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Approving The Agreement Between The Portuguese Republic And The British Crown Dependent Territory Of The Isle Of Man, By Exchange Of Letters, Respectively Of 22 June 2004 And 19 November 2004, Concerning The Taxation Of Savings Income And Its

Original Language Title: Aprova o Acordo entre a República Portuguesa e o Território Dependente da Coroa Britânica da Ilha de Man, por troca de Cartas, respectivamente de 22 de Junho de 2004 e de 19 de Novembro de 2004, Relativo à tributação dos Rendimentos da Poupança e à respec

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MOTION FOR RESOLUTION No. 16 /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 Isle of Man enshrines the normative framework

for this territory to adopt the said measures, particularly those relating to

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

natural residents in Portuguese territory with a breakdown of revenue, and which constitutes

an essential element for the achievement of the objectives of Directive No 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 Isle of Man, by Exchange of Letters, respectively June 22, 2004

and of November 19, 2004, Relative to the Taxation of Savings Income and the

respective provisional application, the text of which, Appendix 1 and Annex, in the versions

authenticated in the Portuguese and English languages, if they publish in attachment.

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 INCOME FROM SAVINGS AND THE

RESPECTIVE PROVISIONAL APPLICATION

A. Charter of the Portuguese Republic

Excelent Lord,

I have the honour to refer to the texts, respectively, of the " Proposal for a model of

agreement between Guernsey, the Isle of Man and Jersey and each of the EU Member States

which will apply the automatic exchange of information "and the" Proposal for a model agreement

between Guernsey, the Isle of Man and Jersey and each of the EU Member States that will

apply the withholding tax in the transition period ", which resulted from the negotiations of

an Agreement on Taxation of Savings with the Authorities of the Islands, and were

apensas, respectively as Annex I and Annex II, to the outcome of the proceedings of the

High Level Group of the Council of Ministers of the European Union of March 12

(Doc. 7408/04 FISC 58).

In the face of the said texts, I have the honour to propose V. Ex. the " Agreement concerning the

taxation of income from savings " listed in Appendix 1 to this letter, and the

mutual commitment to ultimarms with the greatest possible brevity

internal constitutional formalities for the entry into force of this Agreement and of

we proceed without delay to the reciprocal notification that such formalities are

completed.

Pending the completion of the internal tramites and the entry into force of the present

"Agreement relating to the taxation of savings income", I have the honour to propose to

V. Ex que Portugal and the Isle of Man apply the present Agreement provisionally,

taking into account the framework of their respective internal constitutional ordinances, to be

of January 1, 2005, or of the date of application of Council Directive 2003 /48/CE

of June 3, 2003 on the taxation of income from savings in the form of

interest, worth the most late of the dates.

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

this letter and your confirmation shall jointly constitute an Agreement between

Portugal and the Isle of Man.

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

By the Portuguese Republic

Minister of State and Finance

Done in Lisbon, Jun 22, 2004

B. Letter from the Isle of Man

Excelent Lord,

I have the honour to acknowledge receipt of your letter of Your Honour dated today, of the

following content:

" Excellent Lord,

I have the honour to refer to the texts, respectively, of the " Model Proposal

of agreement between Guernsey, the Isle of Man and Jersey and each of the States-

EU members who will apply the automatic exchange of information "and the" Proposal

of model agreement between Guernsey, the Isle of Man and Jersey and each of the

EU Member States that will apply the withholding tax in the period of

transition ", which resulted from the negotiations of an Agreement on Taxation of the

Savings with the Authorities of the Islands, and were apensed, respectively as

Annex I and Annex II, to the outcome of the proceedings of the High-Level Group of the

Council of Ministers of the European Union of March 12 (Doc. 7408/04

FISC 58).

In the face of the said texts, I have the honour to propose V. Ex. the " Agreement concerning

to the taxation of savings income " constant from Appendix 1 to the present

letter, and the mutual commitment to ultimarms with the greatest possible brevity as

our internal constitutional formalities for the entry into force of the present

Agreement and to proceed without delay to the reciprocal notification that such

formalities are completed.

Pending the completion of the internal tramites and the entry into force of the

present "Agreement relating to the taxation of savings income", I have the

honor to propose to V. Ex that Portugal and the Isle of Man apply the present

Agreement provisionally, taking into account the framework of the respective ordinances

internal constitutional, as of January 1, 2005, or the date of application of the

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

of the income from savings in the form of interest, worth the later of the

dates.

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

that the present letter and your confirmation shall jointly constitute an Agreement

between Portugal and the Isle of Man.

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

consideration "

I can confirm that the Isle of Man is in accordance with the content of the letter of V. Ex. th.

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

consideration,

By the Isle of Man

Treasury Minister

Made on 11/19/2004

Appendix 1

AGREEMENT ON THE TAXATION OF SAVINGS INCOME

BETWEEN THE ISLAND OF MAN AND THE PORTUGUESE REPUBLIC

CONSIDERING THE FOLLOWING:

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

European Union ("the Council") on the taxation of savings income

that before January 1, 2004 Member States adopt and publish the

legislative, regulatory and administrative provisions necessary to give

compliance with that Directive, whose provisions will be applied to

of January 1, 2005, provided that:

" i) the Swiss Confederation, the Principality of Liechtenstein, the Republic of Saint

Marino, the Principality of Monaco, the Principality of Andorra apply the

from that same date measures equivalent to those established in the present

Directive, in accordance with the agreements concluded between these countries and

the European Community, following a unanimous decision of the

Advice;

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 period of

transition defined in Article 10, will apply a withholding tax in the

conditions laid down in Articles 11 and 12) ".

2. The relationship of the Isle of Man with the EU is the subject of Protocol No 3 of the Treaty

of Accession of the United Kingdom to the European Community. In the terms of the Protocol, the

Isle of Man is not situated in the EU's fiscal territory.

3. The Isle of Man notes that, if the final objective of the Member States of the

EU consists to allow effective taxation of interest in the Member State of

tax residence of the beneficial owner through the exchange of information between them

relating to such interest payments, three Member States, namely Austria, the

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.

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

retention " in the internal right of the Isle of Man. For the purposes of this Agreement the

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

retention " and have the same meaning.

5. The Isle of Man woke up to apply a withholding tax with effect from

of January 1, 2005 provided that Member States have adopted the

legislative, regulatory and administrative provisions necessary to give

compliance with the Directive, and have been generously met the requirements of the

Article 17 of the Directive and Article 17 (2) of this Agreement.

6. The Isle of Man woke up to apply the exchange of automatic information in the molds

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

defined in Article 10 (2) of the Directive.

7. The Isle of Man has legislation in respect of investment bodies

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

in Articles 2 and 6 of the Directive.

The Isle of Man and Portugal hereafter referred to as "Contracting Party" or " Parties

Contractors " unless the context requires otherwise,

They agreed to conclude the following agreement that obliges exclusively the Parties

Contractors and provides for:

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

for the competent authority of the Isle of Man in the same way as for the

competent authority of a Member State;

b) the application by the Isle of Man, during the transition period defined in the

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

on the same conditions as those set out in Articles 11 and 12 of that

Directive;

c) the automatic exchange of information from the competent authority of the Isle of Man

for the competent authority of Portugal in harmony with Art. 13 para.

Directive;

d) the transfer of the competent authority of the Isle of Man to the authority

competent from Portugal of 75% of the withholding tax revenue.

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

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

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

contracting parties means " the Minister of Finance or his representative

authorized "relatively to Portugal and" the Chief Financial Officer of the Treasury or

his delegate " relatively to the Isle of Man.

Article 1 Retention of tax by paying agents

The interest payments set out in Article 8 of this Agreement made by

a paying agent established on the Isle of Man to effective 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 transition period referred to in the

Article 14 of this Agreement as of the date referred to in Article 15 of the present

Agreement. The rate of the withholding tax is expected to be 15% during the first three

years of the transition period, 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

this Agreement, by a paying agent established in Portugal to beneficiaries

actual, as defined in Article 5 of this Agreement, which are residents

of the Isle of Man, or where the provisions of paragraph 1 (a) of the above apply

Article 3 of this Agreement, the paying agent shall report to the respective

competent authority:

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

compliance 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 the absence thereof, identification of the

credit generator credit;

d) information in respect of the interest payments specified in paragraph 1 of the

Article 4 of this Agreement. However, the Contracting Parties may

limit the minimum content of the information that the paying agent must

communicate with regard to the payment of interest, to the total amount of the

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

rescue or redemption;

and Portugal shall observe the paragraph 2 of this Article.

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

competent from Portugal must communicate to the competent authority of the Isle of Man,

automatically, the information referred to in points (a) to (d) of paragraph 1 of the present

article, in relation to all the 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 Isle of Man shall establish one, or both, of the following procedures

so that the actual beneficiaries can request the non-application of such retention:

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

which is given to you by Art. 5, avoid the withholding tax specified in the

Article 1 of this Agreement, expressly authorizing its agent

payer to communicate the information relating to interest payments to the

competent authority of the Contracting Party of establishment of the agent

payer. Such authorization will cover all interest payments

made to the beneficial owner by that paying agent;

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

when the beneficial owner submits to his or her paying agent a

certificate issued on its behalf by the competent authority of the Party

Contractor of tax residence pursuant to 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, address and tax identification number, or other, or, failing

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 thereof, identification of the

title of credit.

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

passed to any beneficial owner who requests it, within two months of

count of the submission of that application.

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

of the Isle of Man of establishment of the paying agent shall 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 take place at least once a year, in the six months

subsequent to the end of the fiscal year defined in the Party's legislation

Contractor, in relation to all the interest payments made during that year.

Article 4 Base of incidence of withholding tax

1. A paying agent established on the Isle of Man shall apply the tax of

retention of harmony with Art. 1 of this Agreement as follows:

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

Article 8 of this Agreement: on the gross amount of interest paid or

taken to credit;

b) in the case of a payment of interest within the meaning of paragraphs (b) or (d) of paragraph 1

of Art. 8 of this Agreement: on the amount of interest or of the

income referred to in points (b) or (d) of that paragraph or through

an imposition of effect equivalent to the office 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 point (c) of paragraph 1 of the

Article 8 of 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 Art. 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 which

meet the conditions of Article 5 (1) of this Agreement;

e) whenever the Isle of Man avails itself of 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 paragraphs (a) and (b) of paragraph 1 of this Article, the tax of

retention will be deducted on a proportional basis with respect to the period during

which the beneficial owner holds a credit. Should the paying agent not be able

determine the period of detention on the basis of the information at its disposal, the

payer agent will assume that the beneficial owner has held himself in the possession of the

credit during the entirety of the period of its existence, unless the latter

provide evidence regarding the date on which it acquired it.

3. The application of the retention tax by the Isle of Man does not preclude the other Party

Tax residence contractor of the beneficial owner of taxing the income

in accordance with its domestic law.

4. During the transition period, the Isle of Man may predict that an operator

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

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

considered as the paying agent in place of the entity and apply the tax of

retention on these interest unless the entity has formally accepted that the

your name and address, as well as the total amount of interest paid to you or

assigned, are communicated in harmony with the last paragraph of the n ° 2 of the

Article 7 of this Agreement.

Article 5 Definition of beneficial owner

1. For the purposes of this Agreement, by "beneficial owner" means any

natural person who receives a payment of interest or any natural person to

who is assigned an interest payment, unless it makes proof that the interest

have not been paid to you or assigned to your advantage. It is assumed that a person

singular is not beneficial owner whenever:

a) acts as a payer agent within the meaning of Article 7 (1) of the

this 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,

an authorized UCITS of harmony with the provisions of Directive 85 /611/CEE or a

equivalent collective investment body established on the Isle of Man, or a

of the entities referred to in Article 7 (2) of this Agreement and, in the latter

case, reveals the name and address of that entity to the responsible economic operator

by the payment of interest, and the latter communicates then this information to the

competent authority of its Contracting Party of establishment;

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

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

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

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

beneficial owner and case do not apply to subparagraph (a) or (b) of paragraph 1, the

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

beneficial owner. If it is unable to identify the beneficial owner, the agent

payer shall consider the natural person concerned as the beneficial owner.

Article 6 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 required to allow the paying agent to identify the

actual beneficiaries and the respective place of residence for the purposes of the

present Agreement. Such procedures must comply with the minimum standards

established in paragraphs 2 and 3.

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

agreement with minimum standards that vary depending on the date of commencement of

relations between the paying agent and the receiver of the interest payment, namely:

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

payer agent shall determine the identity of the beneficial owner,

expressed by its name and address, based on the information that

has, inter alia, in application of the regulations in force in its

State of establishment and Directive 91 /308/CEE of June 10

of 1991 in the case of Portugal or equivalent legislation in the case of the Island of

Man on the prevention of the use of the financial system for the purpose of

money laundering;

b) for the contractual relationships established, or for the transactions made

in the lack of contractual relationships, as of January 1, 2004 the agent

payer shall determine the identity of the beneficial owner, expressed by the

your name, address and, should it exist, tax identification number assigned

by the Member State of tax residence. 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 in the passport or the

official identity card, the address is determined on the basis of

any other supporting document submitted by the beneficiary

effective. If the tax identification number does not appear on the passport, of the

official identity card or any other document

proving, 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 of the agreement

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

paying agent and the receiver of the interest payment. Subject to the exposed below,

it is considered that the residence is located in the country in which the beneficial owner has the

your permanent domicile:

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

payer agent must determine the residence of the beneficial owner with

basis in the information available to it, particularly in application of the

regulation in force in its state of establishment and of the

Directive 91 /308/CEE in the case of Portugal or equivalent legislation in the case

of the Isle of Man;

b) for the contractual relationships established, or for the transactions made

in the lack of contractual relationships, as of January 1, 2004, the agent

payers must determine the residence of the beneficial owner on the basis of

at the address mentioned in your passport or official identity card

or, if necessary, in any other supporting document presented

by the beneficial owner, in accordance with the following procedure: for the

natural persons who present a passport or a ticket from

official identity issued by a Member State and declaron to be residents

in a third country, the residence shall be determined on the basis of an attestative

of tax residence issued by the competent authority of the third country in

that the natural person declars residir. In the lack of presentation of that

attestative, the residence is deemed to be situated in the Member State which

has issued the passport or any other official identity document. "

Article 7 Definition of paying agent

1. For the purposes of this Agreement, by "paying agent" means any

economic operator who pays interest or assigns the payment of interest to the advantage

immediate from the beneficial owner, regardless of whether that operator is the

debtor of the interest generator credit or the operator in charge of the debtor or

by 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 attributed the payment of interest to the benefit of the beneficial owner must

also be considered as a paying agent at the time of that payment or the

allocation of the same. This provision does not apply if the operator

economic has reason to believe, on the basis of supporting elements

officers presented by the entity, which:

a) whether it is a legal person, with the exception of legal persons

referred to in paragraph 5 of this Article; or

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

in matters of corporate taxation; or

c) whether it is an authorized UCITS of harmony with the provisions of the

Directive 85 /611/CEE of the Council or of an investment body

equivalent collective set in the Isle of Man.

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

entity of this type established in another Contracting Party that is considered

as a paying agent under the terms of this paragraph shall communicate the name and the

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

entity, to the competent authority of its Contracting Party of establishment,

who will then communicate this information to the competent authority of the Party

Contractor of establishment of the said entity.

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

effects of this Agreement as an OICVM or equivalent body referred to

in point (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 Parties shall lay down the rules

specific relating to this possibility for the entities established in their

territory.

4. Should the economic operator and the entity referred to in paragraph 2 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 it acts

in the quality of paying agent.

5) Legal persons excluded from the application of paragraph 2 (a) shall be:

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, "payment of interest" means:

a) the interest paid or credited to account in respect of claims from any

nature, with or without a mortgage guarantee and with a right or not to participate

in the profits of the debtor, and, in particular, the income of the public debt and

of loan obligations, including premiums achievable to such securities;

the penalties for late payment are not considered to be

payment of interest;

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

reimbursement or the rescue of the credits referred to in point (a);

c) the income from interest payments, whether these are

performed directly, either through an entity referred to in the

n Article 7 (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

Isle of Man;

iii) entities that benefit from the possibility provided for in paragraph 3 of the

article 7 of this Agreement;

iv) bodies for collective investment established outside the territory a

that applies to the Treaty establishing the European Community by force

from your article 299 ° and off the Isle of Man.

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

parts or units of participation in the following bodies and entities,

if they have invested, directly or indirectly, through other

collective investment bodies or authorities below, more

of 40% of its asset in credits referred to in (a):

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

Directive 85 /611/CEE;

ii) an equivalent collective investment body established in the

Isle of Man.

iii) entities that benefit from the possibility provided for in paragraph 3 of the

article 7 of this Agreement;

iv) bodies for collective investment established outside the territory a

that applies to the Treaty establishing the European Community by force

from your article 299 ° and off the Isle of Man.

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

d (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 from a payment of interest within the meaning of points (a) and (b) of paragraph 1 of the

present article.

2. As referred to in points (c) and (d) of paragraph 1 of this Article, if an agent

payer does not have any information relating to the part of income

coming from interest payments, the total amount of income must be

considered as payment of interest.

3. With respect to paragraph 1 (d) of this Article, if a paying agent

do not have any information regarding the percentage of the asset invested in

credits or in parts or units of participation as defined in that paragraph,

it should be considered that that percentage is more than 40%. When it can't

determine the amount of income realized by the beneficial owner,

it is considered that the yield is the product of the assignment, refund or ransom

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 7 of this Agreement interest, as defined in paragraph 1, and that entity

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

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

that entity.

5. As regards paragraphs (b) and (d) of paragraph 1 of this Article, the Parties

Contractors may require paying agents located on their territory to

annualization of interest in relation to a period that may not exceed one year, and

treat these annualized interest as a payment of interest even if not if

has verified any assignment, refund or rescue during that period.

6. By way of derogation from paragraphs (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 those provisions from bodies or entities

established in their territory whenever the investments of these entities in the

credits referred to in point (a) of paragraph 1 do not exceed 15% of their asset. Of the same

mode, by way of derogation from the provisions of paragraph 4 of this Article, the Parties

Contractors may decide to exclude from the definition of constant interest payment

of paragraph 1 the interest paid or credited to an account of an entity referred to in paragraph 2

of Article 7 of this Agreement which does not benefit from the possibility provided for in the

n Article 7 (3) of this Agreement and is established in its territory,

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

of paragraph 1 do not exceed 15% of its asset.

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

too many Contracting Parties.

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

n ° 3 of this Article shall pass from 25%.

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

this article should be determined in relation to the investment policy such

as defined in the regulation of the fund or in the constitutive documents of the

organisms or entities concerned or, in their absence, depending on the composition

effective of the assets of such bodies or entities.

Article 9 Breakdown of revenue from withholding tax

1. The Isle of Man shall withhold 25% of the withholding tax deducted under the

present Agreement and transfer the remaining 75% of these revenue to the other Party

Contractor.

2. When applying a withholding tax, in harmony with Article 4 (4) of the

This Agreement, the Isle of Man shall conserve 25% of its revenue and

transfer 75% of these revenues to Portugal in the proportion of the transfers

carried out in accordance with paragraph 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 Isle of Man.

4. When applying a withholding tax, the Isle of Man shall adopt the measures

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

recipes.

Article 10 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

The Isle of Man 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

withholding tax on the Isle of Man, the other Contracting Party shall

give you a tax credit equal to the amount of the withholding tax

compliance with their domestic law. In the case of the amount of this

exceed the amount of tax due in accordance with your right

internal, the other Contracting Party shall reimburse to the beneficial owner

the amount of the withholding tax paid in excess;

ii) if, to be added to the withholding tax referred to in Article 4 of the present

Agreement, the interest received by an effective beneficiary has been

subject to any other type of withholding tax / withholding tax and the

Part Contractor of tax residence grants a tax credit for

this withholding tax / withholding tax in accordance with your

internal law or conventions on double taxation, such other retention in the

source / withholding tax should be credited before being applied the

procedure set out in paragraph (i) of this Article.

2. The Contracting Party's 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 1 of this Agreement.

Article 11 Transitional provisions for negotiable debt securities

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

by December 31, 2010 at the latest, national obligations and

international and other negotiable debt securities whose initial issuance is

previous to March 1, 2001 or whose initial prospectuses have been targeted

before that date by the competent authorities within the meaning of the

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

third parties should not be considered credits within the meaning of point (a) of paragraph 1 of the

Article 8 of this Agreement, provided that no new issuance is carried out

of these negotiable debt securities as of March 1, 2002. However, case

the transition period continues to invigorate after December 31, 2010, the

provisions of this article will only continue to apply to debt securities

negotiable:

-that include "all-of-all" clauses and early redemption; and

-in cases where the paying agent is established in a Party

Contractor who applies the withholding tax and in which such paying agent

pay interest or ascribe the payment of interest in immediate advantage of a

beneficial owner resident in the other Contracting Party.

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

tradable credit referred to above issued by a public administration or

afim entity, acting in the quality of public authority, or whose function is

recognized in an international treaty, as defined in the Annex to the present

Agreement, all emissions from that title, i.e. the initial issue and any issuance

additional, should be considered as an issue of a credit title in the

meaning of subparagraph (a) of Article 8 (1) of this Agreement.

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

tradable credit listed above issued by any entity not covered

by the second paragraph, such a new issue shall be considered an issue of

a credit title within the meaning of Article 8 (1) (a) of the present

Agreement.

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

to tax the income from the tradable debt securities referred to in paragraph 1 of

harmony with the respective internal right.

Article 12 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 13 Confidentiality

1. The confidentiality of all information provided and received must be preserved

by the competent authority of a Contracting Party.

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

may be used for any effect other than for the effects of taxation

direct without prior written consent of the other Contracting Party.

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

interested in the purpose of direct taxation, and used by such persons or

authorities only for these purposes or for supervisory purposes, which may

include the introduction of an eventual appeal. For this purpose, the information may

be disclosed in a public hearing or in a court decision.

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

information that it has received from the competent authority of the other Contracting Party

may be useful to the competent authority of another Member State, may

transmit you such information with the agreement of the competent authority which

provided the information.

Article 14 Transitional Period

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

Man shall cease to apply the withholding tax and the allocation of the planned revenue

in this Agreement and shall apply in respect of the other Contracting Party to

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

Chapter II of the Directive. If during the transitional period the Isle of Man chooses to apply

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

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

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

Article 15 Entry into force

Subject to the provisions of Article 17 of this Agreement, the present Agreement enters into

vigour on January 1, 2005.

Article 16 Denpronunciation

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

Contractor.

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

notice in writing to the other Contracting Party, in a notification specifying the

circumstances that led to that same notification. In this case, the present

Agreement cede no effect of 12 months after notification.

Article 17 Application and suspension of application

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

all Member States of the European Union, by the United States of America,

the Switzerland, Andorra, oLiechtenstein, Monaco and São Marino, and by all territories

dependent and relevant associates of the Member States of the Community

European, respectively, of measures that conform to or be equivalent

to those contained in the Directive or in this Agreement, and provide for the same dates as

application.

2. The Contracting Parties shall decide by common agreement, at least six months

prior to the date referred to in Article 15 of this Agreement, if the condition

set out in paragraph 1 will be met, taking into account the dates of entry into force

of the relevant measures in the Member States, third countries and territories

dependent or associated in question.

3. Subject to the procedure of mutual agreement provided for in Article 12 of the present

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

another that specifies the circumstances that led to that notification, in the case of the

Directive shall cease to be applicable, on a temporary or permanent basis, in

compliance with Community law or in the case of a Member State

suspend the application of its transposition legislation. The implementation of the Agreement will be

resume as soon as they cease to check the circumstances that led to the

suspension.

4. Subject to the procedure of mutual agreement provided for in Article 12 of the present

Agreement, any of the Contracting Parties may suspend the application of the present

Agreement by notification to the other that specifies the circumstances that led

to such 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 the

application will not be able to occur less than two months after notification. The application

of the Agreement will be resumed as soon as the measures are reimposed by the third country or

territory in question.

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

ANNEX

List of the equated entities referred to in Article 11 para.

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

" afim entity, acting in the quality of public authority, or whose function is

recognized in an 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

Autonomous Community 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

-ργανισμός tions ηλεπικοινωνιών Ελλάδος (Organism of Telecommunications of the

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 the

Social Debt)

-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 Parties

Contractors may have assumed in respect of the international entities above

referred to.

ENTITIES IN THIRD COUNTRIES:

The entities that fulfil the following criteria.

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

national criteria.

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

funds a group of activities, which essentially consist of providing goods

and non-market services intended for collectivity, and which are effectively

controlled by 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 clauses of

ressarcement ( gross-up ).

CONDITIONS OF AMENDMENT OF THIS ANNEX:

The list of equiparable entities listed in this Annex may be amended by

mutual agreement

.

____________________________________ --

_______________________________________________

AGREEMENT

IN THE FORM OF AN EXCHANGE OF LETTERS

ON THE TAXATION OF SAVINGS INCOME AND THE PROVISIONAL

APPLICATION

DATA

A. Letter from the World's Republic

Sir,

I have the honour to refer to the texts of the "Proposed Model Agreement"

between each other of Guernsey, Isle of Man, and Jersey and each individual EU Member

State that is to apply automatic exchange of information "and the" Proposed Model

Agreement between each other of Guernsey, Isle of Man, and Jersey and each individual EU

Member State that is to apply the withholding tax in the transitional period ", that

banned from the negotiations with the Island Authorities on a Savings Tax Agreement,

and that were, as an Annex to the Annex I and

Proceeding II, to the Outcome of Proceedings of the High Level Working Party of the

Council of Ministers of the European Union of 12 March (Doc. 7408/04 FISC 58).

In view of the above mentioned texts I have the honour to propose to you the

"Agreement on the taxation of savings income" as contained in Appendix 1 to this

letter, and our mutual undertaking to be told at the earliest possible date with our

internal constitutional reform for the entry into force of this Agreement and to

notify each other without delay when such journalist are

completed.

Pending the completion of these internal procedures and the entry into force of this

"Agreement on the taxation of savings income", I have the honour to propose to you

that Portugal and the Isle of Man apply this Agreement provisionally, within the

framework of our respective domestic constitutional requirements, as from 1 January

2005, or 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, whichever is later.

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

letter and your confirmation shall together receives an Agreement between Portugal

and the Isle of Man.

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

For the World Republic

Minister of State and Finance

Done at Lisbon, on Jun 22, 2004, in the English language in three copies.

B. Letter from the Isle of Man

Sir,

I have the honour to acknowledge receipt of your letter of today's date, which reads as

follows:

" Sir,

I have the honour to refer to the texts of the "Proposed Model Agreement"

between each other of Guernsey, Isle of Man, and Jersey and each individual EU member

State that is to apply automatic exchange of information "and the" Proposed Model

Agreement between each other of Guernsey, Isle of Man, and Jersey and each individual EU

member State that is to apply the withholding tax in the transitional period ", that

banned from the negotiations with the Island Authorities on a Savings Tax Agreement,

and that were served, as an outcome of the Annex I and Annex II, to the Outcome of

Proceedings of the High Level Working Party of the Council of Ministers of the Council of Ministers of the

European Union of 12 March (Doc. 7408/04 FISC 58).

In view of the above mentioned texts I have the honour to propose to you the

"Agreement on the taxation of savings income" as contained in Appendix 1 to this

letter, and our mutual undertaking to be told at the earliest possible date with our

internal constitutional reform for the entry into force of this Agreement and to

notify each other without delay when such a completed are completed.

Pending the completion of these internal procedures and the entry into force of this

"Agreement on the taxation of savings income", I have the honour to propose to you

that Portugal and the Isle of Man apply this Agreement provisionally, within the

framework of our respective domestic constitutional requirements, as from 1 January

2005, or 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, whichever is later.

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

this letter and your confirmation shall together receive an Agreement between

Portugal and the Isle of Man.

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

I am able to confirm that the Isle of Man is in agreement with the contents of your letter.

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

For the Isle of Man

Treasury Minister

Done at Douglas, on 11/19/2004, in the English language in three copies.

Appendix 1

AGREEMENT ON THE TAXATION OF SAVINGS INCOME BETWEEN

THE ISLE OF MAN

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 provisions necessary to be made with this Directive

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 a withholding tax on the same terms as are contained in

Articles 11 and 12) ".

2. The relationship of the Isle of Man with the EU is determined by Protocol 3 of the

Treaty of Accession of the United Kingdom to the European Community. Under the

terms of the Protocol the Isle of Man is not within the EU fiscal territory.

3. the Isle of Man 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, photographs

Austria, Belgium and Luxembourg, during the transitional period, shall not be

required to exchange information but shall apply to withholding tax to the savings

income covered by the Directive.

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

tax " in the Isle of Man's domestic legislation. For the purposes of this Agreement

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

and shall have the same thing.

5. the Isle of Man has agreed to apply for retention tax with effect from 1 January 2005

provided the Member States have adopted the laws, regulations, and administrative

necessary to be necessary to be necessary with the Directive, and the requirements of Article

17 of the Directive and Article 17 (2) of this Agreement have generally been met.

6. the Isle of Man has agreed to apply automatic exchange of information 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.

7. the Isle of Man has legislation relating to undertakings for collective investment

that is to be equivalent to be equivalent in its effect to the EC legislation referred to in Articles

2 and 6 of the Directive.

The Isle of Man and Portugal opposition referred to as a "contracting party" or the

"contracting parties" unless the context otherwise requires,

Have agreed to agree 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 Isle of Man in the same manner as to the

competent authority of a Member State;

(b) the application by the Isle of Man, 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 Isle of

Man to the competent authority of Portugal in accordance with Article 13 of

the Directive;

(d) the transfer by the competent authority of the Isle of Man 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

Parties means "the Minister of Finance or an authorised representative" in

respect of Portugal and "the Chief Financial Officer of the Treasury or his delegate" in

respect of the Isle of Man.

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 Isle of Man to beneficial owners within the course of Article 5

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

Agreement, be subject to a retention 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% percent.

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 Isle of Man, 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 interest;

(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 banned from sale, redemption or refund;

and Portugal will be charged with paragraph (2) of this Article.

(2) Within six months following the end of the tax year, the competent authority of

Portugal shall communicate to the competent authority of the Isle of Man,

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 Isle of Man 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 paying 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) a procedure which would be that retention tax shall not be increased 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 paragraph (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

a:

(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 Isle

of Man 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 Isle of Man 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 or income referred to in (b)

or (d) of that paragraph or by a levy of equivalent effect to be borne by the

recipient on the full amount of the sale 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 Isle of Man 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 age of retention tax by the Isle of Man shall not vary the other

house 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 Isle of Man 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 convicted an interest payment or any individual for an individual's 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 Isle of Man, 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 or 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

braking with the minimum standards established in paragraphs (2) and (3).

(2) 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 1 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 10th June, 1991 in the case of Portugal or

equivalent legislation in the case of the Isle of Man 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

do we have a good of contractual relations, on or after 1 January, 2004 the paying agent

shall establish the identity of the beneficial owner, shall establish 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

Helpful 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, by the beneficial

owner, the identity shall be recommended 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 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

equivalent legislation in the case of the Isle of Man;

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

against a degree of contractual relations, on or after 1 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 declarates 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

discuss the 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 undertaking for collective investment established in

the Isle of Man.

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 contracting 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 held for the purposes of this Agreement as an UCITS or

equivalent undertaking as a referred to in sub-paragraph (c) of paragraph (2) of this

article. The exercise of this option shall require a certificate to be issued by the

party in which the entity is established and has applied to the economic

operator by that entity. The party's party shall lay down the detailed rules for

this option for entities established in its 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 a party shall be

take the necessary measures to ensure that the entity is exploring 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

ans and prizes attaching to such securities, bonds or debentures;

penalty charges for late payment shall not be imposed on 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

Isle of Man;

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

Agreement;

(iv) undertakings for collective investment established outside the territory

to which the Treaty applies the European Community applies by

virtue of Article 299 protests and outside the Isle of Man.

(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

Isle of Man.

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

Agreement;

(iv) undertakings for collective investment established outside the territory

to which the Treaty applies the European Community applies by

virtue of Article 299 protests and outside the Isle of Man.

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 was to be directly or indirectly caused by

deriving from interest payments within the banned 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 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 as 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 helpful to the benefits of the study 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 following paragraphs (1) (b) and (d) of this Article, a party's 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 populations from paragraphs (1) (c) and (d) of this Article, the

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. Thereof, by way of a paragraph of paragraph (4) of this Article, a

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 been 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% 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 be 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 Isle of Man shall retain 25% percent of the retention tax deducted under this

Agreement and transfer the remaining 75% of the revenue to the other contracting

party.

(2) the Isle of Man levying retention tax in accordance with Article 4 (4) of this

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

pursuant to the transfers carried 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 Isle of Man.

(4) the Isle of Man 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) A 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

Shall be alleged by the Isle of Man 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 Isle of Man, the other contracting party shall be 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, the other contracting party 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 other

withholding/retention tax shall be credited 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 a refund of the retention tax referred to in Article 1 of this

Agreement.

Article 11 Transitional provisions for negotiable debt securities

(1) During 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 1 March 2001 or for

which the original looking forward prospectuses have been approved before that date by the

competent authorities within the roof of Council Directive 80 /390/EEC or by

the responsible authorities in third countries shall not be considered as debt claims

within the Article 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:

-which contain gross up and early redemption clauses; and,

-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 underway

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

Thereof of Article 8 (1) (a) of this Agreement.

If a further issue is made on or after 1 March 2002 of an underway

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 resolve the matter by mutual agreement.

Article 13 Confidentiality

(1) All information provided and received by the competent authority of a contracting party

party shall be kept confidential.

(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 Isle

of Man shall cease to apply for the retention tax and revenue sharing provided for in this

Agreement and shall apply in respect of the other contracting party 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 Isle of Man 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

Subject to the provisions of Article 17 of this Agreement, this Agreement shall come

into force on 1 January 2005.

Article 16 Termination

(1) This Agreement shall remain in force until terminated by either the contracting party.

(2) Non-deal party may terminate this Agreement by giving notice of

termination in writing to the other contracting party, such notice to specify the

circumstances 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) The contracting parties shall decide, by common accord, at least six months before

the date referred to in Article 15 of this Agreement, whether the condition set out

in paragraph (1) will be met having regard to the dates of entry into force of the

relevant measures in the Member States, the named third countries and the

dependent or associated territories concerned.

(3) Subject to the mutual agreement procedure provided for in Article 12 of this

Agreement, the application of this Agreement or parts enhancing may be suspended

by either a contracting party with immediate effect through notification to the other

Growing the 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

sums up as soon as the promises leading to the suspension no longer apply.

(4) Subject to the mutual agreement procedure provided for in Article 12 of this

Agreement, either a 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.

-----------------------------

The

List of related entities referred to in Article 11

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)

Greec and

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 Contracting 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 exploring 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.

CONDITIONS FOR PROCEEDING THE PRESENT DAY:

The list of related entities in this Annex may be enhancing by mutual agreement.