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SCHEDULE 2
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CONVENTION BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVA SION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL |
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The Government of Canada and the Government of the Republic
of Lithuania, desiring to conclude a Convention for the
avoidance of double taxation and the prevention of fiscal
evasion with respect to taxes on income and on capital,
have agreed as follows:
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I. SCOPE OF THE CONVENTION |
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ARTICLE 1 |
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Personal Scope |
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This Convention shall apply to persons who are residents of
one or both of the Contracting States.
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ARTICLE 2 |
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Taxes Covered |
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1. This Convention shall apply to taxes on income and on
capital imposed on behalf of Lithuania or of its local authorities
and on behalf of Canada, irrespective of the manner in which they
are levied.
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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.
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3. The existing taxes to which the Convention shall apply are,
in particular:
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4. The Convention shall apply also to any similar taxes and to
taxes on capital 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 notify
each other of any significant changes which have been made in
their respective taxation laws.
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II. DEFINITIONS |
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ARTICLE 3 |
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General Definitions |
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1. In this Convention, unless the context otherwise requires:
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2. As regards the application of the Convention by a
Contracting State at any time, any term not defined therein shall,
unless the context otherwise requires, have the meaning which it
has at that time under the law of that State concerning the taxes
to which the Convention applies.
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ARTICLE 4 |
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Resident |
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1. For the purposes of this Convention, the term ``resident of
a Contracting State'' means:
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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.
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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:
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3. Where by reason of the provisions of paragraph 1 a
company is a resident of both Contracting States, then it shall be
deemed to be a resident only of the State of which it is a national.
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4. Where by reason of the provisions of paragraph 1 a person
other than an individual or a company is a resident of both
Contracting States, the competent authorities of the Contracting
States shall by mutual agreement endeavour to settle the question
and to determine the mode of application of the Convention to
such person.
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ARTICLE 5 |
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Permanent Establishment |
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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.
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2. The term ``permanent establishment'' includes especially:
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3. A building site or construction or installation project
constitutes a permanent establishment only if it lasts for more
than six months.
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4. Notwithstanding the preceding provisions of this Article,
the term ``permanent establishment'' shall be deemed not to
include:
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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 on behalf 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.
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6. An enterprise 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.
However, when the activities of an agent are devoted wholly or
almost wholly on behalf of that enterprise, the agent will not be
considered to be an agent of an independent status within the
meaning of this paragraph.
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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.
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III. TAXATION OF INCOME |
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ARTICLE 6 |
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Income from Immovable Property |
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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.
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2. For the purposes of this Convention, the term ``immovable
property'' shall have the meaning which it has for the purposes
of the relevant taxation law of the Contracting State in which the
property in question is situated. The provisions of the
Convention relating to immovable property shall apply also to
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, any
option or similar right to acquire immovable property, 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, to the extent that
such rights or property are not included in the definition of the
term ``immovable property'' in the preceding sentence. Ships
and aircraft shall not be regarded as immovable property.
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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 and to income from the alienation of such property.
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4. Where the ownership of shares or other corporate rights in
a company entitles the owner of such shares or corporate rights
to the enjoyment of immovable property held by the company,
the income from the direct use, letting, or use in any other form
of such right to enjoyment may be taxed in the Contracting State
in which the immovable property is situated.
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5. 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.
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ARTICLE 7 |
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Business Profits |
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1. The business 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 or has
carried on business as aforesaid, the business profits of the
enterprise may be taxed in the other State but only so much of
them as is attributable to that permanent establishment.
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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 business 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 and with all other
persons.
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3. In the determination of the business profits of a permanent
establishment, there shall be allowed as deductions expenses
(other than expenses which would not be deductible if that
permanent establishment were a separate enterprise) which are
incurred for the purposes of the permanent establishment
including executive and general administrative expenses,
whether incurred in the State in which the permanent
establishment is situated or elsewhere.
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4. Insofar as it has been customary in a Contracting State to
determine the business 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 business
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.
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5. No business 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.
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6. For the purposes of the preceding paragraphs, the business
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.
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7. Where business 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.
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ARTICLE 8 |
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Shipping and Air Transport |
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1. Profits derived by an enterprise of a Contracting State from
the operation of ships or aircraft in international traffic shall be
taxable only in that State.
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2. Notwithstanding the provisions of Article 7, profits derived
by an enterprise of a Contracting State from a voyage of a ship
where the principal purpose of the voyage is to transport
passengers or property between places in the other Contracting
State may be taxed in that other State.
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3. The provisions of paragraphs 1 and 2 shall also apply to
profits from the participation in a pool, a joint business or an
international operating agency.
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4. For the purposes of this Article, profits of an enterprise from
the operation of ships or aircraft in international traffic include:
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where such rental or such use, maintenance or rental, as the case
may be, is incidental to the operation of ships or aircraft by the
enterprise in international traffic.
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ARTICLE 9 |
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Associated Enterprises |
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1. Where
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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.
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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 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.
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3. A Contracting State shall not change the profits of an
enterprise in the circumstances referred to in paragraph 1 after the
expiry of the time limits provided in its domestic laws and, in any
case, after five years from the end of the year in which the profits
which would be subject to such change would, but for the
conditions referred to in paragraph 1, have accrued to that
enterprise.
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4. The provisions of paragraphs 2 and 3 shall not apply in the
case of fraud, wilful default or neglect.
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ARTICLE 10 |
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Dividends |
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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.
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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 a resident
of the other Contracting State is the beneficial owner of the
dividends the tax so charged shall not exceed:
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The provisions of this paragraph shall not affect the taxation of
the company on the profits out of which the dividends are paid.
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3. The term ``dividends'' as used in this Article means income
from shares, ``jouissance'' shares or ``jouissance'' rights, mining
shares, founders' shares or other rights, not being debt-claims,
participating in profits, as well as income 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.
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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.
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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 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.
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6. Nothing in this Convention shall be construed as preventing
a Contracting State from imposing on the earnings of a company
attributable to a permanent establishment in that State, a tax in
addition to the tax which would be chargeable on the earnings of
a company which is a national of that State, provided that any
additional tax so imposed shall not exceed 5 per cent of the
amount of such earnings which have not been subjected to such
additional tax in previous taxation years. For the purpose of this
provision, the term ``earnings'' means the profits, including any
gains, attributable to a permanent establishment in a Contracting
State in a year and previous years after deducting therefrom all
taxes, other than the additional tax referred to herein, imposed on
such profits in that State.
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ARTICLE 11 |
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Interest |
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1. Interest arising in a Contracting State and paid to a resident
of the other Contracting State may be taxed in that other State.
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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 a resident of the other Contracting State is the beneficial owner
of the interest the tax so charged shall not exceed 10 per cent of
the gross amount of the interest.
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3. Notwithstanding the provisions of paragraphs 1 and 2,
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4. The term ``interest'' as used in this Article means income
from debt-claims of every kind, whether or not secured by
mortgage, and in particular, income from government securities
and income from bonds or debentures, including premiums and
prizes attaching to such securities, bonds or debentures, as well
as income which is subjected to the same taxation treatment as
income from money lent by the laws of the Contracting State in
which the income arises. However, the term ``interest'' does not
include income dealt with in Article 10.
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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 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.
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6. Interest shall be deemed to arise in a Contracting State when
the payer is 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.
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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 Convention.
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ARTICLE 12 |
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Royalties |
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1. Royalties arising in a Contracting State and paid to a
resident of the other Contracting State may be taxed in that other
State.
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2. However, such royalties may also be taxed in the
Contracting State in which they arise and according to the laws
of that State, but if a resident of the other Contracting State is the
beneficial owner of the royalties the tax so charged shall not
exceed 10 per cent of the gross amount of the royalties.
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3. 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, patent, trade mark, design or model, plan,
secret formula or process or other intangible property, or for the
use of, or the right to use, industrial, commercial or scientific
equipment, or for information concerning industrial, commercial
or scientific experience, and includes payments of any kind in
respect of motion picture films and works on film, videotape or
other means of reproduction for use in connection with
television.
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4. The provisions of paragraphs 1 and 2 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.
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5. Royalties shall be deemed to arise in a Contracting State
when the payer is a resident of that State. Where, however, the
person paying the royalties, 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
obligation 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.
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6. 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.
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7. If in any convention for the avoidance of double taxation
concluded by Lithuania with a third State, being a member of the
Organisation for Economic Co-operation and Development
(OECD) at the date of signature of this Convention, Lithuania
after that date agrees to exempt from Lithuanian tax:
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such exemption shall automatically apply to royalties referred to
in subparagraph (a) or (b).
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ARTICLE 13 |
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Capital Gains |
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1. Gains derived by a resident of a Contracting State from the
alienation of immovable property situated in the other
Contracting State may be taxed in that other State.
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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 a
fixed base, may be taxed in that other State.
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3. Gains derived by an enterprise of a Contracting State from
the alienation of ships or aircraft operated in international traffic
by that enterprise, or movable property pertaining to the
operation of such ships or aircraft, shall be taxable only in that
Contracting State.
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4. Gains derived by a resident of a Contracting State from the
alienation of:
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5. Where a resident of a Contracting State alienates property
in the course of an organization, reorganization, amalgamation,
division or similar transaction and profit, gain or income with
respect to such alienation is not recognized for the purpose of
taxation in that State, if requested to do so by the person who
acquires the property, the competent authority of the other
Contracting State may agree, subject to terms and conditions
satisfactory to such competent authority, to defer the recognition
of the profit, gain or income with respect to such property for the
purpose of taxation in that other State until such time and in such
manner as may be stipulated in the agreement.
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6. 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.
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7. The provisions of paragraph 6 shall not affect the right of a
Contracting State to levy, according to its law, a tax on gains from
the alienation of any property derived by an individual who was
a resident of the first-mentioned State at any time during the five
years immediately preceding the alienation of the property.
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ARTICLE 14 |
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Independent Personal Services |
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1. Income derived by an individual who is a resident of a
Contracting State in respect of professional or similar services 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 services. If
he has or had such a fixed base, the income may be taxed in the
other State but only so much of the income as is attributable to
that fixed base. For this purpose, where an individual who is a
resident of a Contracting State stays in the other Contracting
State for a period or periods exceeding in the aggregate 183 days
in any twelve-month period commencing or ending in the fiscal
year concerned, he shall be deemed to have a fixed base regularly
available to him in that other State and the income that is derived
from his activities referred to above that are performed in that
other State shall be attributable to that fixed base.
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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.
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ARTICLE 15 |
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Dependent Personal Services |
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1. Subject to the provisions of Articles 16, 18 and 19, salaries,
wages and other remuneration 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.
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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:
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3. Notwithstanding the preceding provisions of this Article,
remuneration 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.
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ARTICLE 16 |
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Directors' Fees |
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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 or a similar organ of a company which is a
resident of the other Contracting State may be taxed in that other
State.
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ARTICLE 17 |
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Artistes and Sportsmen |
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1. Notwithstanding the provisions of Articles 7, 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.
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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.
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3. The provisions of paragraph 2 shall not apply if it is
established that neither the entertainer or the sportsman, nor
persons related thereto, participate directly or indirectly in the
profits of the person referred to in that paragraph.
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4. The provisions of paragraphs 1 and 2 shall not apply to
income derived from activities exercised in a Contracting State
by an entertainer or sportsman if the visit to that State is wholly
or mainly supported by public funds of the other Contracting
State, or a political subdivision or local authority thereof. In such
case, the income shall be taxable only in the Contracting State of
which the entertainer or sportsman is a resident.
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ARTICLE 18 |
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Pensions and Annuities |
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1. Pensions and annuities arising in a Contracting State and
paid to a resident of the other Contracting State may be taxed in
that other State but the amount of any such pension that would
be excluded from taxable income in the first-mentioned State if
the recipient were a resident thereof, shall be exempt from tax in
the other State.
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2. Pensions arising in a Contracting State and paid to a resident
of the other Contracting State may also be taxed in the State in
which they arise and according to the law of that State. However,
in the case of periodic pension payments other than social
security benefits, the tax so charged shall not exceed the lesser of:
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3. Annuities arising in a Contracting State and paid to a
resident of the other Contracting State may also be taxed in the
State in which they arise and according to the law of that State;
but the tax so charged shall not exceed 10 per cent of the portion
thereof that is subject to tax in that State. However, this limitation
does not apply to lump-sum payments arising on the alienation
of an interest in an annuity, or to payments of any kind under an
annuity contract the cost of which was deductible, in whole or in
part, in computing the income of any person who acquired the
contract.
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4. Notwithstanding anything in this Convention, alimony and
other similar payments arising in a Contracting State and paid to
a resident of the other Contracting State who is subject to tax
therein in respect thereof, shall be taxable only in that other State.
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ARTICLE 19 |
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Government Service |
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1. (a) Salaries, wages and similar 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.
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2. The provisions of paragraph 1 shall not apply to
remuneration 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.
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ARTICLE 20 |
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Students |
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Payments which a student, an apprentice or a trainee 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.
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ARTICLE 21 |
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Other Income |
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1. Subject to the provisions of paragraph 2, 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.
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2. However, if such income is derived by a resident of a
Contracting State from sources in the other Contracting State,
such income may also be taxed in the State in which it arises, and
according to the law of that State. Where such income is income
from an estate or a trust, other than a trust to which contributions
were deductible, the tax so charged shall, provided that the
income is taxable in the Contracting State in which the beneficial
owner is a resident, not exceed 15 per cent of the gross amount
of the income.
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IV. TAXATION OF CAPITAL |
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ARTICLE 22 |
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Capital |
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1. Capital represented by immovable property owned by a
resident of a Contracting State and situated in the other
Contracting State, may be taxed in that other State.
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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 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.
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3. Capital represented by ships and aircraft operated by an
enterprise of a Contracting State in international traffic and by
movable property pertaining to the operation of such ships and
aircraft, shall be taxable only in that State.
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4. All other elements of capital of a resident of a Contracting
State shall be taxable only in that State.
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V. METHODS FOR PREVENTION OF DOUBLE TAXA TION |
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ARTICLE 23 |
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Elimination of Double Taxation |
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1. In the case of Lithuania, double taxation shall be avoided as
follows:
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2. In the case of Canada, double taxation shall be avoided as
follows:
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3. Tax payable in Lithuania by a company which is a resident
of Canada in respect of profits attributable to manufacturing and
agricultural activities, exploration or exploitation of natural
resources and construction or telecommunications projects
carried on by it in Lithuania shall be deemed to include any
amount which would have been payable thereon as Lithuanian
tax for any year but for an exemption from or reduction of tax
granted for that year or any part thereof under specific Lithuanian
legislation to promote economic development, to the extent that
the exemption or reduction is for a period not in excess of ten
years.
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4. For the purposes of this Article, profits, income or gains of
a resident of a Contracting State which are taxed in the other
Contracting State in accordance with this Convention shall be
deemed to arise from sources in that other State.
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VI. SPECIAL PROVISIONS |
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ARTICLE 24 |
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Non-Discrimination |
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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 more burdensome than the taxation
and connected requirements to which nationals of that other State
in the same circumstances are or may be subjected.
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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.
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3. Nothing in this Article shall be construed as obliging a
Contracting State to grant to residents of the other Contracting
State any personal allowances, reliefs and reductions for taxation
purposes on account of civil status or family responsibilities
which it grants to its own residents.
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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-mentioned State to any taxation or any
requirement connected therewith which is more burdensome
than the taxation and connected requirements to which other
similar enterprises of the first-mentioned State, the capital of
which is wholly or partly owned or controlled, directly or
indirectly, by one or more residents of a third State, are or may be
subjected.
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5. In this Article, the term ``taxation'' means taxes which are
the subject of this Convention.
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ARTICLE 25 |
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Mutual Agreement Procedure |
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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, address to the competent authority of the
Contracting State of which he is a resident an application in
writing stating the grounds for claiming the revision of such
taxation. To be admissible, the said application must be
submitted within two years from the first notification of the
action which gives rise to taxation not in accordance with the
Convention.
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2. The competent authority referred to in paragraph 1 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
not in accordance with the Convention.
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3. A Contracting State shall not, after the expiry of the time
limits provided in its domestic laws and, in any case, after five
years from the end of the taxable period in which the income
concerned has accrued, increase the tax base of a resident of either
of the Contracting States by including therein items of income
which have also been charged to tax in the other Contracting
State. This paragraph shall not apply in the case of fraud, wilful
default or neglect.
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4. 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.
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5. The competent authorities of the Contracting States may
consult together for the elimination of double taxation in cases
not provided for in the Convention and may communicate with
each other directly for the purpose of applying the Convention.
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ARTICLE 26 |
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Exchange of Information |
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1. The competent authorities of the Contracting States shall
exchange such information as is relevant for carrying out the
provisions of this Convention or of the domestic laws in the
Contracting States concerning taxation insofar as such taxation
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) involved in the assessment or
collection of, the enforcement in respect of, or the determination
of appeals in relation to, taxes. 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.
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2. Nothing in paragraph 1 shall be construed so as to impose
on a Contracting State the obligation:
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3. If information is requested by a Contracting State in
accordance with this Article, the other Contracting State shall
endeavour to obtain the information to which the request relates
in the same way as if its own taxation were involved. If
specifically requested by the competent authority of a
Contracting State, the competent authority of the other
Contracting State shall endeavour to provide information under
this Article in the form requested, such as depositions of
witnesses and copies of unedited original documents (including
books, papers, statements, records, accounts or writings), to the
same extent such depositions and documents can be obtained
under the laws and administrative practices of that other State
with respect to its own taxes.
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ARTICLE 27 |
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Diplomatic Agents and Consular Officers |
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1. 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.
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2. Notwithstanding Article 4, an individual who is a member
of a diplomatic mission, consular post or permanent mission of
a Contracting State which is situated in the other Contracting
State or in a third State shall be deemed for the purposes of the
Convention to be a resident of the sending State if he is liable in
the sending State to the same obligations in relation to tax on his
total income as are residents of that sending State.
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3. The Convention shall not apply to international
organizations, to organs or officials thereof and to persons who
are members of a diplomatic mission, consular post or permanent
mission of a third State or group of States, being present in a
Contracting State and who are not liable in either Contracting
State to the same obligations in relation to tax on their total
income as are residents thereof.
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ARTICLE 28 |
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Miscellaneous Rules |
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1. The provisions of this Convention shall not be construed to
restrict in any manner any exemption, allowance, credit or other
deduction accorded:
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2. Nothing in the Convention shall be construed as preventing
a Contracting State from imposing a tax on amounts included in
the income of a resident of that State with respect to a partnership,
trust, or company, in which the person has an interest.
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3. Notwithstanding the provisions of any other Article of this
Convention, a resident of a Contracting State who, as a
consequence of domestic law concerning incentives to promote
foreign investment, is not subject to tax or is subject to tax at a
reduced rate in that Contracting State on profits, income or gains,
shall not receive the benefit of any reduction in or exemption
from tax provided for in this Convention by the other
Contracting State if the main purpose or one of the main purposes
of such resident or person connected with such resident was to
obtain the benefits of this Convention.
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4. Contributions by an individual who renders dependent
personal services in a Contracting State to a pension plan
established and recognized for tax purposes in the other
Contracting State shall, for a period not exceeding in the
aggregate 60 months, be deducted, in the first-mentioned State,
in determining the individual's taxable income, and treated in
that State, in the same way and subject to the same conditions and
limitations, as contributions made to a pension plan that is
recognized for tax purposes in that first-mentioned State,
provided that:
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For the purposes of this provision the term ``pension plan''
means an arrangement in which the individual participates in
order to secure retirement benefits payable in respect of the
dependent personal services, and a pension plan shall be
recognized for tax purposes in a State if contributions to the plan
would qualify for tax relief in that State.
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5. With respect to paragraph 3 of Article XXII of the General
Agreement on Trade in Services, the Contracting States agree
that, notwithstanding that paragraph, any dispute between them
as to whether a measure relating to a tax to which any provision
of this Convention applies falls within the scope of this
Convention may be brought before the Council for Trade in
Services, as provided by that paragraph, only with the consent of
both Contracting States.
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ARTICLE 29 |
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Offshore Activities |
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1. The provisions of this Article shall apply notwithstanding
the provisions of Articles 4 to 20 of this Convention.
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2. In this Article the term ``offshore activities'' means activities
which are carried on offshore in a Contracting State in connection
with the exploration or exploitation of the seabed and its subsoil
and their natural resources situated in that Contracting State.
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3. An enterprise of a Contracting State which carries on
offshore activities in the other Contracting State shall, subject to
paragraph 4, be deemed to be carrying on business in that other
Contracting State through a permanent establishment situated
therein.
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4. The provisions of paragraph 3 shall not apply where the
offshore activities are carried on in the other Contracting State for
a period or periods not exceeding in the aggregate thirty days in
any twelve month period. For the purposes of this paragraph:
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5. A resident of a Contracting State who carries on offshore
activities in the other Contracting State, consisting of rendering
professional services or other services of an independent
character shall be considered to be performing his activities from
a fixed base in that other State.
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6. Subject to paragraph 7, salaries, wages and similar
remuneration derived by a resident of a Contracting State in
respect of an employment connected with offshore activities in
the other Contracting State may, to the extent that the duties are
performed offshore in that other State, be taxed in that other State.
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7. Salaries, wages and similar remuneration derived by a
resident of a Contracting State in respect of an employment
exercised on board a ship or aircraft engaged in the transportation
of supplies or personnel to a location where activities connected
with the exploration or exploitation of the seabed and its subsoil
and their natural resources are being carried on in a Contracting
State, or in respect of any employment exercised on board a
tugboat or other vessels auxiliary to such activities, may be taxed
in the Contracting State of which the enterprise is a resident.
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8. Gains derived by a resident of a Contracting State from the
alienation of:
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may be taxed in that other State.
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In this paragraph the term ``exploration or exploitation rights''
means rights to assets to be produced by the exploration or
exploitation of the seabed and its subsoil and their natural
resources in the other Contracting State, including rights to
interests in or to the benefit of such assets.
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VII. FINAL PROVISIONS |
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ARTICLE 30 |
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Entry into Force |
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Each of the Contracting States shall notify to the other through
the diplomatic channel the completion of the procedures required
by law for the bringing into force of this Convention. The
Convention shall enter into force on the date of the later of these
notifications and shall thereupon have effect:
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ARTICLE 31 |
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Termination |
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This Convention shall continue in effect indefinitely but either
Contracting State may, on or before June 30 of any calendar year,
give to the other Contracting State a notice of termination in
writing through diplomatic channels; in such event, the
Convention shall cease to have effect:
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IN WITNESS WHEREOF the undersigned, duly authorized
to that effect, have signed this Convention.
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DONE in duplicate at Vilnius, this 29th day of August 1996
in the English, French and Lithuanian languages, each version
being equally authentic.
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FOR THE GOVERNMENT FOR THE
GOVERNMENT OF CANADA: OF THE REPUBLIC OF LITHUANIA:
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Lloyd Axworthy Povilas Gylys
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