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Approving The Agreement Between The Portuguese Republic And The British Crown Dependent Territory Of Anguilla, By Exchange Of Letters Respectively To 29 December 2004 And 21 January 2005 Concerning The Taxation Of Savings Income Approving

Original Language Title: Aprova o Acordo entre a República Portuguesa e o Território Dependente da Coroa Britânica de Anguilla, por Troca de Cartas, respectivamente de 29 de Dezembro de 2004 e de 21 de Janeiro de 2005, Relativo à Tributação dos Rendimentos da Poupança que Aprova

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MOTION FOR RESOLUTION No. 21 /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 entered into with Anguilla enshrines the normative framework for

that this territory adopts the said measures, particularly those relating to

automatic transmission of information on interest payments to persons

singular residents in Portuguese territory, 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 Anguilla, by Exchange of Letters, respectively December 29-

2004 and of January 21, 2005, Relative to the Taxation of Savings Income,

whose text, the Convention between the Portuguese Republic and Anguilla Concerning Troca

Automatic Information in Matter of Savings from Savings under the Form of

Payment of Interest by those approved and respective Attachment, in the authenticated versions

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 SAVINGS INCOME

A. Charter of the Portuguese Republic

Excelent Lord,

I have the honour to refer to the text of the model proposal of " Convention between

Anguilla and the Portuguese Republic concerning the automatic exchange of information in

income matters from savings in the form of interest payments ", approved

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

Ministers of the European Union, June 22, 2004.

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

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

constant from Appendix 1 to this letter,

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

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

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

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

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

present agreement;

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

such internal constitutional formalities and of proceeding without delay to the

reciprocal notification through the formal channels that these formalities are

completed.

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

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

set, the reciprocal acceptance and the conclusion of the Agreement between Portugal and Anguilla.

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

By the Government of the Portuguese Republic

Minister of Finance and Public Administration

Made in Lisbon, in, in the Portuguese and English languages, in three

exemplars.

B. Proposal for a response from the Government of Anguilla

Excelent Lord,

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

following content:

" Excellent Lord,

I have the honour to refer to the text of the model proposal of " Convention

between Anguilla and the Portuguese Republic concerning the automatic exchange of information

in matters of income from savings in the form of interest payments ",

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

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

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

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

savings " constant from Appendix 1 to this letter,

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

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

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

provisions of Article 17º (2) of the Directive, subject to the notification

reciprocating that the internal constitutional formalities have been met

relating to the entry into force of this Agreement;

 propose the mutual commitment of ultimarms with the greatest possible brevity

the said internal constitutional formalities and of proceeding without

delay to the reciprocal notification through the formal channels of which such

formalities are completed.

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

that the present letter with the respective Appendix 1 and your confirmation

constitute, together, the reciprocal acceptance and the conclusion of the Agreement between

Portugal and Anguilla.

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

consideration. "

I can confirm that the Government of Anguilla is in accordance with the content of the letter of V.

Ex. th, from [...].

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

consideration,

[name, title and signature of individuality in Anguilla competent for the

signature]

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

CONVENTION BETWEEN ANGUILLA AND THE PORTUGUESE REPUBLIC

ON THE AUTOMATIC EXCHANGE OF INFORMATION IN RESPECT OF

INCOME FROM SAVINGS IN THE FORM OF PAYMENTS FROM

INTEREST

The Government of Anguilla and the Government of the Portuguese Republic, wishing to conclude a

Convention that allows the income from savings in the form of payments of

interest, carried out in one of the Contracting Parties to actual beneficiaries, who are

natural persons residing in the other Contracting Party, be subject to taxation

effective in harmony with the legislation of the last Contracting Party mentioned, in

compliance with Directive 2003 /48/CE of the Council of the European Union of 3 of

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

interest payments, agreed on the following:

Article 1º General Scope

1. This Convention applies to the interest paid by a paying agent

established in the territory of one of the Contracting Parties with a view to enabling

that the income from savings in the form of interest payments, made

in one of the Contracting Parties to actual beneficiaries, who are persons

natural residents in the other Contracting Party, be subject to taxation

effective in harmony with the legislation of the last mentioned Contracting Party.

2. The scope of this Convention shall be limited to the taxation of the

income from savings in the form of interest payments on credits, with

deletion, inter alia , of the matters relating to the taxation of pensions and the

benefits of insurance.

Article 2º Definitions

1. For the purposes of this Convention, unless the context requires interpretation

different:

a) The expression "a Contracting Party" and "the other Contracting Party" means

Anguilla or Portugal, depending on the context;

b) The term "Directive" means Directive 2003 /48/CE of the Council of the

European Union of June 3, 2003 on the taxation of income

of the savings in the form of interest payments, applicable to the date of

signature of this Convention;

c) The term "Portugal" means the territory of the Portuguese Republic situated

on the European continent, the archipelagos of the Azores and Madeira, the waters

interiors and the respective territorial sea, as well as the continental shelf

and any other space, where the Portuguese state exercises rights to

sovereignty or jurisdiction, according to the standards of international law;

d) The expression "beneficial owner" means the beneficial owner of

agreement with Article 2º of the Directive;

e) The expression "paying agent" means the paying agent in accordance with the

Article 4º of the Directive;

f) The expression "competent authority" means:

i) In the case of Anguilla: the Comptroller of Inland Revenue;

ii) In the case of Portugal: the Minister of Finance or a representative

authorized;

g) The expression "payment of interest" means the payment of interest in agreement

with Article 6º, having regard to the provisions of Article 15º of the Directive;

h) Any undefined term or expression of another mode will have the

meaning that is assigned to it by the Directive.

2. For the purposes of this Convention, in the provisions of the Directives for the

present Convention refers instead to "Member States" shall read: Parties

Contractors.

Article 3º Identification and determination of the place of residence of the beneficiaries

actual

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 Article 4º.

Such procedures shall comply with the minimum standards set out in paragraphs 2

and 3 of Article 3º of the Directive, with the proviso that, as far as Anguilla is concerned and

in relation to the point a) of the said numbers, the identification and residence of the

Beneficial Owner will be determined in accordance with the information that

have the Agent Pagador by virtue of the application of the relevant provisions of the

legislation in force in Anguilla concerning the prevention of the use of the system

financial for the purpose of money laundering.

Article 4º Automatic exchange of information

1. The competent authority of the Contracting Party where the paying agent is located

established shall communicate the information referred to in Article 8º of the Directive to

competent authority of the other Contracting Party of the residence of the beneficiary

effective.

2. Communication of the information will be automatic and will take place at least once

per year, within the six months subsequent to the end of the fiscal year of Part

Contractor of the paying agent, regarding all interest payments

performed during that year.

3. The exchange of information pursuant to this Convention shall be dealt with by the

Contracting Parties in molds consistent with the provisions of Article 7º of the

Council Directive 77 /799/CEE.

Article 5º Transposition

Prior to January 1, 2005, the Contracting Parties shall adopt and publish the

legislative, regulatory and administrative provisions necessary to

compliance with this Convention.

Article 6º Annex

The text of the Directive and Article 7º of the Council Directive 77 /799/CEE 19

of December 1977 on mutual assistance by the competent authorities

of the Member States, in the area of direct and indirect taxation, applicable to the date of

signature of this Convention and for which the present Convention refers,

are apse as Annex and form an integral part of this Convention. The

text of Article 7º of Directive 77 /799/CEE of the Constant Council of the Annex will be

replaced by the text of the said Article in the revision of Directive 77 /799/CEE of the

Advice if this revised Directive comes into force before the date from which the

provisions of this Convention produce effect.

Article 7º Entry into force

1. This Convention shall enter into force on the thirtieth day after the last of the dates in

that the respective Governments notify each other, in writing, that the

respective constitutionally required formalities have been satisfied, and their

provisions produce effect from the date on which the Directive is applicable in the

terms of paragraphs 2 and 3 of Article 17º of the Directive.

2. The provisions of Article 4º of this Agreement shall not produce effect in Portugal on the

absence of direct taxation in Anguilla.

Article 8º Denpronunciation

This Convention shall remain in force until it is denounced by a Party

Contractor. Any Contracting Party may denounce the Convention by way of

diplomatic, upon minimum advance notice of six months before the end of

any calendar year after the expiration of a period of three years from the date of

its entry into force. In such a case, the Convention will cease to apply relatively

to the periods commencing after the end of the calendar year in which the notice of denunciation was

done.

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

/Annex: text of Article 7º of Directive 77 /799/CEE

Annex: Text with Article 7º of Directive 77 /799/CEE

Provisions on secrecy

1. All the information that a Member State takes notice of in

application of this Directive are considered secret, in that state, of the same

mode that the information obtained in application of its national legislation.

In any case, the said information

Gains will only be provided to those directly connected to the establishment of the tax

or to the administrative control of the establishment of the tax;

Lawsuit will only be disclosed, on the other hand, on the occasion of court proceedings, of proceedings

penal or process that involves the application of administrative sanctions,

instituted for the establishment or control of the establishment of the tax

or with it related, and solely to the persons who intervene directly

in such proceedings; they may, however, disclose the said information in the course

of public hearings or on trial, if the competent authority of the State

Member providing the information not to submit objections;

Shall not be used, in any case, for other purposes other than tax or

for the purposes of judicial process, criminal procedure or process involving the

application of administrative sanctions, instituted for the establishment or the

control of the establishment of the tax, or with it related.

In addition, the Member States may provide that the information referred to in the

first sub-paragraph are used for the establishment of other levies,

rights and taxes referred to in Article 2º of Directive 76 /308/CEE 1

2. The provisions of paragraph 1 shall not impose on a Member State, whose legislation or practice

administrative establish, for internal purposes, more constrained limitations than those

1 JO L73 of 3/19/1976, p. 18.

contained in the said paragraph 1, which provides information if the State concerned does not

commit to respecting such restrictions.

3. By way of derogation from the provisions of paragraph 1, the competent authority of the Member State

which provides the information may authorize the use of such information for others

purposes, in the requesting State, provided that, in accordance with its own legislation, its

use is possible for the same purposes, under the same circumstances.

4. When the competent authority of a Member State considers that the

information that you have obtained from the competent authority of another Member State are

likely to be useful to the competent authority of a third State

Member, may pass them on to the latter with the agreement of the competent authority which

has provided.

AGREEMENT

IN THE FORM OF AN EXCHANGE OF LETTERS

ON THE TAXATION OF SAVINGS INCOME

A. Letter from the World's Republic

Sir,

I refer to the text of the proposed model " Convention between Anguilla and the

World Republic Concerning the Automatic Exchange of Information about Savings

Income in the form of Interest Payments " that was approved by the High Level Working

Party (Taxation of Savings) of the Council of Ministers of the European Union on 22

June 2004.

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

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

to this letter;

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

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

income in the form of interest payments, which date shall be subject to the

conditions set out in Article 17 (2) of the Directive, subject to the notification to each

other that the internal constitutional changes for the coming into effect of these

arrangements are completed;

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

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

formal channels when such heated are completed.

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

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

mutual acceptance and making of the arrangements between the Portuguese Republic

and Anguilla.

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

For the Government of the World Jewish Republic

Minister of Finance and Public Administration

Done at Lisbon, on in the English an English language in three

copies

B. Proposed reply from the Government of Anguilla

Sir,

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

follows:

" Sir,

I refer to the text of the proposed model " Convention between Anguilla and the

World Republic Concerning the Automatic Exchange of Information about Savings

Income in the form of Interest Payments " that was approved by the High Level Working

Party (Taxation of Savings) of the Council of Ministers of the European Union on 22

June 2004.

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

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

to this letter;

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

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

income in the form of interest payments, which date shall be subject to the

conditions set out in Article 17 (2) of the Directive, subject to the notification to each

other that the internal constitutional changes for the coming into effect of these

arrangements are completed;

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

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

formal channels when such heated are completed.

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

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

mutual acceptance and making of the arrangements between Portugal and Anguilla.

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

I am able to confirm that the Government of Anguilla is in agreement with the contents

of your letter dated [...].

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

[name, title and signature of the person in Anguilla competent for signature]

Done at [], on [], in the English an English language languages in three copies

CONVENTION BETWEEN ANGUILLA AND THE WORLD REPUBLIC

REGARDING THE AUTOMATIC EXCHANGE OF INFORMATION ABOUT

SAVINGS INCOME IN THE FORM OF INTEREST PAYMENTS

The Government of Anguilla and the Government of the World's Republic, desiring

to have a Convention which has increased savings income in the form of interest

payments made in one of the Contracting Parties to beneficial owners who are

individuals resident in the other Contracting Party, to be made subject to effective

taxation in accordance with the laws of the latter Contracting Party in conformity with

Directive 2003 /48/EC of the Council of the European Union of 3 June 2003 on taxation

of savings income in the form of interest payments, have agreed as follows:

Article 1 General Scope

1. This Convention shall apply to interest paid by a paying agent established within the

territory of one of the Contracting Parties with a view to enable savings income in the

form of interest payments made in one Contracting Party to beneficial owners who are

individuals resident for tax purposes in the other Contracting Party to be made subject to

effective taxation in accordance with the laws of the latter Contracting Party.

2. The scope of this Convention shall be limited to taxation of savings income in the

form of interest payments on debt claims, to the exclusion, inter alia, of the issues

relating to the taxation of pension and insurance benefits.

Article 2 Definitions

1. For the purposes of this Convention, unless the context otherwise requires:

a. The term "a Contracting Party" and "the other Contracting Party" mean Anguilla

or Portugal as the context requires;

b. The term "Directive" means the Directive 2003 /48/EC of the Council of the

European Union of 3 June 2003 on taxation of savings income in the form of

interest payments, the applicable at the date of signing this Convention;

c. The term "Portugal" means the territory of the Portuguese Republic situated in

the European Continent, the archipelagos of sovereignty and Madeira, the territorial

sea and inland waters served as well as the continental shelf and any other area

wherein the World State exercises sovereign rights or jurisdiction in

accordance with the rules of international law;

d. the term "beneficial owner" means the beneficial owner according to article 2 of

the Directive;

e. the term "paying agent" means the paying agent according to article 4 of the

Directive;

f. the term "competent authority" means:

i) in the case of Anguilla: the Comptroller of Inland Revenue;

ii) in the case of Portugal: the Minister of Finance or an authorised

representative;

g. the term "interest payment" means the interest payment according to article 6,

due account being taken of article 15, of the Directive;

h. any term not otherwise defined herein shall have been given to it in the

Directive.

2. For the purposes of this Convention, in the provisions of the general to which this

Convention refers, instead of "Member States" has to be read: Contracting Parties.

Article 3 Identity and residence of beneficial owners

Each Contracting 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 purpose of Article 4. These procedures shall be answered with the

minimum standards established in Article 3, paragraphs 2 and 3 of the Directive, with

the proviso that, with respect to Anguilla and in relation to meaning (a) of each of

these paragraphs, the identity and residence of the Beneficial Owner shall be established

on the basis of the information which is available to the Paying Agent by virtue of the virtue of the

application of the relevant provisions of legislation in force in Anguilla on prevention of

the use of the financial system for the purpose of money laundering.

Article 4 Automatic exchange of information

1. The competent authority of the Contracting Party where the paying agent is

established, shall communicate the information referred to in Article 8 of the

Directive to the competent authority of the other Contracting Party of residence of

the beneficial owner.

2. The communication of information shall be automatic and shall take place at least

once a year, within six months following the end of the tax year of the year

Party of the paying agent, for all interest payments made during that year.

3. Information exchange under this Convention shall be accessible by the Contracting

Parties in a manner consistent with the provisions of Article 7 of Directive

77 /799/EEC.

Article 5 Transposition

Before 1 January 2005 the Contracting Parties shall adopt and publish the laws,

regulations and administrative provisions necessary to be made with this Convention.

Article 6 Annex

The text of the Directive and of Article 7 of the Directive 77 /799/EEC of the Council of

the European Union of 19 December 1977 mutual assistance by the

competent authorities of the Member States in the field of direct and indirect taxation,

the applicable at the date of signing this Convention, and to which this Convention

refers, are appended as an Annex to, and form an integral part of, this Convention. The

text of Article 7 of Directive 77 /799/EEC in this proceedings shall be replaced by the text of

the said Article in the revised Directive 77 /799/EEC if this revised Directive enters into

force before the date from which the provisions of this Convention shall take effect.

Article 7 Entry Into Force

1. This Convention shall enter into force on the thirtieth day after the latter of the dates on

which the respective governments have notified each other in writing that the

required constitutionally required have been kissed with, and its provisions shall

have effect from the date from which the Directive is applicable according to Article

17, paragraph 2 and 3, of the Directive.

2. Article 4 of this Agreement shall not have any effect in Portugal in the diameter of direct

taxation in Anguilla.

Article 8 Termination

This Convention shall remain in force until terminated by one of the Contracting

Parties. Either Party may terminate the Convention, through diplomatic channels, by

giving notice of termination at least six months before the end of any calendar year after

the expiration of a period of three years from the date of its entry into force. In such

event the Convention shall cease to have effect for periods beginning after the end of

the calendar year in which the notice of termination has been given.

Done in the World and English languages all texts being equally authentic.

/Annex: text of Article 7 of Directive 77 /799/EEC

Namely: Text of Article 7 of Directive 77 /799/EEC

Provisions relating to secrecy

1. All information made known to a Member State under this Directive shall be kept

secret in that State in the same manner as the information received under its national

legislation. In any case, such information:

-may be made available only to the persons directly involved in the

assessment of the tax or in the administrative control of this assessment,

-may be made known only in connection with judicial proceedings or

administrative proceedings involving sanctions with a view to,

or relating to, the making or reducing the tax assessment and only to

persons who are directly involved in such proceedings; such information

may, however, be disclosed during public hearings or in judgements if the

competent authority of the Member State has detailed the information raises

on the objection,

-shall in no proceedings be used other than for taxation purposes or in

connection with judicial proceedings or administrative proceedings involving

sanctions that are with a view to, or in relation to, the making or

Obstacle the tax assessment.

In addition, Member States may provide for the information referred to in the

first obstacle to be used for assessment of other obstacle, duties and taxes covered by

Article 2 of Directive 76 /308/EEC 2 .

2. Paragraph 1 shall not oblige a Member State whose legislation or administrative

practices lays down, for domestic purposes, narrower limits than those contained in

the provisions of that paragraph, to provide information if the State concerned does

not least to respect those narrower limits.

3. paragraph 1, the competent authorities of the Member State

providing the information may permit it to be used for other purposes in the

requesting State if, under the legislation of the informing State, the information

could, in similar manner, be used in the informing State for similar purposes.

4. Where the competent authority of a Member State considers that information which it

has received from the competent authority of another Member State is likely to be

useful to the competent authority of a third Member State, it may transmit it to the

latter competent authority with the agreement of the competent authority which

supplied the information. "

2 OJ L 73, 3/19/1976, p. 18.