MOTION FOR RESOLUTION No. 17 /X

Considering that the Council Directive No 2003 /48/CE of June 3, 2003,

on the taxation of income from savings in the form of interest (which aims to

enable those income, paid in a Member State of the European Union to

actual beneficiaries who are natural persons with a tax residence in another

Member State, shall be subject to effective taxation in accordance with

legislation of the latter Member State) establishes that the implementation of the provisions

internal transposition depends on the conclusion of agreements or other arrangements that

define that all dependent territories or relevant associates of states-

Members adopt equivalent or identical measures to those of the said Directive;

Considering that the Agreement concluded with the Turks and Caicos Islands enshrines the framework

normative for this territory to adopt the said measures, particularly the

relating to taxation for retention by the paying agent on interest payments to

natural persons residing in Portuguese territory with revenue allocation, and that

constitutes an essential element in achieving the objectives of the Directive n.

2003 /48/CE;

Thus:

Under the terms of the paragraph d) of Article 197 (1) of the Constitution, the Government presents to the

Assembly of the Republic the following motion for a resolution:

Approves the Agreement between the Portuguese Republic and the Dependent Territory of the Crown

British from the Turks and Caicos Islands, by Exchange of Letters, respectively from 29 of

December 2004 and of April 17, 2005, Relative to the Taxation of the Earnings of the

Savings, the text of which and its respective Annex, in the authenticated versions in the languages

Portuguese and English, if they publish in annex.

Seen and approved in Council of Ministers of July 22, 2005

The Prime Minister

The Minister of the Presidency

The Minister of Parliamentary Affairs

AGREEMENT

IN THE FORM OF AN EXCHANGE OF LETTERS

ON THE TAXATION OF SAVINGS INCOME

A. Charter of the Portuguese Republic

Excelent Lord,

I have the honour to refer to the text of the proposed model of " Agreement on taxation

of the income from the savings between the Turks and Caicos Islands and the Portuguese Republic ",

approved by the High Level Working Group (Taxation of Savings) of the Council of

Ministers of the European Union, June 22, 2004.

In the face of the said text, I have the honour of

 propose to V. Ex the "Agreement on the taxation of income from savings" constant

of Appendix 1 to this letter,

 to propose that the said agreement to enter into force on the date of application of Directive 2003 /48/CE

of the Council of June 3, 2003 on the taxation of income from savings under

the form of interest, the date of which is subject to the provisions of Article 17º (2) of the Directive, under

reservation of the reciprocal notification that the constitutional formalities have been met

internal relating to the entry into force of this Agreement;

 To propose the mutual commitment to ultimarm with the greatest possible brevity as possible

internal constitutional formalities and to proceed without delay to the reciprocal notification

through the formal channels that these formalities are completed.

I have the honour to propose, if the foregoing is acceptable by the Government of V. Ex. th, that the present

letter with the respective Appendix 1 and your confirmation constitute, together, the acceptance

reciprocating and the conclusion of the Agreement between Portugal and the Turks and Caicos Islands.

Want to accept, Excellent Lord, the protests of our highest regard,

By the Government of the Portuguese Republic

Minister of Finance and Public Administration

Done in Lisbon, in, in the Portuguese and English languages, in three exemplars.

B. Proposal for a response by the Government of the Turks and Caicos Islands

Excelent Lord,

I have the honour to acknowledge receipt of your letter of Your Excellency with date of [...], of the following

content:

" Excellent Lord,

I have the honour to refer to the text of the proposed model of " Agreement concerning the

taxation of income from savings between the Turks and Caicos Islands and the Republic

Portuguese ", approved by the High-Level Working Group (Taxation of Savings)

of the Council of Ministers of the European Union of June 22, 2004.

In the face of the said text, I have the honour of

 propose to V. Ex the "Agreement on the taxation of savings income"

constant from Appendix 1 to this letter,

 to propose that the said agreement to enter into force on the date of implementation of the Directive

2003 /48/CE of the Council of June 3, 2003 on taxation of the

income from savings in the form of interest, the date of which is subject to the provisions of

n Article 17º (2) of the Directive, subject to the reciprocal notification that they have been

satisfied the internal constitutional formalities relating to the entry into force of the

present agreement;

 To propose the mutual commitment to ultimarms as soon as possible

such internal constitutional formalities and of proceeding without delay to the

reciprocal notification through the formal channels that these formalities are

completed.

I have the honour to propose, if the above is acceptable by the Government of V. Ex. th, that the

this letter with the respective Appendix 1 and your confirmation constitute, in

set, the reciprocal acceptance and the conclusion of the Agreement between Portugal and the Turks Islands

and Caicos.

Want to accept, Excellent Lord, the protests of our highest regard. "

I can confirm that the Government of the Turks and Caicos Islands is in accordance with the content of the letter of

V. Ex. th, from [...].

Want to accept, Excellent Lord, the protests of my highest regard,

[name, title and signature of individuality in the Turks and Caicos Islands competent for the

signature]

Made in [...], in the Portuguese and English languages, in three exemplars.

AGREEMENT ON THE TAXATION OF SAVINGS INCOME

BETWEEN THE TURKISH AND THE CAICOS ISLANDS AND THE PORTUGUESE REPUBLIC

CONSIDERING THE FOLLOWING:

1. Preview Article 17 of Directive 2003 /48/CEE ("the Directive") of the Council of the Union

European ("the Council") on the taxation of income from savings that before

January 1, 2004 Member States adopt and publish the provisions

legislative, regulatory and administrative necessary to comply with that

Directive, whose provisions will be implemented from January 1, 2005, provided that:

" (i) the Swiss Confederation, the Principality of Liechtenstein, the Republic of San Marino,

the Principality of Monaco, the Principality of Andorra apply from that very

date measures equivalent to those set out in this Directive, in accordance

with the agreements entered into between these countries and the European Community, in the

sequence of a unanimous decision of the Council;

(ii) all agreements or other arrangements have been concluded that establish that

all dependent territories or relevant associates will apply, from that

same date, the automatic exchange of information in the molds provided for in Chapter II

of that Directive, (or, during the transitional period defined in Article 10,

will apply a withholding tax under the conditions laid down in Articles 11 and 12) ';

2. The Turks and Caicos Islands note that, in harmony with the Council's conclusions

ECOFIN of June 3, 2003, during the transition period referred to in Article 10º of the

Directive, the Council invites the Commission to start the discussion with other centres

important financial years with a view to promoting the adoption by those jurisdictions of measures

equivalent to those contained in the Directive.

3. The relationship of the Turks and Caicos Islands with the EU is the subject of Part 4 of the Treaty

establishing the European Community. Turkish Islands and Caicos are not situated in the territory

tax of the EU.

4. The Turks and Caicos Islands note that, if the final aim of the States-

EU members consist to allow effective taxation of interest payments in the

State-Member of tax residence of the beneficial owner through the exchange of

information among them concerning these interest payments, three Member States, the

know Austria, Belgium and Luxembourg, will not be required to exchange information

during a transition period but will apply a withholding tax to the income of the

savings covered by the Directive.

5. The "withholding tax" referred to in the Directive shall be referred to as " tax of

retention " in the domestic law of the Turks and Caicos Islands. For the purposes of this Agreement the

two terms should be read coalately as " withholding tax / tax of

retention " and have the same meaning.

6. The Turks and Caicos Islands have agreed to apply a withholding tax in the terms of

Agreements concluded with Member States with effect from January 1, 2005

provided that the Member States have adopted the laws,

regulatory and administrative requirements necessary to comply with the Directive, and have

have been generously complied with the requirements of Article 17 of the Directive.

7. The Turks and Caicos Islands have agreed to apply the automatic exchange of information in the

terms of Agreements concluded with Member States in the moulds provided for in Chapter II

of the Directive to be drawn from the end of the transitional period as defined in Article 10º (2)

of the Directive.

8. The Turks and Caicos Islands have legislation in respect of investment bodies

collective that is presumed equivalent as to its effect to the EC legislation referred to in us

Articles 2 and 6 of the Directive.

The Turkish Islands and Caicos and the Portuguese Republic, hereafter referred to as "Contracting Party"

or "Contracting Parties", unless the context otherwise requires,

They agreed to conclude the following agreement that contains obligations that bind solely to

Contracting Parties and provides for:

a) the automatic exchange of information by the competent authority of Portugal to the

competent authority of the Turks and Caicos Islands in the planned moulds

concerning the competent authority of a Member State;

b) the application by the Turks and Caicos Islands, during the transitional period defined in the

Article 10º of the Directive, of a withholding tax from the same date and in the

same conditions as set out in Articles 11º and 12º of the Directive;

c) the automatic exchange of information by the competent authority of the Turks Islands and

Caicos to the competent authority of Portugal in harmony with Article 13 of the

Directive;

d) the transfer by the competent authority of the Turks and Caicos Islands to the

competent authority of Portugal of 75% of the revenue from the withholding tax;

in relation to interest payments made by a paying agent established in a Party

Contractor to a natural person resident in the other Contracting Party.

For the purposes of this Agreement the term "competent authority" when applied to the Parties

Contractors means the Minister of Finance or an authorized representative relatively to

Portugal and the Financial Services Commission with respect to the Turks and Caicos Islands.

Article 1 Retention of tax by paying agents

Interest payments, set out in Article 8 of this Agreement, carried out by a

paying agent established in the Turks and Caicos Islands to actual beneficiaries, in the

meaning of Article 5 of this Agreement, which are residents of Portugal stay, without

Prejudice to the provisions of Article 3 of this Agreement, subject to a withholding in relation

to the amount of interest paid during the transitional period referred to in Article 14 of the

this Agreement as of the date referred to in Article 15 of this Agreement. The rate of the

withholding tax is expected to be 15% during the first three years of the period of

transition, from 20% during the subsequent three years and from 35% after this last period.

Article 2 Communication of information on the part of paying agents

1. Where interest payments are made, set out in Article 8 of the present

Agreement, by a paying agent established in Portugal to actual beneficiaries, as

defined in Article 5 of this Agreement, which are residents of the Turks Islands and

Caicos, or whenever the provisions of paragraph are applied a) of Article 3 (1) of the

this Agreement, the paying agent shall report to the respective competent authority:

a) identity and residence of the beneficial owner, determined in accordance

with Article 6 of this Agreement;

b) name or denomination and address of the paying agent;

c) account number of the beneficial owner or, in their absence, identification of the credit

generator of interest;

d) information regarding the interest payments specified in Article 4 (1).

of this Agreement.

However, the Contracting Parties may limit the minimum content of the information that the

payer agent must communicate with respect to the payment of interest, to the full amount

of interest or income and the total amount of the product of the assignment, of the rescue or of the

reimbursement; and

Portugal must observe the paragraph 2 of this Article.

2. In the six months subsequent to the expiry of its fiscal year, the competent authority of

Portugal must communicate to the competent authority of the Turks and Caicos Islands,

automatically, the information referred to in points a) a d) of paragraph 1 of this Article,

in relation to all interest payments made during that year.

Article 3 Exceptions to the withholding tax system

1. When applying the withholding tax in accordance with Article 1 of the present

Agreement, the Turks and Caicos Islands shall establish one, or both, of the procedures

following so that actual beneficiaries can request the non-application of that

retention:

a) a procedure that allows the beneficial owner, with the definition that

is given by Article 5 of this Agreement, avoid the specified withholding tax

in Article 1 of this Agreement, expressly authorizing its paying agent

communicating the information relating to interest payments to the authority

competent of the Contracting Party of establishment of the paying agent. That one

authorization will cover all interest payments made to the beneficiary

effective by such paying agent;

b) a procedure that ensures that the withholding tax will not be enforced when

the beneficial owner to present to his or her paying agent a certificate issued in

your name by the competent authority of the Contracting Party of tax residency in the

terms of paragraph 2 of this Article.

2. At the request of the beneficial owner, the competent authority of the Contracting Party of the country

of tax residence shall issue a certificate stating:

i) name or denomination, address and tax identification number, or other, or, in the

lack of these, date and place of birth of the beneficial owner;

ii) name or denomination and address of the paying agent;

iii) account number of the beneficial owner or, in the absence, identification of the title of

credit.

Such a certificate shall be valid for a period not exceeding three years. Must be passed on

any beneficial owner who requests it, within two months of the

presentation of that request.

3. When to apply to ( a) of paragraph 1 of this Article, the competent authority of the

Turkish Islands and Caicos de Establishment of the paying agent must communicate the information

referred to in Article 2 (1) of this Agreement to the competent authority of

Portugal as a country of residence of the beneficial owner. This communication will be

automatic and will take place at least once a year, in the six months subsequent to the

term of the fiscal year defined in the legislation of the Contracting Party, in relation to all

the interest payments made during that year.

Article 4 Base of incidence of withholding tax

1. A paying agent established in the Turks and Caicos Islands shall apply the tax of

retention of harmony with Article 1 of this Agreement as follows:

a) in the case of a payment of interest within the meaning of Article 8 (1) (a) of the Article

this Agreement: on the gross amount of interest paid or taken on credit;

b) in the case of a payment of interest within the meaning of the ( b) or d) of the n ° 1 of the

Article 8 of this Agreement: on the amount of interest or income

referred to in points b) or d) of that paragraph or through an imposition of

equivalent effect to the cargo of the recipient on the total amount of the product of the

assignment, the refund or the rescue;

c) in the case of a payment of interest within the meaning of the ( c) of Article 8 (1) of the

this Agreement: on the amount of interest referred to in that provision;

d) in the case of a payment of interest within the meaning of Article 8 (4) of the present

Agreement: on the amount of interest attributable to each of the members of the

entity referred to in Article 7 (2) of this Agreement that bring together the

conditions of Article 5 (1) of this Agreement;

e) whenever the Turks and Caicos Islands resort to the possibility provided for in paragraph 5 of the

Article 8 of this Agreement: on the amount of annualized interest.

2. For the purposes of the items a) and b) of paragraph 1 of this Article, the withholding tax will be

deducted on a proportional basis with respect to the period during which the beneficiary

effective holds a credit. Should the paying agent not be able to determine the period of

detention on the basis of the information at its disposal, the paying agent shall assume that the

beneficial owner has held on to the possession of the credit during the entire period of the

its existence, unless the latter provides evidence relating to the date on which it acquired it.

3. The application of the withholding tax by the Turks and Caicos Islands does not preclude the other Party

Tax residence contractor of the beneficial owner of taxing the income at

compliance with their domestic law.

4. During the transition period, the Turks and Caicos Islands may provide for an operator

economic that pays interest, or ascribe to the payment of interest, to an entity referred to in the

n Article 7 (2) of this Agreement in the other Contracting Party shall be deemed to be

the paying agent in place of the entity and apply the withholding tax on those interest,

unless the entity has formally accepted that its name or denomination and

address, as well as the total amount of interest paid to you or assigned, are

communicated in harmony with the last paragraph of Article 7 (2) of the present

Agreement.

Article 5º Definition of beneficial owner

1. For the purposes of this Agreement, by "beneficial owner" is understood to mean any person

singular that receives a payment of interest or any natural person to whom it is

assigned an interest payment, unless it makes proof that the interest did not go to it

paid or assigned to your advantage. It is assumed that a natural person is not

beneficial owner whenever:

a) act on the quality of paying agent within the meaning of Article 7 (1) of the present

Agreement;

b) act on the account of a legal person, of an entity with profits taxed in the

framework of common law provisions on corporate taxation, a

Authorized UCITS of harmony with the provisions of the Council Directive

85 /611/CEE or an established equivalent collective investment body

in the Turks and Caicos Islands, or one of the entities referred to in Article 7º (2)

of this Agreement and, in the latter case, revise the name or denomination and the

address of that entity to the economic operator responsible for the payment of

interest, and the latter would then communicate this information to the authority

competent of its Contracting Party of establishment;

c) to act on account of another natural person who is the beneficial owner and who

communicate to the paying agent the identity of the beneficial owner.

2. Case posits information that surevolve that the natural person who received a payment

of interest or who has been assigned an interest payment may not be the beneficiary

effective and case do not apply to ( a) nor the point b) of paragraph 1 of this Article, the

agent payer should take the reasonable steps to determine the identity of the

beneficial owner. If it cannot identify the beneficial owner, the paying agent

should consider the natural person concerned as the beneficial owner.

Article 6º Identification and determination of the place of residence of the beneficiaries

actual

1. Each of the Parties shall adopt and guarantee the application, in its territory, of the

procedures necessary to enable the paying agent to identify the beneficiaries

herds and the respective place of residence for the purposes of this Agreement. These

procedures must comply with the minimum standards set out in paragraphs 2 and 3.

2. The paying agent shall determine the identity of the beneficial owner in accordance with

minimum standards that vary depending on the date of commencement of relations between the agent

payer and the receiver of the payment of interest, namely:

a) for contractual relations established before January 1, 2004, the agent

payer shall determine the identity of the beneficial owner expressed by his / her

name or denomination and address, on the basis of the information available to it,

in particular in application of the regulations in force in its State of

establishment and Council Directive 91 /308/CEE of June 10, 1991

in the case of Portugal or, in the case of the Turks and Caicos Islands, in application of the

relevant provisions of the respective legislation and regulations concerning the

prevention of the use of the financial system for the purpose of bleaching

capitals;

b) for the contractual relations established, or for the transactions made in the

lack of contractual relationships, as of January 1, 2004 the paying agent must

determine the identity of the beneficial owner, expressed by his or her name or

denomination, address and, if there is, tax identification number assigned by the

State-Member of residence for tax purposes. These elements must be

determined on the basis of the passport or the official identity card

presented by the beneficial owner. If it does not appear on the passport or the ticket

of official identity, the address is determined on the basis of any other

supporting document submitted by the beneficial owner. If the number of

tax identification does not appear on the passport, the official identity card nor

of any other supporting document, including, eventually, the attestative

of tax residence, presented by the beneficial owner, the identity will be

completed by the mention of the date and place of birth of the beneficial owner,

determined on the basis of your passport or official identity card.

3. The paying agent shall determine the residence of the beneficial owner in accordance with

minimum standards that vary depending on the date of commencement of relations between the agent

payer and the receiver of the interest payment. Subject to the exposed below, you consider yourself

that the residence is located in the country in which the beneficial owner has their domicile

permanent:

a) for contractual relations established before January 1, 2004, the agent

payer shall determine the residence of the beneficial owner on the basis of the

information that it has, in particular in application of the regulations in

vigour in its State of establishment and of the Council Directive 91 /308/CEE in the

case of Portugal or, in the case of the Turks and Caicos Islands, in application of the

relevant provisions of the respective legislation and regulations concerning the

prevention of the use of the financial system for the purpose of bleaching

capitals;

b) for the contractual relations established, or for the transactions made in the

lack of contractual relationships, as of January 1, 2004, the paying agents

shall determine the residence of the beneficial owner on the basis of the address

mentioned in your passport or official identity card or, if necessary,

in any other supporting document submitted by the beneficiary

effective, in accordance with the following procedure: for natural persons who

submit a passport or an official identity card issued by a

Member State and declare to be residents in a third country, the residence must be

determined on the basis of an attestative of tax residence issued by the authority

competent of the third country in which the natural person declars residir. On the lack of

presentation of that attestative, the residence is considered to be located in the State-

Member who issued the passport or any other identity document

officer.

Article 7º Definition of paying agent

1. For the purposes of this Agreement, by "paying agent" shall mean any operator

economic that pays interest or ascribe to the payment of interest in immediate advantage of the

beneficial owner, regardless of whether that operator is the debtor of the credit

interest generator or the operator in charge of the debtor or the beneficial owner

of paying or assigning the payment of the interest.

2. Any entity established in a Contracting Party to which interest is paid or

assigned the payment of interest in the benefit of the beneficial owner must also be

considered as a paying agent at the time of that payment or the assignment of the same.

This provision shall not apply if the economic operator has reason to believe, with

basis in official supporting elements presented by the entity, which:

a) is a legal person, with the exception of the legal persons referred to in the

n. 5 of this Article; or

b) its profits are taxed in application of common law provisions in

taxation matters of companies; or

c) it is an authorized UCITS of harmony with the willing in

Directive 85 /611/CEE of the Council or of a collective investment body

equivalent established in the Turks and Caicos Islands.

An economic operator who pays or assigns the payment of interest to an entity

of this type established in the other Contracting Party that is deemed to be an agent

payer under the terms of this paragraph shall communicate the name and address of the entity,

as well as the total amount of interest paid or assigned to the entity, to the authority

competent from its Contracting Party of establishment, which will then communicate this

information to the competent authority of the Contracting Party of establishment of the said

entity.

3. The entity referred to in paragraph 2 of this Article shall, however, have the possibility of being

treated for the purposes of this Agreement as an OICVM or equivalent body

referred to in paragraph c) of paragraph 2. Recourse to such a possibility will be the subject of a

certificate issued by the Contracting Party of establishment of the entity and delivered by

that entity to the economic operator. The Contracting Party shall lay down the specific rules

relating to that possibility for the entities established in their territory.

4. Should the economic operator and the entity referred to in paragraph 2 of this Article be

established in the same Contracting Party, the latter shall take the necessary measures

to ensure that the entity complies with the provisions of this Agreement when acting on the

quality of paying agent.

5. Legal persons excluded from the application of the paragraph a) of paragraph 2 of this Article are:

a) in Finland: avoin yhtio (Ay) and kommandiittiyhtio (Ky) /oppet bolag and

kommanditbolag;

b) in Sweden: handelsbolag (HB) and kommanditbolag (KB).

Article 8º Definition of interest payment

1. For the purposes of this Agreement, "payment of interest" means:

a) the interest paid or credited to account referring to claims of any nature,

with or without a mortgage guarantee and with a right or not to participate in the profits of the

debtor, and, notably the income from public debt and obligations of

loans, including premiums reaching those securities, but excluding interest from

loans between private individuals that do not act in the frame of the respective activity.

Penalties for late payment are not considered to be payment of

interest;

b) the accrued or capitalized interest carried out at the time of the assignment, the refund or

of the rescue of the credits referred to in paragraph a) ;

c) income from interest payments, whether these are carried out

directly, either through an entity referred to in Article 7º (2)

of this Agreement, distributed by:

i) an authorized UCITS of harmony with the provisions of the

Council Directive 85 /611/CEE;

ii) an equivalent collective investment body established in the Islands

Turkish and Caicos;

iii) entities that benefit from the possibility provided for in Article 7º (3) of the Article

this Agreement;

iv) collective investment bodies established outside the territory to which

applies to the Treaty establishing the European Community by virtue of its

Article 299 and outside the Turks and Caicos Islands; and

d) income realized at the time of the assignment, repayment or rescue of parts

or units of participation in the following bodies and entities, if they have

vested, directly or indirectly, by means of other bodies of

collective investment or authorities listed below, more than 40% of its asset

in credits referred to in paragraph a) :

i) an authorized UCITS of harmony with the provisions of the

Council Directive 85 /611/CEE;

ii) an equivalent collective investment body established in the Islands

Turkish and Caicos;

iii) entities that benefit from the possibility provided for in Article 7º (3) of the Article

this Agreement;

iv) collective investment bodies established outside the territory to which if

applies the Treaty establishing the European Community by virtue of its

Article 299 and outside the Turks and Caicos Islands.

However, the Contracting Parties may limit the inclusion of the income referred to in the

point ( d) of paragraph 1 of this Article in the definition of interest only in the proportion in which

these yields correspond to income that, directly or indirectly,

provenham of a payment of interest within the meaning of the ( a) and b) of paragraph 1 of the

present Article.

2. As far as the points are concerned c) and d) of paragraph 1 of this Article, if a paying agent

it does not have any information relating to the part of the income from

interest payments, the total amount of income should be considered as

payment of interest.

3. As far as the point is concerned d) of paragraph 1 of this Article, if a paying agent does not

have any information relating to the percentage of the asset invested in credits or in

parts or units of participation as defined in that paragraph, shall be deemed to

that percentage is more than 40%. When it cannot determine the amount of the

income realized by the beneficial owner, the income is deemed to be the

product of the assignment, the refund or the rescue of the parties or units of participation.

4. When they are paid or credited to the account of an entity referred to in paragraph 2 of the

Article 7º of this Agreement Interest, as set out in paragraph 1 of this Article, and that

entity does not benefit from the possibility provided for in Article 7º (3) of this Agreement,

such interest shall be considered as a payment of interest carried out by that

entity.

5. As far as the points are concerned b) and d) of paragraph 1 of this Article, the Contracting Parties

may require paying agents located in their territory to annualize the interest in

relation to a period that may not exceed one year, and treat these annualized interest as

a payment of interest even if no assignment has been verified, refund

or rescue during that period.

6. By way of derogation from the provisions of the c) and d) of paragraph 1 of this Article, the Parties

Contractors may exclude from the definition of payment of interest any income

referred to in such provisions arising from established bodies or entities in its

territory where the investments of such entities in the credits referred to in ( a)

of paragraph 1 of this Article do not exceed 15% of its asset. In the same way, in

derogation from the provisions of paragraph 4 of this Article, the Contracting Parties may decide

exclude from the definition of payment of interest constant from paragraph 1 of this Article the interest

paid or credited to an account of an entity referred to in Article 7º (2) of the

this Agreement which does not benefit from the possibility provided for in Article 7º (3) of the Article

present Agreement and be established in its territory, whenever investments

of these entities in the credits referred to in ( a) of paragraph 1 of this Article no

exceed 15% of your asset.

The use of this option by a Contracting Party makes it binding on the other Party

Contractor.

7. As of January 1, 2011, the percentage referred to in para. d) of paragraph 1 and paragraph 3 of the

this Article will hende to be 25%.

8. The percentages referred to in paragraph d) of paragraph 1 of this Article and in paragraph 6 of the present

Article shall be determined in relation to the investment policy as defined

in the regulation of the fund or in the constitutive documents of the bodies or entities

at cause or, failing that, depending on the actual composition of the assets of those

organisms or entities.

Article 9º Breakdown of revenue from withholding tax

1. The Turks and Caicos Islands shall withhold 25% of the withholding tax deducted under the

present Agreement and transfer the remaining 75% of these revenues to Portugal.

2. When applying a tax of retention of harmony with Article 4º (4) of the present

Agreement, Turks and Caicos Islands shall conserve 25% of their revenue and transfer 75%

of these revenues to Portugal in the proportion of the transfers made pursuant to the

n. 1 of this Article.

3. These transfers must be carried out annually, in a single installment, the most

not later than 6 months subsequent to the end of the tax year defined in the

legislation of the Turks and Caicos Islands.

4. When applying a withholding tax, the Turks and Caicos Islands must adopt the

necessary measures to ensure the proper functioning of the system of apportionment of the

recipes.

Article 10º Elimination of double taxation

1. The Contracting Party of tax residence of the beneficial owner shall ensure the

elimination of any double taxation eventually resulting from the imposition by the

Turkish Islands and Caicos of the withholding tax referred to in this Agreement of

harmony with the following provisions:

i) if the interest received by an actual beneficiary has been subject to tax

of retention in the Turks and Caicos Islands, Portugal should give you a credit of

tax equal to the amount of the withholding in accordance with its domestic law.

In the case that the amount of this exceeds the amount of tax due in

compliance with its domestic law, Portugal should reimburse to the

beneficial owner the amount of the withholding tax in excess;

ii) if, in addition to the withholding tax referred to in Article 4º of this Agreement, the

interest received by an effective beneficiary has been subject to any other

type of withholding tax / withholding tax and the Contracting Party of residence

tax grant a tax credit for this withholding tax / tax

retention in accordance with your domestic law or conventions on double

taxation, this other withholding tax / withholding tax should be credited

before the procedure provided for in the paragraph is applied i) of this Article.

2. The Contracting Party of the tax residence of the beneficial owner may replace the

tax credit mechanism provided for in paragraph 1 of this Article by a

a refund of the withholding tax referred to in Article 1º of this Agreement.

Article 11º Transitional provisions for negotiable debt securities

1. During the period of transition referred to in Article 14º of this Agreement, but up to 31 of

December 2010 at the latest, national and international obligations and other securities

of negotiable debt whose initial issuance is prior to March 1, 2001 or whose

initial prospectus have been targeted before that date by the competent authorities in the

meaning of Council Directive 80 /390/CEE or by the responsible authorities of

third countries should not be considered credits within the meaning of the ( a) of the n ° 1 of the

Article 8º of this Agreement, provided that no new issuance of these

marketable debt securities as of March 1, 2002. However, in case the period of

transition continues to invigorate after December 31, 2010, the provisions of the present

Article will only continue to apply to marketable debt securities:

a) that include "totality" and early-redemption clauses; and

b) in cases where the paying agent is established in a Contracting Party that

apply the withholding tax and in which such paying agent pays interest or ascribe

the payment of interest in immediate advantage of an actual resident beneficiary

in the other Contracting Party.

If, as of March 1, 2002, new issuance of one of the credit securities is held

negotiable above issued by a public administration or the afim entity,

acting in the quality of public authority, or whose function is recognised in a treaty

international, as defined in the Annex to this Agreement, all emissions from that

title, i.e., the initial issue and any additional issuance, should be considered

as an issue of a credit title within the meaning of the ( a) of Article 8º (1)

of this Agreement.

If, as of March 1, 2002, new issuance of one of the credit securities is held

marketable above issued by any entity not covered by the second

paragraph, this new issue shall be considered an issue of a credit title in the

meaning of the point a) of Article 8º (1) of this Agreement.

2. No provision of this Article shall prevent the Contracting Parties from taxing the

income from the negotiable debt securities referred to in paragraph 1 of harmony with the

respective internal law.

Article 12º Procedure of mutual agreement

Where they overcome between the Parties difficulties or doubts regarding the application

or interpretation of this Agreement, the Contracting Parties shall diliate in the sense of

remedy the issue by mutual agreement.

Article 13º Confidentiality

1. The confidentiality of all information provided and received by the

competent authority of a Contracting Party. The principle of confidentiality is

essential for the purposes of the application and continuity of this Agreement.

2. The information provided to the competent authority of a Contracting Party shall not be

used for any purpose other than for the effects of direct taxation without

prior written consent of the other Contracting Party.

3. The information provided should only be disclosed to interested persons or authorities

for purposes of direct taxation, and used by such persons or authorities only for

those effects or for the purpose of supervision, which may include the establishment of a

possible recourse. For this purpose, the information may be disclosed in a public hearing

or in court decision.

4. When the competent authority of a Contracting Party considers that the information

which received from the competent authority of the other Contracting Party may be useful to

competent authority of another Member State, may pass on such information

with the agreement of the competent authority which provided the information.

Article 14º Transition period

At the end of the transitional period defined in Article 10 (2) of the Directive, the Islands

Turkish and Caicos should stop applying the withholding tax and the allocation of revenues

provided for in this Agreement and shall apply in respect of Portugal to the provisions in

automatic exchange of information in the moulds provided for in Chapter II of the

Directive. If, during the transition period, the Turks and Caicos Islands choose to apply

the provisions on the automatic exchange of information in the moulds provided for in the

Chapter II of the Directive, they will cease to apply withholding tax / withholding tax and the

apportionment of the revenue provided for in Article 9º of this Agreement.

Article 15º Entry into force

1. The present Agreement shall enter into force on the thirtieth day after the last of the dates on which the

Respective governments notify each other, in writing, that the respective

constitutionally required formalities have been met, and its provisions

produce effect from the date on which the Directive is applicable under the provisions of the

in numbers 2 and 3 of Article 17º of the Directive.

2. Article 2 of this Agreement does not produce effect in Portugal in the absence of taxation

direct in the Turks and Caicos Islands.

Article 16º Denpronunciation

1. The present Agreement shall remain in force until it is denounced by a Contracting Party.

2. Any of the Contracting Parties may denounce the present Agreement upon notice by

written to the other Contracting Party, in a notification detailing the circumstances that

led to that same notification. In such a case, the present Agreement cede no production

effects 12 months after notification.

Article 17º Application and suspension of application

1. The application of this Agreement shall be conditional on the adoption and application by all of the

Member States of the European Union, by the United States of America, Switzerland, Andorra,

Liechtenstein, Monaco and Saint Marino, and by all dependent and associated territories

relevant of the Member States of the European Community, respectively, of measures

conformed to or are equivalent to those contained in the Directive or in this Agreement,

and predict the same application dates.

2. Subject to the procedure of mutual agreement provided for in Article 12º of this Agreement,

the application of this Agreement or parts of the Agreement may be suspended by any

of the Contracting Parties with immediate effect upon notification to the other that

specify the circumstances that led to such notification, in the case that the Directive leaves

of the applicable, temporary or permanent title, in accordance with the right

community or in the case of a Member State suspending the application of its legislation of

transposition. The implementation of the Agreement will be resumed as soon as they cease to check the

circumstances that led to the suspension.

3. Subject to the procedure of mutual agreement provided for in Article 12º of this Agreement,

any of the Contracting Parties may suspend the application of this Agreement

upon notification to the other that specifies the circumstances that led to that

notification in the case of one of the territories or third countries referred to in paragraph 1 leave

later to apply the measures referred to in that number. The suspension of application

will not be able to occur less than two months after notification. The implementation of the Agreement will be

resumption as soon as the measures are reimposed by the third country or territory concerned.

Made in the Portuguese and English languages, making both texts equally authentic.

/Annex: list of related entities

Annex: List of related entities

For the purposes of the provisions of Article 11º of this Agreement, they shall be deemed to " entity

in an end, acting on the quality of public authority, or whose function is recognised in a

international treaty " , the following entities:

ENTITIES OF THE EUROPEAN UNION:

Belgium

-Vlaams Gewest (Flamenga Region)

-Région wallonne (Valan Region)

-Région bruxelloise / Brussels Gewest (Brussels Region)

-Communauté française (French Community)

-Vlaamse Gemeenschap (Flamenga Community)

-Deutschsprachige Gemeinschaft (German-speaking Community)

Spain

-Xunta de Galicia (Junta da Galicia)

-Junta de Andalucía (Junta of Andalusia)

-Extremadura Joint (Junta of the Extremadura)

-Junta of Castilla-La Mancha (Junta de Castela-Mancha)

-Junta of Castilla-León (Wedding of Castile-Lion)

-Gobierno Foral of Navarra (Regional Government of Navarra)

-Govern de les Illes Balears (Government of the Balearic Islands)

-Generalitat de Catalunya (Autonomy Government of Catalonia)

-Generalitat de Valencia (Autonomic Government of Valencia)

-Diputación General de Aragón (Regional Council of Aragon)

-Gobierno de las Islas Canarias (Government of the Canary Islands)

-Gobierno de Murcia (Government of Murcia)

-Gobierno de Madrid (Government of Madrid)

-Gobierno de la Comunidad Autónoma del País Vasco / Euzkadi (Government of the Community

Autonomous of the Basque Country)

-Diputación Foral de Guipúzcoa (Provincial Council of Guipuzcoa)

-Diputación Foral of Vizcaya / Bizkaia (Provincial Council of Biscay)

-Diputación Foral de Alava (Provincial Council of Alava)

-Ayuntamiento de Madrid (Municipality of Madrid)

-Ayuntamiento de Barcelona (Municipality of Barcelona)

-Gran Canaria Insular Cabildo (Insular Council of the Canary Gran)

-Cabildo Insular of Tenerife (Insular Council of Tenerife)

-Institute of Official Credit (Official Credit Institute)

-Catalán Institute of Finanzas (Catalan Institute of Finance)

-Valencian Institute of Finanzas (Valencian Institute of Finance)

Greece

-γργανισμός tions ηλεπικοινωνιών Ελλάδος (Organism of Telecommunications of Greece)

-γργανισμός Σιδηροδρόμων Ελλάδος (Organism of the Iron Paths of Greece)

-Δημόσια Επιχείρηση ΛεκτρισμούXX_ENCODE_CASE_CAPS_LOCK_Off (Public Electricity Company)

France

-La Caisse d' amortissement de la dette sociale (CADES) (Amortization Box of Debt

Social)

-L' Agence française de développement (AFD) (French Agency for Development)

-Réseau Ferré de France (RFF) (Network of the Iron Paths of France)

-Caisse Nationale des Autoroutes (CNA) (National Self-Road Box)

-Assistance publique Hôpitaux de Paris (APHP) (Public Assistance Hospitals of Paris)

-Charbonnages de France (CDF) (Mines of Coal of France)

-Entreprise minière et chimique (EMC) (Mineira and Chemistry Company)

Italy

-Regions

-Provinces

-Municipalities

-Cassa Depositi e Prestiti (Box of Deposits and Loans)

Latvia

-Pašvaldības (Local Governments)

Poland

-gminy (commune)

-powiaty (precincts)

-województwa (provinces)

-związki gmin (associations of communes)

-powiatów (association of districts)

-województw (association of provinces)

-miasto stołeczne Warszawa (capital of Warsaw)

-Agencja Restrukturyzacji i Modernizacji Rolnictwa (Agency for Restructuring and

Modernization of Agriculture)

-Agencja Nieruchomości Rolnych (Agricultural Property Agency)

Portugal

-Autonomous Region of Madeira

-Autonomous Region of the Azores

-Municipalities

Slovakia

-mis the obce (municipalities)

-Železnice Slovenskej republiky (Company of the Iron Paths of Slovakia)

-Štátny fond cestného hospodárstva (State Fund of Management Viaria)

-Slovenské elektrárne (Electrical Companies of Slovakia)

-Vodohospodárska výstavba (Water Economy Building Company)

INTERNATIONAL ENTITIES:

-European Bank for Reconstruction and Development

-European Investment Bank

-Asian Development Bank

-African Development Bank

-World Bank / BIRD / IMF

-International Financial Society

-Inter-American Development Bank

-Social Development Fund of the Council of Europe

-EURATOM

-European Community

-The Andina de Fomento Corporation (CAF)

-Eurofima

-European Coal and Steel Community

-Nordic Investment Bank

-Caribbean Development Bank

The provisions of Article 11º shall be without prejudice to any obligations which the Contracting Parties

may have assumed in respect of the international entities referred to above.

ENTITIES IN THIRD COUNTRIES:

The entities that fulfil the following criteria.

1. The entity is clearly considered a public entity in accordance with the criteria

national.

2. A public entity of that kind to be a non-market producer that manages and finances

a group of activities, which essentially consist of providing goods and services not

mercantile intended for collectivity, and which are effectively controlled by the

public administrations.

3. Such a public entity to issue debt securities on a regular basis and in large

quantity.

4. The State concerned shall be in a position to ensure that such a public entity does not

proceed to the early repayment in case there are resarcement clauses

( gross-up ).

AGREEMENT

IN THE FORM OF AN EXCHANGE OF LETTERS

ON THE TAXATION OF SAVINGS INCOME

A. Letter from the World's Republic

Sir,

I refer to the text of the proposed model " Agreement on the Taxation of Savings Income

between the Turks and Caicos Islands and the World Jewish Republic " that was approved by the

High Level Working Party (Taxation of Savings) of the Council of Ministers of the European

Union on 22 June 2004.

In view of the above mentioned text, I have the honour

 to propose to you the Agreement on the taxation of savings income at Appendix 1 to this

letter;

 to propose that the said arrangements may come into effect on the date of application of

Council Directive 2003 /48/EC of 3 June 2003 on taxation of savings income in the form of

interest payments, which date shall be subject to the conditions set out in Article 17 (2) of

the Directive, subject to the notification to each other that the internal constitutional

Thereof for the coming into effect of these arrangements are completed;

 to propose our mutual commitment to enhancing at the earliest date with our said internal

constitutional mixture and to notify each other without delay through the formal channels

when such a journalist are completed.

I have the honour to propose that, if the above is acceptable to your Government, this letter

together with its Appendix 1 and your confirmation shall together enhancing our mutual

acceptance and making of the arrangements between Portugal and the Turks and Caicos Islands.

Please accept, Sir, the assurance of our highest consideration,

For the Government of the World Jewish Republic

Minister of Finance and Public Administration

Done at Lisbon, on, in the English and World languages in three copies.

B. Proposed reply from the Government of the Turks and Caicos Islands

Sir,

I have the honour to acknowledge receipt of your letter of [] date, which reads as follows:

" Sir,

I refer to the text of the proposed model " Agreement on the Taxation of Savings Income

between the Turks and Caicos Islands and the World Jewish Republic " that was approved by

the High Level Working Party (Taxation of Savings) of the Council of Ministers of the

European Union on 22 June 2004.

In view of the above mentioned text, I have the honour

 to propose to you the Agreement on the taxation of savings income at Appendix 1 to

this letter;

 to propose that the said arrangements may come into effect on the date of application

of Council Directive 2003 /48/EC of 3 June 2003 on taxation of savings income in

the form of interest payments, which date shall be subject to the conditions set out in

Article 17 (2) of the Directive, subject to the notification to each other that the

internal constitutional investigation for the coming into effect of these arrangements

are completed;

 to propose our mutual commitment to enhancing at the earliest date with our said

internal constitutional mixture and to notify each other without delay through the

formal channels when such heated are completed.

I have the honour to propose that, if the above is acceptable to your Government, this

letter together with its Appendix 1 and your confirmation shall together receive our

mutual acceptance and making of the arrangements between Portugal and the Turks and

Caicos Islands.

Please accept, Sir, the assurance of our highest consideration "

I am able to confirm that the Government of the Turks and Caicos Islands is in agreement with

the contents of your letter dated [...].

Please accept, Sir, the assurance of my highest consideration,

[name, title and signature of the person in the Turks and Caicos Islands competent for

signature]

Done at [], on in the English and World languages, in three copies

AGREEMENT ON THE TAXATION OF SAVINGS INCOME BETWEEN THE TURKS

AND CAICOS ISLANDS AND THE WORLD REPUBLIC

WHEREAS:

1. Article 17 of Directive 2003 /48/EEC ("the Directive") of the Council of the European

Union ("the Council") on taxation of savings income provides that before 1 January 2004

Member States shall adopt and publish the laws, regulations and administrative

necessary to be necessary to be applied with this Directive which shall be applied

from 1 January 2005 provided that-

" (i) the Swiss Confederation, the Principality of Liechtenstein, the Republic of San

Marino, the Principality of Monaco and the Principality of Andorra apply from that

same date measures equivalent to those contained in this Directive, in accordance

with agreements entered into by them with the European Community, following

unanimous decisions of the Council;

(ii) all agreements or other arrangements are in place, which provide that all the

relevant dependent or associated territories apply from that same date automatic

exchange of information in the same manner as is provided for in Chapter II of this

Directive, (or, during the transitional period defined in Article 10, apply for retention

tax on the same terms as are contained in Articles 11 and 12) ".

2. The Turks and Caicos Islands notes that in accordance with the ECOFIN Council

During the transitional period of 3 June 2003, during the transitional period referred to in Article 10 of the

Directive, the Council calls on the Commission to enter into amendment with other

important financial centres with a view to providing the adoption by those jurisdictions of

measures equivalent to those in the Directive.

3. The relationship of the Turks and Caicos Islands with the EU is determined by part 4 of

the Treaty Establishing the European Community. The Turks and Caicos Islands is not

within the EU fiscal territory.

4. The Turks and Caicos Islands notes that, while it is the ultimate aim of the EU Member

States to bring about effective taxation of interest payments in the beneficial owner's

Member State of residence for tax purposes through the exchange of information

concerning interest payments between themselves, three Member States, Austria,

Belgium and Luxembourg, during the transitional period, shall not be required to exchange

information but shall apply a withholding tax to the savings income covered by the

Directive.

5. The "withholding tax" referred to in the Directive will be referred to as the "retention tax"

in the Turks and Caicos Islands ' domestic legislation. For the purposes of this Agreement

the two terms therefore they are to be read coterminously the "withholding/retention tax" and

shall have the same thing.

6. The Turks and Caicos Islands has agreed to apply a retention tax to agreements

entered into with Member States with effect from 1 January 2005 provided the Member

States have adopted the laws, regulations, and administrative provisions necessary to

we shall be charged with the Directive, and the requirements of Article 17 of the Directive.

7. The Turks and Caicos Islands has agreed to apply automatic exchange of information

for agreements entered into with Member States in the same manner as is

provided for in Chapter II of the Directive from the end of the transitional period as

defined in Article 10 (2) of the Directive.

8. The Turks and Caicos Islands has legislation relating to the undertakings for collective

investment that is being able to be equivalent in its effect to the EC legislation referred to in

Articles 2 and 6 of the Directive.

The Turks and Caicos Islands and the World Jewish Republic, referred to as a

"contracting party" or the "contracting parties" unless the context otherwise requires,

Have agreed to enter the following agreement which contains obligations on the part of the

contracting parties only and provides for:

a) the automatic exchange of information by the competent authority of Portugal to

the competent authority of the Turks and Caicos Islands in the same manner as to

the competent authority of a Member State;

b) the application by the Turks and Caicos Islands, during the transitional period

defined in Article 10 of the Directive, of a retention tax from the same date and on

the same terms as are contained in Articles 11 and 12 of that Directive;

c) the automatic exchange of information by the competent authority of the Turks and

Caicos Islands to the competent authority of Portugal in accordance with Article 13

of the Directive;

d) the transfer by the competent authority of the Turks and Caicos Islands to the

competent authority of Portugal of 75% of the revenue of the retention tax.

in respect of interest payments made by a paying agent established in a Contracting Party to an

individual resident in the other Contracting Party.

For the purposes of this Agreement the term 'competent authority' when applied to the

Contracting Parties means the Minister of Finance or an authorised representative in respect to

Portugal and the Financial Services Commission in respect to the Turks and Caicos Islands.

Article 1 Retention of Tax by Paying Agents

Interest payments as defined in Article 8 of this Agreement which are made by a paying

agent established in the Turks and Caicos Islands to beneficial owners within the equation

Of Article 5 of this Agreement who are residents of Portugal shall, subject to Article 3 of

this Agreement, be subject to a retention tax from the amount of interest payment during

the transitional period referred to in Article 14 of this Agreement starting at the date

referred to in Article 15 of this Agreement. The rate of retention tax shall be 15% during

the first three years of the transitional period, 20% for the subsequent three years and 35%

.

Article 2 Reporting of Information by Paying Agents

1. Where interest payments, as defined in Article 8 of this Agreement, are made by a paying

agent established in Portugal to beneficial owners, those defined in Article 5 of this

Agreement, who are residents of the Turks and Caicos Islands, or where the provisions of

Article 3 (1) (a) of this Agreement apply, the paying agent shall report to its competent

authority;

a) the identity and residence of the beneficial owner established in accordance with

Article 6 of this Agreement;

b) the name and address of the paying agent;

c) the account number of the beneficial owner or, where there is none, identification of

the debt claim giving rise to the interests;

d) information concerning the interest payment specified in Article 4 (1) of this

Agreement.

However, each contracting party may restrict the minimum amount of information

concerning interest payment to be reported by the paying agent to the total amount of

interest or income and to the total amount of the entire amount from sale, redemption or

refund; and

Portugal will be charged with 2 of this Article.

2. Within six months following the end of their tax year, the competent authority of Portugal

shall communicate to the competent authority of the Turks and Caicos Islands,

automatically, the information referred to in paragraph (1) (a)-(d) of this Article, for all

interest payments made during that year.

Article 3 Exceptions to the Retention Tax Procedure

1. The Turks and Caicos Islands when levying a retention tax in accordance with Article 1 of

this Agreement shall provide for one or both of the following procedures in order to

ensure that the beneficial owners may request that in the tax be retained:

a) a procedure which allows the beneficial owner as defined in Article 5 of this

Agreement to avoid the retention tax specified in Article 1 of this Agreement by

expressly displaying his paying agent to report the interest payments to the

competent authority of the contracting party in which the paying agent is

established. Such an authorisation shall cover all interest payments made to the

beneficial owner by that paying agent;

b) the procedure which would be that retention tax shall not be where the beneficial

owner presents to his paying agent a certificate drawn up in his name by the

competent authority of the contracting party of residence for tax purposes in

accordance with 2 of this Article.

2. At the request of the beneficial owner, the competent authority of the contracting party of

the country of residence for tax purposes shall issue a certificate of interest:

i) the name, address and tax or other identification number or, failing such, the date

and place of birth of the beneficial owner;

ii) the name and address of the paying agent;

iii) the account number of the beneficial owner or, where there is none, the

identification of the security.

Such certificate shall be valid for a period not full-time three years. It shall be issued to

any beneficial owner who requests it, within two months following such request.

3. Where paragraph (1) (a) of this Article applies, the competent authority of the Turks and

Caicos Islands in which the paying agent is established shall communicate the

information referred to in Article 2 (1) of this Agreement to the competent authority of

Portugal as the country of residence of the beneficial owner. Such communications shall

be automatic and shall take place at least once a year, within six months following the end

of the tax year established by the laws of a contracting party, for all interest payments

made during that year.

Article 4 Basis of assessment for retention tax

1. A paying agent established in the Turks and Caicos Islands shall levy retention tax in

accordance with Article 1 of this Agreement as follows:

a) in the case of an interest payment within the proceedings of Article 8 (1) (a) of this

Agreement: on the gross amount of interest paid or credited;

b) in the case of an interest payment within the proceedings of Article 8 (1) (b) or (d) of

this Agreement: on the amount of interest or income referred to in (b) or (d) of that

sub-paragraph or by a levy of equivalent effect to be borne by the recipient on the

full amount of the salaries of the sale, redemption or refund;

c) in the case of an interest payment within the proceedings of Article 8 (1) (c) of this

Agreement: on the amount of interest referred to in that sub-section;

d) in the case of an interest payment within the proceedings of Article 8 (4) of this

Agreement: on the amount of interest attributable to each of the members of the

entity referred to in Article 7 (2) of this Agreement who meet the conditions of

Article 5 (1) of this Agreement;

e) where the Turks and Caicos Islands exercises the option under Article 8 (5) of this

Agreement: on the amount of annualised interest.

2. For the purposes of sub-paragraphs (a) and (b) of paragraph (1) of this Article, the

retention tax shall be deducted on a pro rata basis to the period during which the

beneficial owner held the debt-claim. If the paying agent is unable to determine the

period of holding on the basis of the information made available to him, the paying agent

shall treat the beneficial owner as having been in the proceedings of the debt-claim for the

entire period of its existence, unless the latter provides evidence of the date of the

acquisition.

3. The equation of retention tax by the Turks and Caicos Islands shall not vary the

other contracting party of residence for tax purposes of the beneficial owner from taxing

income in accordance with its national law.

4. During the transitional period, the Turks and Caicos Islands may provide that an

economic operator paying interest to, or securing interest for, an entity referred to in

Article 7 (2) of this Agreement in the other contracting party shall be considered the

paying agent in place of the entity and shall levy the retention tax on that interest, unless

the entity has formally agreed to its name, address and the total amount of the interest

paid to it or secured for it being held in accordance with the last paragraph of

Article 7 (2) of this Agreement.

Article 5 Definition of beneficial owner

1. For the purposes of this Agreement, "beneficial owner" shall mean any individual who

an interest payment or any individual for an individual interest payment or any individual for an interest payment is secured,

unless such individual can provide evidence that the interest payment was not received or

secured for his own benefit. An individual is not being told to be the beneficial owner when

he:

a) acts as a paying agent within the course of Article 7 (1) of this Agreement;

b) acts on behalf of a legal person, an entity which is taxed on its profits under the

general arrangements for business taxation, an UCITS authorised in accordance

with Directive 85 /611/EEC or an equivalent undertaking for collective investment

established in the Turks and Caicos Islands, or an entity referred to in Article 7 (2)

of this Agreement and, in the last mentioned case, discloses the name and address

of that entity to the economic operator making the interest payment and the latter

communicates such information to the competent authority of its contracting party

of establishment;

c) acts on behalf of another individual who is the beneficial owner and discloses to the

paying agent the identity of that beneficial owner.

2. Where a paying agent has information reveals that the individual who has been an

interest payment for an interest payment is secured may not be the beneficial

owner, and where neither paragraph (1) (a) nor (1) (b) of this Article applies, it shall take

reasonable steps to establish the identity of the beneficial owner. If the paying agent is

unable to identify the beneficial owner, it shall treat the individual in question as the

beneficial owner.

Article 6 Identity and residence of beneficial owners

1. Each Party shall, within its territory, adopt and ensure the application of the procedures

necessary to allow the paying agent to identify the beneficial owners and their residence

for the purposes of this Agreement. Such procedures shall be required with the minimum

standards established in paragraphs (2) and (3).

1. The paying agent shall establish the identity of the beneficial owner on the basis of

minimum standards which vary according to when relations between the paying agent and

the recipient of the interest are entered into, as follows:

a) for contractual relations entered into before the 1 st January 2004, the paying agent

shall establish the identity of the beneficial owner, shall establish of his name and

address, by using the information at its disposal, in particular to the

regulations in force in its country of establishment and to Council Directive

91 /308/EEC of the 10 th June, 1991 in the case of Portugal or in the case of the

Turks and Caicos Islands Act to the relevant provisions of Turks and Caicos

Islands ' laws and regulations on prevention of the use of the financial system for

the purpose of money laundering;

b) or contractual relations entered into, or transactions carried out in the investigation of

contractual relations, on or after the 1 st January, 2004 the paying agent shall

establish the identity of the beneficial owner, shall be of the name, address and, if

there is one, the tax identification number allocated by the Member State of

residence for tax purposes. These details should be established on the basis of the

passport or of the official identity card has died by the beneficial owner. If it does

not appear on that passport or official identity card, the address shall be established

on the basis of any other documentary proof of identity corrected by the beneficial

owner. If the tax identification number is not mentioned on the passport, on the

official identity card or any other documentary proof of identity, including, possibly

the certificate of residence for tax purposes, which is necessary by the beneficial owner, the

identity shall be taken by a reference to the latter's date and place of birth

established on the basis of his passport or official identification card.

3. The paying agent shall establish the residence of the beneficial owner on the basis of

minimum standards which vary according to when relations between the paying agent and

the recipient of the interest are entered into. Subject to the conditions set out below,

residence shall be considered to be situated in the country where the beneficial owner has

his permanent address:

a) for contractual relations entered into before 1 st January, 2004 the paying agent shall

establish the residence of the beneficial owner by using the information at its

disposal, in particular to the regulations in force in its country of

establishment and to Directive 91 /308/EEC in the case of Portugal or in the case of

the Turks and Caicos Islands Act to the relevant provisions of Turks and

Caicos Islands ' laws and regulations on prevention of the use of the financial

system for the purpose of money laundering;

b) for contractual relations entered into, or transactions carried out in the investigation of

contractual relations, on or after the 1 st January, 2004, the paying agents shall

establish the residence of the beneficial owner on the basis of the address

mentioned on the passport, on the official identity card or, if necessary, on the basis

of any documentary proof of identity corrected by the beneficial owner and

according to the following procedure: for individuals to have a passport or

official identity card issued by a Member State who declare themselves to be

resident in a third country, residence shall be established by means of a tax

residence certificate issued by the competent authority of the third country in which

the individual claims to be resident. Failing the presentation of such a certificate,

the Member State which issued the passport or other official identity document

shall be considered to be the country of residence.

Article 7 Definition of paying agent

1. For the purposes of this Agreement, 'paying agent' means any economic operator who

pays interest to or secures the payment of interest for the immediate benefit of the

beneficial owner, whether the operator is the debtor of the debt claim which has been

interest or the operator charged by the debtor or the beneficial owner with paying interest

or securing the payment of interest.

2. Any entity established in a contracting party to which interest is paid or for which interest

is secured for the benefit of the beneficial owner shall also be considered a paying agent

upon such payment or securing of such payment. This provision shall not apply if the

economic operator has reason to believe, on the basis of official evidence produced by

that entity that:

a) it is a legal person with the exception of those legal persons referred to in paragraph

5 of this Article; or

b) its profits are taxed under the general arrangements for business taxation; or

c) it is an UCITS recognised in accordance with Directive 85 /611/EEC of the Council

or an equivalent of an equivalent undertaking for collective investment established in the Turks and

Caicos Islands.

An economic operator paying interest to, or securing interest for, such an entity

established in the other contracting party which is considered a paying agent under this

paragraph shall communicate the name and address of the entity and the total amount of

interest paid to, or secured for, the entity to the competent authority of its

party of establishment, which shall pass this information on to the competent authority of

the contracting party where the entity is established.

3. The entity referred to in paragraph (2) of this Article shall, however, have the option of

being able to be the purposes of this Agreement as an UCITS or equivalent undertaking

the referred to in sub-paragraph (c) of paragraph (2). The exercise of this option shall

require a certificate to be issued by the contracting party in which the entity is established

and exploring to the economic operator by that entity. The party's party shall lay down

the detailed rules for this option for entities established in their territory.

4. Where the economic operator and the entity referred to in paragraph (2) of this Article are

established in the same contracting party, that contracting party shall take the necessary

measures to ensure that the entity has dealt with the provisions of this Agreement when it

acts as a paying agent.

5. The legal persons banned from sub-paragraph (a) of paragraph (2) of this Article are:

a) in Finland: avoin yhtio (Ay) and kommandiittiyhtio (Ky) /oppet bolag and

kommanditbolag;

b) in Sweden: handelsbolag (HB) and kommanditbolag (KB).

Article 8 Definition of interest payment

1. For the purposes of this Agreement "interest payment" shall mean:

a) interest paid, or credited to an account, relating to debt claims of every kind,

whether or not secured by mortgage and whether or not carrying a right to

participate in the debtor's profits, and, in particular, income from government

securities and income from bonds or debentures, including taxable and prizes

attaching to such securities, bonds or debentures, but excluding interest from loans

between private individuals not acting in the course of their business. Penalty

charges for late payment shall not be elected as interest payment;

b) interest accrued or capitalised at the sale, refund or redemption of the debt claims

referred to in (a);

c) income deriving from interest payments either directly or through an entity referred

to in Article 7 (2) of this Agreement, distributed by-

i) an UCITS authorised in accordance with EC Directive 85 /611/EEC of the

Council;

ii) an equivalent undertaking for collective investment established in the Turks

and Caicos Islands;

iii) entities which qualify for the option under Article 7 (3) of this Agreement; or

iv) undertakings for collective investment established outside the territory to

which the Treaty shall represent the European Community applies by virtue of

Article 299 An outside and outside the Turks and Caicos Islands.

d) income from the sale, refund or redemption of shares or units in the

following undertakings and entities, if they invest directly or indirectly, via other

undertakings for collective investment or entities referred to below, more than 40%

of their assets in debt claims as a referred to in (a):

i) an UCITS authorised in accordance with Directive 85 /611/EEC;

ii) an equivalent undertaking for collective investment established in the Turks

and Caicos Islands.

iii) entities which qualify for the option under Article 7 (3) of this Agreement; or

iv) undertakings for collective investment established outside the territory to

which the Treaty shall represent the European Community applies by virtue of

Article 299 An outside and outside the Turks and Caicos Islands.

However, the contracting parties shall have the option of including income

mentioned under paragraph (1) (d) of this Article in the definition of interest only to

the extent that such income has been made to directly or indirectly derive from

interest payments within the income of paragraphs (1) (a) and (b) of this Article.

2. The Amendments (1) (c) and (d) of this Article, when a paying agent has no

information concerning the proportion of the income which derives from interest

payments, the total amount of the income shall be considered an interest payment.

3. The following Amendments (1) (d) of this Article, when a paying agent has no information

concerning the percentage of the assets of the assets in debt claims or in shares or units

defined in that paragraph, that percentage shall be considered to be above 40%. Where he

cannot determine the amount of income by the beneficial owner, the income shall

be it to be filled to the corresponding sale of the sale, refund or redemption of the shares or

units.

4. When interest, as defined in paragraph (1) of this Article, is paid to or credited to an

account held by an entity referred to in Article 7 (2) of this Agreement, such entity not

having qualified for the option under Article 7 (3) of this Agreement, such interest shall be

considered an interest payment by such entity.

5. The Amendments (1) (b) and (d) of this Article, a contracting party shall have the

option of paying agents in its territory to annualise the interest over a period of

time which may not exceed one year, and excellent such annualised interest as an interest

payment even if no sale, redemption or refund occurs during that period.

6. By way of opposition from paragraphs (1) (c) and (d) of this Article, a contracting party

shall have the option of excluding from the definition of interest payment any income

referred to in those provisions from undertakings or entities established within its territory

where the investment in debt claims referred to in paragraph (1) (a) of this Article of such

entities has not exceeded 15% of their assets. Banned, by way of banned from

paragraph (4) of this Article, a contracting party shall have the option of excluding from

the definition of interest payment in paragraph (1) of this Article interest paid or credited

to an account of an entity referred to in Article 7 (2) of this Agreement which has not

qualified for the option under Article 7 (3) of this Agreement and is established within its

territory, where the investment of such an entity in debt claims referred to in paragraph

(1) (a) of this Article has not exceeded 15% percent of its assets.

The exercise of such option by one contracting party shall be binding on the other

party-party.

7. The percentage referred to in paragraph (1) (d) of this Article and paragraph (3) of this

Article shall, from 1 January 2011, be 25%.

8. The percentages referred to in paragraph (1) (d) of this Article and in paragraph (6) of this

Article shall be determined by reference to the investment policy as laid down in the fund

rules or instruments of incorporation of the undertakings or entities concerned or, failing

which, by reference to the current composition of the assets of the undertakings or entities

concerned.

Article 9 Retention tax Revenue sharing

1. The Turks and Caicos Islands shall retain 25% percent of the retention tax deducted under this

Agreement and transfer the remaining 75% of the revenue to Portugal.

2. The Turks and Caicos Islands levying retention tax in accordance with Article 4 (4) of this

Agreement shall retain 25% of the revenue and transfer 75% to Portugal Act to be

the transfers carried out out to paragraph (1) of this Article.

3. Such transfers shall take place for each year in one instalment at the latest within a period

of six months following the end of the tax year established by the laws of the Turks and

Caicos Islands.

4. The Turks and Caicos Islands levying retention tax shall take the necessary measures to

ensure the proper functioning of the revenue sharing system.

Article 10 Elimination of double taxation

1. The contracting party in which the beneficial owner is resident for tax purposes shall ensure

the elimination of any double taxation which might result from the banned by the

Turks and Caicos Islands of the retention tax to which this Agreement refers in

accordance with the following provisions-

i) if interest received by a beneficial owner has been subject to retention tax in the

Turks and Caicos Islands, Portugal shall grant a tax credit equal to the amount of

the tax retained in accordance with its national law. Where this amount exceeds the

amount of tax due in accordance with its national law, Portugal shall repay the

excess amount of tax retained to the beneficial owner;

ii) if, in addition to the retention tax referred to in Article 4 of this Agreement, interest

received by a beneficial owner has been subject to any other type of

withholding/retention tax and the Contracting Party of residence for tax purposes

grants a tax credit for such withholding / retention tax in accordance with its national

law or double taxation conventions, such as other withholding / retention tax shall be

before the procedure in sub-paragraph (i) of this Article is applied.

2. The Contracting Party which is the country of residence for tax purposes of the beneficial

owner may replace the tax credit mechanism referred to in paragraph (1) of this Article by

the refund of the retention tax referred to in Article 1 of this Agreement.

Article 11 Transitional provisions for negotiable debt securities

1. The transitional period referred to in Article 14 of this Agreement, but until 31

December 2010 at the latest, domestic and international bonds and other negotiable debt

securities which have been first issued before the 1 March 2001 or for which the original

recommend prospectuses have been approved before that date by the competent authorities

within the proceedings of Council Directive 80 /390/EEC or by the responsible authorities in

third countries shall not be considered as debt claims within the opposition of Article

8 (1) (a) of this Agreement, provided that no further issues of such negotiable debt

securities are made on or after 1 March 2002. However, should the transitional period

continue beyond 31 December 2010, the provisions of this Article shall only continue to

apply in respect of such negotiable debt securities:

a) which contain gross up and early redemption clauses and;

b) where the paying agent is established in a contracting party's retention tax

and that paying agent pays interest to, or secures the payment of interest for the

immediate benefit of a beneficial owner resident in the other contracting party.

If a further issue is made on or after 1 March 2002 of an allegedly negotiable debt

security issued by a Government or a related entity acting as a public authority or whose

role is recognised by an international treaty, as defined in the Annex to this Agreement,

the entire issue of such security, investigations of the original issue and any further issue,

shall be considered a debt claim within the following of Article 8 (1) (a) of this Agreement.

If a further issue is made on or after 1 March 2002 of an allegedly negotiable debt

security issued by any other issuer not covered by the second sub-paragraph, such further

issue shall be considered a debt claim within the whole of Article 8 (1) (a) of this

Agreement.

2. Nothing in this Article shall prevent the Contracting Parties from taxing the income from

the negotiable debt securities referred to in paragraph (1) in accordance with their national

laws.

Article 12 Mutual agreement procedure

Where difficulties or doubts arise between the parties regarding the implementation or

interpretation of this Agreement, the contracting parties shall use their best endeavours to

resolves the matter by mutual agreement.

Article 13 Confidentiality

1. All information provided and received by the competent authority of a Contracting Party

shall be kept confidential. The principle of confidentiality is essential to the proper

implementation and permanence of this Agreement.

2. Information provided to the competent authority of a Contracting Party may not be used

for any purpose other than for the purposes of direct taxation without the prior written

consent of the other contracting party.

3. Information provided shall be disclosed only to persons or authorities concerned with the

purposes of direct taxation, and used by such persons or authorities only for such purposes

or for oversight purposes, including the determination of any appeal. For these purposes,

information may be disclosed in public court proceedings or in judicial proceedings.

4. Where the competent authority of a Contracting Party considers that information which it

has received from the competent authority of the other contracting party is likely to be

useful to the competent authority of another Member State, it may transmit it to the latter

competent authority with the agreement of the competent authority which supplied the

information.

Article 14 Transitional Period

At the end of the transitional period as defined in Article 10 (2) of the Directive, the Turks

and Caicos Islands shall cease to apply for the retention tax and revenue sharing provided for

in this Agreement and shall apply in respect of Portugal the automatic exchange of

information provisions in the same manner as is provided for in Chapter II of the

Directive. If during the transitional period the Turks and Caicos Islands elects to apply

the automatic exchange of information provisions in the same manner as is provided for

in Chapter II of the Directive, it shall be no longer apply the withholding / retention tax and

the Revenue Sharing provided for in Article 9 of this Agreement.

Article 15 Entry into force

1. This Agreement shall enter into force on the thirtieth day after the latter of the dates on which

the respective governments have notified each other in writing that the rhetoric

constitutionally required have been banned with, and its provisions shall have effect from

the date from which the Directive is applicable according to paragraphs 2 and 3 of Article

17 of the Directive.

2. Article 2 of this Agreement shall not have any effect in Portugal in the diameter of direct

taxation in the Turks and Caicos Islands.

Article 16 Termination

1. This Agreement shall remain in force until terminated by either Contracting Party.

2. Contracting Party may terminate this Agreement by giving notice of termination in

writing to the other contracting party, such notice to specify the opposition leading to

the giving of such notice. In such a case, this Agreement shall cease to have effect 12

months after the serving of notice.

Article 17 Application and suspension of application

1. The application of this Agreement shall be conditional on the adoption and

implementation by all the Member States of the European Union, by the United States of

America, Switzerland, Andorra, Liechtenstein, Monaco and San Marino, and by all the

relevant dependent and associated territories of the Member States of the European

Community, probability, of measures which conform with or are equivalent to those

contained in the Directive or in this Agreement, and providing for the same dates of

implementation.

2. Subject to the mutual agreement procedure provided for in Article 12 of this Agreement,

the application of this Agreement or parts of this Agreement may be suspended by either

Party with immediate effect through notification to the other hopes of the opposition

leading to such notification should the Directive cease to be applicable either temporarily

or permanently in accordance with European Community law or in the event that a

Member State should suspend the application of its implementing legislation. Application

of the Agreement shall summarizes as soon as the suspension leading to the suspension in the

longer apply.

3. Subject to the mutual agreement procedure provided for in Article 12 of this

Agreement, either Contracting Party may suspend the application of this

Agreement through notification to the other mixture the leading leading

to such notification in the event that one of the third countries or territories

referred to in paragraph (1) should cease to apply the measures

referred to in that paragraph. Suspension of application shall take place in the earlier

than two months after notification. Application of the Agreement shall resume the

soon as the measures are reinstated by the third country or territory in question.

Done in the World and English languages all texts being equally authentic

/Annex: list of related entities

Namely: List of related entities

For the purposes of Article 11 of this Agreement, the following entities will be considered to be

a " related entity acting as a public authority or whose role is recognised by an international

treaty ":

ENTITIES WITHIN THE EUROPEAN UNION:

Belgium

-Vlaams Gewest (Flemish Region)

Région wallonne (Walloon Region)

Région bruxelloise / Brussels Gewest (Brussels Region)

Communauté française (French Community)

Vlaamse Gemeenschap (Flemish Community)

Deutschsprachige Gemeinschaft (German-speaking Community)

Spain

Xunta de Galicia (Regional Executive of Galicia)

Joined by Andalucía (Regional Executive of Andalusia)

Extreme Board of Extremadura (Regional Executive of Extremadura)

Joint of Castilla-La Mancha (Regional Executive of Castilla-La Mancha)

Joint of Castilla-León (Regional Executive of Castilla-León)

Gobierno Foral de Navarra (Regional Government of Navarre)

Govern of les Illes Balears (Government of the Balearic Islands)

Generalitat de Catalunya (Autonomous Government of Catalonia)

Generalitat de Valencia (Autonomous Government of Valencia)

Diputación General de Aragón (Regional Council of Aragon)

Gobierno de las Islas Canarias (Government of the Canary Islands)

Gobierno de Murcia (Government of Murcia)

Gobierno de Madrid (Government of Madrid)

Gobierno de la Comunidad Autónoma del País Vasco / Euzkadi (Government of the

Autonomous Community of the Basque Country)

Diputación Foral de Guipúzcoa (Regional Council of Guipúzcoa)

Diputación Foral of Vizcaya / Bizkaia (Regional Council of Vizcaya)

Diputación Foral de Alava (Regional Council of Alava)

Ayuntamiento de Madrid (City Council of Madrid)

Ayuntamiento de Barcelona (City Council of Barcelona)

Cabildo Insular of Gran Canaria (Island Council of Gran Canaria)

Capabildo Insular de Tenerife (Island Council of Tenerife)

Institute of Official Credit Institution (Public Credit Institution)

Catalán Institute of Finanzas (Finance Institution of Catalonia)

Valencian Institute of Finanzas (Finance Institution of Valencia)

Greece

Оργανισμός πηλεπικοινωνιών Ελλάδος (National Telecommunications Organisation)

Оργανισμός Σιδηροδρόμων Ελλάδος (National Railways Organisation)

Δημόσια Επιχείρηση ΗλεκτρισμοΩ (Public Electricity Company)

France

La Caisse d' amortissement de la dette sociale (CADES) (Social Debt Redemption

Fund)

L' Agence française de développement (AFD) (French Development Agency)

Réseau Ferré de France (RFF) (French Rail Network)

Caisse Nationale des Autoroutes (CNA) (National Motorways Fund)

Assistance publique Hôpitaux de Paris (APHP) (Paris Hospitals Public Assistance)

Charbonnages de France (CDF) (French Coal Board)

Entreprise minière et chimique (EMC) (Mining and Chemicals Company)

Italy

Regions

Provinces

Municipalities

Cassa Depositi e Prestiti (Deposits and Loans Fund)

Latvia

Pašvaldības (Local government)

Poland

gminy (communes)

powiaty (districts)

województwa (provinces)

związki gmin (associations of communes)

powiatów (association of districts)

województw (association of provinces)

miasto stołeczne Warszawa (capital city of Warsaw)

Agencja Restrukturyzacji i Modernizacji Rolnictwa (Agency for Restructuring and

Modernisation of Agriculture)

Agencja Nieruchomości Rolnych (Agricultural Property Agency)

Portugal

Autonomous Region of Madeira (Autonomous Region of Madeira)

Autonomous Region of the Azores (Autonomous Region of surrounding)

Municipalities

The

mis the obce (municipalities)

Železnice Slovenskej republiky (Slovak Railway Company)

Štátny fond cestného hospodárstva (State Road Management Fund)

Slovenské elektrárne (Slovak Power Plants)

Vodohospodárska výstavba (Water Economy Building Company)

INTERNATIONAL ENTITIES:

European Bank for Reconstruction and Development

European Investment Bank

Asian Development Bank

African Development Bank

World Bank / IBRD / IMF

International Finance Corporation

Inter-American Development Bank

Council of Europe Social Development Fund

EURATOM

European Community

Corporación Andina de Fomento (CAF) (Andean Development Corporation)

Eurofima

European Coal & Steel Community

Nordic Investment Bank

Caribbean Development Bank

The provisions of Article 11 are without prejudice to any international obligations that the

May Parties may have entered into with respect to the above mentioned international

entities.

ENTITIES IN THIRD COUNTRIES:

The entities that meet the following criteria:

1) The entity is considered to be a public entity according to the national criteria.

2) Such public entity is a non-market producer which adheres and finances a group of

activities, providing providing non-market goods and services, intended for the benefit of the

community and which are effectively controlled by general government.

3) Such public entity is a large and regular issuer of debt.

4) The State concerned is able to guarantee that such public entity will not exercise early

redemption in the event of gross-up clauses.