Act (1998:258) If Double Taxation Treaties Between Sweden And Macedonia

Original Language Title: Lag (1998:258) om dubbelbeskattningsavtal mellan Sverige och Makedonien

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section 1 of the agreement for the avoidance of double taxation with respect to

taxes on income and capital as Sweden and Macedonia

signed on 17 February 1998 shall apply that law here in

the country. The agreement is written in Swedish, Macedonian and

English. The Swedish and English text appears in annex

to this law.



section 2 of the agreement's tax rules shall apply only if these

involves restriction of the tax liability in Sweden that would otherwise

would exist.



3 repealed by law (2011:1390).



Transitional provisions



1998:258



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

apply to fiscal years beginning on January 1, the closest

After the day on which the Act comes into force or later.



2. The following provisions shall no longer apply as far as

refers to the relationship between Sweden and Macedonia, namely



Regulation (1982:70) If double tax agreement between

Sweden and Yugoslavia,



Regulation (1982:71) if the withholding of resident

in Yugoslavia, etc.



The specified conditions shall, however, continue to apply



(a)) on income which is acquired before 1 January of the year following the

years when the Act comes into force, and



(b)) in respect of tax on wealth, on taxes imposed by

taxation year following the year in which the law comes into force or at the

prior years ' assessments.



Annex



AGREEMENT BETWEEN THE

THE KINGDOM OF SWEDEN AND THE REPUBLIC OF

MACEDONIA FOR

AVOIDANCE OF

DOUBLE TAXATION

WITH RESPECT TO TAXES ON

INCOME AND

FORTUNE



The Kingdom of Sweden and the Republic of Macedonia, which are included

an agreement for the avoidance of double taxation with respect to

taxes on income and on capital, have agreed

the following:



Article 1



Persons to whom the agreement applies



This agreement shall apply to persons who are domiciled in a

Contracting State or in both Contracting States.



Article 2



Taxes covered by the agreement



1. this Agreement shall apply to taxes on income and on

wealth that accrues for each Contracting

State or its local authorities, irrespective of the

the way in which taxes are levied.



2. taxes on income and on capital, of course, all

taxes paid on income or wealth in its entirety

or on elements of income or of capital, including

taxes on gains from the alienation of movable or immovable

property, as well as taxes on capital appreciation.



3. The taxes to which this Agreement shall apply are:



(a)) in the Republic of Macedonia:

1) income tax

2) gains tax,

3) property tax,

(referred to below as the "Macedonian tax");



b) in Sweden:

1) state income tax, withholding tax rate in that involved,

2) the Special income tax for non-residents,

3) the Special income tax for non-resident artists

et al.,

4) the municipal income tax,

5) expansion Fund tax,

6) property tax, and

7) State property tax,

(referred to below as "Swedish tax").



4. the agreement also apply to taxes for the same or essentially

Similarly, after the signing of the agreement accrue at

addition to or in place of the taxes listed in paragraph 3. The

competent authorities of the Contracting States shall

notify each other of the essential changes made in

the respective tax laws.



Article 3



General definitions



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

by this agreement the following expressions the following meaning:



(a)) 1) "Macedonia" refers to the territory of the Republic of Macedonia

and, when the expression is used in the geographical sense,

its lands and water and bottoms of the Lakes of

what Macedonia has jurisdiction or sovereign rights

to explore, exploit and management of natural resources, in accordance

with internal jurisdiction and the rules of international law;



2) "Sweden" refers to the Kingdom of Sweden and the includes, when

the expression is used in the geographical sense, the territory of Sweden,

Sweden's territorial sea and other maritime areas over which the

Sweden, in conformity with international law, exercises

sovereign rights or jurisdiction;



(b)) "a Contracting State" and "the other Contracting

the State "is a reference to Macedonia or Sweden, depending on

context;



c) "person" includes natural persons, companies and other

Association;



d) "company" refers to the legal person or other that at

taxes are treated as entity;



e) "registered office" refers to the legal headquarters

a company registered under internal legislation in a

Contracting State;



f) "national" refers to:



1) in Macedonia, the natural person who according to Macedonian

law on citizenship have citizenship in the Republic of Macedonia,



2) in Sweden, the natural person who has the citizenship of Sweden,



3) legal person or another association formed

According to the law of a Contracting State;



g) "enterprise of a Contracting State" and "enterprise of the other

Contracting State "refers to the business carried on by the person

resident in one Contracting State and company

conducted by the resident of the other Contracting

the State;



h) "competent authority" refers to:



1) in Macedonia: the Minister of finance or his authorised

agents, and



2) in Sweden: the Minister of finance or his authorised representative

or authority to whom be entrusted to be competent

authority for the purposes of this agreement;



in) "international traffic" refers to transport by ship or

aircraft used by companies who have their place of effective management

of a Contracting State, except when the ship or aircraft

used exclusively between places in the other Contracting

State.



2. Where a Contracting State applies, unless the contract is considered

no context, causing the other, each expression that does not

defined in this agreement have the meaning the term has under the

the State's legislation in respect of such taxes on the

the agreement shall apply.



Article 4



Resident



1. for the purposes of this agreement reference to the expression "person

resident in one Contracting State "person under

the laws of that State, is liable to tax there because of

domicile, residence, place of management, legal

Head Office (registered office) or other similar

circumstance. The term includes the trading companies and estates

only to the extent that the income is taxable in that State

in the same way as income that are acquired by resident

where, either by trading company or the estate, or of its

co-owner.



The term "resident of a Contracting State"

However, it does not include a person who is liable to tax in this

State only on income from sources in that State or of

wealth located there.



2. where by reason of the provisions of paragraph 1 an individual is

a resident of both Contracting States, is determined his residence on

the following ways:



a) he shall be deemed to have established in the State where he has a home that

permanently available to him. If he has such a

property in both States, he shall be deemed to be a resident of the State with

which his personal and economic relations are strongest

(Centre of life interests);



(b)) if it cannot be settled in the Contracting State in which he has

Centre for their living interests or if he's not in either

the State has a permanent home at his

disposal, he is deemed to be resident in the State in which he

usually resides;



(c)) if he usually resides in both States, or if he

not reside permanently in any of them, he shall be deemed to be a resident

in the State of which he is a national;



d) if he is a national of both States or if he is not

nationals of any of them, the competent authorities of the

Contracting States may settle the question by mutual

agreement.



3. where by reason of the provisions of paragraph 1 a person other than the

an individual is a resident of both Contracting States, it is considered

the person concerned is resident in the State where it has its real

management.



Article 5



Permanent establishment



1. for the purposes of this agreement reference to the expression "fixed

establishment means a fixed place of business, from

What a business is wholly or partly carried on.



2. The term "permanent establishment" includes especially:



a) place of business management,

b) branch,

c) offices,

d) factory,

e) workshop, and

f) mine, an oil or gas well, a quarry or any other place of

the extraction of natural resources.



3. Place for building, construction, Assembly or

installation activities or business that consists of

monitoring in connection therewith constitutes a permanent establishment only

If the operation lasts for a period exceeding twelve

months.



4. Notwithstanding the preceding provisions of this article shall be deemed to

the term "permanent establishment" shall not include:



(a)) the use of facilities solely for storage,

exhibition or disclosure of company-owned goods,



(b) holding of a company belonging to) stock in trade solely

for storage, exhibition or distribution,



(c) holding of a company belonging to) stock in trade solely

for working or processing by other company,



d) holding of fixed place of business

exclusively for the purchase of goods or obtaining information

for the company,



e) holding of fixed place of business

exclusively for the enterprise carrying on other activities of the

preparatory or auxiliary nature,




f) holding of a fixed place of business

exclusively for combining activities listed in

paragraphs a)-(e)), provided that the entire operation as

conducted from the permanent place of business in

because of this combination is of a preparatory or auxiliary

art.



5. If a person, who is not such independent representative on

what paragraph 6 apply, works for a company, as well as in a

Contracting State, and which are regularly using power of Attorney

to conclude agreements in the company name, this company-without

by way of derogation from paragraphs 1 and 2 have fixed

place of business in that State in respect of each activity as this

person engaged in for the company. However, this does not apply, if the

activity which that person carries is limited to such

referred to in paragraph 4 and which, if it was done from a

fixed place of business, would not make this

fixed place of business to the permanent establishment

in accordance with the provisions of that paragraph.



6. Enterprises of a Contracting State are not considered to have fixed

establishment situated in the other Contracting State only on the

because the company carries on business in that State

through the intermediary of brokers, Commissioner or other independent

Representative, provided that such person thereby

conducts its usual business.



7. the fact that a company resident in a

Contracting State controls or is controlled by a

a company resident in the other Contracting State or in a

companies doing business in the other State

(either from a permanent establishment or otherwise),

not in and of itself to constitute either company a permanent establishment

for the other.



Article 6



Income from immovable property



1. income, as a person resident in one Contracting State

acquires immovable property (including income from agriculture

or forestry) situated in the other Contracting State, may

be taxed in that other State.



2. The term "immovable property" has the meaning the term has

According to the legislation of the Contracting State in which the property

is located. However, the term always includes accessories

immovable property, the living and the dead furniture in agriculture and

forestry, rights to which the provisions of private law

If immovable property apply, buildings, tenancies of immovable

property, and the right of changing or fixed remuneration

for the use of, or the right to use mineral occurrence,

source or another natural resource. Ships, boats and aircraft

is not considered to be real property.



3. the provisions of paragraph 1 shall apply to income acquired

through immediate use, through rental or other

use of immovable property.



4. the provisions of paragraphs 1 and 3 shall also apply to income

of immovable property belonging to the company and on the income of the firm

property used by independent professional activities.



Article 7



Income from operating



1. the Income of an enterprise of a Contracting State

acquire, shall be taxable only in that State unless the enterprise

carries on business in the other Contracting State from where

permanent establishment situated. If the enterprise carries on business just now

specified manner, the company's income is taxed in the other

the State, but only so much thereof as is attributable to that

permanent establishment.



2. enterprises of a Contracting State carries on business in the

other Contracting State from where the permanent establishment situated

are entered, unless the provisions of paragraph 3 shall give rise to another, in

Each Contracting State to the permanent establishment the

income as it can be assumed that the establishment would have acquired,

If it were a stand-alone company that operated by

the same or similar nature under the same or similar conditions

and independently completed the business with the undertaking to which the

establishment belongs.



3. In determining permanent establishment income deduction is allowed

for expenses incurred for the permanent establishment, including

included expenses for management and General

management, whether the expenditure incurred in the State in which the

permanent establishment is situated or elsewhere.



4. income not attributable to a permanent establishment by reason only of the

the reason to purchase goods through the permanent establishment

merchandise for the enterprise.



5. for the purposes of the preceding paragraphs, income is determined as

is attributable to the permanent establishment by the same procedure

from year to year, unless good and sufficient reasons causing the

other things.



6. Included in income by operating income which are dealt with in particular in

other articles of this agreement, the provisions of these

articles of the rules contained in this article.



Article 8



Sea and air transport



1. income acquired by the company in a Contracting State

through the use of ships or aircraft in international

traffic shall be taxable only in the Contracting State of which the company

has its place of effective management. In cases where this State because of their

legislation cannot tax the income in its entirety, shall

the income shall be taxable only in the Contracting State in which the

the company is domiciled.



2. the provisions of paragraph 1 apply to the income

acquired by the air transport Consortium Scandinavian Airlines System

(SAS) only in respect of that part of the income corresponding to the

share in the Consortium held by SAS Sweden AB, the Swedish

shareholder in SAS.



3. the provisions of paragraph 1 shall also apply to income

acquired through participation in a pool, a joint business

or an international operating agency.



Article 9



Companies with associated enterprises



1. In cases where the



a) an enterprise of a Contracting State, either directly or indirectly

participate in the management or control of a company in the other

Contracting State or owns part of the company capital,

or



(b)) the same person participates directly or indirectly in the management,

or control of an enterprise of a Contracting State

as an enterprise of the other Contracting State or own

part in both of these corporate capital, observed the following.



If between businesses in terms of trade relations or

financial relations agreed upon or prescribed conditions, as

differ from those which would have been agreed between each other

independent company, receives all the income, that without such conditions

would have been one company but who, because of

the terms in question did not come about this company, be included in the

This company's income and taxed accordingly.



2. In cases where one Contracting State in the income of a company

in this State do-and accordingly, taxes

-income, for which an enterprise of the other Contracting

State is taxed in the other State, and it thus

ancillary income is such as would have been the company

in the first State on the terms agreed between

the enterprises had been those which would have been agreed between the

independent companies, the other State, if the

considers that it is legitimate to income included on the specified

way, implementing the proper adjustment of the amount of the tax

incurred for income there. In compliance with such other adjustment

provisions of this agreement and the competent authorities of the

Contracting States are in talks with each other when necessary.



Article 10



Dividend



1. Dividends paid by a company resident in one Contracting State

to a resident of the other Contracting State,

be taxed in that other State.



2. Such dividends,-notwithstanding the provisions of paragraph

1-taxed in the Contracting State in which the company

paying the dividends is a resident, according to the law of that

State, but if the recipient is entitled to the dividend, the tax

not exceed 15% of the gross amount of the dividends. If

However, the beneficial owner of dividends is a company (with

except for the trading company) which holds directly at least 25 per cent

of the paying company's capital dividend be

exempt from tax in the Contracting State in which the

the company paying the dividends is a resident.



The provisions of this paragraph shall be without prejudice to the company's taxation

for the benefit of which the dividends are paid.



3. The term "dividends" is understood in this article income by

shares or other rights, not being debt-claims, with

right to share in profits, as well as income from other investments in companies,

who, under the law of the State in which the distributing company

is resident for tax purposes shall be treated in the same way as

income from shares.



4. the provisions of paragraphs 1 and 2 shall not apply if the

who is entitled to the dividends is a resident of a Contracting

State and carries on business in the other Contracting State,

which the company paying the dividends is a resident, from where

permanent establishment situated or exercising independent

professional activities in the other State from where located

permanent device, and the proportion due to the

dividend paid owns actual relation to the Permanent

the establishment or the permanent devices. In such a case

apply the provisions of article 7 or article 14.



5. If the company resident in one Contracting State acquires

income from the other Contracting State, that other

State does not tax dividends paid by the company, except to the

so far as the dividend is paid to a resident of the other

State or insofar as the percentage due to the dividend payment

paid owns truly connected with a permanent establishment or

permanent device in that other State, nor on


the company's undistributed profits to a tax payable on

the company's undistributed profits, even if the delivery or the

undistributed profit consists wholly or partly of income

raised in that other State.



Article 11



Interest rate



1. interest, stemming from a Contracting State and which

paid to a resident of the other Contracting

the State, may be taxed in that other State.



2. interest may be taxed in the Contracting

State from which it is derived, under the laws of this

State, but if the recipient is entitled to the interest, the tax is not

exceed 10 per cent of the gross amount of the interest.



3. Notwithstanding the provisions of paragraph 2, interest

set out in paragraph 1 shall be taxable only in the Contracting State in which the

the beneficial owner of the interest is a resident, provided

to one of the following conditions are met:



(a)) the interest is paid by or to a Contracting State, of

or to its public entities or local

Government or central bank of a Contracting State;



b) the interest is paid on the basis of loans approved by the Government of

the Contracting State where the payer of the interest is a resident;



c) the interest is paid on the basis of loans granted or guaranteed

the Swedish International Development Cooperation Agency (SIDA),

Swedfund International AB or the Swedish Export Credits Guarantee Board, or by

other institution of a public character with the purpose of

promote exports or development, provided that the credit

granted or guaranteed on preferential conditions;



d) the interest is paid on the basis of loans granted by the bank.



4. The term "interest" for the purposes of this article the income of

each kind of claim, whether secured by mortgage

in immovable property or not, and whether it entails the right to

interest in the debtor's profits or not. The expression refers to

in particular, income from securities issued by State and

income from bonds or debentures, including

premiums and benefits pertaining to such securities,

bonds or debentures; Penalty fee for late

payment is not considered as interest for the purpose of this

article.



5. the provisions of paragraphs 1, 2 and 3 shall not apply if the

who is entitled to the interest is resident in a Contracting State

and carries on business in the other Contracting State, from

What interest rate are derived, from where the permanent establishment situated or

exercising independent professional activities in the other State from where

located permanent device, as well as the claim for which

the interest is paid owns truly connected with the permanent establishment

or the permanent devices. In such a case be applied

the provisions of article 7 or article 14.



6. interest shall be deemed to arise from a Contracting State if

the payer is that State itself, a local authority or

resident of this state; however, if the person

paying the interest, whether he is a resident of a Contracting

State or not, has in a Contracting State a permanent establishment

or permanent device in connection with which the liability

incurred for which the interest is paid, and the interest rate charged to the

permanent establishment or permanent device, are considered to

rate stem from the State in which the permanent establishment or

the device is permanently.



7. where by reason of a special relationship between the payer and the

the beneficial owner of the interest or between both of them and other

person the amount of the interest, having regard to the claim for

the interest is paid, exceeds the amount which would be

agreed between the payer and the beneficial owner of the interest if

such links do not exist, the provisions in

This article only on the latter amount. In such a case

excess amounts are taxed according to the legislation of each

Contracting State in compliance with the other provisions of

This agreement.



Article 12



Royalty



1. Royalty, as derived from a Contracting State and which

paid to a resident of the other Contracting

State, shall be taxable only in that other State, if the person

has the right to royalties.



2. The term "royalties" in this article, of course, every kind of

payments received as compensation for the use of, or

for the right to use copyright to literary, artistic

or scientific work, including cinematograph films and video

or tapes for radio or television broadcasting, any patent,

trademark, design or model, plan, secret formula or

secret manufacturing process or for information about

experience knowledge of industrial, commercial or scientific

nature.



3. the provisions of paragraph 1 shall not apply if the beneficial

to the royalty is a resident of a Contracting State and carries on

on business in the other Contracting State, from which the royalty

stem, from where the permanent establishment situated or exercises

independent professional activities in the other State from where

located permanent device, as well as the right or

property in respect of which the royalties are paid owns real

connected with the permanent establishment or the Permanent

the device. In such cases, apply the provisions of article 7

and article 14.



4. Royalties shall be deemed to arise from a Contracting State if

the payer is the State itself, a local authority or person

resident in that State. If, however, the person paying the

royalty, either he is domiciled in a Contracting State

or not, has in a Contracting State a permanent establishment or

permanent device in connection with which the obligation to

pay the royalty arises, and the royalty charged to the fixed

establishment or permanent device, are considered to

royalties derived from the State in which the permanent establishment or

the device is permanently.



5. where by reason of a special relationship between the payer and the

the person entitled to the royalties or between both of them and other

personal royalty amount, taking into account the utilization,

the right or the enlightenment for which royalties are payable,

exceeds the amount which would have been agreed between the payer

and the person entitled to the royalty for such relations not

exist, the provisions of this article shall apply only to

the latter amount. In such a case the taxable surplus amount

According to the law of each Contracting State with

observance of the other provisions of this agreement.



Article 13



Capital gain



1. Profit, as a person resident in one Contracting State

acquires from the alienation of such immovable property

referred to in article 6 and situated in the other Contracting

the State, may be taxed in that other State.



2. Gains from the alienation of shares in a company whose

assets mainly consist of such immovable property referred to

in article 6 and situated in the other Contracting

the State, may be taxed in that other State.



3. Gains from the alienation of movable property forming part

of the operating assets of a permanent establishment which an enterprise of the

a Contracting State has in the other Contracting State,

or of movable property, attributable to a permanent device

in order to exercise an independent profession, as a person with

resident of a Contracting State has in the other Contracting

the State, may be taxed in that other State. The same applies to profits

the alienation of such a permanent establishment (alone

or together with the whole enterprise) or of such a

permanent device.



4. Gains from the alienation of ships or aircraft

used in international traffic, or movable property which is

attributable to the use of such ship or aircraft;

shall be taxable only in the Contracting State in which the company has

effective management. In cases where this State because of their

legislation cannot tax the profits in its entirety, shall

profits shall be taxable only in the Contracting State in which the

alienator is a resident.



As regards the profit gained by the air transport Consortium

Scandinavian Airlines System (SAS) will apply the provisions of

This paragraph only in respect of the part of the profits as corresponds to the

the stake in the consortium which is held by SAS Sweden AB, the

Swedish partner of SAS.



5. Gains from the alienation of property other than that

referred to in paragraphs 1, 2, 3 and 4 shall be taxable only in the

Contracting State of which the alienator is a resident.



6. Gains from the alienation of property acquired by the

individual who has been resident in one Contracting State and

as a resident of the other Contracting State shall-without

by way of derogation from point 5-taxed in the

first State.



Article 14



Independent professional activities



1. income, as a physical person resident in a

Contracting State acquires through the exercise of profession or

other independent activity, shall be taxable only in that State if

He's not in the other Contracting State has a permanent

device, which are regularly available to him in order to

exercise activities. If he has such a permanent device,

income may be taxed in that other State but only so much

of them as is attributable to that permanent device.



2. The expression "liberal profession" includes especially independent

scientific, literary and artistic activities,

educational and teaching activities and such

independent operations, as a doctor, lawyer, engineer,

Architect, dentist and an accountant.



Article 15



Single service



1. the provisions of articles 16, 18 and 19 shall give rise


other, taxable wages and other similar remuneration paid by person

resident in one Contracting State receives due

employment only in that State unless the work is carried out in

the other Contracting State. If the work is performed in this

other State, compensation received for work are taxed

there.



2. Notwithstanding the provisions of paragraph 1 shall be taxable

compensation, as a person resident in one Contracting State

receipt for work performed in the other Contracting State,

only in the first-mentioned State if



a) recipient residing in the other State during the time period or

time periods that in total not exceeding 183 days during a

twelve-month period commencing or ending in the

the tax year in question, and



b) the remuneration is paid by the employer who is not domiciled in

the other State or on his behalf, and



c) compensation does not affect the establishment or

permanent device which the employer has in the other

State.



3. Notwithstanding the preceding provisions of this article,

remuneration for work performed on board the ship or

aircraft in international traffic shall be taxable in the

Contracting State in which the company has its place of effective management. If

resident in Sweden receives income from work, which

performed on board an aircraft used in international

traffic by the air transport Consortium Scandinavian Airlines System

(SAS), income is taxed only in Sweden.



Article 16



Directors ' fees



Directors ' fees and other similar remuneration, as a person with

resident in one Contracting State receives as a member of the

Board or other similar bodies in companies established in the

other Contracting State, may be taxed in that other State.



Article 17



Artists and athletes



1. Notwithstanding the provisions of articles 14 and 15,

income, as a resident of a Contracting State

acquire through their personal activities in the other

Contracting State in the capacity as entertainment artist, such as

theatrical or movie actor, radio or television artist

or a musician, or as athletes, are taxed in

that other State.



2. In cases where the income through personal business, as

Entertainment artist or athletes engaged in this

property, not become the entertainment artist or

sportutövaren itself without another person, that income may, without

by way of derogation from the provisions of articles 7, 14 and 15, be taxed in the

the Contracting State where entertainment artist or

sportutövaren conducts business.



3. Such income shall however be excluded from the tax in the

Contracting State in which the activities are exercised in

under a special program for cultural exchange that

agreed upon between the Governments of the two Contracting

States.



Article 18



Pensions, annuities and similar



payments



1. Pensions and other payments relating to the previous

employment, compensation under a Contracting State applicable

social security legislation and annuities arising from a

Contracting State and paid to a resident of the

other Contracting State, may be taxed in the first-mentioned

State.



2. The term "annuity" means a prescribed amount, which

be paid periodically at specified times during a person's

lifetime or during a specified or ascertainable period of time, and

that is because of the obligation to give effect to these

However, payments made as remuneration for fully answering

consideration in money or money value.



Article 19



Public service



1. a) Compensation (except for retirement), paid for by a

Contracting State or of its local authorities to

natural person on the basis of the work carried out in that State

or its local government service, be taxable only in that

State.



b However, such remuneration shall be taxable only) in the second

Contracting State if the work is performed in that other State and

the person in question is domiciled in this State and



1) is a national of that State, or



2) were not allowed to live in this State solely for the purpose of performing

the work.



2. the provisions of articles 15 and 16 shall apply to

compensation paid on the basis of the work carried out in connection

with business carried on by a Contracting State or its

local authorities.



Article 20



Students



Students and business trainee, who is or immediately before

stayed in a Contracting State a resident of the other

Contracting State and residing in the first State

exclusively for their education or training, is not taxed

in this State for the amount that he receives for his living,

his teaching or training, on condition that

amounts derived from sources outside that State.



Article 21



Other income



1. income as a resident of a Contracting State

acquires and which are not dealt with in the foregoing articles of this

Agreement shall be taxable only in that State, regardless of the origin of income

derived.



2. the provisions of paragraph 1 shall not apply to income, with

excluding income from immovable property referred to in article 6

paragraph 2, if the recipient of the income is resident in a

Contracting State, carries on business in the other

Contracting State from where the permanent establishment situated or

exercising independent professional activities in the other State from where

located permanent device, as well as the right or

property in respect of which the income is paid owns real

connected with the permanent establishment or the Permanent

the device. In such cases, apply the provisions of article 7

and article 14.



Article 22



Fortune



1. Fortune consisting of such immovable property referred to in

Article 6, any person resident in one Contracting State

holds and which is situated in the other Contracting State

may be taxed in that other State.



2. Assets consisting of movable property forming part of the

the operating assets of a permanent establishment which an enterprise of a

Contracting State has in the other Contracting State,

or of movable property pertaining to a permanent device for

to exercise an independent profession, as a physical person with

resident of a Contracting State has in the other Contracting

the State, may be taxed in that other State.



3. wealth consisting of ship and aircraft used in the

international traffic and by movable property which are attributable to

the use of such ships and aircraft shall be taxable only in

the Contracting State in which the company has its place of effective management.



The provisions of this paragraph shall apply in respect of Fortune

held by the air transport Consortium Scandinavian Airlines System

(SAS) only in respect of the part of the fortune that corresponds to

the share in the Consortium held by SAS Sweden AB, the

Swedish partner of SAS.



Article 23



The Elimination of



double taxation



1. persons domiciled in the Republic of Macedonia shall

double taxation is avoided in the following manner:



If a resident of Macedonia receives income or

holding assets in accordance with the provisions of this agreement,

taxed in Sweden, Macedonia:



(a)) from the tax on the income of that person an amount credit

equivalent to the income tax paid in Sweden;



b) from the tax on that person's fortune set off an amount

equal to the capital tax paid in Sweden.



Settlement amount shall not, however, in either case

exceed the portion of the income tax or property tax,

calculated without such a settlement, charged on the income or

the fortune that may be taxed in Sweden.



c) If income, as a resident of Macedonia acquires,

or fortune, that such person holds, according to the provision

the agreement is exempt from tax in the Republic of Macedonia, Macedonia

However, in determining the amount of tax on that person's

residual income or wealth, take into account the income or

assets exempt from tax.



2. in the case of Sweden, double taxation shall be avoided in

the following ways:



a) where a resident of Sweden acquires income according to

Macedonian legislation and in accordance with the provisions of

This agreement may be taxed in Macedonia, Sweden-with

subject to the provisions of Swedish legislation concerning

deduction of foreign taxes (even in the version in the future

can get through to change without the general principle set out

This change)-from the Swedish tax on income offset a

the Macedonian tax paid on

income.



b) where a resident of Sweden receives income, which

in accordance with the provisions of this Agreement shall be taxable only in

Macedonia, Sweden may, when determining the tax rate for the

Swedish progressive tax, take into account the income which shall be taxable

only in Macedonia.



c) Notwithstanding the provisions of (a)) above is dividends from

companies established in the Republic of Macedonia for the companies established in Sweden

exempt from Swedish tax according to the provisions of Swedish law

If the tax exemption of dividends received by the Swedish company

from affiliates abroad.



d) for the purposes of (a)), a tax of 5% on

the gross amount shall be deemed to have been paid in Macedonia on royalties

obtained as compensation for the use of patents, design

or model, plan, secret formula or secret

method of manufacture or for information on experience knowledge of

industrial, commercial or scientific nature, if

the deployment occurred in industrial operations or

manufacturing activity, agriculture (including


livestock), forestry, fisheries or tourism (in that

including restaurant and hotel business), during

condition that the activities carried out in the Republic of Macedonia. At

application of a) of this paragraph are considered to the expression "the

Macedonian tax paid "include the Macedonian tax which

would have been paid, but that because of the limited time

provisions in Macedonian law designed to promote

economic development has not been paid, or paid with lower

amount, provided that such exemption or relief

from tax granted with regard to profit from such activities as

specified in the previous sentence.



e) for the purposes of c) above, a tax of 15 per cent

be deemed to have been paid on the profits out of which the dividends are paid by

company domiciled in the Republic of Macedonia, if the profits derived from

industrial operations or manufacturing activities or the

Agriculture (including livestock), forestry, fishing

or tourism (including restaurant and

Hotel operations), provided always that the business

conducted in the Republic of Macedonia.



f) provisions of d) and (e)) apply only in respect of the five

first years during which this Agreement shall apply. This period can

may be extended by mutual agreement between the competent

authorities.



g) where a resident of Sweden owns capital which, in

accordance with the legislation of the Republic of Macedonia and the provisions of

This agreement may be taxed in Macedonia, Sweden from

the tax on this Fortune set off an amount equal to the

property tax paid in Macedonia. Settlement amount

shall not, however, exceed that part of the wealth tax,

calculated without such a settlement, charged on the Fortune

which may be taxed in Macedonia.



Article 24



Prohibition of discrimination



1. nationals of a Contracting State shall not, in the second

Contracting State be subject to taxation or

coherent demands that are of a different kind or more onerous than

the taxation and related requirements as nationals of

the other State under the same circumstances are or may be

subject to. Notwithstanding the provisions of article 1

This provision also applies to any person who is not domiciled

of a Contracting State or in both Contracting States.



2. the taxation on a permanent establishment which businesses in a

Contracting State has in the other Contracting State,

in that other State shall not be less favourable than

taxation of the company in the other State, that carries

activities of the same kind.



3. Except where the provisions of article 9, paragraph 1,

paragraph 7 of article 11 or article 12 paragraph 5 applied, is

interest, royalties and other payments from the company in a

Contracting State to a resident of the other

Contracting State tax deductible in determining the

taxable income of such company on the same terms and conditions

as payment to a resident of the first State.

Similarly, debt as a company of a Contracting State has

to a resident of the other Contracting State

deductible in determining such business

taxable assets on the same terms as the debt to

person resident in that State.



4. Enterprises of a Contracting State, the capital of which is wholly or

partly owned or controlled, directly or indirectly, by a

or more persons resident in the other Contracting

the State shall not be subjected in the first State for

taxation or related requirements of other

kind or more burdensome than the taxation and thus

coherent requirements as other similar companies in the

first State are or may be subjected.



5. the provisions of this article does not entail the obligation

of a Contracting State to grant to a resident of the

other Contracting State such personal deductions for

taxation, such exemptions or reductions for

because of marital status or dependants for family

granted resident in their own State.



6. Notwithstanding the provisions of article 2 shall be applied

the provisions of this article on the taxes of every kind and

nature.



Article 25



The procedure for the mutual



agreement



1. If a person believes that a Contracting State or both

Contracting States took measures to him causes

or will result in taxation contrary to

the provisions of this agreement, he may, without prejudice to

his right to make use of the remedies contained in these

the internal legal order of States, submit the matter to the competent

authority of the Contracting State in which the person is domiciled,

or in the case of application of article 24, paragraph 1, of the

Contracting State of which he is a national. The matter shall be

within three years from the time the person in question had

knowing the action giving rise to taxation as

contrary to the provisions of the agreement.



2. If the competent authority finds the complaint justified but

Unable to achieve a satisfactory solution,

the authority shall seek to resolve the matter by mutual

agreement with the competent authority of the other

Contracting State in order to avoid taxation which

contrary to the agreement. Agreement shall

be carried out without prejudice to the time limits of the Contracting

States ' internal legislation.



3. the competent authorities of the Contracting States shall

by mutual agreement, seek to determine or

doubts arising concerning the interpretation or

the application of the agreement. They can also initiate consultations with a view to

eliminate double taxation in cases not covered by

the agreement.



4. the competent authorities of the Contracting States may

enter into direct relations with each other in order to meet

agreement in the cases specified in the preceding paragraphs.



Article 26



Exchange of information



1. the competent authorities of the Contracting States shall

Exchange such information as is necessary to implement the

the provisions of this agreement or of the Contracting

States ' internal legislation concerning taxes covered

by the agreement, insofar as the taxation thereunder

not contrary to the agreement. Exchange of information is limited

not by article 1. Information which a Contracting State

received shall be treated as secret in the same manner as

information obtained in accordance with the internal legislation of the

This State and shall be disclosed only to persons or authorities

(including courts and administrative bodies)

establishes, or collect the taxes which are the subject of

agreement or dealing with criminal charges or complaints regarding these

taxes. Such persons or authorities shall use the

the information only for such purposes. They may disclose

the information in public court proceedings or in

Court decisions.



2. the provisions of paragraph 1 is not considered to entail the obligation for

a Contracting State to



a) take administrative measures derogating from the legislation and

administrative practices in force in that Contracting State, or in the

other Contracting State,



b) provide information that is not available under

legislation or the usual administrative practice in this

Contracting State or of the other Contracting State,



c) supply information which would disclose any trade secret,

industrial, commercial or professional secret, or in

trade used the process or information,

the surrender would be contrary to ordre public considerations (

public).



Article 27



Limitation of benefits



If after signing a Contracting State before the

legislation under which the "offshore"-income acquired by

a company from



a) shipping,



b) banking, finance, insurance, or similar activities;

or



(c)) to be the head office, the coordination centre or a

similar entity providing administrative or other

services to a group of companies engaged in operating

mainly in other States,



not be taxed in that State, or taxed at a rate

that is significantly lower than that applied to income from

similar activities undertaken within this State, shall

the provisions of this agreement which impose limits on the

other Contracting State's right to tax the income from

such "offshore" activities shall not apply. Similarly,

that other State shall be at liberty to tax dividends

paid by the company in question.



Article 28



Diplomatic representatives and



consular officials



The provisions of this Agreement shall not affect the privileges at the

taxation which, according to the General rules of international law or

provisions of specific agreements apply

diplomatic representatives or consular officials.



Article 29



Date of entry into force



1. the Contracting States shall notify each other when they

measures have been taken as required by the legislation of the State in

respect to this Agreement shall enter into force.



2. this Agreement shall enter into force on the day on which the last of the

notices referred to in paragraph 1 are received and the

provisions apply to fiscal years beginning on 1

January immediately following the date of entry into force of the agreement or

later.



Article 30



Termination



This agreement will remain in force until terminated by a

Contracting State. Each Contracting State may, at the

terminate the agreement through diplomatic channels by notification to this effect

at least six months before the end of any calendar year following


After a period of five years from the date on which the contract is entered into

force. In the event of such termination, the agreement ceases to be valid

for tax years beginning on 1 January immediately following the date

When the contract is terminated or later.



In witness whereof the undersigned, being duly

authorised, have signed this agreement.



Done at Stockholm, on 17 April 1998, in duplicate in the

Macedonian, Swedish and English languages which are equally

an official record. In the event that the texts differ, the

English text shall prevail.



For The Kingdom Of

The Swedish Government



Knut Rexed



For The Republic Of

The Government of the Republic of Macedonia



Tihomir Ilievski



AGREEMENT BETWEEN THE

KINGDOM OF SWEDEN AND THE REPUBLIC OF

MACEDONIA FOR THE AVOIDANCE OF DOUBLE

TAXATION WITH RESPECT

TO TAXES ON INCOME AND

ON CAPITAL



The Kingdom of Sweden and the Republic of Macedonia, desiring

to conclude an Agreement for the avoidance of double taxation

with respect to taxes on income and on capital, have agreed as

follows:



Article 1



Personal scope



This Agreement shall apply to persons who are residents of one

or both of the Contracting States.



Article 2



Taxes covered



(1) This Agreement shall apply to taxes on income and on

capital imposed on behalf of each Contracting State or of its

local authorities, irrespective of the manner in which they are

levied.



(2) There shall be regarded as taxes on income and on capital

all taxes imposed on total income, on total capital, or on

elements of income or of capital, including taxes on gains from

the alienation of movable or immovable property, as well as

taxes on capital appreciation.



(3) The taxes to which the Agreement shall apply are:



(a) in the case of Macedonia:

(i) the income tax;

(ii) the profit tax;

(iii) the property tax;

(hereinafter referred to as "Macedonian Tax");



(b) in the case of Sweden:



(i) the national income tax (State income tax),

including the withholding tax on dividends (withholding tax);



(ii) the income tax on non-residents (the Special

income tax for non-residents);



(iii) the income tax on non-resident artistes and athletes

(the Special income tax for non-resident artists

etc.);



(iv) the municipal income tax (municipal income tax);



(v) the tax on means intended for expansion purposes

(expansion Fund tax);



(vi) the tax on real estate (property tax);



(vii) the national capital tax (the State

wealth tax);



(hereinafter referred to as "Swedish tax").



(4) The Agreement shall apply also to any identical or

substantially similar taxes which are imposed after the date of

signature of the Agreement in addition to, or in place of, the

taxes referred to in paragraph (3). The competent authorities

of the Contracting States shall notify each other of any

substantial changes which have been made in their respective

taxation laws.



Article 3



General definition



(1) For the purposes of this Agreement, unless the context

otherwise requires:



(a) (i) the term "Macedonia" means the territory of the

Republic of Macedonia, and used in geographical sense, means its

country, inland lake water and bottom over which it has

jurisdiction or sovereign rights for the purpose of exploring,

exploiting, conserving and managing the natural resources, pursuant

to internal jurisdiction and international law;



(ii) 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;



(b) the terms "a Contracting State" and "the other Contracting

State "mean Macedonia or Sweden, as the context requires;



(c) the term "person" includes an individual, a company and any

other body of persons;



(d) the term "company" means any body corporate or any entity

which is treated as a body corporate for tax purposes;



(e) the term "registered office" means the legal head office of

a company registered under the domestic laws of each

Contracting State;



(f) the term "national" means:



(i) in relation to Macedonia any individual possessing

Macedonian Nationality in accordance with the Macedonian

Nationality Code;



(ii) in relation to Canada any individual possessing the

nationality of Sweden;



(iii) any legal person, partnership and association deriving

its status as such from the laws in force in either of the

Contracting States;



(g) the terms "enterprise of a Contracting State" and

"enterprise of the other Contracting State" mean respectively

an enterprise carried on by a resident of a Contracting State

and an enterprise carried on by a resident of the other

Contracting State;



(h) the term "competent authority" means:



(i) in Macedonia, the Minister of Finance or his authorized

representative; and



(ii) in Sweden, the Minister of Finance, his authorized

representative or the authority which is designated as a

competent authority for the purposes of this Agreement;



(i) the term "international traffic" means any transport by a

ship or an aircraft operated by an enterprise which has its

the place of effective management in a Contracting State, except

When the ship or aircraft is operated solely between places in

the other Contracting State.



(2) As regards the application of this Agreement by (a)

Contracting State, any term not defined shall, unless the

context otherwise requires, have the meaning which it has under the

the laws of that State concerning the taxes to which the

Agreement applies.



Article 4



Resident



(1) For the purposes of this Agreement, the term "resident of a

Contracting State "means any person who, under the laws of that

State, is liable to tax therein by reason of his domicile,

residence, place of management, legal head office (registered

Office) or any other criterion of a similar nature. However, in

the case of a partnership or estate the term applies only to

the extent that the income derived by such partnership or

estate is subject to tax in that State as the income of a

resident, either in its hands or in the hands of its partners.



The term "resident of a Contracting State" does not include any

person who is liable to tax in that State in respect only of

income from sources in that State or capital situated therein.



(2) Where by reason of the provisions of paragraph (1) an

individual is a resident of both Contracting States, then his

status shall be determined as follows:



(a) he shall be deemed to be a resident of the State in which

He has a permanent home available to him; If he has a permanent

Home available to him in both States, he shall be deemed to be

a resident of the State with which his personal and economic

relations are closer (centre of vital interests);



(b) if the State in which he has his centre of vital interests

cannot be determined, or if he has not a permanent home

available to him in either State, he shall be deemed to be a

resident of the State in which he has an habitual abode;



(c) if he has an habitual abode in both States or in neither of

them, he shall be deemed to be a resident of the State of which

He is a national;



(d) if he is a national of both States or of neither of them,

the competent authorities of the Contracting States shall

settle the question by mutual agreement.



(3) Where by reason of the provisions of paragraph (1) (a) the person

other than an individual is a resident of both Contracting

States, then it shall be deemed to be a resident of the State

in which its place of effective management is situated.



Article 5



Permanent establishment



(1) For the purposes of this Agreement, the term "permanent

establishment "means a fixed place of business through which

the business of an enterprise is wholly or partly carried on.



(2) The term "permanent establishment" includes especially:



(a) a place of management;



(b) a branch;



(c) an office;



(d) a factory;



(e) a workshop; and



(f) a mine, an oil or gas well, a quarry or any other place of

extraction of natural resources.



(3) A building site or a construction, assembly or installation

project or supervisory activities in connection therewith

constitutes a permanent establishment only if such site,

project or activities continue for a period of more than twelve

months.



(4) Notwithstanding the preceding provisions of this Article,

the term "permanent establishment" shall be deemed not to

include:



(a) the use of facilities solely for the purpose of storage,

display or delivery of goods or merchandise belonging to the

Enterprise;



(b) the maintenance of a stock of goods or merchandise

belonging to the enterprise solely for the purpose of storage,

display or delivery;



(c) the maintenance of a stock of goods or merchandise

belonging to the enterprise solely for the purpose of

processing by another enterprise;



(d) the maintenance of a fixed place of business solely for the

purpose of purchasing goods or merchandise or of collecting

information, for the enterprise;



(e) the maintenance of a fixed place of business solely for the

purpose of carrying on, for the enterprise, any other activity

of a preparatory or auxiliary character;



(f) the maintenance of a fixed place of business solely for any

combination of activities mentioned in sub paragraphs (a) to

(e), provided that the overall activity of the fixed place of

business resulting from this combination is of a preparatory or

auxiliary character.



(5) Notwithstanding the provisions of paragraphs (1) and (2),


where a person-other than an agent of an independent status

to whom paragraph (6) applies-is acting in a Contracting

State on behalf of an enterprise of the other Contracting

State, that enterprise shall be deemed to have a permanent

establishment in the first-mentioned Contracting State in

respect of any activities which that person undertakes for the

the enterprise, if such a person has and habitually exercises in

that State an authority to conclude contracts in the name of

the enterprise, unless the activities of such person are

limited to those mentioned in paragraph (4) which, if exercised

through a fixed place of business, would not make this fixed

place of business a permanent establishment under the

the provisions of that paragraph.



(6) An enterprise of a Contracting State shall not be deemed to

have a permanent establishment in the other Contracting State

merely because it carries on business in that other State

through a broker, general commission agent or any other agent

of an independent status, provided that such persons are acting

in the ordinary course of their business.



(7) The fact that a company which is a resident of a

Contracting State controls or is controlled by a company which

is a resident of the other Contracting State, or which carries

on business in that other State (whether through a permanent

establishment or otherwise) shall not of itself constitute

either company a permanent establishment of the other.



Article 6



Income from immovable property



(1) Income derived by a resident of a Contracting State from

immovable property (including income from agriculture or

forestry) situated in the other Contracting State may be taxed

in that other State.



(2) The term "immovable property" shall have the meaning which

It has under the law of the Contracting State in which the

property in question is situated. The term shall in any case

the include property accessory to immovable property, livestock and

equipment used in agriculture and forestry, rights to which the

the provisions of general law respecting landed property apply,

buildings, usufruct of immovable property and rights to

variable or fixed payments as consideration for the working of,

or the right to work, mineral deposits, sources and other

the natural resources; ships, boats and aircraft shall not be

regarded as immovable property.



(3) The provisions of paragraph (1) shall apply to income

derived from the direct use, letting, or use in any other form

of immovable property.



(4) The provisions of paragraphs (1) and (3) shall also apply

to the income from immovable property of an enterprise and to

income from immovable property used for the performance of

independent personal services.



Article 7



Business profits



(1) The profits of an enterprise of a Contracting State shall

be taxable only in that State unless the enterprise carries on

business in the other Contracting State through a permanent

establishment situated therein. If the enterprise carries on

business as aforesaid, the profits of the enterprise may be

taxed in the other State but only so much of them as is

attributable to that permanent establishment.



(2) Subject to the provisions of paragraph (3), where an

Enterprise of a Contracting State carries on business in the

other Contracting State through a permanent establishment

situated therein, there shall in each Contracting State be

attributed to that permanent establishment the profits which it

might be expected to make if it were a distinct and separate

enterprise engaged in the same or similar activities under the

the same or similar conditions and dealing wholly independently

with the enterprise of which it is a permanent establishment.



(3) In the determination of the profits of a permanent

establishment, there shall be allowed as deductions expenses

which are incurred for the purposes of the business of the

the permanent establishment, including executive and general

administrative expenses so incurred, whether in the State in

which the permanent establishment is situated or elsewhere.



(4) No profits shall be attributed to a permanent establishment

by reason of the mere purchase by that permanent establishment

of goods or merchandise for the enterprise.



(5) For the purposes of the preceding paragraphs, the profits

to be attributed to the permanent establishment shall be

determined by the same method year by year unless there is good

and sufficient reason to the contrary.



(6) Where profits include items of income which are dealt with

separately in other Articles of this Agreement, then the

the provisions of those Articles shall not be affected by the

the provisions of this Article.



Article 8



Shipping and air transport



(1) Profits from the operation of ships or aircraft in

international traffic shall be taxable only in the Contracting

State in which the place of effective management of the

the enterprise is situated. If that State according to its

legislation cannot tax the whole of the profits, the profits

shall be taxable only in the Contracting State of which the

the enterprise is a resident.



(2) With respect to profits derived by the air transport

Consortium Scandinavian Airlines System (SAS) the provisions of

paragraph (1) shall apply only to such part of the profits as

corresponds to the participation held in that consortium by SAS

Sweden AB, the Swedish partner of SAS.



(3) The provisions of paragraph (1) shall also apply to profits

from the participation in a pool, a joint business or an

international operating agency.



Article 9



Associated enterprises



(1) Where:



(a) an enterprise of a Contracting State participates directly

or indirectly in the management, control or capital of an

Enterprise of the other Contracting State, or



(b) the same persons participate directly or indirectly in the

management, control or capital of an enterprise of a

Contracting State and an enterprise of the other Contracting

State,



and in either case conditions are made or imposed between the

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 Contracting State includes in the profits of an

Enterprise of that State-and taxes accordingly-profits on

which an enterprise of the other Contracting State has been

charged to tax in that other State and the profits so included

are profits which would have accrued to the enterprise of the

the first-mentioned State if the conditions made between the two

enterprises had been those which would have been made between

independent enterprises, then that other State shall make an

appropriate adjustment to the amount of the tax charged therein

on those profits where that other State considers the

adjustment justified. In determining such adjustment, due

regard shall be had to the other provisions of this Agreement

and the competent authorities of the Contracting States shall

If necessary consult each other.



Article 10



Dividends



(1) Dividends paid by a company which is a resident of a

Contracting State to a resident of the other Contracting State

may be taxed in that other State.



(2) Notwithstanding the provisions of paragraph (1), such

dividends may also be taxed in the Contracting State of which

the company paying the dividends is a resident and according to

the laws of that State, but if the recipient is the beneficial

owner of the dividends the tax so charged shall not exceed 15

per cent of the gross amount of the dividends. However, if the

beneficial owner is a company (other than a partnership) which

holds directly at least 25 per cent of the capital of the

company paying the dividends, the dividends shall be exempt

from tax in the Contracting State of which the company paying

the dividends is a resident.



This paragraph shall not affect the taxation of the company in

respect of the profits out of which the dividends are paid.



(3) The term "dividends" as used in this Article means income

from shares or other rights, not being debt-claims,

participating in profits, as well as income from other

corporate rights which is subjected to the same taxation

treatment as income from shares by the laws of the State of

which the company making the distribution is a resident.



(4) The provisions of paragraphs (1) and (2) shall not apply if

the beneficial owner of the dividends, being a resident of a

Contracting State, carries on business in the other Contracting

State of which the company paying the dividends is a resident,

through a permanent establishment situated therein, or performs

in that other State independent personal services from a fixed

base situated therein, and the holding in respect of which the

dividends are paid is effectively connected with such permanent

establishment or fixed base. In such case the provisions of

Article 7 or Article 14, as the case may be, shall apply.



(5) Where a company which is a resident of a Contracting State

derives profits or income from the other Contracting State,

that other State may not impose any tax on the dividends paid

by the company, except insofar as such dividends are paid to a

the resident of that other State or insofar as the holding in

respect of which the dividends are paid is effectively

connected with a permanent establishment or a fixed base

situated in that other State, nor subject the company's

undistributed profits to a tax on the company's undistributed

profits, even if the dividends paid or the undistributed

profits consist wholly or partly of profits or income arising

in such other State.



Article 11



Interest




(1) Interest arising in a Contracting State and paid to a

resident of the other Contracting State may be taxed in that

other State.



(2) However, such interest may also be taxed in the Contracting

State in which it arises and according to the laws of that

State, but if the recipient is the beneficial owner of the

the interest the tax so charged shall not exceed 10 per cent of the

the gross amount of the interest.



(3) Notwithstanding the provisions of paragraph (2) interest,

mentioned in paragraph (1), shall be taxable only in the

Contracting State where the beneficial owner of the interest is

a resident if one of the following requirements is ugly file led;



(a) the payer or the recipient of the interest is the

Contracting State itself, a statutory body or a local authority

thereof or the Central Bank of a Contracting State;



(b) the interest is paid in respect of a loan which has been

approved by the Government in the Contracting State where the

payer of the interest is a resident;



(c) the interest is paid in respect of a loan granted or

guaranteed by The Swedish International Development Authority

(Page), Swedfund International AB or The Swedish Export Credits

Guarantee Board (exportkreditnämnden) or any other institution

of a public character with the objective to promote exports or

development, if the credit is granted or guaranteed on

preferential conditions;



(d) the interest is paid in respect of a loan granted by a

Bank.



(4) The term "interest" as used in this Article means income

from 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

premiums and prizes attaching to such securities, bonds or

debentures. Penalty charges for late payment shall not be

regarded as interest for the purpose of this Article.



(5) The provisions of paragraphs (1), (2) and (3) shall not

apply if the beneficial owner of the interest, being a resident

of a Contracting State, carries on business in the other

Contracting State in which the interest arises, through a

permanent establishment situated therein, or performs in that

other State independent personal services from a fixed base

situated therein, and the debt-claim in respect of which the

the interest is paid is effectively connected with such permanent

establishment or fixed base. In such case the provisions of

Article 7 or Article 14, as the case may be, shall apply.



(6) Interest shall be deemed to arise in a Contracting State

When the payer is that State itself, a local authority or a

the resident of that State. Where, however, the person paying the

interest, whether he is a resident of a Contracting State or

Note, has in a Contracting State a permanent establishment or a

fixed base in connection with which the indebtedness on which

the interest is paid was incurred, and such interest is borne

by such permanent establishment or fixed base, then such

interest shall be deemed to arise in the State in which the

permanent establishment or fixed base is situated.



(7) Where by reason of a special relationship between the payer

and the beneficial owner or between both of them and some other

person, the amount of the interest, having regard to the debt-

claim for which it is paid, exceeds the amount which would have

been agreed upon by the payer and the beneficial owner in the

absence of such relationship, the provisions of this Article

shall apply only to the last-mentioned amount. In such case,

the excess part of the payments shall remain taxable according

to the laws of each Contracting State, due regard being had to

the other provisions of this Agreement.



Article 12



Royalties



(1) Royalties arising in a Contracting State and paid to a

resident of the other Contracting State shall be taxable only

in that other State if such resident is the beneficial owner of

the royalties.



(2) The term "royalties" as used in this Article means payments

of any kind received as a consideration for the use of, or the

right to use, any copyright of literary, artistic or scientific

work including cinematograph films and films or tapes for radio

or television broadcasting, any patent, trade mark, design or

model, plan, secret formula or process, or for information

concerning industrial, commercial or scientific experience.



(3) The provisions of paragraph (1) shall not apply if the

beneficial owner of the royalties, being a resident of a

Contracting State, carries on business in the other Contracting

State in which the royalties arise, through a permanent

establishment situated therein, or performs in that other State

independent personal services from a fixed base situated

therein, and the right or property in respect of which the

the royalties are paid is effectively connected with such permanent

establishment or fixed base. In such case the provisions of

Article 7 or Article 14, as the case may be, shall apply.



(4) Royalties shall be deemed to arise in a Contracting State

When the payer is that State itself, a local authority or a

the resident of that State. Where, however, the person paying the

royalties, whether he is a resident of a Contracting State or

Note, has in a Contracting State a permanent establishment or a

fixed base in connection with which the liability to pay the

royalties was incurred, and such royalties are borne by such

permanent establishment or fixed base, then such royalties

shall be deemed to arise in the State in which the permanent

establishment or fixed base is situated.



(5) Where by reason of a special relationship between the payer

and the beneficial owner or between both of them and some other

person, the amount of the royalties, having regard to the use,

right or information for which they are paid, exceeds the

the amount which would have been agreed upon by the payer and the

beneficial owner in the absence of such relationship, the

the provisions of this Article shall apply only to the last-

mentioned amount. In such case, the excess part of the payments

shall remain taxable according to the laws of each Contracting

State, due regard being had to the other provisions of this

Agreement.



Article 13



Capital gains



(1) Gains derived by a resident of a Contracting State from the

alienation of immovable property referred to in Article 6 and

situated in the other Contracting State may be taxed in that

other State.



(2) Gains derived by a resident of a Contracting State from the

alienation of shares in a company the assets of which consist

principally of immovable property referred to in Article 6 and

situated in the other Contracting State may be taxed in that

other State.



(3) Gains from alienation of movable property forming part of

the business property of a permanent establishment which an

Enterprise of a Contracting State has in the other Contracting

State or of movable property pertaining to a fixed base

available to a resident of a Contracting State in the other

Contracting State for the purpose of performing independent

personal services, including such gains from the alienation of

such a permanent establishment (alone or with the whole

Enterprise) or of such fixed base, may be taxed in that other

State.



(4) Gains from the alienation of ships or aircraft operated in

international traffic or movable property pertaining to the

the operation of such ships or aircraft, shall be taxable only in

the Contracting State in which the place of effective

management of the enterprise is situated. If that State

According to its legislation cannot tax the whole of the gains,

the gains shall be taxable only in the Contracting State of

which the alienator is a resident.



With respect to gains derived by the air transport consortium

Scandinavian Airlines System (SAS), the provisions of this

paragraph shall apply only to such portion of the gains as

corresponds to the participation held in that consortium by SAS

Sweden AB, the Swedish partner of SAS.



(5) Gains from the alienation of any property other than that

referred to in paragraphs (1), (2), (3) and (4), shall be

taxable only in the Contracting State of which the alienator is

(a) resident.



(6) Notwithstanding the provisions of paragraph (5), gains from

the alienation of any property derived by an individual who has

been a resident of a Contracting State and who has become a

resident of the other Contracting State, may be taxed in the

the first-mentioned State.



Article 14



Independent personal services



(1) Income derived by an individual who is a resident of a

Contracting State in respect of professional services or other

the activities of an independent character shall be taxable only in

that State unless he has a fixed base regularly available to

him in the other Contracting State for the purpose of

performing his activities. If he has such a fixed base, the

the income may be taxed in the other State but only so much thereof

as is attributable to that fixed base.



(2) The term "professional services" includes especially

independent scientific, literary, artistic, educational or

teaching activities as well as the independent activities of

physicians, lawyers, engineers, architects, dentists and

Accountants.



Article 15



Dependent personal services



(1) Subject to the provisions of Articles 16, 18 and 19,

salaries, wages and other similar remuneration derived by a

the resident of a Contracting State in respect of an employment

shall be taxable only in that State unless the employment is

exercised in the other Contracting State. If the employment is

so exercised, such remuneration as is derived therefrom may be

taxed in that other State.



(2) Notwithstanding the provisions of paragraph (1),

remuneration derived by a resident of a Contracting State in


respect of an employment exercised in the other Contracting

State shall be taxable only in the first-mentioned State if:



(a) the recipient is present in the other State for a period or

period not exceeding in the aggregate 183 days in any twelve

month period commencing or ending in the fiscal year concerned;

and



(b) the remuneration is paid by, or on behalf of, an employer

the who is not a resident of the other State; and



(c) the remuneration is not borne by a permanent establishment

or a fixed base which the employer has in the other State.



(3) Notwithstanding the preceding provisions of this Article,

remuneration derived in respect of an employment exercised

aboard a ship or aircraft operated in international traffic may

be taxed in the Contracting State in which the place of

effective management of the enterprise is situated. Where (a)

resident of Sweden derives remuneration in respect of an

the employment exercised aboard an aircraft operated in

international traffic by the air transport consortium

Scandinavian Airlines System (SAS), such remuneration shall be

taxable only in Sweden.



Article 16



Directors ' fees



Directors ' fees and other similar payments derived by a

the resident of a Contracting State in his capacity as a member of

the board of directors of a company which is a resident of the

other Contracting State may be taxed in that other State.



Article 17



Artistes and sportsmen



(1) Notwithstanding the provisions of Articles 14 and 15,

income derived by a resident of a Contracting State as an

entertainer, such as a theatre, motion picture, radio or

television artiste, or a musician, or as a sportsman, from his

personal activities as such exercised in the other Contracting

State, may be taxed in that other State.



(2) Where income in respect of personal activities exercised by

an entertainer or a sportsman in his capacity as such accrues

not to the entertainer or sportsman himself but to another

person, that income may, notwithstanding the provisions of

Articles 7, 14 and 15, be taxed in the Contracting State in

which the activities of the entertainer or sportsman are

exercised.



(3) Such income shall, however, be exempt from tax in the

Contracting State in which these activities are exercised, if

such activities are exercised pursuant to a special program for

cultural exchange agreed upon between the Governments of the

two Contracting States.



Article 18



Pensions, annuities and similar



payments



(1) pension and other remuneration in connection with past

employment, social security payments, under the law in force in

(a) the Contracting State and annuities, arising in a Contracting

State and paid to a resident of the other Contracting State may

be taxed in the first-mentioned Contracting State.



(2) The term "annuity" means a stated sum payable periodically

at stated times during life or during a specified or

ascertainable period of time under an obligation to make the

payments in return for adequate and full consideration in money

or money's worth.



Article 19



Government service



(1) (a) Remuneration, other than a pension, paid by a

Contracting State or a local authority thereof to an individual

in respect of services rendered to that State or local

authority shall be taxable only in that State.



(b) However, such remuneration shall be taxable only in the

other Contracting State if the services are rendered in that

other State and the individual is a resident of that State who:



(i) is a national of that State; or



(ii) did not become a resident of that State solely for the

purpose of rendering the services.



(2) The provisions of Articles 15 and 16 shall apply to

remuneration in respect of services rendered in connection with

a business carried on by a Contracting State or a local

authority thereof.



Article 20



The student's



Payments which a student or business apprentice who is or was

immediately before visiting a Contracting State a resident of

the other Contracting State and who is present in the first-

mentioned State solely for the purpose of his education or

training receives for the purpose of his maintenance, education

or training shall not be taxed in that State, provided that

such payments arise from sources outside that State.



Article 21



Other income



(1) Items of income of a resident of a Contracting State,

wherever arising, not dealt with in the foregoing Articles of

This Agreement shall be taxable only in that State.



(2) The provisions of paragraph (1) shall not apply to income,

other than income from immovable property as defined in

paragraph (2) of Article 6, if the recipient of such income,

being a resident of a Contracting State, carries on business in

the other Contracting State through a permanent establishment

situated therein, or performs in that other State independent

personal services from a fixed base situated therein, and the

right or property in respect of which the income is paid is

effectively connected with such permanent establishment or

fixed base. In such case the provisions of Article 7 or Article

14, as the case may be, shall apply.



Article 22



Capital



(1) Capital represented by immovable property referred to in

Article 6, owned by a resident of a Contracting State and

situated in the other Contracting State, may be taxed in that

other State.



(2) Capital represented by movable property forming part of the

business property of a permanent establishment which an

Enterprise of a Contracting State has in the other Contracting

State or by movable property pertaining to a fixed base,

available to an individual who is a resident of a Contracting

State, in the other Contracting State for the purpose of

performing independent personal services, may be taxed in that

other State.



(3) Capital represented by ships and aircraft operated in

international traffic and by movable property pertaining to the

the operation of such ships and aircraft, shall be taxable only in

the Contracting State in which the place of effective

management of the enterprise is situated.



With respect to capital owned by the air transport consortium

Scandinavian Airlines System (SAS) this provision shall apply

only to such part of the capital as corresponds to the

participation held in that consortium by SAS Sweden AB, the

Swedish partner of SAS.



Article 23



Elimination of double taxation



(1) Double taxation for the residents of Macedonia shall be

eliminated as follows:



Where a resident of Macedonia derives income or owns capital

which in accordance with the provisions of this Agreement may

be taxed in Sweden, Macedonia shall allow:



(a) as deduction of the income tax of that resident an amount

equal to the income tax paid in Canada;



(b) as deduction of the capital tax of the resident, an amount

equal to the capital tax paid in Sweden.



Such deductions shall not, however, exceed that part of the

income tax computed before the deduction is given, which is

appropriate to the income or the capital which may be taxed in

Sweden.



(c) Where in accordance with any provision of the Agreement

income derived or capital owned by a resident of Macedonia is

exempt from tax in Macedonia, Macedonia may nevertheless, in

calculating the amount of tax on the remaining income or

capital of such resident, take into account the exempted income

or capital.



(2) In the case of Sweden, double taxation shall be avoided as

follows:



(a) Where a resident of Sweden derives income which under the

the laws of Macedonia and in accordance with the provisions of this

Agreement may be taxed in Macedonia, Sweden shall allow-

subject to the provisions of the laws of Sweden concerning

credit for foreign tax (as it may be amended from time to time

without changing the general principle hereof)-as a deduction

from the tax on such income, an amount equal to the Macedonian

tax paid in respect of such income.



(b) Where a resident of Sweden derives income which, in

accordance with the provisions of this Agreement, shall be

taxable only in Macedonia, Sweden may, when determining the

graduated rate of Swedish tax, take into account the income

which shall be taxable only in Macedonia.



(c) Notwithstanding the provisions of sub-paragraph (a) of this

paragraph, dividends paid by a company which is a resident of

Macedonia to a company which is a resident of Sweden shall be

exempt from Swedish tax according to the provisions of Swedish

law governing the exemption of tax on dividends paid to Swedish

companies by subsidiaries abroad.



(d) For the purpose of sub-paragraph (a) of this paragraph the

Macedonian tax paid in respect of royalties received as a

consideration for the use of any patent, design or model, plan,

secret formula or process, or for information concerning

industrial, commercial or scientific experience shall, where it

has been used in an industrial or manufacturing activity,

Agriculture (including cattle raising), forestry, fishing or

Tourism (including restaurants and hotels), provided that the

activities have been carried out in Macedonia, a Macedonian tax

of 5 per cent of the gross amount of such royalties shall be

considered to have been paid. For the purpose of sub-paragraph

(a) of this paragraph the term "Macedonian tax paid" shall be

deemed to include the Macedonian tax which would have been paid

but for any time-limited exemption or reduction of tax granted

under incentive provisions contained in Macedonian law designed

to promote economic development to the extent that such

exemption or reduction is granted for profits from any such

activities, carried out in Macedonia, mentioned in the previous

sentence.



(e) For the purpose of sub-paragraph (c) of this paragraph, a

tax of 15 per cent shall be considered to have been paid on the


profits out of which the dividends are paid, if the company

which is a resident of Macedonia has derived the profits

principally from industrial or manufacturing activities as well

as agriculture (including cattle raising), forestry, fishing or

Tourism (including restaurants and hotels), provided that the

activities have been carried out in Macedonia.



(f) The provisions of sub-paragraphs (d) and (e) shall apply

only for the first five years during which this Agreement is

effective. This period may be extended by a mutual agreement

between the competent authorities.



(g) Where a resident of Sweden owns capital which, in the

the laws of Macedonia and in accordance with the provisions of this

Agreement, may be taxed in Macedonia, Sweden shall allow as a

deduction from the tax on such capital an amount equal to the

property tax paid in Macedonia in respect of such capital. Such

deduction shall not, however, exceed that part of the Swedish

capital tax, as computed before the deduction is given, which is

appropriate to the capital which may be taxed in Macedonia.



Article 24



Non-discrimination



(1) nationals of a Contracting State shall not be subjected in

the other Contracting State to any taxation or any requirement

connected therewith, which is other or more burdensome than the

taxation and connected requirements to which nationals of that

other State in the same circumstances are or may be subjected.

This provision shall, notwithstanding the provisions of Article

1, also apply to persons who are not residents of one or both

of the Contracting States.



(2) The taxation on a permanent establishment which an

Enterprise of a Contracting State has in the other Contracting

State shall not be less favourably levied in that other State

than the taxation levied on enterprises of that other State

carrying on the same activities.



(3) Except where the provisions of paragraph (1) of Article 9,

paragraph (7) of Article 11, or paragraph (5) of Article 12,

apply, interest, royalties and other disbursements paid by an

Enterprise of a Contracting State to a resident of the other

Contracting State shall, for the purpose of determining the

the taxable profits of such enterprise, be deductible under the

same conditions as if they had been paid to a resident of the

the first-mentioned State. Similarly, any debts of an enterprise of

a Contracting State to a resident of the other Contracting

State shall, for the purpose of determining the taxable capital

of such enterprise, be deductible under the same conditions as

If they had been contracted to a resident of the first-

mentioned State.



(4) Enterprises of a Contracting State, the capital of which is

wholly or partly owned or controlled, directly or indirectly,

by one or more residents of the other Contracting State, shall

not be subject in the first-mentioned State to any taxation or

any requirement connected therewith which is other or more

burdensome than the taxation and connected requirements to

which other similar enterprises of the first-mentioned State

are or may be subjected.



(5) The provision of this Article shall not be construed as

obliging a Contracting State to grant to residents of the other

Contracting State any personal allowances, reliefs or

reductions for taxation purposes on account of civil status or

family responsibilities which it grants to its own residents.



(6) The provisions of this Article shall, notwithstanding the

the provisions of Article 2, apply to taxes of every kind and

Description.



Article 25



Mutual agreement procedure



(1) Where a person considers that the actions of one or both of

the Contracting States result or will result for him in

taxation not in accordance with the provisions of this

The agreement, he may, irrespective of the remedies provided by the

the domestic law of those States, present his case to the competent

authority of the Contracting State of which he is a resident

or, if his case comes under paragraph (1) of Article 24, to

that of the Contracting States of which he is a national. The

the case must be presented within three years from the first

notification of the action resulting in taxation not in

accordance with the provisions of the Agreement.



(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

Contracting State, 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 Contracting States.



(3) The competent authorities of the Contracting States shall

endeavour to resolve by mutual agreement any difficulties or

doubts arising as to the interpretation or application of the

Agreement. They may also consult together for the elimination

of double taxation in cases not provided for in the Agreement.



(4) The competent authorities of the Contracting States may

communicate with each other directly for the purpose of

reaching an agreement in the sense of the preceding paragraphs.



Article 26



Exchange of information



(1) The competent authorities of the Contracting States shall

Exchange such information as is necessary for carrying out the

the provisions of this Agreement or of the domestic laws of the

Contracting States concerning taxes covered by the Agreement,

insofar as the taxation thereunder is not contrary to the

Agreement. The exchange of information is not restricted by

Article 1. Any information received by a Contracting State

shall be treated as secret in the same manner as information

obtained under the domestic laws of that State and shall be

disclosed only to persons or authorities (including courts and

administrative bodies) involved in the assessment or collection

of, the enforcement or prosecution in respect of, or the

determination of appeals in relation to, the taxes covered by

the Agreement. Such persons or authorities shall use the

information only for such purposes. They may disclose the

information in public court proceedings or in judicial

decisions.



(2) In no case shall the provisions of paragraph (1) be

construed so as to impose on a Contracting State the

bond:



(a) to carry out administrative measures at variance with the

laws and administrative practice of that or of the other

Contracting State;



(b) to supply information which is not obtainable under the

laws or in the normal course of the administration of that or

of the other Contracting State;



(c) to supply information which would disclose any trade,

business, industrial, commercial or professional secret or

trade process, or information, the disclosure of which would be

contrary to public policy (ordre public).



Article 27



Limitation on benefits



If after the date of signature (a) the Contracting State introduces

legislation in terms of which offshore income derived by a

company from:



(a) shipping;



(b) banking, financing, insurance or similar activities; or



(c) being the headquarters, co-ordination centre or similar

the entity providing administrative services or other support to a

Group of companies which carry on business primarily in other

States,



is not taxed in that State or is taxed at a rate of tax which

is significantly lower than the rate of tax which is applied to

income from similar onshore activities, any limitation imposed

under this Agreement on the right of the other Contracting

State to tax the income derived by the company from such

offshore activities, or to tax the dividends paid by the

company, shall not apply.



Article 28



Diplomatic agents and consular



officers



Nothing in this Agreement shall affect the fiscal privileges of

diplomatic agents and consular officers under the general rules

of international law or under the provisions of special

agreements.



Article 29



Entry into force



(1) Each of the Contracting States shall notify the other 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 day of the

later of these notifications and shall thereupon have effect:

for taxable years beginning on or after the first day of

January of the year next following that of the entry into force

of the Agreement.



Article 30



Termination



This Agreement shall remain in force until terminated by a

Contracting State. Either Contracting State may terminate the

The agreement, through diplomatic channels, by giving written

notice of termination at least six months before the end of any

calendar year after the expiry of five years from the date on which

the Agreement enters into force. In such case, the Agreement

shall cease to have effect for taxable years beginning on or

After the first day of January of the year next following the

the day when the notice of termination is given.



In witness whereof the undersigned being duly authorized

thereto have signed this Agreement.



Done in duplicate at Stockholm, this 17th day of February 1998

in the Macedonian, Swedish and English languages, all three

texts being equally authentic. In case of divergence between

the texts, the English text shall prevail.



For the Government of

the Kingdom of Sweden



Knut Rexed



For the Government of

the Republic of Macedonia



Tihomir Ilievski

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