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3 repealed by law (2011:1390).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