The Saeima has adopted and the President promulgated the following laws: For the Republic of Latvia and the Republic of Iceland, of the Convention for the avoidance of double taxation and prevention of tax fraud article 1. 1994. on 19 October, in signed in Reykjavik of the Republic of Latvia and the Republic of Iceland, the Convention for the avoidance of double taxation and the prevention of tax evasion (hereinafter referred to as the Convention) with this law is accepted and approved. 2. article. The law shall enter into force on the date of its promulgation. With the law put referred to in article 1 of the Convention and its translation into Latvian language. 3. article. On the basis of this law and in accordance with article 29 of the Convention, the Ministry of Foreign Affairs of the Republic of Latvia shall prepare written exchanges with the ratification of the Government of the Republic of Iceland. 4. article. Convention enters into force provided for in article 29 of the them at the time and in order. The Parliament adopted the law of 2 March 1995. The President g. Ulmanis in Riga on 17 March 1995, the Republic of Latvia and the Republic of Iceland, the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital the Government of the Republic of Latvia and the Government of the Republic of Iceland, accepting his willingness to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital, agreed as follows: article 1. The scope of the Convention this Convention shall apply to persons of either Contracting State or resident of both Contracting States. 2. Article. Taxes covered by the Convention the existing taxes, 1 covered by this Convention, in particular the following: (a)) in Latvia; (i) the profit tax; (ii) the individual income tax; (iii) the property tax; (hereinafter referred to as "Latvian tax") b) Iceland: (i) the national income tax (tekjuskattur til rikisin); (ii) the national capital tax (eignarskattur til rikisin); (iii) the municipal income tax (tekjuutsvar til sveitarfelag); (hereinafter referred to as "Icelandic tax"). 2. where a Contracting State is introduced new income or capital taxes after the date of signature of this Convention, this Convention will apply also in respect of those taxes. A Contracting State competent authorities mutually agreed way is to determine whether the tax is introduced in each of the Contracting States, is a tax for which according to the above is to apply this Convention. 3. the Convention shall also apply to any taxes identical or substantially similar taxes which are referred to or to which reference is made in paragraphs 1 and 2, which are implemented at the date of signature of this Convention, supplementing or replacing the tax, which according to these points is suitable for this Convention. Contracting State the competent authorities shall inform each other of any significant amendments which have been made in their respective taxation laws. 3. Article. General definitions 1. If it is not apparent from the context, otherwise in this Convention: a the term "Latvia") means the Republic of Latvia, and, used in a geographical sense, it represents the territory of the Republic of Latvia and any other Latvian territorial waters adjacent to the territories in which, in accordance with the legislation of Latvia and international law can be implemented in Latvia of rights on land and sea depths and natural resources contained therein; (b)) the concept of "Iceland" means the Republic of Iceland and, used in a geographical sense, it represents the territory of the Republic of Iceland and the Republic of Iceland in any other territorial waters adjacent to the territories in which, in accordance with the law of Iceland and international law Iceland's sovereign rights to the seas and subsoils and there existing natural resource exploration and exploitation; (c) the term "person") represents a natural person, company, or any person as a whole; (d) the term "company") represents any United formations or to any entity which, for the purposes of taxation is considered as a United entity; e) concepts "Contracting State" and "enterprise of the other Contracting State" represents the company, run by a resident of a Contracting State and the company, run by a resident of the other Contracting State; (f) the term "citizen") stands for: (i) any natural person who is a citizen of a Contracting State; (ii) any legal person, partnership or association whose status stems from State legislation in force; g) 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 in the other Contracting State; h) the term "competent authority" means: (i) in Latvia-Minister of finance or his authorised representative; (ii) the Minister of Finance of Iceland-or his authorized representative. 2. as regards the application of the Convention, the Contracting State will use any term which is not defined here, if one does not follow from the context otherwise, only in the sense in which it is applied to these national tax legislation with respect to taxes to which this Convention applies. 4. Article. 1. for the purposes of this Convention a resident, the term "resident of a Contracting State" means any person who, in accordance with the national legislation is subject to taxation on the basis of the place of residence, residence, the actual location of management, place of incorporation (registration) or any similar character criteria. This term also includes a Contracting State itself, its political and administrative units, local authorities and incorporated companies. This term does not include any person who is taxed in that State in respect only of income from sources in that country or from the country deployed capital. 2. Where, in accordance with the provisions of article 1 the natural person is a resident of both Contracting States, its status will be determined in the following manner: (a)) this person will be deemed to be resident in the country where the permanent place of residence; If you are habitually resident in two countries, this person will be considered a resident of the State with which it has the closest personal or economic relations (vital interests); (b)) if it is not possible to determine the country in which that person is a vibrant centre of interests, or if it does not have a permanent place of residence in one of the two countries, that person will be considered a resident of the State that it is customary in the home; c) if that person normally home in both countries, or is not one of them, it will be considered a resident of the State of which a citizen is a person; (d)) if that person is a national of both States or no citizen of this country, the competent authorities of the Contracting States shall settle the question by mutual agreement. 3. Where, in accordance with the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then the competent authorities of the Contracting States shall endeavour to resolve this question of mutual agreement and determine the mode of application of this Convention to such person. If such an agreement not be reached, then the application of the Convention to that person in each of the Contracting States shall not be deemed to be a resident of the other Contracting State. 5. Article. 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) workshop; 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 installation project or a supervisory or related advisory activities would be regarded as a permanent establishment only if such building or design work lasts more than six months. 4. Notwithstanding the preceding paragraphs of this article, the provisions of the term "permanent establishment" shall not include: (a) the use of buildings and equipment) only and exclusively the goods belonging to the storage, demonstration and supplies; (b) goods belonging to the company) and inventory products intended solely for storage, demonstration and supplies; (c) the goods belonging to the company) and inventory products intended exclusively for processing in the other company. d) permanent site designed exclusively for the purchase of goods or products or company collecting the information you need; e) permanent site designed exclusively for making business arrangements or any other ancillary; f) permanent site designed exclusively for making "a" and "e" the actions referred to in any combination, provided that the overall activity of the preparatory or ancillary nature is. 5. Notwithstanding points 1 and 2, when the person is not subject to paragraph 6, the independent agent status, running the business and typically uses its powers to enter into contracts in the name of this establishment in the Contracting State, shall be considered that this company has a permanent establishment in the country with respect to any action taken by this person in this country, except for the permanent site, used by the person performing the action referred to in paragraph 4 may not be considered a permanent establishment under the provisions of paragraph 4. 6. it will be considered that the company does not have permanent representation in the Contracting State where the undertaking is established in that country, through intermediaries only, sales agent or any other agent of an independent, provided that such persons perform their normal business activities. However, if such an agent is completely or almost completely is made for your business, they can not be considered independent agents in the sense referred to in this paragraph. 7. the fact that the company is a resident of a Contracting State-controlled company, which is a resident of the other Contracting State, or which carries on business in that other State (via the permanent representations, or in any other way), or is subject to the control of such undertaking itself does not turn into one of those companies on the other company's permanent representation. 6. Article. 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 that other country. 2. the term "immovable property" have the meaning it has in its legislation of a Contracting State in which the property is located. In any case, this concept will be used to refer to real estate property belonging to property, livestock and equipment used in agriculture and forestry; the rights covered by the provisions of general legislation on real estate, located on the ground; buildings; the right to use the rights in respect of immovable property or similar rights; uzufrukt of immovable property and rights to variable or fixed payments for the right to use valid minerals, sources and other natural resources, or for their use. For real estate will not be considered as passenger or cargo ships and aircraft. 3. the provisions of paragraph 1 shall be applied in respect of income from real estate direct use, letting or use in any other way, as well as for the profits obtained from the disposal of real estate. 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 taxing in the Contracting State in which the immovable property is situated. 5.1 and paragraph 3 shall be applied also with regard to the income from real property of the company, as well as income from property that is used for independent individual services. 7. Article. Business profits 1. Contracting State company profits will be taxed only in that State unless the enterprise carries on business in the other Contracting State through a permanent representation of the existing there. If the enterprise carries on business in that way, the company's profits can be taxing in the other country, but only the profit that can be attributed to: (a) the permanent representation;) or (b)) the same or similar goods and the sale of the products in that second country which are sold via the permanent representations; or (c)) the second country do other business, which is the same or similar to that undertaken with this permanent representation. Subparagraph (b)), and (c)) the rules will not be enforced if the company reasonably demonstrate that such sales or operation cannot be performed using this permanent representation. 2. in accordance with the provisions of paragraph 3, if the Contracting State is established in the other Contracting State through a permanent establishment there, existing in each Contracting State to the permanent representations should the amount of profit, it would benefit if the individual is clearly the company that performs the same or similar business activities under the same or similar conditions and works independently from this company. 3. in determining the profits of the permanent representation will be made permanent representation in the deductible expense deduction from amounts taxable. These expenses may be representations of operational and general administrative expenses incurred by the country in which the permanent establishment or elsewhere. 4. where a Contracting State the profits attributable to the permanent establishment shall be determined by the joint company profits apportioned between units, (2) do not prohibit a Contracting State as usual to determine the taxable profit by this principle; However, this method of distribution must be used so that the results match the principles contained in this article. 5. On the permanent representation will not be applied the earnings just because it has purchased your business goods or articles. 6. for the purposes of the application of the previous paragraph, the profits attributed to the permanent representations, each year must be determined by the same method, except when there are sufficient grounds to act otherwise. 7. If the profit is included in the other articles of this Convention separately featured income types, the provisions of this article shall not affect the other provisions of this article. 8. Article. Sea and air transport 1. Contracting State company profits from the sea or air transport use in international traffic will be taxed only in the country. 2. paragraph 1 shall also apply to profits from the participation in a pool, joint business or international traffic transportation company. 9. Article. Related companies: 1. in cases where a company of a Contracting State) directly or indirectly participating in the other Contracting State, the company's management or control or it owns part of the company's capital; (b)) one and the same person, directly or indirectly, participate in Contracting State of an organization's management or control or they own in the company's capital and at the same time-in another company in the other Contracting State and the two companies in the commercial and financial relations are created or established by rules different from those provisions that the force between two independent (non-related) companies, any profit that the formation of one of the companies, but the above provisions do not affect the established, 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, where the taxable profit, in respect of which the company of the other Contracting State has been charged to tax in that other country and this included in earnings in the first Contracting State is regarded as a profit, which would have been the first company of a Contracting State, if the relationship between the two companies would have been as exist between two totally independent companies country, then the other must be the appropriate corrective for the size of the tax, which taxed the earnings of the other State, if the other country considers this change acceptable. In determining this corrective, account must be taken of other provisions of this Convention and, if necessary, shall be held by the competent authorities of the Contracting States for consultations. 10. Article. 1. Dividends dividends by the company-a resident of a Contracting State in the other Contracting State, the cost for residents will be exempt from taxes in the other country. 2. However, such dividends may also be exempt from taxes according to the national law of the Contracting State of which the resident is a company that pays dividends if the recipient is the dividends dividend real owner, tax shall not exceed: a 5 per cent of the dividend) total, if the true owner of the dividends is a company that is not a limited partnership and directly managed by no less than 25 percent of the capital in the company that paid dividends; b) 15 per cent of the total of dividends in all other cases. The competent authorities of the Contracting States in the mutual agreement may determine the application of such restrictions. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividend is paid. 3. Notwithstanding paragraph 2 (a)) rules, dividend, which the company is a resident of Latvia, paid the company that is a resident of Iceland can be exempt from taxes in Iceland not exceeding 15 per cent rate for the payment of the part of the public in Iceland in accordance with the laws of Iceland are allowed to deduct from profits or transferred to the next year's expenses. 4. The term "dividends" in this article means income from shares or other rights to participate in profits, which has no debt and is part of the profits, as well as income from other corporate rights which is subjected to the same taxation as income for the procedure of shares in accordance with the national provisions, which the resident is a company that performs this distribution. 5.1, 2 and 3 shall not be applied, if the true owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment there, existing, or provide other State independent personal services from a permanent base located there, where the company that pays dividends, is the other State residents and where participation, which is paid out in dividends, is actually related to the permanent representation or permanent base. In this case in accordance with the conditions applicable in article 7 or 14. 6. If company-a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not be nor to any duty of the dividends paid by the company, except when dividends are paid to a resident of the other State, or when the participation of which is paid out in dividends, is actually related to the permanent representation or permanent base, located in the other country, nor to retained earnings in the company's retained earnings even If the dividends paid or retained earnings consists in whole or in part from the other country of profit or income. 11. Article. 1. interest interest arising in a Contracting State and paid to a resident of the other Contracting State, may be taxing in that other country. 2. However, such interest may also be taxing according to national law the Contracting State in which they arise, if the recipient of the interest is the true owner of the interest, the tax must not exceed 10 percent of the total amount of interest. The competent authorities of the Contracting States in the mutual agreement may determine the application of such restrictions. 3. Notwithstanding paragraphs 1 and 2 of the regulations): (a) the interest arising in Latvia, will be exempt from taxation with tax, if the interest is paid to: (i) the country of Iceland, its political and administrative entity, municipality or incorporated companies; (ii) the Central Bank of Iceland; (iii) the Industrial credit fund or the Industrial Development Fund or any other similar institution, agreed between the competent authorities of the Contracting States; or (iv) any other institution, similar to subsection (ii) above, agreed between the competent authorities of the Contracting States; b a) interest arising in Iceland, will be exempt from taxation in Iceland if the interest is paid to: (i) the country of Latvia, its political and administrative entity, municipality or incorporated companies; (ii) the Bank of Latvia; (iii) any organization in Latvia that is established after the date of signature of this Convention, and which is similar to Iceland appointed bodies listed in (a) (iii) in subsection (Contracting State the competent authorities mutually agreed way to determine which organizations are similar in nature); or (iv) any other institution, similar to a) in subparagraph (iii) referred to in the subsection as agreed to by the competent authorities of the Contracting States; c) interest arising in a Contracting State on a loan guaranteed by any a) or (b)), and that institution which is paid to residents of the other Contracting State, be taxed only in that other State; (d)) interest arising in a Contracting State will be taxed only in the other Contracting State if: (i) the beneficiary is a resident of the other State, and (ii) the resident is the second State company and is the true owner of the interest, and (iii) the interest is paid to the company for such debt that created any articles or industrial, commercial or scientific equipment sales to credit the former State company except where the sale is made between associated enterprises. 4. for the purposes of this article, the term "interest" means income from debt of any kind regardless of their security guarantees, in particular, income from government securities and income from bonds, promissory notes, including bonuses and awards for these securities, bonds or debentures. Interest received interest paid, not good will not be considered interest covered by this article. 5. paragraphs 1 and 2 shall not apply if the person put the owner in – interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent representation of the existing there, or provide this second country independent personal services through a permanent base located there, and the indebtedness on which the interest is paid is effectively connected with such permanent establishment or fixed base. In this case, the appropriate circumstances are applicable to article 7 or 14. 6. If the payer of the interest is a resident of a Contracting State, it will be deemed that the interest generated in this country. If, however, the person paying the interest, whether that person is a resident of a Contracting State or not, used in the Contracting State of the existing permanent representation or permanent base located there, which incurred the debt for which interest is paid, and the interest shall be paid to the permanent establishment or fixed base, will be considered that the interest incurred in the State in which the permanent establishment or fixed base. 7. If due to the special relationship between the payer and the interest percentage implemented owner or between both of them and a third person interest amount relating to indebtedness on the basis of which it is paid, exceeds the amount that would have been able to agree to the interest payer and the interest owner will, if implemented, they would not have this special relationship, then the provisions of this article shall be applied only to the last-mentioned amount. In this case, the remaining part of the payment is taxed in accordance with the national provisions, provided that you comply with the other provisions of this Convention. 12. Article. Royalties 1. Royalties arising in a Contracting State and is paid to residents of the other Contracting State, be taxed in that other State. 2. However, royalties can also be taxing in accordance with national law of the Contracting State in which it arises, but if the recipient is the royalty of the true owner of the royalties the tax shall not exceed: a 5 per cent of the royalties) the total volume of production, trade or scientific equipment; b) 10 per cent of the total of the royalties in all other cases. The competent authorities of the Contracting States of the mutual agreement may determine the application of such restrictions. 3. The term "royalties" in this article means payments of any kind received as a compensation for the use of any copyright or rights to use the copyright in a literary, scientific or artistic works, including motion pictures, television movies, recordings, television and radio broadcasting, any patent, trademark, design or model, plan, secret formula or process, industrial, commercial or scientific equipment or for the right to use it , or for information concerning industrial, commercial or scientific activity and experience. 4. paragraphs 1 and 2 shall not apply if the payment is effected, as the owner of a Contracting State, carries on business in the other resident in the Contracting State in which the royalties arise, through a permanent representation of the existing there, or in another country provides independent personal services through a permanent base located there, and if the rights or property of, subject to royalty payments, is actually related to the permanent representations, or permanent base. In this case in accordance with the conditions applicable in article 7 or 14. 5. If the payer of the royalties is a resident of a Contracting State, it will be considered that the royalties arise in the country. If, however, the person paying the royalties, whether or not that person is a resident of a Contracting State or not, used in the Contracting State of the existing permanent representation or permanent base located there, which committed to pay royalties and the royalties paid to the permanent establishment or fixed base, will be considered that the royalties arise in the State in which the permanent establishment or fixed base. 6. If, owing to a special relationship between the payer of royalties and royalties shall implement the owner or between both of them and a third person the amount of the royalties relating to the rights of use or information exceeds the amount of royalties that would have been able to implement a single payer and the owner if they would not have this special relationship, then the provisions of this article shall be applied only to the last-mentioned amount. In this case, the payment of the part that exceeds this amount, you will be taxed according to the Each Contracting State law provided that, subject to the other provisions of this Convention. 7. If in any Convention for the avoidance of double taxation, which Latvia signed with a third country which is the economic development and cooperation (OECD) member at the time of signature of this Convention, after that date, Latvia agrees to exclude any rights or ownership of this article, the definitions included in or release the royalties arising in Latvia, the Latvian tax on royalties or reducing tax rates as indicated in paragraph 2, by this definition, the exemption or reduced rate of tax will be automatically applied, as though it were specified in paragraph 3 or 2. 13. Article. 1. Capital gains capital gains, the resident of a Contracting State alienates a article 6, paragraph 2, in the other Contracting State the existing real estate or shares of one company, which actively consist mainly of such property can be taxing in that other country. 2. Capital gains that accrued, disposing of property, which is a permanent part of the mission commercial units, which one Contracting State company uses the second Contracting State or capital gains arising from the disposal of real property, a resident of a Contracting State-owned independent personal services to create a permanent base in the other Contracting State; also the capital gains gained from disposing of such, the permanent representation (alone or with the whole enterprise) or of such a standing base, can be taxing in the other Contracting State. 3. Capital increase for the company of a Contracting State that use sea or air means of transport in international traffic, the disposal of sea or air transport or disposal of property that is linked to the sea or air vehicles, shall be taxable only in that State. 4. the capital gains gained from the transferred property, different from this article mentioned in the previous paragraphs, shall be taxable only in the Contracting State of which the resident is the seizure of property. 14. Article. Independent personal services of a resident of a Contracting State 1-physical persons income earned by providing professional services or other independent activities, will be taxed only in the country, except when this person your actions, uses regular access to a permanent base in the other Contracting State. If you are using the following permanent base, income can be taxing in the other Contracting State but only to the extent that they apply to this permanent base. In this regard will be considered that an individual uses regular access to permanent base in the other Contracting State if the individual is a resident of a Contracting State-maintained in the other Contracting State for a period or periods exceeding in the aggregate 183 that days in any 12 month period commencing or ending in the fiscal year, and the income earned on the second country made the above actions will be applied to this permanent base.. 2. The term "professional services" includes independent scientific, literary, artistic, educational or teaching activities as well as doctors, lawyers, engineers, architects, dentists and accountants of independent operation. 15. Article. Depending on the individual services according to 16.1 18. Article 19 rules and salary and other similar remuneration received by a resident of a Contracting State on its work will be taxed only in the country, if one paid work is not performed in the second Contracting State. If the salaried work is carried out in this way, it can receive taxing in that 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, provided that: (a) the beneficiary is found) in the second country no more than 183 days in any 12 month period or periods that begin or end of the financial year concerned, and b the remuneration is paid), the employer that is not a resident of the other State or another person, the employer, and c the remuneration is not paid) permanent establishment or fixed base which the employer uses the second country. 3. Notwithstanding the preceding provisions of this article, remuneration received for work that is being done on the company-resident of a Contracting State the sea or air transport, operating in international traffic, may be to tax in this country. 16. Article. Directors ' fees directors ' fees and other similar payments to residents of a Contracting State receives as a member of the Board of directors or any other similar companies-residents of the other Contracting State-governing body member, can be taxing in the other Contracting State. Article 17. Artists and athletes 1. articles 14 and 15 of the rules of the income that you receive a resident of a Contracting State as izpildītājmāksliniek, such as theatre, film, radio or television actor, as a musician, or as an athlete for your individual activities in the other Contracting State, may be taxing in the second country. 2. If an artist or athlete's income on his individual actions in this area are paid not the artist or athlete but to another person, that income regardless of the 7, 14 and 15 of the rules, the article can be taxing the Contracting State to which the izpildītājmāksliniek or athletes. 3.1 and paragraph 2 shall not apply to income derived from activities performed by country artist or athlete, if they visit this country wholly or partially financed from the territory of the other Contracting State, its political and administrative units or local public funds. In this case, depending on the circumstances, the income is subject to tax in accordance with 7, 14 or 15. 18. Article. Pensions and similar costs 1. in accordance with paragraph 2 of article 19, pensions and other similar remuneration received by a resident of a Contracting State will be subject to tax only in the country. 2. Notwithstanding the provisions of paragraph 1 and paragraph 2 of article 19 of the regulations, a pension and other benefits, which are granted in accordance with national social security provisions or in accordance with any Contracting State social welfare system will be taxed only in the country, whether periodic or lump-sum payout is. 19. Article. 1. the public service (a) remuneration other than pensions) and that paid to a natural person, the Contracting State or of its political or administrative unit of local government or incorporated companies on this country, entity, or incorporated companies for services provided to the municipality the dependent personal services will be taxed only in the country. (b)) However, this reward will be taxed only in the Contracting State of which the natural person is resident if the services are rendered in that State and the individual: (i) is a national of that State; or (ii) has not become resident in this country only and solely for the purpose of providing the services. 2. a pension by) any natural person the cost of Contracting State or of its political-administrative unit, a local authority or incorporated companies, or paid from a Contracting State or of its political and administrative units, municipalities or incorporated companies established funds, for the dependent personal services provided by that person in that State, municipality or entity incorporated companies will be taxed only in the country. (b)) However, this pension will be taxed only in the Contracting State of which the resident and citizen is this natural person. 3.15, 16 and article 18, rules must be applied to the remuneration and pensions that are paid for services provided in respect of the Contracting State, its political and administrative units, municipalities or incorporated companies carried out by the business. 20. Article. Students payments which a residence, study or internship needs receives a student, apprentice or trainee, who just before the arrival of a Contracting State has or had in the other Contracting State, a resident of and located in the first mentioned State solely for the purpose of study or placement period, will not be taxed in that State, if such payments arise outside that State. 21. Article. Other income 1. other previous articles of this Convention shall not featured a resident of a Contracting State shall, whatever their income sources, will be taxed only in the country. However, the income arising from the second Contracting State can also be taxing in the second country. 2. paragraph 1 shall not apply to income, other than income from article 6 paragraph 2 defines the immovable property, if the recipient of the income, being a resident of a Contracting State, carries on business in the other Contracting State, with there existing permanent representation, or in the second country independent personal services through a permanent base located there, and if the rights or property of which you receive this income is actually linked to the permanent representations, or permanent base. In these cases, the appropriate circumstances are applicable to article 7 or 14. 22. Article. 1. Capital the capital represented by article 6, paragraph 2 of the contracting Countries resident in real property situated in the other Contracting State or shares in a company, the property of which consists mainly of such property can be taxing in the second country. 2. capital represented by movable property forming part of the other Contracting State, the Contracting State of the permanent representation of the company property, or capital represented by movable property that belongs to a resident of a Contracting State to a permanent base in the other Contracting State and this base is used independent of individual services can be taxing in the second country. 3. Capital represented by the enterprise of a Contracting State maritime and air transport products, which are used in international traffic, as well as movable property that is associated with the sea and air transport, will be subject to tax only in the country. 4. All the other Contracting State, a resident of the capital items will be taxed only in the country. 23. Article. The avoidance of double taxation 1. In Latvia, double taxation shall be avoided as follows: (a)) in case the Latvian resident receives income or owns capital which, in accordance with the provisions of this Convention can be taxing in Iceland, unless the internal legislation of Latvia does not provide for more favourable terms, Latvia must permit: (i) reduce the resident's income tax on the portion of the tax is equal to the income tax paid in Iceland; (ii) reduce the capital residents a tax on that portion of the tax is equal to the capital tax paid in Iceland. These reductions, however, shall in no case exceed the income tax or capital tax, part of which is calculated before the application of this reduction, which is attributable to the income or the capital which may be taxed by duties in Iceland. (b) the application of a)): If a company which is a resident of Latvia receives a dividend from a company that is a resident of Iceland and in the Latvian resident company holding not less than 10 percent of shares with full voting rights, the tax paid in Iceland will contain not only tax that taxed dividends, but also tax, which taxed the public profits from which dividends are paid. 2. Iceland, double taxation will be avoided in the following manner: (a)) in case a resident of Iceland receives income or owns capital which, in accordance with the provisions of this Convention can be taxing in Latvia, Iceland in accordance with the "b" and "c" section rules should be released this income or capital from tax. (b) where a resident of Iceland) receives income, which in accordance with: (i) paragraph 2 of article 10 in the "b" section, or (ii) 11. paragraph 2 of article 12 may be exempt from taxes in Latvia, Iceland should be allowed to reduce the resident's income tax on the amount equal to the tax paid in Latvia. These reductions must not, however, exceed before the application of this reduction in the calculated part of the tax which is attributable to the income gained in Latvia. (c)) If, in accordance with any provisions of this Convention a resident of Iceland received the income or the capital he holds is exempt from taxation in Iceland, Iceland, by the resident's tax calculation on other income or capital, take into account the exempted income tax or capital. d) b) (i) the provisions of subsections will be applied only during the first 10 years after the entry into force of this Convention. The competent authorities must be consulted to determine whether this period will be extended. Any extension will come into force by that date, and will be subject to such modifications and conditions, including rules on winding up, which may be specified and agreed between the Contracting States exchange notes, which must be a diplomatic way or in any other manner in accordance with their domestic constitutional procedures. When, in accordance with the provisions of subparagraph (b)) shall terminate (i) from the application of subsection (b) (ii) the text of the subsection is replaced by the following text: "(ii) 10, 11 or 12 of article". 24. Article. Prevent discrimination 1. nationals of a Contracting State in the other Contracting State shall not be subject to taxation or any requirements connected therewith which differs from taxation or the related requirements which are or may be exposed to the other citizens of the country in the same circumstances, or which is more burdensome, in particular with respect to residence. This provision shall, notwithstanding the provisions of article 1, also apply to persons who are not party to one or both of the Contracting States of the residents. 2. Stateless persons who are residents of a Contracting State, any of the Contracting States shall not be subject to taxation or any related requirements, which differ from the taxation and related requirements, which are or may be exposed to nationals in the same circumstances, or which is more burdensome, in particular with respect to residence. 3. a Contracting State a permanent establishment of the representation used in the other Contracting State may not be taxing in the second country less favourably than would be taxed in the other State companies that do the same type of business. This provision shall not be interpreted so that it would impose a Contracting State the obligation to grant the other Contracting State, a resident of any private discounts, exemptions or reductions for taxation, as this country give their residents given their civil status or family responsibilities. 4. Except where the applicable paragraph 1 of article 9, paragraph 7 of article 11, or paragraph 6 of article 12 apply, 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 upon the same terms as if they were to be paid to the first residents of that State. Similarly, the enterprise of a Contracting State in the other Contracting State debt residents, establishing this company's taxable capital, is to be deducted by the same rules as if it refers to the first residents of that State. 5. the Contracting State whose capital is wholly or partly belongs to one or more of the other Contracting State residents or which they directly or indirectly control, not the first in that country may be subject to taxation or any related requirements, which differ from the taxation and related requirements, which are subject to similar companies in the first country, or which is more burdensome. 6. The provisions of this article independently of the provisions of article 2, apply to taxes of every kind and name. 25. Article. Mutual conciliation procedure 1. If a person believes that one or both of the Contracting States party to lead or may lead to the person's taxation, which does not comply with the provisions of this Convention, that person may, irrespective of the internal legislation of these countries the rules governing to prevent such taxation, submit your question for consideration by the competent authorities of the country of which that person is resident, or, if the matter relates to article 24, paragraph 1 of the Member State the competent authorities of which are this person. The question to be submitted for review within three years from the first notification of the action which led to the taxation not in accordance with the provisions of this Convention. 2. the competent authorities are obliged to seek to resolve this issue, if it considers that the complaint is justified, and if this institution fail to reach a satisfactory solution, it should try to solve the question by mutual agreement with the other Contracting State, the competent authorities in order to prevent this Convention without the appropriate taxation. In the event the competent authorities reach such an agreement, Contracting States should be allowed to reduce or repay the tax in accordance with this agreement. Each such agreement is reached must be met regardless of the contracting domestic legislative deadlines. 3. the competent authorities of the country should strive for harmonisation between the course of resolving any problems or concerns that may arise in the interpretation or application of this Convention. They may also consult to avoid double taxation in cases not provided for in this Convention. 4. The competent authorities of the Contracting States may communicate directly with one another in order to reach an agreement during the previous points on these issues. If it seems appropriate to achieving agreement to share thoughts verbally, this argument may be creating a Commission, composed of the competent authorities of the Contracting States. 26. Article. 1. Exchange of information the contracting national authorities should exchange information necessary for the carrying out of the provisions of this Convention or in this Convention, the Contracting States tax related internal legislation requirements in so far as these laws are not contrary to this Convention. Article 1 of the Convention does not restrict the exchange of information. Any information received by a Contracting State, should be treated as sensitive as information that is obtained in accordance with the national legislation and may be disclosed only to persons or authorities (including courts and administrative bodies) involved in this Convention included in the calculation of tax, in the collection, the use of coercive measures, trials or appeals. Such persons or authorities, this information must be used 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 shall not be interpreted so that they bind the Contracting State 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 can reveal any trade, commercial or professional secret or trade process, or information the disclosure of which would be contrary to public policy (ordre public). 27. Article. Assistance in tax collection 1. the Contracting States undertake to provide each other assistance the taxpayer's outstanding tax collection, tax in final size is determined in accordance with the law of the country which makes a request for assistance. 2. where a Contracting State shall submit the request to provide assistance in the collection of taxes, the collection of which is accepted by the other Contracting State, such taxes will be collected in the other country, in accordance with its laws, which apply to the second state tax revenues, and as taxes would be levied in the other State taxes. 3. any Contracting State a request for assistance in collection of taxes must be accompanied by a confirmation that the taxpayer's debt is fixed definitively in accordance with the laws of the country. 4. when a Contracting State, the tax amount requested is not definitive, so that it is determined in court, or in any other way, this country, to maintain its revenue may ask another Contracting State to take interim action in the preservation of these funds on its behalf, if it is allowed to the second country, in accordance with the second law. If the latter agrees to comply with the request, temporary is performed as if this tax debt first to that country would be the second country due to taxes. 5. the Contracting State must submit a request in accordance with paragraphs 3 and 4 of the regulations only if it does not have available sufficient property tax to cover the outstanding tax amount. 6. the Contracting State in which, in accordance with the provisions of this article are charged tax, must be paid to the Contracting State of which the good this tax was levied, the amount of the tax collected from which, if necessary, less the amount of exceptional costs associated with this collection, referred to in paragraph 7 (b)). 7. as long as the competent authorities of the Contracting States have agreed on other arrangements will be considered: (a) the Contracting State) current expenditure incurred in providing assistance shall be borne by that State; b) extraordinary expenses arising in the Contracting State providing assistance shall be borne by the other State, irrespective of the amount of tax is collected on its behalf. In the case where a Contracting State anticipates that extraordinary costs may arise, it must do it immediately known second country and should show the following expenditure possible. 8. for the purposes of this article, the term "tax" means the taxes covered by this Convention, and any related penalties or interest. 28. Article. Diplomats and consular officers nothing in this Convention shall not affect the members of diplomatic missions or consular point of fiscal privileges of the employees, in accordance with the applicable international law or special agreements. 29. Article. 1. The entry into force once the constitutional requirements are met, to the Convention to take effect, the Governments of the Contracting States must exchange relevant notes. 2. the Convention shall enter into force 30 days after the last notes referred to in paragraph 1 of the date of submission and the rules of both the Contracting States be applied: (a)) in respect of taxes withheld at the time the costs from income accruing on or after 1 January in the calendar year of January 1 following the year in which this Convention enters into force; (b)) in respect of other taxes on income and capital: starting with taxes paid in any taxation year that begins on January 1, on or after 1 January in the calendar year following the year in which this Convention enters into force. 30. Article. Termination this Convention shall remain valid as long as the contracting party terminates its activities. Each Contracting State may terminate this Convention, through diplomatic channels, submit a written note about the termination at least six months before any end of the calendar year. In such event, the Convention in both Contracting States will end: a) in respect of taxes withheld at the time the cost from income, which on January 1 or January 1 following the calendar year following the year in which the notes in question; (b)) in respect of other taxes on income and capital: starting with taxes paid in any taxation year that begins on January 1, on or after 1 January in the calendar year following the year in which the relevant note. This, the undersigned, being duly authorised, have signed this Convention. The Convention is drawn up in duplicate in the English, signed in 1994, Reykjavik on October 19. The Government of the Republic of Latvia, the Republic of Iceland signed the PROTOCOL on behalf of the Government of today, of the Convention for the avoidance of double taxation and the prevention of tax evasion regarding income and on capital (hereinafter referred to as "the Convention") between the Republic of Latvia and the Republic of Iceland signed up have agreed upon the following provisions, which forms an integral part of this Convention: 1. in respect of the provisions of this Convention: a the term "use" incorporated companies (statutory body), will be understood that this concept means any legal entity of a public nature, which is constituted under the laws of a Contracting State and which is not participating in another person as only this State, its political subdivisions or local authorities. 2. with regard to article 7 (3): to be understood that the expenditure is allowed to deduct from income, when determining the taxable income of a Contracting State is the only expenditure that is permitted to deduct, in accordance with the national legislation. 3. as regards article 8: to be understood that the term "enterprise of a Contracting State income from the use of maritime transport in international traffic" will be interpreted in accordance with the OECD (OECD) the 1992 Convention, article 8 of the model 7 comments to 14 points, and in any case these income does not include income earned on the quays, storage, Terminal, or other similar ground-based the use of property, except where such income is directly attributable to the business activities of the sea. 4. in respect of article 11 (d)): to be understood that the person is associated with another person, in the case where one person alone or with another, or several persons associated, directly or indirectly, holds more than 50 percent of the other party, or in the event of one or more persons individually, or together directly or indirectly owns more than 50 percent of the two parties. 5. with regard to paragraph 3 of article 12: to be understood that the term "royalties" does not include payments for drilling rig or other similar facilities, which are used in exploration or extraction of hydrocarbons. 6. with regard to paragraph 3 of article 12: have decided that income from the production, trade, and scientific equipment rentals are included in the term "royalties" as defined in paragraph 3 of article 12. 7. with regard to paragraph 2 of article 15: paragraph 2 does not apply in respect of employees who are "rented" (hired out). The application of the first sentence: an employee who is a resident of a Contracting State will be treated as a "rented", if a person they designate (leaseholders) of another person, with the intention to make the work of the other person (the driver) in the framework of the business carried out in the other Contracting State provided that this other person (the Manager) is the second resident of a Contracting State, or use the second Contracting State hosted solo missions and that person (leaseholders) does not in any way responsible for the results of the work to be carried out. In determining when the employee will be considered to be "rented" to do a comprehensive assessment, paying particular attention to whether: (a) the working copy) responsibility for the implementation rests with the driver; (b)) work is done in the workplace, which is located in the driver's possession and responsibility; (c) the remuneration of the person) ("leaseholders") is calculated on the time spent or with reference to any other relationship between the remuneration and the wages received by the employee (the "rented"); d) most of the tools and materials are delivered to the driver; e) person ("leaseholders") unilaterally decide questions about the number of staff and their qualifications. This, the undersigned being duly authorised, have signed this Protocol. Protocol is drawn up in two copies in the English language, signed in Reykjavik in 1994. The Government of the Republic of Latvia, the Republic of Iceland on behalf of the Government of