Law (2009:1125) If Agreement Between Sweden And Guernsey On The Mutual Agreement Procedure In Connection With The Adjustment Of Profits Of Associated Enterprises

Original Language Title: Lag (2009:1125) om avtal mellan Sverige och Guernsey om förfarande för ömsesidig överenskommelse vid justering av inkomst mellan företag i intressegemenskap

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Read the untranslated law here: http://rkrattsbaser.gov.se/sfst?bet=2009:1125

section 1 of the agreement between the Kingdom of Sweden and the Guernsey if

mutual agreement procedure in connection with the adjustment of

profits of associated enterprises signed

on October 28 2008 to be valid as law in this country. Agreement

is drawn up in English and appears in annex to this law.



section 2 of the tax rules of the agreement are to be applied only to the

share these results in reduction of the tax liability in

Sweden that would otherwise exist.



Transitional provisions



2009:1125



1. This law shall enter into force on the day the Government determines.



2. This law shall apply to taxes levied for

fiscal years beginning on 1 January of the year following

immediately following the year in which the law comes into force or later.



Annex



AGREEMENT BETWEEN THE KINGDOM OF SWEDEN AND THE STATES OF GUERNSEY ON THE ACCESS TO MUTUAL AGREEMENT PROCEDURES IN CONNECTION WITH THE ADJUSTMENT OF PROFITS OF ASSOCIATED ENTERPRISES



The Government of the Kingdom of Sweden and the States of Guernsey ("the Parties"), desiring to conclude an Agreement on the access to mutual agreement procedures in connection with the adjustment of profits of associated enterprises, have agreed as follows:



Article 1 Taxes covered



This Agreement shall apply to taxes on income and profits.



Article 2



Definition



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



(a) the term "Sweden" means the Kingdom of Sweden and, when used in a geographical sense, includes the national territory, the territorial sea of Sweden as well as other maritime areas over which Sweden in accordance with international law exercises sovereign rights or jurisdiction;



(b) the term "Guernsey" means Guernsey, Alderney and Herm, including the territorial sea adjacent to those islands, in accordance with international law;



(c) the term "competent authority" means



(i) in the case of Guernsey, the Administrator of Income Tax or his delegate;



(ii) in the case of Sweden, the Minister of Finance, his authorised representative or the authority which is designated as a competent authority for the purposes of this Agreement.



2. As regards the application of the Agreement at any time by a Party, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that Party for the purposes of the taxes to which the Agreement applies, any meaning under the applicable tax laws of that Party prevailing over a meaning given to the term under other laws of that Party.



Article 3



Principles applying to the adjustment of profits of associated enterprises 1. Where:



(a) an enterprise of a Party participates directly or indirectly in the management, control or capital of an enterprise of the other Party, or



(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Party and an enterprise of the other Party, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would , but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.



2. Where a Party includes in the profits of an enterprise of that Party-and taxes accordingly-profits on which an enterprise of the other Party has been charged to tax in that other Party and the profits so included are profits which would have accrued to the enterprise of the first-mentioned Party if the conditions made between the two enterprises had been those which would have been made between independent enterprises , then that other Party shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Agreement.



Article 4



General commissions



Where a Party intends to adjust the profits of an enterprise in accordance with the principles set out in Article 3, it shall in accordance with its laws inform the enterprise of the intended action in due time and give it the opportunity to inform the other enterprise so as to give that other enterprise the opportunity to inform in turn the other Party.

However, the Party providing such information shall not be prevented from making the proposed adjustment



Article 5



Mutual agreement procedures



1. Where an enterprise considers that, in any case to which this Agreement applies, the actions of one or both of the Parties result or will result for it in double taxation, it may, irrespective of the remedies provided by the domestic law of the Party concerned, present its case to the competent authority of the Party of which it is a resident. The case must be presented within three years of the first notification of the action which is contrary or is likely to be contrary to the principles set out in Article 3. The competent authority shall then without delay notify the competent authority of the other Party.



2. The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Party, with a view to the avoidance of taxation which is not in accordance with the Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Parties.



3. The competent authorities of the Parties shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement.



4. The competent authorities of the Parties may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs.



Article 6 Entry into force



1. This Agreement shall enter into force on the thirtieth day after the later of the dates on which each of the Parties has notified the other in writing that the procedures required by its law have been complied with. The Agreement shall have effect on taxes chargeable for any tax year beginning on or after the first day of January of the calendar year next following that in which this Agreement enters into force.



2. Notwithstanding paragraph 1, this Agreement shall only have effect when the Agreement signed on 28 October 2008 between the Kingdom of Sweden and the States of Guernsey for the exchange of information relating to tax matters shall have effect.



Article 7



Termination



1. This Agreement shall remain in force until terminated by either Party. Either Party may terminate the Agreement by giving written notice of termination at least six months before the end of any calendar year. In such event, the Agreement shall cease to have effect on taxes chargeable for any tax year beginning on or after the first day of January of the calendar year next following the end of the six months period.



2. Notwithstanding paragraph 1, this Agreement will be terminated, without giving notice of termination, on the date of termination of the Agreement signed on 28 October 2008 between the Kingdom of Sweden and the States of Guernsey for the exchange of information relating to tax matters.



In witness whereof the undersigned being duly authorised thereto have signed this Agreement.



Done at Helsinki, this 28th day of October 2008, in duplicate in the English language.



For the Government of the Kingdom of Sweden



Anders Borg



For the States of Guernsey



Lyndon Trott



(Translation)



AGREEMENT BETWEEN the KINGDOM of SWEDEN and the GUERNSEY of the MUTUAL AGREEMENT PROCEDURE in CONNECTION with the ADJUSTMENT of profits of associated enterprises



The Government of the Kingdom of Sweden and the Government of Guernsey ("the parties"), desiring to conclude an agreement on the mutual agreement procedure in connection with the adjustment of profits of associated enterprises, have agreed as follows:



Article 1



Taxes covered by the agreement



This agreement shall apply to taxes on income.



Article 2



Definitions



1. Unless the context shall give rise to another, have for the purposes of this agreement the following expressions below specified meaning: a) "Sweden" means the Kingdom of Sweden and the includes, if the term is used in the geographical sense, the territory of Sweden, Sweden's territorial waters and other maritime areas over which Sweden, in accordance with international law, exercises sovereign rights or jurisdiction;



(b)) "Guernsey" means Guernsey, Alderney and Herm, including territorial waters adjacent to these islands in accordance with international law,



(c)) "competent authority" means



1) in Guernsey, "the Administrator of Income Tax or his delegate,



2) in Sweden, the Minister of finance or his authorised representative or the authority to whom has been assigned to be a competent authority for the purposes of this agreement.



(2) where a party applies the agreement at any time shall be deemed to, unless the context shall give rise to another, any expressions that are not defined in this agreement have the meaning as the expression has at that time under the law of that party in respect of such taxes to which the agreement shall apply and the importance that the term has under the applicable tax laws of that party owns overrides the importance of expression have under other legislation in this party.



Article 3



Principles governing the adjustment of profits of associated enterprises



1. In cases where




(a)) a company in a party directly or indirectly involved in the management or control of a company of the other party or own part of this company's capital, or b) the same persons participate directly or indirectly in the management or control of a company in a party that a company of the other party or own part in both of these corporate capital , observed the following.



If between businesses in terms of trade or financial relations be agreed or prescribed conditions, which differ from those which would have been agreed between independent companies, all the income, that without such conditions would have added one company but because of the conditions in question did not come about this company, be included in that company's income and taxed accordingly.



2. In cases where a party to the income of an enterprise of that party include-and taxes accordingly-income on which an enterprise of the other party being taxed in that other party, and thus included the income is such that would have created the company in the first-mentioned party if the conditions agreed between the enterprises had been those which would have been agreed between independent enterprises , the other party carry out appropriate adjustment to the amount of tax payable on income there. When such adjustments are observed the other provisions of this agreement.



Article 4



General provision



If a party intends to adjust the income of an enterprise in accordance with the principles set out in article 3, it shall, in accordance with their legislation in good time inform the company thereof and give the company the opportunity to inform the other company so that it may in turn inform the other party. The party providing such notice is however not able to implement the proposed adjustment.



Article 5



Mutual agreement procedure



1. If a company believes that a party or both parties, in a case covered by this agreement, adopted measures which the company incurs or will result in double taxation, it may, without prejudice to its right to make use of the remedies available in its internal legal order, submit the matter to the competent authority of the Contracting Party in which it is domiciled. The thing to be presented within three years from the date on which the undertaking in question had knowledge of the action that is contrary to or likely to be presumed to be contrary to the principles set out in article 3. The competent authority shall then immediately inform the competent authority of the other party.



2. If the competent authority finds the objection founded but cannot bring about a satisfactory resolution, the authority shall seek its decision by mutual agreement with the competent authority of the other party in order to avoid taxation which is contrary to the agreement. Agreement reached is carried out without prejudice to the time limits in the domestic law of the parties.



3. the competent authorities of the Parties shall decide by mutual agreement, seek difficulties or doubts arising concerning the interpretation or application of the agreement.



4. the competent authorities of the parties may enter into direct relations with each other in order to reach agreement in the sense of the preceding paragraphs.



Article 6



Date of entry into force



1. This agreement shall enter into force on the thirtieth day following the date on which the last of the written notifications-which the parties should leave when the measures required under their respective legislation, has been provided. The agreement shall apply to taxes levied for the fiscal year that begins on 1 January of the calendar year following the calendar year in which the agreement enters into force or later.



2. by way of derogation from paragraph 1, this agreement is only applicable when the agreement between the Kingdom of Sweden and Guernsey for the exchange of information in tax matters signed on 28 October 2008 is applicable.



Article 7



Termination



1. this agreement will remain in force until it is terminated by either party. Each party can terminate the agreement in writing by notification to that effect at least six months before the end of any calendar year. In the event of such termination, the agreement ceases to apply in respect of tax levied for the fiscal year that begins on 1 January of the calendar year immediately following the expiry of the six-month period or later.



2. by way of derogation from paragraph 1, this agreement ceases to apply, without termination, on the date on which the agreement between the Kingdom of Sweden and Guernsey for the exchange of information in tax matters signed on 28 October 2008, expires.



In witness whereof the undersigned, being duly authorised, have signed this agreement.



Done at Helsinki on 28 October 2008, in duplicate in the English language.



For the Government of the Kingdom of Sweden



Anders Borg



For the Government of Guernsey



Lyndon Trott