Law (2009:1112) If Agreement Between Sweden And The Cayman Islands On Mutual Agreement Procedure In Connection With The Adjustment Of Profits Of Associated Enterprises

Original Language Title: Lag (2009:1112) om avtal mellan Sverige och Caymanöarna 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=2009:1112

Article 1 the agreement between the Government of the Kingdom of Sweden and

The Cayman Islands Government on the procedure for the exchange of

agreement on the adjustment of profits of

Community of interest that was signed on June 17, 2009

apply that law in this country. The agreement is drawn up in English

and set out 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



2009:1112



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 GOVERNMENT OF THE KINGDOM OF SWEDEN AND THE GOVERNMENT OF THE CAYMAN ISLANDS FOR 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 the Cayman Islands, desiring to conclude an Agreement for the mutual agreement procedures access to 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 the Cayman Islands: any tax imposed by the Cayman Islands which is substantially similar to the existing taxes of Sweden to which this Agreement applies (hereinafter referred to as "the Cayman Islands tax");



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

and (ii) the municipal income tax (the communal income 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 Cayman Islands or Canada as the context requires; the term "Parties" means the Cayman Islands and Sweden;



(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 "the Cayman Islands" means the territory of the Cayman Islands and includes the territorial sea, areas within the maritime boundaries of the Cayman Islands and any area within which in accordance with international law the rights of the Cayman Islands with respect to the seabed homepage and sub-soil and their natural resources may be exercised;



(d) the term "resident of a Party" means (i) in Hong Kong, 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 the Cayman Islands, any person who, under its laws, is recognised as a resident by reason of his domicile, residence, or its place of incorporation, place of effective management or other criterion of a similar nature; provided that an entity shall not be deemed to be resident in the Cayman Islands unless its effective management is situated, and its active business is carried on, in the Cayman Islands;



(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 the Cayman Islands, the Dachshund Information Authority or a person or authority designated by it;



(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, 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 procedure



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. This Agreement shall have effect provided that the Agreement signed on April 1, 2009 between the Government of the Kingdom of Sweden and the Government of the Cayman Islands concerning information on tax matters has effect.



Article 6



Termination



This Agreement shall remain in force until terminated by a 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 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.



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



Done at Paris, this 17th day of June 2009, in duplicate in the English language.



For the Government of the Kingdom of Sweden



Gunnar Lund



For the Government of the Cayman Islands



William McKeeva Bush



(Translation)



AGREEMENT BETWEEN the GOVERNMENT of the KINGDOM of SWEDEN and the GOVERNMENT of the CAYMAN ISLANDS to MUTUAL AGREEMENT PROCEDURE in CONNECTION with the ADJUSTMENT of PROFITS of associated enterprises



The Government of the Kingdom of Sweden and the Government of the Cayman Islands, 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 the Cayman Islands: every tax in the Cayman Islands and which are mainly similar kind as the currently outgoing taxes in Sweden on which this Agreement shall apply (in the following referred to as "tax in the Cayman Islands"),



b) in Sweden:



1) state income tax, and



2) the municipal income tax



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




Article 2



Definitions



1. Unless the context gives rise to different, for the purposes of this agreement the following expressions the following meaning:



a) "party" refers to the Cayman Islands or Sweden, as the context requires; "parties" refers to the Cayman Islands 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) "Cayman Islands" means the territory of the Cayman Islands and includes its territorial waters and any area in which the Cayman Islands, in accordance with international law, may exercise rights with respect to the seabed and its subsoil and natural resources,



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 the Cayman Islands, person under its law is domiciled there because of domicile, residence, place of incorporation, place of actual management or other similar circumstances. A subject is not considered to be domiciled in the Cayman Islands on its place of effective management is situated, and its active business activities are pursued, in the Cayman Islands,



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 the case of the Cayman Islands, "the Tax Information Authority" or the person or authority that this appointment,



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 laws of that party and the importance of 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)) 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 if 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. this agreement is applicable provided that the agreement between the Government of the Kingdom of Sweden and the Government of the Cayman Islands of information in tax matters signed on april 1, 2009.



Article 6



Termination



This agreement will remain in force until terminated by one party. Either party may terminate this agreement by providing notice in writing to that effect 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.



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



That took place in Paris on June 17, 2009, in duplicate in the English language.



For the Government of the Kingdom of Sweden



Gunnar Lund



For the Cayman Islands Government



William McKeeva Bush