Law (2009:1118) If Agreement Between Sweden And Bermuda On The Mutual Agreement Procedure In Connection With The Adjustment Of Profits Of Associated Enterprises

Original Language Title: Lag (2009:1118) om avtal mellan Sverige och Bermuda 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=2009:1118

Article 1 the agreement between the Kingdom of Sweden and Bermuda if

the mutual agreement procedure in connection with the adjustment of

profits of associated enterprises, signed

on april 16, 2009 to apply that law in this country. The agreement is

drafted in English and appears in annex to this law.



section 2 of the tax rules of the agreement shall apply only to the

some of these causes restriction of the tax liability in

Sweden that would otherwise exist.



Transitional provisions



2009:1118



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



2. This Act shall apply



(a)) in respect of withholding taxes, on amounts paid or

tillgodoförs on 1 January of the year immediately following the

the date the law enters into force, or later, and



(b)) in respect of other taxes on income, to taxes levied

for tax years beginning on 1 January of the year

the immediately following the date the law enters into force, or

later.



Annex



AGREEMENT BETWEEN THE KINGDOM OF SWEDEN AND BERMUDA 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 Government of Bermuda, 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



The taxes to which this Agreement shall apply are: (a) in Bermuda: (i) any tax imposed by the Bermuda which is substantially similar to the existing taxes of Sweden to which this Agreement applies, but does not include payroll tax



(hereinafter referred to as "Bermudian tax");



(b) in Sweden: (i) the national income tax (State income tax);

and (ii) the municipal income tax (municipal tax)

(hereinafter referred to as "Swedish tax").



Article 2



Definition



1. For the purposes of this Agreement, unless the context otherwise requires: (a) the term "Party" means the Bermuda or Canada as the context requires; the term "Parties" means the Bermuda and Malaysia;



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



(c) the term "Bermuda" means the Islands of Bermuda;



(d) the term "resident of a Party" means (i) in Canada, any person, who, under the law of Canada is liable to tax therein by reason of his domicile, residence, place of management, place of incorporation or any other criterion of a similar nature; This term, however, does not include a person who is liable to tax in Canada in respect only of income from sources in Canada;



(ii) in Bermuda, an individual ordinarily resident in Bermuda, and a company, partnership or other entity created under the laws of Bermuda; provided that an entity created under the laws of Bermuda shall not be deemed to be resident in Bermuda unless its effective management is carried on in Bermuda;



(e) the term "enterprise" applies to the carrying on of any business;



(f) the term "enterprise of a Party means an enterprise carried on by a resident of a Party;



(g) the term "competent authority" means (i) in the case of Bermuda, the Minister of Finance, or an authorised representative;



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



2. As regards the application of this 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 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.



Article 4



Mutual agreement procedures



1. Where an enterprise considers that, in any case to which this Agreement applies, the principles set out in Article 3 have not been observed, 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 from 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 5



Entry into force



1. Each of the Parties shall notify the other in writing of the completion of the procedures required by its law for the entry into force of this Agreement.



2. The Agreement shall enter into force on the thirtieth day after the receipt of the later of these notifications and shall thereupon have effect: (i) in respect of taxes withheld at source, for amounts paid or credited on or after the first day of January of the year next following the date on which the Agreement enters into force;



(ii) in respect of other taxes on income, on taxes chargeable for any tax year beginning on or after the first day of January of the year next following the date on which the Agreement enters into force.



3. Notwithstanding paragraph 2, this Agreement shall only have effect when the Agreement signed on April 16, 2009, between the Kingdom of Sweden and Bermuda on the exchange of information with respect to taxes shall have effect.



Article 6



Termination



1. This Agreement shall remain in force until terminated by a Party. Either Party may terminate the Agreement, through diplomatic channels, by giving written notice of termination at least six months before the end of any calendar year. In such case, the Agreement shall cease to have effect: (i) in respect of taxes withheld at source, for amounts paid or credited on or after the first day of January of the year next following the end of the six month period;



(ii) in respect of other taxes on income, on taxes chargeable for any tax year beginning on or after the first day of January of the year next following the end of the six month 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 April 16, 2009, between the Kingdom of Sweden and Bermuda on the exchange of information with respect to taxes.



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



Done at Washington, this 16th day of April, 2009, in duplicate in the English language.



For the Government of the Kingdom of Sweden



Jonas Hafström



For the Government of Bermuda



Paula Ann Cox



(Translation)



AGREEMENT BETWEEN the KINGDOM of SWEDEN and BERMUDA on 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 Bermuda, 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



The taxes to which this Agreement shall apply are:



a) in Bermuda: 1) each tax levied in Bermuda and who are of essentially similar nature as the currently outgoing taxes in Sweden on which this Agreement shall apply, but that does not include tax of salary payments (hereinafter referred to as "tax in Bermuda"),



1) state income tax, and



b) in Sweden:



2) the municipal income tax



(in the following referred to as "Swedish tax").



Article 2



Definitions



1. Unless the context gives rise to different, have in the application


by this agreement the following expressions the following meaning:



a) "party" refers to Bermuda or Sweden, as the context requires;

"parties" refers to Bermuda and Sweden,



b) "Sweden" means the Kingdom of Sweden and the includes, when the expression is used in the geographic significance, Sweden's territory, territorial waters of Sweden and other maritime areas over which Sweden, in accordance with international law, exercises sovereign rights or jurisdiction;



c) "Bermuda" refers to Bermuda,



d) "resident of a party" means



1) in Sweden, a person who, under the law in Sweden is taxable there because of domicile, residence, place of management, place of incorporation or other similar circumstances. This expression, however, does not include a person who is liable to tax in Sweden only for income source in Sweden,



2) in Bermuda, the natural person who, under the laws of Bermuda are permanently resident there ("ordinarily resident") and the company, partnership or other entity that is incorporated under the laws of Bermuda. An entity that is incorporated under the laws of Bermuda are not considered to be domiciled in Bermuda, if not its effective management is practiced in Bermuda,



e) "company" means the exercise of any form of movement,



f) "company of a party" means the business carried on by a resident of a party,



g) "competent authority" means



1) in respect of Bermuda, the Minister of finance or his authorised representative,



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



2. When a party applies the contract at any time is deemed, unless the context otherwise raises, each expression that is not defined in the agreement have the same meaning as the expression has at that time under the law of that party in respect of such taxes to which the agreement is implemented and the importance that the term has under the applicable tax laws of that party prevail over the relevant term has under other legislation of that party.



Article 3



Principles for the adjustment of profits of associated enterprises



In cases where:



(a) an enterprise of a party participates directly or indirectly in the management or control of a company of the other party or own part in this undertaking, or



(b) the same person participates directly or indirectly in the management or control of a company in a party that is an enterprise of the other party or own some of both of these corporate capital, observed the following.



If between businesses in terms of trade or financial relations be agreed or laid down conditions which deviate from what would have been agreed between independent companies, receives all the income, that without such conditions would have been 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.



Article 4



The procedure for the mutual agreement



1. where an undertaking, in a case covered by this agreement, is of the opinion that the principles set out in article 3 have not been observed, it may, without prejudice to its right to make use of the remedies available under the domestic legal system of the party concerned, submit the matter to the competent authority of the party where the company is domiciled. The thing to be presented within three years from the time the company learned about the action that violates or is likely to be likely to be contrary to the principles set out in article 3. The competent authority shall then promptly notify the competent authority of the other party.



2. If the competent authority finds the complaint justified but are unable to achieve a satisfactory resolution, the competent authority shall seek decide by mutual agreement with the competent authority of the other party in order to avoid taxation which is contrary to the agreement. Agreement is carried out without prejudice to the time limits in the domestic law of the parties.



3. the competent authorities of the Parties shall, by mutual agreement, seek to determine difficulty or doubt arising in respect of 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 meet such agreement referred to in the preceding paragraphs.



Article 5



Date of entry into force



1. Each Party shall notify the other party of the measures taken pursuant to their respective legislation required that this agreement should enter into force.



2. the agreement shall enter into force on the thirtieth day after the date on which the last of these notifications is received and shall apply



1) in respect of withholding taxes, on amounts paid or tillgodoförs on 1 January of the year immediately following the date on which the agreement enters into force or later,



2) in respect of other taxes on income, to taxes levied for the fiscal year that begins on 1 January of the year immediately following the date on which the agreement enters into force or later.



3. without prejudice to paragraph 2, this Agreement shall apply only during the time when the agreement between the Kingdom of Sweden and Bermuda on the exchange of information relating to taxes signed on april 16, 2009.



Article 6



Termination



1. this Agreement shall remain in force until terminated by one party. Either party may terminate this agreement by written notification through diplomatic channels about this leave at least six months before the end of any calendar year. In the event of such termination, the agreement ceases to be valid



1) in respect of withholding taxes, on amounts paid or tillgodoförs on 1 January of the year immediately following the expiry of the six-month period or later,



2) in respect of other taxes on income, to taxes levied for the fiscal year that begins on 1 January of the year immediately following the expiry of the six-month period or later.



2. Notwithstanding paragraph 1, the agreement ceases to apply, without notice of termination, on the date of agreement between the Kingdom of Sweden and Bermuda on the exchange of information relating to taxes signed on april 16, 2009.



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



That took place in Washington on april 16, 2009, in duplicate in the English language.



For the Government of the Kingdom of Sweden



Jonas Hafström



For the Government of Bermuda



Paula Ann Cox