in any taxation year that begins on April 6, or after the calendar year following the year in which this Convention enters into force; (ii) in respect of the business tax: starting in any fiscal year beginning on April 1, or after the calendar year following the year in which this Convention enters into force; (b)): (i) in respect of taxes withheld at the time the cost: starting with the income gained from January 1 of the calendar year or after the calendar year following the year in which this Convention enters into force; (ii) in respect of other taxes on income from taxes payable in any tax year beginning in the calendar year January 1, on or after 1 January, following the entry into force of this Convention. Article 31 termination this Convention shall remain valid as long as the Contracting State to stopped. Each Contracting State may terminate this Convention of diplomatic channels, by giving notice of termination at least six months before any end of the calendar year. In such event, the Convention will be terminated: (a)) in the United Kingdom: (i) in respect of income and capital gains tax: starting in any taxation year that begins on April 6, or after the calendar year following the year in which the notice of termination; (ii) in respect of the business tax: starting in any fiscal year beginning on April 1, or after the calendar year following the year in which the notice of termination; (b)): (i) in respect of taxes withheld at the time the cost: starting with the income gained from January 1 of the calendar year, or after the calendar year following the year in which the notice of termination; (ii) in respect of other taxes on income from taxes payable in any tax year beginning in the calendar year January 1, on or after January 1 following the year in which the notice of termination is submitted. This, the undersigned, being duly authorised, have signed this Convention. The Convention is drawn up in duplicate in London 8 May 1996 in Latvian and English, both texts being equally authentic. Different interpretations of the case, the determinant is the text in English.

The Republic of Latvia, the United Kingdom of Great Britain and Northern Ireland on behalf of the Government of the Government, the agreement notes his Excellency Valdis Birkavs, Minister for Foreign Affairs of 8 May 1996, the Excellency, I have the honour to refer to the United Kingdom of Great Britain and Northern Ireland and the Government of the Government of the Republic of Latvia, of the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to income and capital gains taxes, which was signed today, and to submit to the United Kingdom of Great Britain and Northern Ireland on behalf of the Government of the proposals following the application of article 1. as regards article 2, paragraph 3, of the United Kingdom noted the fact that the existing listed in this Convention are subject to tax for a substantial modification of the program, and if it will not be possible to determine exactly when each new tax satisfies the provisions of paragraph 4, the United Kingdom is ready to immediately initiate negotiations on this Convention is complementary to the Protocol. 2. with regard to article 4, paragraph 3, in the case of a person other than a natural person, is a resident of both Contracting States, and the competent authorities of the Contracting States shall endeavour to determine by mutual agreement the status of travel, they must take into account factors such as the location of the actual management, incorporation or place of establishment, and any other important factors. 3. with regard to article 5, paragraph 6 the Contracting States agree that: (i) in the case of the operation between the agent and the enterprise were created on the basis of the rules, which will be in force between two unrelated parties, the second sentence of paragraph 6 shall not apply; and (ii) in determining whether an agent is completely or almost completely business, Contracting States must be guided by the important factors for any 12-month period that begins or ends in the relevant financial year. If the agent's business completely or almost completely is performed up to 9 months in that 12-month period, it should be regarded as completely or almost completely make this business in the relevant tax year. 4. with regard to article 6 paragraph 3 of the Contracting States understand that all income and capital gains that arise from real property situated in the Contracting State, seizures, may be taxed in that State taxes in accordance with article 13 of this Convention. 5. with regard to article 7, paragraph 3, it is understood that, in determining the profits of a permanent representation in that Contracting State, will be allowed to deduct only expenses that are deductible under the law of that State. 6. with regard to article 12 of the Convention, if any for the avoidance of double taxation, which, at the date of signature of this Convention, Latvia signed with a third country, which is the Organization for economic cooperation and development member at the time of signature of this Convention, Latvia agrees that royalty definition that does not include any right or other property referred to in paragraph 3, or agrees to release the royalties tax, royalties arising in Latvia or to apply rates that are lower than those set out in paragraph 2, then, starting from the date of entry into force of the Convention with a third country, the narrow definition, exemption or reduced rate is to be applied automatically as if it were specified in paragraph 3 of article 12 or paragraph 2. 7. with regard to article 24, paragraph 2 it is understood that incentives to attract foreign investments do not include facilities that are used solely for domestic investment. If the above proposal is acceptable to the Government of the Republic of Latvia, I have the honour to propose that this note and Your Excellency's reply should be considered as an agreement between the two Governments, which shall enter into force simultaneously with the entry into force of the Convention. I use this opportunity to express to your Excellency of my highest consideration. Sir Nicholas Bonsor Bt MP, Minister of State by His Excellency Sir Nicholas Bonsor Bt MP, Minister of State at the Ministry of Foreign Affairs of the United Kingdom on 8 May 1996, Excellency, I am in receipt of your 8 May 1996 in the note with the following content: "his Excellency Valdis Birkavs, Latvian Minister for Foreign Affairs of the Republic, I have the honour to refer to the United Kingdom of Great Britain and Northern Ireland and the Government of the Government of the Republic of Latvia, of the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to income and capital gains taxes , which was signed today, and to submit to the United Kingdom of Great Britain and Northern Ireland on behalf of the Government of the proposals following the application of the article: 1. with respect to article 2, paragraph 3, of the United Kingdom noted the fact that this Convention the existing duties listed are subject to significant modifications to the program, and if it will not be possible to determine exactly when each new tax satisfies the provisions of paragraph 4, the United Kingdom is ready to immediately initiate negotiations on this Convention is complementary to the Protocol. 2. with regard to article 4, paragraph 3, in the case of a person other than a natural person, is a resident of both Contracting States, and the competent authorities of the Contracting States shall endeavour to determine by mutual agreement the status of travel, they must take into account factors such as the location of the actual management, incorporation or place of establishment, and any other important factors. 3. with regard to article 5, paragraph 6 the Contracting States agree that: (i) in the case of the operation between the agent and the enterprise were created on the basis of the rules, which will be in force between two unrelated parties, the second sentence of paragraph 6 shall not apply; and (ii) in determining, or agent is completely or almost completely business, Contracting States must be guided by the important factors for any 12-month period that begins or ends in the relevant financial year. If the agent's business completely or almost completely is performed up to 9 months in that 12-month period, it should be regarded as completely or almost completely make this business in the relevant tax year. 4. with regard to article 6 paragraph 3 of the Contracting States understand that all income and capital gains that arise from real property situated in the Contracting State, seizures, may be taxed in that State taxes in accordance with article 13 of this Convention. 5. with regard to article 7, paragraph 3, it is understood that, in determining the profits of a permanent representation in that Contracting State, will be allowed to deduct only expenses that are deductible under the law of that State. 6. with regard to article 12 of the Convention, if any for the avoidance of double taxation, which, at the date of signature of this Convention, Latvia signed with a third country, which is the Organization for economic cooperation and development member at the time of signature of this Convention, Latvia agrees that royalty definition that does not include any right or other property referred to in paragraph 3, or agrees to release the royalties tax, royalties arising in Latvia or to apply rates that are lower than those set out in paragraph 2, then, starting from the date of entry into force of the Convention with a third country, the narrow definition, exemption or reduced rate is to be applied automatically as if it were specified in paragraph 3 of article 12 or paragraph 2. 7. with regard to article 24, paragraph 2 it is understood that incentives to attract foreign investments do not include facilities that are used solely for domestic investment. If the above proposal is acceptable to the Government of the Republic of Latvia, I have the honour to propose that this note and Your Excellency's reply should be considered as an agreement between the two Governments, which shall enter into force simultaneously with the entry into force of the Convention. I use this opportunity to express to your Excellency of my highest consideration. " Whereas the abovementioned proposals are acceptable to the Government of the Republic of Latvia, I have the honour to confirm that your Excellency's note and this reply is to be regarded as an agreement between the two Governments, which shall enter into force simultaneously with the entry into force of the Convention. I use this opportunity to express to your Excellency of my highest consideration. Valdis Birkavs, Minister for Foreign Affairs of the CONVENTION BETWEEN the Government OF the REPUBLIC OF Latvia AND the Government OF the UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND FOR the avoidance OF double TAXATION AND the PREVENTION OF FISCAL EVASION WITH RESPECT TO taxes ON income AND ON CAPITAL GAINS to the Government of the Republic of Latvia and the Government of the United Kingdom of Great Britain and Northern Ireland; (Menu rngton Line4) to conclud a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital gains; Have agreed as follows: article 1 Personal scope 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 and on capital imposed on behalf of gains a Contracting State or of its political subdivisions or local authorities, irrespectiv of the manner in which they are levied. (2) there shall be regarded as taxes on income and on capital all taxes imposed on gains 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 are in particular: (a) in the case of the United Kingdom: (i) the income tax; (ii) the corporation tax; and (iii) the capital gains tax; (hereinafter referred to as "United Kingdom tax"); (b) in the case of Latvia: (i) the enterprise income tax (corporate income tax); and (ii) the personal income tax (individual income tax); (hereinafter referred to as "Latvian tax"). (4) the Convention shall also apply to any identical or substantially similar taxes which are imposed after the date of signature of this Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify the other of any substantial changes to each which have been made in their taxation laws of respectiv. Article 3 General definition (1) For the purpose of this Convention, unless the context otherwise requires: (a) the term "United Kingdom" means Great Britain and Northern Ireland, including any area outside the territorial sea of the United Kingdom which in accordanc with international law has been or may hereafter be designated, under the laws of the United Kingdom concerning the Continental Shelf as an area within which the rights of the United Kingdom with respect to the sea bed and sub-soil and their natural resources may be exercised; (b) the term "United States" 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 laws 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; (c) the term "national" means: (i) in relations to the United Kingdom, any British citizen, or any British subject not possessing the citizenship of any other Commonwealth country or territory, provided he has the right of abode in the United Kingdom; and any legal person, partnership, association or other entity deriving its status as such from the law in force in the United Kingdom; (ii) in Latvia, all the relations of the individual possessing the nationality of the Republic of Latvia; and any legal person, partnership or association deriving its status as such from the law in force in the Republic of Latvia; (d) the terms "a Contracting State" and "the other Contracting State" mean the United Kingdom or Latvia, as the context requires; (e) the term "person" includes an individual, a company and any other body of persons, but subject to paragraph (2) of this article does not include a partnership; (f) the term "company" means any body corporate or any entity which is treated as a body corporate for tax purpose; (g) the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; (h) the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; (i) the term "competent authority" means: (i) in the case of the United Kingdom, the Commissioners of Inland Revenue or their authorised representative; and (ii) in the case of a corporation, the Minister of finance or his authorised representative. (2) (A) deriving its status from the series Latvian law which is treated as a unit under the taxabl law of Latvia shall be treated as a person for the purpose of this Convention. (3) As regards the application of this Convention by a Contracting State any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the law of that Contracting State concerning the taxes to which the Convention applies. Article 4 residence (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 management, place of incorporation or any other criterion of a similar nature; the term does not include any person who is liabl to tax in that Contracting State in respect only of income from sources in that State or capital situated therein. (2) where by reason of the provision of paragraph (1) of this article an individual is a resident of both Contracting States, then his status shall be determined in accordanc with the following rules: a he shall be deemed (a) to be a resident of the Contracting State in which he has a permanent home available to him; If he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (Centre of vital interests); (b) if the Contracting 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 Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode; (c) if he has an habitual abode in both Contracting States or in ither of them, he shall be deemed to be a resident of the Contracting State of which he is a national; (d) if he is a national of both Contracting 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) of this article a person other than an individual is a resident of both Contracting States, the competent authorities of the Contracting States shall endeavour to the settle the question it by mutual agreement. In the absence of such agreement, for the purpose of the Convention, the person shall not be entitled to claim any relief or exemption from tax 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; and (f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources. (3) A building site, a construction, assembly or installation project constitut a permanent establishment only if such site or project lasts for a period of more than six months. (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-paragraph (a) to (e) of this paragraph, 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) of this article, where a person-other than an agent of an independent status to whom paragraph (6) of this article applies-acting on behalf of an ISA 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 Contracting 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) of this article 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. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, he will not be considered an agent of an independent status within the meaning of this paragraph. (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. 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, in particular building, livestock and equipment used in agriculture and forestry, rights to which the provision of general law respecting landed property apply, in particular any options or similar right to the immovabl property, usufruc acquir 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; ships and aircraft shall not be regarded as immovabl property. (3) the provision of paragraph (1) of this article shall apply to income derived from the direct use, letting, or use in any other form of immovabl property. (4) where the ownership of shares or other corporate rights in a company the owner of entitl such shares or corporate rights to the enjoymen of immovabl property held by the company, the income from the direct use, letting, or use in any other form of such right may be taxed to the enjoymen in the Contracting State in which the immovabl property is situated. (5) the provision of paragraph (1), (3) and (4) of this article 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) of this article, 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 the enterprise of which it is a permanent establishment. (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 Contracting State in which the permanent establishment is situated or elsewher. (4) shall be attributed the profits to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. (5) 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. (6) where profits include items of income or capital gains 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 Shipping and air transport (1) Profits of an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxabl only in that State. (2) For the purpose of this article, profits of an enterprise from the operation of ships or aircraft in international traffic include: (a) profits from the rental on a barebo basis of a ship or aircraft; and (b) profits from the use, maintenance or rental of containers (including trailers and related equipment for the transport of containers) used for the transport of goods or merchandise; where such rental or such use, maintenance or rental, as the case may be, is it the operations of incidentals ships or aircraft by the enterprise in international traffic. (3) the provision of paragraph (1) and (2) of this article shall also apply to profits from the participation in a pool, a joint business or an international operating agency but only to so much of the profits so derived as is attributabl to the participant in proportion to its share in the joint operations. Article 9 Associated enterprises (1) where (a) an enterprise of a Contracting State of the directly or indirectly participat in the management, control or capital of an enterprise of the other Contracting State; or (b) the same person is directly or indirectly to 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 shall 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 recipient is the beneficial owner of the dividends the tax so charged shall be the 12 Notes: (a) 5 per cent of the gross amount of the dividends if the beneficial owner is a company which controls directly at least 25 per cent of the voting power in the company paying the dividend; (b) 15 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 corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident and also includes any other item which , under the law of the Contracting State of which the company paying the dividends is a resident, is treated as a dividend or distribution of a company. (4) the provision of paragraph (1) and (2) of this article 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 article 14 of this Convention, 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 that other State. Article 11 interest (1) interest 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 interest may also be taxed in the Contracting State in which it «arise and according to the law of that State, but if the recipient is the beneficial owner of the interest the tax so charged shall be the 10 per cent exceeds 100 notes of the gross amount of the interest. (3) Notwithstanding the provision of paragraph (2) interest arising in a Contracting State and paid to a resident of the other Contracting State shall be in the taxabl only if such a State (a) the other resident is the beneficial owner of the interest and: (a) the payer or the recipient of the interest is the Government of a Contracting State, a political subdivision or a local authority thereof or an instrumentality of that agency or Government , political subdivision or local authority; or (b) the interest is paid in respect of a loan made, guaranteed or insured, or any other debt-claim or credit guaranteed or insured by the United Kingdom export credits guarantee Department or by the State joint stock company "Latvian Exportcredi" (Latvian eksportkredīt) or by any organisation established in either Contracting State after the date of signature of this Convention and which is of a similar nature (the competent authorities of the Contracting States shall by the mutual agreement of whethers determin such organisations with of a similar nature); or (c) the interest is paid in respect of a loan made, guaranteed or insured by the Bank of England or the Bank of Latvia. (4) the term "interest" as used in this article means income from debt-claims of every kind, whethers or not secured by mortgage, and in the case of the United Kingdom or not carrying a right whethers 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 , bond or debentur. In the case of Latvia penalty charges for late payment shall not be regarded as interest for the purpose of this article. The term interest shall not include any item which is treated as a distribution under the provision of article 10 of this Convention. (5) the provision of paragraph (1), (2) and (3) of this article 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 article 14 of this Convention, as the case may be, shall apply. (6) interest shall be deemed the «arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or 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 paid exceeds 100, for whatever reason, 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 of interest. 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. (8) the provision of this article shall not apply if it was the main purpose or one of the main purpose of any person concerned with the creation or assignment of the debt-claim in respect of which the interest is paid to take advantage of this article by means of that creation or assignment. Article 12 (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 recipient is the beneficial owner of the royalt, the tax so charged shall not (a) 12:5 per cent of the gross amount of royalt that are for the use of industrial, commercial or scientific equipment; (b) 10 per cent of the gross amount of royalt to others than those referred to in sub-paragraph (a). (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 television or radio broadcasting), any patent, trade mark, design or model, plan, secret formula or process, or for the use of , or the right to use, industrial, commercial, or scientific equipment, or for information (know-how) concerning industrial, commercial or scientific experience. (4) the provision of paragraph (1) and (2) of this article shall not apply if the beneficial owner of 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 a fixed base. In such case the provision of article 7 or article 14 of this Convention, as the case may be, shall apply. (5) shall be deemed to be the Royalt «arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or 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 liability to pay the incurred, and such was the royalt royalt with is borne by 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 paid to 12, royalt for whatever reason, 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. (7) the provision of this article shall not apply if it was the main purpose or one of the main purpose of any person concerned with the creation or assignment of the rights in respect of which the royalt with paid to take advantage of this article by means of that creation or assignment. Article 13 Capital gains (1) gains derived by a resident of a Contracting State from the alienation of property referred to immovabl in article 6 of this Convention and situated in the other Contracting State may be taxed in that other State. (2) gains derived by a resident of a Contracting State from the alienation of: (a) shares, other than shares quoted on an approved Stock Exchange, deriving their value or the greater part of their value directly or indirectly from immovabl property situated in the other Contracting State, or (b) an interest in a partnership or trust the assets of which the consis of immovabl property situated principally in the other Contracting State , or of shares referred to in sub-paragraph (a) above, may be taxed in that other State. (3) gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or 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. (4) gains derived by an enterprise of a Contracting State from the alienation of ships or aircraft operated in international traffic by that enterprise or movable property pertaining to the operation of such ships or aircraft, shall be only in the taxabl Contracting State a. (5) gains from the alienation of any property other than that referred to in paragraph (1), (2), (3) and (4) of this article shall be the taxabl only in the Contracting State of which the alienator is a resident. (6) the provision of paragraph (5) of this article shall not be affec the right of a Contracting State to levy according to its law a tax on capital gains from the alienation of any property derived by an individual who is a resident of the other Contracting State and has been a resident of the first-mentioned Contracting State at any time during the five years immediately preceding the alienation of the property. Article 14 independent personal services (1) income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be 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 a fixed base, the income may be taxed in the other State but only so much of the income as is attributabl to that fixed base. For this purpose, where a resident of a Contracting State is present in the other Contracting State for a period or periods exceeding in the aggregate 183 days in the in any twelve month period commencing or ending in-in any fiscal year, shall be deemed to he for that fiscal year 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 it deemed 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 dependent personal services (1) subject to the provision of articles 16, 18, 19, 20 and 21 of this Convention, and others of the salar, WAGs 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) of this article, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be 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 or aircraft 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 payments 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 artistes and sportsmen (1) Notwithstanding the provision of article 14 and article 15 of this Convention, 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 of this Convention, be taxed in the Contracting State in which the activities of the entertainer or sportsman's are exercised. (3) the provision of paragraph (1) and (2) shall not apply to income derived from activities exercised in a Contracting State by an entertainer or sportsman's if the visit to that State is wholly or mainly supported by public funds of the other Contracting State, or a political subdivision or local authority thereof. In such case, the income shall be taxabl only in the Contracting State of which the entertainer or sportsman's is a resident. Article 18 (1) of the Pension subject to the provision of paragraph (2) of article 19 of this Convention, and other similar remuneration paid at pension in considerations of past employment to a resident of a Contracting State and any annuity paid to such a resident shall be only in the taxabl you state. (2) the term "annuity" means a stated sum payable to an individual periodically at stated times during his 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) Remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof or an agency thereof or an entity wholly owned by such a State, political subdivision or local authority to an individual in respect of services rendered to that State, subdivision, authority, agency or entity shall be only in the taxabl you state. (b) Notwithstanding the provision of sub-paragraph (a) of this paragraph, such 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 political subdivision or a local authority thereof or an agency thereof or an entity wholly owned by such State, subdivision or authority to an individual in respect of services rendered to that State, subdivision, authority, agency or entity shall be only in the taxabl you state. (b) Notwithstanding the provision of sub-paragraph (a) of this paragraph, 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 and 18 of this Convention shall apply to remuneration and pension in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof or an agency thereof or an entity wholly owned by such State, subdivision or authority. Article 20 students payments which a student or an apprentice or 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 the first-mentioned State , provided that such payments «arise from sources outside that State. Article 21 Professor and teachers (1) An individual who at it a Contracting State for the purpose of teaching or engaging in research at a university, college or other recognised educational institution in that Contracting State, and who is or was immediately before that visit a resident of the other Contracting State, shall not be taxed by 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 to that State for such purpose. (2) this article shall only apply to income from research if such research is undertaken by the individual in the public interest and not primarily for the benefit of some other person or persons in private. Article 22 Other income (1) items of income beneficially owned by a resident of a Contracting State, wherever arising, which are not deal with in the foregoing articles of this Convention, other than income paid out of trusts or the estates of deceased persons in the course of administration, shall be only in the taxabl you state. (2) the provision of paragraph (1) of this article shall not apply to income, other than income from property immovabl as defined in paragraph (2) of article 6 of this Convention, 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 article 14 of this Convention, as the case may be, shall apply. (3) where by reason of a special relationship between the person referred to in paragraph (1) and some other person, or between both of them and some third person, the amount of the income referred to in paragraph (1) exceeds 100 for the amount (if any) which would have been agreed upon between them in the absence of such a relationship, the provision of this article shall apply only to the last mentioned amount. In such a case, the excess part of the income shall remain the taxabl according to the law of each Contracting State, due regard had it beeing the other applicable provision of this Convention. (4) the provision of this article shall not apply if it was the main purpose or one of the main purpose of any person concerned with the creation or assignment of the rights in respect of which the income is paid to take advantage of this article by means of that creation or assignment. Article 23 Elimination of double taxation (1) subject to the provision of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom (which shall not be the general principles of the affec hereof): (a) the Latvian tax payable under the laws of Latvia and in accordanc with this Convention , directly or by deduction in "whethers, on profits, income or gains from sources of chargeabl within the Corporation (excluding in the case of a dividend, tax payable in Latvia in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or gains of chargeabl by reference to which the Latvian tax is computed; (b) in the case of a dividend paid by a company which is a resident of Latvia to a company which is a resident of the United Kingdom and which controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividend, the credit shall take into account (in addition to any Latvian tax for which credit may be allowed under the provision of sub-paragraph (a) of this paragraph) the Latvian tax payable by the company in respect of the profits out of which such dividend is paid. (2) (a) where a resident of Latvia or of deriv income capital gains which, in accordanc with this Convention, may be taxed in the United Kingdom, 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 tax paid thereon in the United Kingdom the United Kingdom. Such notes shall, however, exceeds 100 Marbles that about of Latvian tax as computed before the deduction in "is given, which is attributabl to the income or the capital which may be taxed in the gain in the United Kingdom. (b) For the purpose of sub-paragraph (a) of this paragraph, where a company that is a resident of Latvia receive a dividend from a company that is a resident of the United Kingdom in which it will own at least 10 per cent of shares having full voting rights, the tax paid in the United Kingdom shall include not only the tax paid on the dividend , but also the tax paid on the underlying profits of the company out of which the dividend was paid. (3) For the purpose of paragraph (1) and (2) of this article, profits, income and capital gains owned by a resident of a Contracting State which may be taxed in the other Contracting State in accordanc with this Convention, shall be deemed the «arise from sources in that other Contracting State. Article 24 Limitations of relief (1) where under any provision of this Convention any income is relieved from tax in a Contracting State and, under the law in force in the other Contracting State a person, in respect of that income, is subject to tax by reference to the amount thereof which is remitted to or received in that other Contracting State and not by reference to the full amount thereof , then the relief to be allowed under this Convention in the first-mentioned Contracting State shall apply only to so much of the income as is taxed in the other Contracting State. (2) Notwithstanding the provision of any other article of this Convention, a resident of a Contracting State who, as a consequences of domestic law concerning incentives to promote foreign investment, is not subject to tax or is subject to tax at a reduced rate in that Contracting State on income or capital gains, shall not receive the benefit of any reduction in or exemption from tax provided for in this Convention by the other Contracting State if the main purpose or one of the main purpose of such resident or person connected with such resident was to obtain the benefits of this Convention. Article 25 partnerships where, under any provision of this Convention, (a) the partnership is entitled, as a resident of Latvia, the exemption from tax in the United Kingdom on any income or capital gains, that provision shall not be construed as restricting the right of the United Kingdom to tax any member of the partnership who is a resident of the United Kingdom on his share of such income or capital gains; but any such income or capital gains shall be treated for the purpose of article 23 of this Convention as income or gains from sources in the United States. Article 26 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 other or 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. (2) a person who by 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 other or more burdensom than the taxation and connected requirements to which nationals of the State concerned in the same circumstanc with or may be subjected. (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. (4) Except where the provision of paragraph (1) of article 9, paragraphs (7) and (8) of article 11, paragraphs (6) and (7) of article 12 or paragraph (3) and (4) of article 22 of this Convention 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 under the same-deductibl condition 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 other or more burdensom than the taxation and connected requirements to which other similar enterprises of the first-mentioned State may be subjected to or. (6) Nothing in this article shall led be construed as obliging either Contracting State to grant to an individual not resident in that State any of the personal allowance, relief and reduction for tax purpose of which are granted to individual so resident. (7) the provision of this article shall apply to the taxes which are the subject of this Convention. Article 27 Mutual agreement procedure (1) where a resident of a Contracting State 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 26 of this Convention, to that of the Contracting State of which he is a national. (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. (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. (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 28 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 of the Contracting States concerning taxes covered by this Convention insofar as the taxation thereunder is not contrary to this Convention, in particular, to prevent fraud and to facilitat the administration of statutory provision against legal avoidance. The exchange of information is not restricted by article 1. Any information received by a Contracting State shall be treated as secret and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of the appeal in their relations, the taxes covered by this Convention. 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 the case of IR the provision of paragraph (1) of this article be construed so as to impost on the competent authority of either Contracting State the obligation: (a) to carry out administrative measure's 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. Article 29 members of diplomatic or permanent missions and consular posts Nothing in this Convention shall be the fiscal privilege of affec accorded to members of diplomatic or permanent missions or consular posts under the general rules of international law or under the provision of special agreements. Article 30 Entry into force the Governments of each of the Contracting States shall notify to the other through the diplomatic channel the completion of the procedures required by law for the bringing into force of this Convention. This Convention shall enter into force on the date of the later of these notifications and shall thereupon have effect: (a) in the United Kingdom: (i) in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6th April in the calendar year next following that in which the Convention enter into force; (ii) in respect of corporation tax, for any financial year beginning on or after 1st April in the calendar year next following that in which the Convention enter into force. (b) in the United Kingdom: (i) 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; (ii) in respect of other taxes on income, for taxes chargeabl for any tax year beginning on or after the first day of January in the calendar year next following the year in which the Convention enter into force; Article 31 Termination this Convention shall remain in force until terminated by one of the Contracting States. Either Contracting State may terminate the Convention, through diplomatic channels, by giving notice of termination at least six months before the end of any calendar year. In such event, the Convention shall cease to the have effect: (a) in the United Kingdom: (i) in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6th April in the calendar year next following that in which the notice is given; (ii) in respect of corporation tax, for any financial year beginning on or after 1st April in the calendar year next following that in which the notice is given. (b) in the United Kingdom: (i) 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 is given; (ii) in respect of other taxes on income for taxes chargeabl for any tax year beginning on or after the first day of January in the calendar year next following the year in which the notice is given; In witness whereof the undersigned, duly authorised, have signed theret this Convention. Done in duplicate at London, this 8th day of May 1996, in the Latvian and the English languages, both texts being equally authentic. In the case of the divergenc of interpretation the English text shall prevails.
For the Government For the Government of the Republic of Latvia of the United Kingdom of Great Britain and Northern Ireland Exchange OF notes the His Excellency Mr. Valdis Birkavs Minister for Foreign Affairs 8 May 1996 Excellency I have the honour to refer to the Convention between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Latvia for the avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income and Capital gains which has been signed today, and to make on behalf of the Government of the United Kingdom of Great Britain and Northern Ireland the following proposals for the purpose of applying: 1. Article 2 (3) the United Kingdom takes note of the fact that the existing taxes as listed in the Convention are subject to a substantial programme of reform and wherever it is not possible they agree that a particular new tax to satisf the condition of paragraph (4), the United Kingdom is ready to gotiat not an amending Protocol to the Convention without delay. 2. Article 4 (3) where a person other than an individual is a resident of both Contracting States and the competent authorities of the Contracting States the endeavour to determin it status by mutual agreement, they shall have regard to such factors as the place of effective management, the place where it is incorporated or otherwise constituted and any other relevant factors. 3. Article 5 (5) the Contracting States agree that: (i) where the transactions between the agent and the enterprise are made under the conditions which would be made between unrelated persons in the second line of paragraph (6) shall not apply; and (ii) in considering the activities are the whethers devoted wholly or almost wholly on behalf of that enterprise, the Contracting States shall have regard to any relevant factors during any 12 month period commencing or ending in the fiscal year concerned. In particular if the relevant activities are devoted wholly or almost wholly on behalf of that enterprise for a period exceeding 9 months within the period of 12 months, you, they will be considered to have been so devoted in that fiscal year. 4. Article 6 (3) the Contracting States understand that all income and gains arising from the alienation of property situated in a Contracting immovabl State may be taxed in that Contracting State in accordanc with article 13 of this Convention. 5. Article 7 (3) In determining the profits of a permanent establishment, it is understood that expense to be allowed as of marbles by a Contracting State include only expense the are under the domestic law of deductibl of that State. 6. Article 12 where, in any Convention for the avoidance of double taxation, signed after the date of signature of this Convention, between Corporation and a third State which is a member of the Organisation for Economic Co-operation and development at the date of signature of this Convention, to a definition of its affiliates agree to exclude any of the royalt which rights or other property referred to in paragraph 3 or in the main the royalt arising from the corporation tax on Latvian royalt to or the lower rates of tax than those provided for in paragraph 2, such exemption or lower, narrower definition, that rate shall automatically apply as if it had been specified in paragraph 3 or paragraph 2 of article 12 with effect from the date of entry into force of that Convention. 7. Article 24 (2) It is understood that incentives to promote foreign investment shall not include incentives promoting only domestic investment. If the foregoing proposals are acceptabl to the Government of the Republic of Latvia, I have the honour to suggest that the present note and Your Excellency's reply to that effect should be regarded as constituting an agreement between the two Governments in this matter, which shall enter into force at the same time as the entry into force of this Convention. I myself of this opportunity to availa ... extend to Your Excellency the assurance of my highest considerations. Sir Nicholas Bonsor, Bt MP Minister of State His Excellency Sir Nicholas Bonsor Bt Mp Minister of State Foreign and Commonwealth Office 8 May 1996 Your Excellency I am in receipt of your note dated 8 May 1996 which States as follows: "His Excellency Mr. Valdis Birkavs Minister for Foreign Affairs of Your Excellency I have the honour to refer to the Convention between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Latvia for the avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income and Capital gains which has been signed today, and to make on behalf of the Government of the United Kingdom the following proposals for the purpose of applying: 1. Article 2 (3) the United Kingdom takes note of the fact that the existing taxes as listed in the Convention are subject to a substantial programme of reform and wherever It is not possible to agree that a particular new tax to satisf the condition of paragraph (4), the United Kingdom is ready to gotiat not an amending Protocol to the Convention without delay. 2. Article 4 (3) where a person other than an individual is a resident of both Contracting States and the competent authorities of the Contracting States the endeavour to determin it status by mutual agreement, they shall have regard to such factors as the place of effective management, the place where it is incorporated or otherwise constituted and any other relevant factors. 3. Article 5 (5) the Contracting States agree that: (i) where the transactions between the agent and the enterprise are made under the conditions which would be made between unrelated persons in the second line of paragraph (6) shall not apply; and (ii) in considering the activities are the whethers devoted wholly or almost wholly on behalf of that enterprise, the Contracting States shall have regard to any relevant factors during any 12 month period commencing or ending in the fiscal year concerned. In particular if the relevant activities are devoted wholly or almost wholly on behalf of that enterprise for a period exceeding 9 months within the period of 12 months, you, they will be considered to have been so devoted in that fiscal year. 4. Article 6 (3) the Contracting States understand that all income and gains arising from the alienation of property situated in a Contracting immovabl State may be taxed in that Contracting State in accordanc with article 13 of this Convention. 5. Article 7 (3) In determining the profits of a permanent establishment, it is understood that expense to be allowed as of marbles by a Contracting State include only expense the are under the domestic law of deductibl of that State. 6. Article 12 where, in any Convention for the avoidance of double taxation, signed after the date of signature of this Convention, between Corporation and a third State which is a member of the Organisation for Economic Co-operation and development at the date of signature of this Convention, to a definition of its affiliates agree to exclude any of the royalt which rights or other property referred to in paragraph 3 or in the main the royalt arising from the corporation tax on Latvian royalt to or the lower rates of tax than those provided for in paragraph 2, such exemption or lower, narrower definition, that rate shall automatically apply as if it had been specified in paragraph 3 or paragraph 2 of article 12 with effect from the date of entry into force of that Convention. 7. Article 24 (2) It is understood that incentives to promote foreign investment shall not include incentives promoting only domestic investment. If the foregoing proposals are acceptabl to the Government of the Republic of Latvia, I have the honour to suggest that the present note and Your Excellency's reply to that effect should be regarded as constituting an agreement between the two Governments in this matter, which shall enter into force at the same time as the entry into force of the Convention. I myself of this opportunity to availa ... extend to Your Excellency the assurance of my highest considerations. " The foregoing proposals being acceptabl to the Government of the Republic of Latvia, I have the honour to confirm in Your Excellency's note and this reply shall be regarded as constituting an agreement between the two Governments in this matter which shall enter into force at the same time as the entry into force of the Convention. I take this opportunity to renew to Your Excellency the assurances of my highest considerations. Mr. Valdis Birkavs Minister for Foreign Affairs