(Översättning)

Convention between the Government of the Kingdom of Sweden and the Government of the Republic of Cyprus for the avoidance of double taxation with respect to taxes on income

Avtal mellan Konungariket Sveriges regering och Republiken Cyperns regering för att undvika dubbelbeskattning beträffande inkomstskatter

The Government of the Kingdom of Sweden and the Government of the Republic of Cyprus desiring to conclude a Convention for the Avoidance of Double Taxation with respect to Taxes on Income, have agreed as follows:

Konungariket Sveriges regering och Republiken Cyperns regering, som önskar ingå ett avtal för att undvika dubbelbeskattning beträffande inkomstskatter, har kommit överens om följande:

Article 1

Artikel 1

Personal scope

Personer på vilka avtalet tillämpas

This Convention shall apply to persons who are residents of one or both of the Contracting States.

Detta avtal tillämpas på personer som har hemvist i en avtalsslutande stat eller i båda avtalsslutande staterna.

Article 2

Artikel 2

Taxes covered

Skatter som omfattas av avtalet

(1) This Convention shall apply to taxes on income imposed on behalf of a Contracting State or of its political subdivisions or local authorities, irrespective of the manner in which they are levied.

(2) There shall be regarded as taxes on income all taxes imposed on total income or on elements of income, including taxes on gains from the alienation of movable or immovable property, as well as taxes on capital appreciation.

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

(a) In Cyprus:

a) i Cypern:

(i) the income tax;

1) inkomstskatten,

(ii) the capital gains tax; and

2) realisationsvinstskatten, samt

(iii) the special contribution

3) den särskilda avgiften

(hereinafter referred to as ”Cyprus tax”).

(i det följande benämnda ”cypriotisk skatt”).

(b) In Sweden:

b) i Sverige:

(i) the State income tax (den statliga inkomstskatten), including the sailors’ tax (sjömansskatten) and the coupon tax (kupongskatten);

1) den statliga inkomstskatten, sjömansskatten och kupongskatten däri inbegripna,

(ii) the tax on the undistributed profits of companies (ersättningsskatten) and the tax on distribution in connection with reduction of share capital or the winding up of a company (utskiftningsskatten);

2) ersättningsskatten och utskiftningsskatten,

(iii) the tax on public entertainers (bevillningsavgiften för vissa offentliga föreställningar);

3) bevillningsavgiften för vissa offentliga föreställningar,

(iv) the communal income tax (den kommunala inkomstskatten); and

4) den kommunala inkomstskatten, samt

(v) the profit sharing tax (vinstdelningsskatten)

5) vinstdelningsskatten

(hereinafter referred to as ”Swedish tax”).

(i det följande benämnda ”svensk skatt”).

(4) The Convention shall also apply to any identical or substantially similar taxes which are imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall each year notify each other of any significant changes which have been made in their respective taxation laws.

Article 3

Artikel 3

General definitions

Allmänna definitioner

(1) For the purposes of this Convention, unless the context otherwise requires:

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

a) ”Cypern” åsyftar Republiken Cypern och innefattar, när uttrycket används i geografisk betydelse, Cyperns territorium, Cyperns territorialvatten och de andra havsområden över vilka Cypern, i överensstämmelse med folkrättens allmänna regler, utövar suveräna rättigheter eller jurisdiktion,

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

b) ”Sverige” åsyftar Konungariket Sverige och innefattar, när uttrycket används i geografisk betydelse, Sveriges territorium, Sveriges territorialvatten och andra havsområden över vilka Sverige, i överensstämmelse med folkrättens allmänna regler, utövar suveräna rättigheter eller jurisdiktion,

(c) the terms ”a Contracting State” and ”the other Contracting State” mean the Republic of Cyprus or the Kingdom of Sweden, as the context requires;

c) ”en avtalsslutande stat” och ”den andra avtalsslutande staten” åsyftar Republiken Cypern eller Konungariket Sverige allteftersom sammanhanget kräver,

(d) the term ”person” includes an individual, a company and any other body of persons;

d) ”person” inbegriper fysisk person, bolag och annan sammanslutning,

(e) the term ”company” means any body corporate or any entity which is treated as a body corporate for tax purposes;

e) ”bolag” åsyftar juridisk person eller annan som vid beskattningen behandlas såsom juridisk person,

(f) 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;

(f) ”företag i en avtalsslutande stat” och ”företag i den andra avtalsslutande staten” åsyftar företag som bedrivs av person med hemvist i en avtalsslutande stat, respektive företag som bedrivs av person med hemvist i den andra avtalsslutande staten,

(g) the term ”international traffic” means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;

g) ”internationell trafik” åsyftar transport med skepp eller luftfartyg som används av företag i en avtalsslutande stat utom då skeppet eller luftfartyget används uteslutande mellan platser i den andra avtalsslutande staten,

(h) the term ”national” means:

h) ”medborgare” åsyftar

(i) any individual possessing the citizenship of a Contracting State;

1) fysisk person som är medborgare i en avtalsslutande stat samt

(ii) any legal person, partnership and association deriving its status as such from the laws in force in a Contracting State;

2) juridisk person, handelsbolag eller sammanslutning som bildats enligt den lagstiftning som gäller i en avtalsslutande stat,

(i) the term ”competent authority” means:

i) ”behörig myndighet” åsyftar

(i) in Cyprus, the Minister of Finance or his authorized representative;

1) i Cypern, finansministern eller dennes befullmäktigade ombud,

(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 Convention.

2) i Sverige, finansministern, dennes befullmäktigade ombud eller den myndighet åt vilken uppdras att vara behörig myndighet vid tillämpningen av avtalet.

(2) As regards the application of the Convention by a Contracting State any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the law of that State concerning the taxes to which the Convention applies.

Article 4

Artikel 4

Resident

Hemvist

(1) For the purposes of this Convention, 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 or any other criterion of a similar nature. But this term does not include any person who is liable to tax in that State in respect only of income from sources in that State.

(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);

a) Han anses ha hemvist i den stat där han har en bostad som stadigvarande står till hans förfogande. Om han har en sådan bostad i båda staterna, anses han ha hemvist i den stat med vilken hans personliga och ekonomiska förbindelser är starkast (centrum för levnadsintressena).

(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;

b) Om det inte kan avgöras i vilken stat han har centrum för sina levnadsintressen eller om han inte i någondera staten har en bostad som stadigvarande står till hans förfogande, anses han ha hemvist i den stat där han stadigvarande vistas.

(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;

c) Om han stadigvarande vistas i båda staterna eller om han inte vistas stadigvarande i någon av dem, anses han ha hemvist i den stat där han är medborgare.

(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.

d) Om han är medborgare i båda staterna eller om han inte är medborgare i någon av dem, avgör de behöriga myndigheterna i de avtalsslutande staterna frågan genom ömsesidig överenskommelse.

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

Artikel 5

Permanent establishment

Fast driftställe

(1) For the purposes of this Convention 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;

a) plats för företagsledning,

(b) a branch;

b) filial,

(c) an office;

c) kontor,

(d) a factory;

d) fabrik,

(e) a workshop; and

e) verkstad, och

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

f) gruva, olje- eller gaskälla, stenbrott eller annan plats för utvinning av naturtillgångar.

(3) A building site or construction or installation project constitutes a permanent establishment only if it lasts more than six 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;

a) användningen av anordningar uteslutande för lagring, utställning eller utlämnande av företaget tillhöriga varor,

(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;

b) innehavet av ett företaget tillhörigt varulager uteslutande för lagring, utställning eller utlämnande,

(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

c) innehavet av ett företaget tillhörigt varulager uteslutande för bearbetning eller förädling genom ett annat företags försorg,

(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;

d) innehavet av stadigvarande plats för affärsverksamhet uteslutande för inköp av varor eller inhämtande av upplysningar för företaget,

(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;

e) innehavet av stadigvarande plats för affärsverksamhet uteslutande för att för företaget bedriva annan verksamhet av förberedande eller biträdande art,

(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.

f) innehavet av stadigvarande plats för affärsverksamhet uteslutande för att kombinera verksamheter som anges i punkterna a)   e), under förutsättning att hela den verksamhet som bedrivs från den stadigvarande platsen för affärsverksamhet på grund av denna kombination är av förberedande eller biträdande art.

(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 on behalf of an enterprise and has, and habitually exercises in a Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes for 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 provisions of that paragraph.

(6) An enterprise of a Contracting State shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that 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

Artikel 6

Income from immovable property

Inkomst av fast egendom

(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 include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which 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 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

Artikel 7

Business profits

Inkomst av rörelse

(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 same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.

(3) In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of 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) Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article.

(5) 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.

(6) 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.

(7). Where profits include items of income which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.

Article 8

Artikel 8

Shipping and air transport

Sjöfart och luftfart

(1) Profits of an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State.

(2) The provisions of paragraph (1) shall also apply to profits from the participation in a pool, a joint business or an international operating agency.

(3) Notwithstanding the foregoing provisions profits from the operation of ships in international traffic derived by a company or partnership which is a resident of Cyprus, more than 25 per cent of the capital of which is owned, directly or indirectly, by persons who are not residents of Cyprus, may be taxed in Sweden if the company or partnership does not prove that the Cyprus tax appropriate to such income is equal to the Cyprus tax which would have been appropriate to such income if the Cyprus tax were computed without regard to any provision identical or similar to the provisions of The Merchant Shipping (Taxing Provisions) Law as in force at the signing of this Convention.

(4) 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 AB Aerotransport (ABA), the Swedish partner of Scandinavian Airlines System (SAS).

Article 9

Artikel 9

Associated enterprises

Företag med intressegemenskap

(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

a) ett företag i en avtalsslutande stat direkt eller indirekt deltar i ledningen eller övervakningen av ett företag i den andra avtalsslutande staten eller äger del i detta företags kapital, eller

(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,

b) samma personer direkt eller indirekt deltar i ledningen eller övervakningen av såväl ett företag i en avtalsslutande stat som ett företag i den andra avtalsslutande staten eller äger del i båda dessa företags kapital,

iakttas följande.

and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

Om mellan företagen i fråga om handelsförbindelser eller finansiella förbindelser avtalas eller föreskrivs villkor, som avviker från dem som skulle ha avtalats mellan av varandra oberoende företag, får all inkomst, som utan sådana villkor skulle ha tillkommit det ena företaget men som på grund av villkoren i fråga inte tillkommit detta företag, inräknas i detta företags inkomst och beskattas i överensstämmelse därmed.

(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 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. In determining such adjustment, due regard shall be had to the other provisions of this Convention and the competent authorities of the Contracting States shall if necessary consult each other.

Article 10

Artikel 10

Dividends

Utdelning

(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) However, 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:

(a) 5 per cent of the gross amount of the dividends 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;

a) 5 procent av utdelningens bruttobelopp, om den som har rätt till utdelningen är ett bolag (med undantag för handelsbolag) som direkt behärskar minst 25 procent av det utbetalande bolagets kapital,

(b) 15 per cent of the gross amount of the dividends in all other cases.

b) 15 procent av utdelningens bruttobelopp i övriga fall.

The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of these limitations.

De behöriga myndigheterna i de avtalsslutande staterna skall träffa överenskommelse om sättet att genomföra dessa begränsningar.

This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

Denna punkt berör inte bolagets beskattning för vinst av vilken utdelningen betalas.

(3) The term ”dividends” as used in this Article means income from shares, mining shares, founders’ 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) Notwithstanding the provisions of paragraph (2)   as long as Cyprus does not impose tax at source on dividends   dividends paid by a company which is a resident of Cyprus to a resident of Sweden shall not be subject to any tax imposed by Cyprus in excess of the tax imposed with respect to the profits or earnings out of which such dividends are paid. An individual resident of Sweden shall be entitled to a refund of any Cyprus tax imposed with respect to the profits or earnings out of which a dividend is paid, to the extent that the said tax exceeds the individual’s tax liability in Cyprus.

(5) Notwithstanding the provisions of paragraph (1), dividends paid by a company which is a resident of Cyprus shall be exempt from Swedish tax to the extent that the dividends would have been exempt under Swedish law if both companies had been Swedish companies. This exemption shall not apply unless

(a) the profits out of which the dividends are paid have been subjected to the normal corporate tax in Cyprus or an income tax comparable thereto, or

a) om den vinst av vilken utdelningen betalas underkastats den normala cypriotiska inkomstskatten för bolag eller därmed jämförlig inkomstskatt, eller

(b) the dividends paid by the company which is a resident of Cyprus consist wholly or almost wholly of dividends which that company has received, in the year or previous years, in respect of shares held by it in a company which is a resident of a third State and which would have been exempt from Swedish tax if the shares in respect of which they are paid had been held directly by the company which is a resident of Sweden.

b) den utdelning som betalas av bolaget med hemvist i Cypern uteslutande eller så gott som uteslutande utgörs av utdelning vilken detta bolag under ifrågavarande år eller tidigare år mottagit på aktier eller andelar, som bolaget innehar i ett bolag med hemvist i en tredje stat, och vilken skulle ha varit undantagen från svensk skatt om de aktier eller andelar på vilka utdelningen betalas hade innehafts direkt av bolaget med hemvist i Sverige.

(6) 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.

(7) 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 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, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.

Article 11

Artikel 11

Interest

Ränta

(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 interest the tax so charged shall not exceed 10 per cent of the gross amount of the interest. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation.

(3) Notwithstanding the provisions of paragraph (2), interest arising in a Contracting State and derived by the Government of the other Contracting State, including political subdivisions and local authorities thereof, the Central Bank of that other Contracting State or any governmental financial institution shall be exempt from tax in the first-mentioned Contracting State.

(4) For the purposes of paragraph (3), the terms ”the Central Bank” and ”governmental financial institution” mean:

(a) In the case of Cyprus:

a) i Cypern:

(i) the Central Bank of Cyprus and

1) Cyperns riksbank och

(ii) such other governmental financial institution as may be agreed upon from time to time between the competent authorities of the two Contracting States;

2) statlig finansinrättning som de behöriga myndigheterna i de avtalsslutande staterna kommit överens om,

(b) In the case of Sweden:

b) i Sverige:

(i) the Central Bank of Sweden or the Swedish National Debt Office and

1) Sveriges riksbank eller riksgäldskontoret och

(ii) such other governmental financial institution as may be agreed upon from time to time between the competent authorities of the two Contracting States.

2) statlig finansinrättning som de behöriga myndigheterna i de avtalsslutande staterna kommit överens om.

(5) 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 payments shall not be regarded as interest for the purpose of this Article.

(6) The provisions of paragraphs (1) and (2) 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 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.

(7) Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, 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 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.

(8) 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 Convention.

Article 12

Artikel 12

Royalties

Royalty

(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 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) 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 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 Convention.

Article 13

Artikel 13

Capital gains

Realisationsvinst

(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, or from the alienation of shares in a company the assets of which consist principally of such property, may be taxed in that other State.

(2) Gains from the 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.

(3) Gains derived by a resident of a Contracting State from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that State.

With respect to gains derived by the Swedish, Danish and Norwegian 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 AB Aerotransport (ABA), the Swedish partner of Scandinavian Airlines System (SAS).

Beträffande vinst som förvärvas av konsortiet Scandinavian Airlines System (SAS) tillämpas bestämmelserna i denna punkt endast i fråga om den del av vinsten som motsvarar den andel i konsortiet vilken innehas av AB Aerotransport (ABA), den svenske delägaren i Scandinavian Airlines System (SAS).

(4) Gains from the alienation of any property other than that referred to in paragraphs (1), (2) and (3), shall be taxable only in the Contracting State of which the alienator is a resident.

(5) In the case of an individual who has been a resident of a Contracting State and who has become a resident of the other Contracting State, the provisions of paragraph (4) shall not affect the right of the first-mentioned State to tax gains from the alienation of any property derived by such an individual at any time during the seven years next following the date on which the individual has ceased to be a resident of the first-mentioned State.

Article 14

Artikel 14

Independent personal services

Självständig yrkesutövning

(1) Income derived by a resident of a Contracting State in respect of professional services or other 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 income may be taxed in the other State but only so much of it 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

Artikel 15

Dependent personal services

Enskild tjänst

(1) Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration, other than a pension, derived by a 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 periods not exceeding in the aggregate 183 days within any period of 12 months, and

a) mottagaren vistas i den andra staten under tidrymd eller tidrymder som sammanlagt inte överstiger 183 dagar under en tolvmånadersperiod, och

(b) the remuneration is paid by, or on behalf of, an employer who is not resident of the other State, and

b) ersättningen betalas av eller på uppdrag av arbetsgivare som inte har hemvist i denna andra stat, samt

(c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.

c) ersättningen inte belastar fast driftställe eller stadigvarande anordning som arbetsgivaren har i den andra staten.

(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 by an enterprise of a Contracting State, may be taxed in that State. Where a resident of Sweden derives remuneration in respect of an employment exercised aboard an aircraft operated in international traffic by the air transport consortium Scandinavian Airlines System (SAS) such remuneration shall be taxable o nly in Sweden.

Article 16

Artikel 16

Directors’ fees

Styrelsearvode

Directors’ fees and other similar payments derived by a 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.

Styrelsearvode och annan liknande ersättning, som person med hemvist i en avtalsslutande stat uppbär i egenskap av medlem i styrelse eller annat liknande organ i bolag med hemvist i den andra avtalsslutande staten, får beskattas i denna andra stat.

Article 17

Artikel 17

Artistes and athletes

Artister och idrottsmän

(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 an athlete, 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 an athlete in his capacity as such accrues not to the entertainer or athlete 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 athlete are exercised.

Article 18

Artikel 18

Government service

Offentlig tjänst

(1)(a) Remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or 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 State and the individual is a resident of that State who:

b) Sådan ersättning beskattas emellertid endast i den andra avtalsslutande staten, om arbetet utförs i denna stat och personen i fråga har hemvist i denna stat och

(i) is a national of that State; or

1) är medborgare i denna stat, eller

(ii) did not become a resident of that State solely for the purpose of rendering the services.

2) inte fick hemvist i denna stat uteslutande för att utföra arbetet.

(2)(a) Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

(b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.

b) Sådan pension beskattas emellertid endast i den andra avtalsslutande staten, om personen i fråga har hemvist och är medborgare i denna stat.

(3) The provisions of Articles 15, 16 and 20 shall apply to remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof.

Article 19

Artikel 19

Students

Studerande

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 Contracting State solely for the purpose of his education or training shall be exempt from tax in that Contracting State with respect to:

Studerande eller affärspraktikant, som har eller omedelbart före vistelse i en avtalsslutande stat hade hemvist i den andra avtalsslutande staten och som vistas i den förstnämnda avtalsslutande staten uteslutande för sin undervisning eller utbildning, beskattas inte i denna avtalsslutande stat för

(a) payments received from sources outside that Contracting State for the purpose of his maintenance, education or training; and

a) belopp, som betalas till honom från källor utanför denna stat för hans uppehälle, undervisning eller utbildning, och

(b) income from personal services performed in that Contracting State provided that the income does not exceed 10 000 Swedish kronor or its equivalent in Cyprus pounds for any taxable year.

b) inkomst av arbete som utförs i denna avtalsslutande stat, om inkomsten inte under något beskattningsår överstiger 10 000 svenska kronor eller motvärdet i cypriotiska pund.

The benefits provided under sub-paragraph (b) shall extend only for such period of time as is reasonably necessary to complete the education or training, but shall in no event exceed a period of seven consecutive years.

Skattebefrielse enligt b) ovan medges endast för den tid som skäligen erfordras för att fullborda utbildningen eller praktiken, men får inte i något fall avse längre tidrymd än sju på varandra följande år.

Article 20

Artikel 20

Other income

Annan inkomst

(1) Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Convention 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 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.

(3) Notwithstanding the provisions of paragraphs (1) and (2), items of income of a resident of a Contracting State not dealt with in the foregoing Articles of this Convention and arising in the other Contracting State may be taxed in that other State.

(4) Items of income dealt with in this Article shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority, or a resident of that State or when the income is paid under the local security legislation of that State.

Article 21

Artikel 21

Elimination of double taxation

Undanröjande av dubbelbeskattning

(1) In the case of Cyprus, double taxation shall be avoided as follows:

(a) Subject to the provisions of Cyprus tax Law regarding credit for foreign tax, there shall be allowed as a credit against Cyprus tax payable in respect of any item of income or chargeable gains derived from Sweden the Swedish tax paid under the laws of Sweden and in accordance with this Convention. The credit shall not however exceed that part of the Cyprus tax, as computed before the credit is given, which is appropriate to such items of income or chargeable gains.

a) I enlighet med bestämmelserna i cypriotisk lagstiftning om avräkning av utländsk skatt, skall från cypriotisk skatt på inkomst eller skattepliktig realisationsvinst som härrör från Sverige avräknas den svenska skatt som erlagts enligt svensk lag och i enlighet med detta avtal. Avräkningsbeloppet skall emellertid inte överstiga den del av den cypriotiska skatten, beräknad utan sådan avräkning, som belöper på sådan inkomst eller skattepliktig realisationsvinst.

(b) Where such income or chargeable gain is a dividend paid by a company which is a resident of Sweden to a company which is a resident of Cyprus and which owns directly at least 25 per cent of the capital of the Swedish company, the credit shall take into account (in addition to any Swedish tax on dividends) the Swedish tax payable in respect of its profits by the company paying the dividends, and which is attributable to that capital.

b) I fall då sådan inkomst eller skattepliktig realisationsvinst utgörs av utdelning från ett bolag med hemvist i Sverige till ett bolag med hemvist i Cypern, som direkt äger minst 25% av det svenska bolagets kapital, medräknas vid avräkningen (förutom varje svensk skatt på utdelningen) den svenska skatt som det utdelande bolaget erlägger på sin inkomst och som är hänförlig till detta kapital.

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

(a) Subject to the provisions of (b) below, where a resident of Sweden derives income which under the laws of Cyprus and in accordance with the provisions of this Convention may be taxed in Cyprus, Sweden shall allow   subject to the provisions of the law 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 Cyprus tax paid in respect of such income.

a) Om en person med hemvist i Sverige förvärvar inkomst som enligt cypriotisk lagstiftning och i enlighet med bestämmelserna i detta avtal får beskattas i Cypern, skall Sverige, såvida inte bestämmelserna i b) nedan föranleder annat, med beaktande av bestämmelserna i svensk lagstiftning rörande avräkning av utländsk skatt   såsom den kan komma att ändras från tid till annan utan att den allmänna princip som anges här ändras   från denna persons svenska inkomstskatt avräkna ett belopp motsvarande den cypriotiska skatt som betalats på denna inkomst.

(b) Where a resident of Sweden derives income which, in accordance with the provisions of Article 7 or Article 14, may be taxed in Cyprus, Sweden shall exempt such income from tax provided that the principal part of the income of the permanent establishment or fixed base arises from business activities, other than the management of securities and other similar property, and such activities are carried on within Cyprus through the permanent establishment or the fixed base.

b) Om en person med hemvist i Sverige uppbär inkomst som enligt bestämmelserna i artikel 7 eller artikel 14 får beskattas i Cypern, skall Sverige undanta inkomsten från skatt, under förutsättning att den övervägande delen av inkomsten från det fasta driftstället eller den stadigvarande anordningen härrör från annan verksamhet än förvaltning av värdepapper eller annan liknande egendom och verksamheten i fråga bedrivs i Cypern från det fasta driftstället eller den stadigvarande anordningen.

(c) Where a resident of Sweden derives income which shall be taxable only in Cyprus in accordance with the provisions of this Convention or shall be exempt from Swedish tax in accordance with sub-paragraph (b) of this paragraph, Sweden may, when determining the graduated rate of Swedish tax, take into account the income which shall be taxable only in Cyprus or shall be exempt from Swedish tax, respectively.

c) I fall då en person med hemvist i Sverige uppbär inkomst som enligt bestämmelserna i detta avtal beskattas endast i Cypern eller skall undantas från svensk skatt enligt punkt b) ovan, får Sverige, vid fastställandet av skattesatsen för svensk progressiv skatt, beakta den inkomst som beskattas endast i Cypern respektive är undantagen från svensk skatt.

(d) For purposes of deduction from the tax referred to in sub-paragraph (a)

d) Vid den nedsättning av skatten som avses i punkt a) skall,

(i) where dividends are exempt from any tax in Cyprus in addition to the tax chargeable on the profits or income of the company, or are taxed in Cyprus at a rate lower than 20 per cent of the gross amount of such dividends, the amount of Cyprus tax shall be deemed to be 20 per cent of the gross amount of such dividends;

1) i fall då utdelning undantas från skatt i Cypern utöver den skatt som utgår på bolagets vinst eller inkomst eller beskattas i Cypern med en skattesats som understiger 20% av utdelningens bruttobelopp, den cypriotiska skatten anses utgöra 20% av utdelningens bruttobelopp,

(ii) where the rate of Cyprus tax on interest to which paragraph (2) of Article 11 applies is reduced below 15 per cent of the gross amount of such interest, the amount of Cyprus tax shall be deemed to be 15 per cent of the gross amount of such interest.

2) i fall då sådan ränta på vilken bestämmelserna i artikel 11 punkt 2 tillämpas beskattas i Cypern med en skattesats som understiger 15 % av räntans bruttobelopp, den cypriotiska skatten anses utgöra 15 % av räntans bruttobelopp.

The provisions of this sub-paragraph shall apply for the first seven years for which this Convention is effective. The competent authorities shall consult each other in order to determine whether such period shall be extended.

Bestämmelserna i denna punkt gäller de första sju åren under vilka detta avtal tillämpas. De behöriga myndigheterna skall överlägga med varandra för att bestämma om denna tidrymd skall utsträckas.

(3) Where under any provision of this Convention income or chargeable gains are relieved from tax in one of the Contracting States and, under the law in force in the other Contracting State, a person, in respect of the said income or chargeable gains, is subject to tax by reference to the amount thereof which is remitted to or received in that other Contracting State and not by reference to the full amount thereof, then the relief to be allowed under this Convention in the first-mentioned Contracting State shall apply only to so much of the income or chargeable gains as is remitted to or received in the other Contracting State.

(4) For the purposes of this Article, income of a resident of a Contracting State which is taxed in the other Contracting State in accordance with this Convention shall be deemed to be derived from that other State.

Article 22

Artikel 22

Non-discrimination

Förbud mot diskriminering

(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.

This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reduction for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.

Denna bestämmelse anses inte medföra skyldighet för en avtalsslutande stat att medge person med hemvist i den andra avtalsslutande staten sådant personligt avdrag vid beskattningen eller sådan skattebefrielse eller skattenedsättning på grund av civilstånd eller försörjningsplikt mot familj som medges person med hemvist i den egna staten.

(3) Except where the provisions of paragraph (1) of Article 9, paragraph (8) of Article 11, or paragraph (4) 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 taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of 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 subjected in the first-&rbl 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 provisions of this Article shall, notwithstanding the provisions of Article 2, apply to taxes of every kind and description.

Article 23

Artikel 23

Mutual agreement procedure

Förfarandet vid ömsesidig överenskommelse

(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 Convention, he may, irrespective of the remedies provided by 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 22, to that of the Contracting State of which he is a national. 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 Convention.

(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 Convention. 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 Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention.

(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 24

Artikel 24

Exchange of information

Utbyte av upplysningar

(1) The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention. 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) concerned with 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 Convention. 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 obligation:

(a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;

a) vidta förvaltningsåtgärder som avviker från lagstiftning och administrativ praxis i denna avtalsslutande stat eller i den andra avtalsslutande staten,

(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;

b) lämna upplysningar som inte är tillgängliga enligt lagstiftning eller sedvanlig administrativ praxis i denna avtalsslutande stat eller i den andra avtalsslutande staten,

(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).

c) lämna upplysningar som skulle röja affärshemlighet, industri-, handels- eller yrkeshemlighet eller i näringsverksamhet nyttjat förfaringssätt eller upplysningar, vilkas överlämnande skulle strida mot allmänna hänsyn (ordre public).

Article 25

Artikel 25

Diplomatic agents and consular officers

Diplomatiska företrädare och konsulära tjänstemän

Nothing in this Convention shall affect the fiscal privileges of diplomatic agents or consular officers under the general rules of international law or under the provisions of special agreements.

Bestämmelserna i detta avtal berör inte de privilegier vid beskattningen som enligt folkrättens allmänna regler eller bestämmelser i särskilda överenskommelser tillkommer diplomatiska företrädare eller konsulära tjänstemän.

Article 26

Artikel 26

Entry into force

Ikraftträdande

(1) This Convention shall be ratified and the instruments of ratification shall be exchanged in London as soon as possible.

(2) The Convention shall enter into force upon the exchange of instruments of ratification and its provisions shall have effect on income derived on or after the first day of January 1988.

Article 27

Artikel 27

Termination

Upphörande

This Convention shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Convention at any time after 5 years from the date on which the Convention enters into force, provided that at least 6 months prior notice has been given through diplomatic channels. In such case, the Convention shall cease to have effect on income derived on or after the first day of January of the year next following that in which the notice of termination is given.

In witness whereof the undersigned being duly authorized thereto have signed the present Convention and have affixed thereto their seals.

Till bekräftelse härav har undertecknade, därtill vederbörligen bemyndigade, undertecknat detta avtal och försett detsamma med sina sigill.