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The Government of Canada and the Government of the Republic
of Moldova, desiring to conclude a Convention for the
avoidance of double taxation and the prevention of fiscal
evasion with respect to taxes on income, have agreed as
follows:
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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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1. This Convention shall apply to taxes on income imposed on
behalf of a Contracting State, irrespective of the manner in which
they are levied.
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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.
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3. The existing taxes to which the Convention shall apply are
in particular:
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(a) in the case of Canada, the income taxes imposed by the
Government of Canada under the Income Tax Act (hereinafter
referred to as ``Canadian tax''); and
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(b) in the case of Moldova, the income tax (hereinafter referred
to as ``Moldovan tax'').
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4. The Convention shall apply also to any identical or
substantially similar taxes that 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 that have
been made in their respective taxation laws.
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1. For the purposes of this Convention, unless the context
otherwise requires:
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(a) the terms ``a Contracting State'' and ``the other
Contracting State'' mean, as the context requires, Canada or
Moldova;
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(b) the term ``Canada'', used in a geographical sense, means
the territory of Canada, including:
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(i) any area beyond the territorial sea of Canada which, in
accordance with international law and the laws of Canada,
is an area within which Canada may exercise rights with
respect to the seabed and subsoil and their natural
resources, and
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(ii) the sea and airspace above every area referred to in
clause (i) in respect of any activity carried on in connection
with the exploration for or the exploitation of the natural
resources referred to therein;
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(c) the term ``Moldova'' means the Republic of Moldova and,
when used in a geographical sense, means its territory within
its borders, consisting of soil, subsoil, waters and aerial space
above soil and waters, over which the Republic of Moldova
exercises its absolute and exclusive sovereignty and
jurisdiction, in accordance with its internal legislation and
international law;
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(d) the term ``person'' includes an individual, a trust, a
company, a partnership and any other body of persons;
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(e) the term ``company'' means any body corporate or any
entity that is treated as a body corporate for tax purposes;
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(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;
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(g) the term ``competent authority'' means:
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(i) in the case of Canada, the Minister of National Revenue
or the Minister's authorized representative, and
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(ii) in the case of Moldova, the Minister of Finance or the
Minister's authorized representative;
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(h) the term ``national'' means:
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(i) any individual possessing the nationality of a
Contracting State, and
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(ii) any legal person, partnership or association deriving its
status as such from the laws in force in a Contracting State;
and
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(i) the term ``international traffic'' means any transport by a
ship or aircraft operated by an enterprise of a Contracting
State, except where the principal purpose is to transport
passengers or property between places within the other
Contracting State.
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2. As regards the application of the Convention at any time by
a Contracting State, any term not defined therein shall, unless the
context otherwise requires, have the meaning that it has at that
time under the law of that State for the purposes of the taxes to
which the Convention applies.
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1. For the purposes of this Convention, the term ``resident of
a Contracting State'' means:
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(a) any person who, under the laws of that State, is liable to tax
therein by reason of the person's domicile, residence, place of
management, place of registration, place of incorporation or
any other criterion of a similar nature, but does not include any
person who is liable to tax in that State in respect only of
income from sources in that State, and
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(b) that State or a political subdivi-sion or local authority
thereof or any agency or instrumentality of any such State,
subdivision or authority.
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2. Where by reason of the provisions of paragraph 1 an
individual is a resident of both Contracting States, then the
individual's status shall be determined as follows:
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(a) the individual shall be deemed to be a resident only of the
State in which the individual has a permanent home available
and if the individual has a permanent home available in both
States, the individual shall be deemed to be a resident only of
the State with which the individual's personal and economic
relations are closer (centre of vital interests);
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(b) if the State in which the individual's centre of vital interests
is situated cannot be determined, or if there is not a permanent
home available to the individual in either State, the individual
shall be deemed to be a resident only of the State in which the
individual has an habitual abode;
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(c) if the individual has an habitual abode in both States or in
neither of them, the individual shall be deemed to be a resident
only of the State of which the individual is a national; and
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(d) if the individual 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.
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3. Where by reason of the provisions of paragraph 1 a
company is a resident of both Contracting States, then its status
shall be determined as follows:
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(a) it shall be deemed to be a resident only of the State of which
it is a national; or
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(b) if it is a national of neither of the States, it shall be deemed
to be a resident only of the State in which its place of effective
management is situated.
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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. In the absence of such agreement, such person shall
not be entitled to claim any relief or exemption from tax provided
by the Convention.
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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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(a) a place of management;
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(f) a mine, an oil or gas well, a quarry or any other place
relating to the exploration for or the exploitation of natural
resources.
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3. A building site, construction, assembly or installation
project or supervisory activities in connection therewith
constitute a permanent establishment only if such site, project or
activities continue for a period of more than twelve 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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(a) the use of facilities solely for the purpose of storage,
display or delivery of goods or merchandise belonging to the
enterprise;
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(b) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of storage,
display or delivery;
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(c) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of
processing by another enterprise;
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(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;
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(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; or
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(f) the maintenance of a fixed place of business solely for any
combination of activities mentioned in subparagraphs (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.
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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 the provisions of paragraph 6 apply) 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.
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7. Notwithstanding the preceding provisions of this Article,
an insurance enterprise of a Contracting State shall, except in the
case of reinsurance, be deemed to have a permanent
establishment in the other Contracting State if it collects
insurance premiums in the territory of that other State or insures
risks situated therein through a person that is not an agent of an
independent status to whom paragraph 6 applies.
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8. 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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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 tax 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,
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 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. 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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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 or has carried 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.
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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 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 profits of a permanent
establishment, there shall be allowed those deductible expenses
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. However, no such
deduction shall be allowed in respect of amounts, if any, paid
(otherwise than towards reimbursement of actual expenses) by
the permanent establishment to the head office of the enterprise
or any of its other offices by way of royalties, fees or other similar
payments in return for the use of patents or other rights, or by way
of commission, for specific services performed or for
management, or, except in the case of a banking enterprise, by
way of interest on moneys lent to the permanent establishment.
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4. No profits shall be attributed to a permanent establishment
by reason of the mere purchase by that permanent establishment
of goods or merchandise for the enterprise.
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5. For the purposes of the preceding paragraphs, the profits to
be attributed to the permanent establishment shall be determined
by the same method year by year unless there is good and
sufficient reason to the contrary.
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6. 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.
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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 paragraph 1 and Article
7, profits derived by an enterprise of a Contracting State from the
operation of ships or aircraft used principally to transport
passengers or property exclusively 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,
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(a) the term ``profits'' includes:
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(i) gross receipts and revenues derived directly from the
operation of ships or aircraft in international traffic, and
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(ii) interest on sums generated directly from the operation
of ships or aircraft in international traffic if that interest is
incidental to the operation; and
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(b) the term ``operation of ships or aircraft in international
traffic'' by an enterprise, includes:
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(i) the charter or rental of ships or aircraft, and
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(ii) the rental of containers and related equipment,
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by that enterprise if that charter or rental is incidental to the
operation by that enterprise of ships or aircraft in international
traffic.
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1. Where
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(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
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(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,
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and in either case conditions are made or imposed between the
two enterprises in their commercial or financial relations that
differ from those that would be made between independent
enterprises, then any income that would, but for those conditions,
have accrued to one of the enterprises, but, by reason of those
conditions, has not so accrued, may be included in the income of
that enterprise and taxed accordingly.
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2. Where a Contracting State includes in the income of an
enterprise of that State - and taxes accordingly - income on
which an enterprise of the other Contracting State has been
charged to tax in that other State and the income so included is
income that would have accrued to the enterprise of the
first-mentioned State if the conditions made between the two
enterprises had been those that would have been made between
independent enterprises, then that other State shall make an
appropriate adjustment to the amount of tax charged therein on
that income. 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 income of an
enterprise in the circumstances referred to in paragraph 1 after the
expiry of the time limits provided in its national laws and, in any
case, after five years from the end of the year in which the income
that 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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1. Dividends paid by a company that 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 the
beneficial owner of the dividends is a resident of the other
Contracting State, the tax so charged shall not exceed:
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(a) 5 per cent of the gross amount of the dividends if the
beneficial owner is a company that controls directly or
indirectly at least 25 per cent of the voting power in the
company paying the dividends; and
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(b) 15 per cent of the gross amount of the dividends in all other
cases.
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The provisions of this paragraph shall not affect the taxation of
the company in respect of 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 that 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
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 that would be chargeable on the earnings of a
company that is a national of that State, except that any additional
tax so imposed shall not exceed 5 per cent of the amount of such
earnings that 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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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 the beneficial owner of the interest is a resident of the other
Contracting State, 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 paragraph 2
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(a) interest arising in a Contracting State and paid in respect
of indebtedness of the government of that State or of a political
subdivision or local authority thereof shall, if the interest is
beneficially owned by a resident of the other Contracting
State, be taxable only in that other State; and
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(b) interest arising in a Contracting State and paid to a resident
of the other Contracting State which was established and is
operated exclusively to administer or provide benefits under
one or more pension, retirement or other employee benefits
plans shall not be taxable in the first-mentioned State provided
that:
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(i) the resident is the beneficial owner of the interest and is
generally exempt from tax in the other State, and
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(ii) the interest is not derived from carrying on a trade or a
business or from a related person.
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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 State in which the
income arises. However, the term ``interest'' does not include
income dealt with in Article 8 or Article 10.
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5. 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.
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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 the payer 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 of the interest 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
that would have been agreed upon by the payer and the beneficial
owner of the interest 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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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 the beneficial owner of the royalties is a
resident of the other Contracting State, 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 the payer 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 of the royalties 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 that would have been agreed upon by
the payer and the beneficial owner of the royalties 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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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 that 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
or from containers used in, or other movable property pertaining
to, the operation of such ships or aircraft shall be taxable only in
that State.
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4. Gains derived by a resident of a Contracting State from the
alienation of:
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(a) shares, the value of which is derived principally from
immovable property situated in the other State, or
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(b) an interest in a partnership or trust, the value of which is
derived principally from immovable property situated in that
other State,
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may be taxed in that other State. For the purposes of this
paragraph, the term ``immovable property'' does not include any
property, other than rental property, in which the business of the
company, partnership or trust is carried on.
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5. Gains from the alienation of any property, other than that
referred to in paragraphs 1, 2, 3 and 4, shall be taxable only in the
Contracting State of which the alienator is a resident.
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6. The provisions of paragraph 5 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 is a
resident of the other Contracting State and has been a resident of
the first-mentioned State at any time during the six years
immediately preceding the alienation of the property.
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7. Where an individual who ceases to be a resident of a
Contracting State, and immediately thereafter becomes a resident
of the other Contracting State, is treated for the purposes of
taxation in the first-mentioned State as having alienated a
property and is taxed in that State by reason thereof, the
individual may elect to be treated for the purposes of taxation in
the other State as if the individual had, immediately before
becoming a resident of that State, sold and repurchased the
property for an amount equal to its fair market value at that time.
However, this provision shall not apply to property any gain
from which, arising immediately before the individual became a
resident of that other State, may be taxed in that other State nor
to immovable property situated in a third State.
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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
the individual has a fixed base regularly available in the other
Contracting State for the purpose of performing the services. If
the individual has or had 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.
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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, accountants and auditors.
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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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(a) the recipient is present in the other State for a period or
periods not exceeding in the aggregate 183 days in any
twelve-month period commencing or ending in the calendar
year concerned, and
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(b) the remuneration is paid by, or on behalf of, a person who
is not a resident of the other State, and
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(c) the remuneration is not borne by a permanent
establishment or a fixed base that the person has in the other
State.
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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 shall be taxable only in that State
unless the remuneration is derived by a resident of the other
Contracting State.
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Directors' fees and other similar payments derived by a
resident of a Contracting State in that resident's 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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1. Notwithstanding the provisions of Articles 14 and 15,
income derived by a resident of a Contracting State as an
entertainer, such as a theatre, motion picture, radio or television
artiste, or a musician, or as a sportsperson, from that resident's
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 sportsperson in that individual's capacity as
such accrues not to the entertainer or sportsperson personally 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 sportsperson are
exercised.
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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.
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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 laws of that State. However,
in the case of periodic pension payments, other than payments
under the social security legislation in a Contracting State, the tax
so charged shall not exceed 15 per cent of the gross amount of the
payment.
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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 laws of that State,
but the tax so charged shall not exceed 15 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 surrender,
cancellation, redemption, sale or other alienation of 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
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(a) war pensions and allowances (including pensions and
allowances paid to war veterans or paid as a consequence of
damages or injuries suffered as a consequence of a war) arising
in a Contracting State and paid to a resident of the other
Contracting State shall be exempt from tax in that other State
to the extent that they would be exempt from tax if received
by a resident of the first-mentioned State; and
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(b) benefits under the social security legislation in a
Contracting State paid to a resident of the other Contracting
State shall be taxable only in the first-mentioned State.
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1. (a) Salaries, wages and other 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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(b) However, such salaries, wages and other similar
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:
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(i) is a national of that State; or
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(ii) did not become a resident of that State solely for the
purpose of rendering the services.
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2. The provisions of Articles 15, 16 and 17 shall apply to
salaries, wages and other similar 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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Payments which a student, apprentice or business 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 that individual's
education or training receives for the purpose of that individual's
maintenance, education or training shall not be taxed in that
State, if such payments arise from sources outside that State.
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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 a trust, other than a trust to which contributions were
deductible, the tax so charged shall, if 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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1. In the case of Canada, double taxation shall be avoided as
follows:
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(a) subject to the existing provisions of the law of Canada
regarding the deduction from tax payable in Canada of tax
paid in a territory outside Canada and to any subsequent
modification of those provisions - which shall not affect the
general principle hereof - and unless a greater deduction or
relief is provided under the laws of Canada, tax payable in
Moldova on profits, income or gains arising in Moldova shall
be deducted from any Canadian tax payable in respect of such
profits, income or gains;
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(b) where, in accordance with any provision of the
Convention, income derived by a resident of Canada is
exempt from tax in Canada, Canada may nevertheless, in
calculating the amount of tax on other income, take into
account the exempted income.
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2. In the case of Moldova, double taxation shall be avoided as
follows:
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(a) where a resident of Moldova derives income which, in
accordance with the provisions of the Convention, may be
taxed in Canada, Moldova shall allow as a deduction from the
tax on the income of that resident, an amount equal to the
income tax paid in Canada;
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(b) where in accordance with any provision of the Convention
income derived by a resident of Moldova is exempt from tax
in Moldova, Moldova may nevertheless, in calculating the
amount of tax on the remaining income of such resident, take
into account the exempted income.
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3. For the purposes of this Article, profits, income or gains of
a resident of a Contracting State that may be 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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1. Nationals of a Contracting State shall not be subjected in the
other Contracting State to any taxation or any requirement
connected therewith that 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. This
provision shall, notwithstanding the provisions of Article 1, also
apply to individuals who are not residents of one or both of the
Contracting States.
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2. Stateless persons who are residents of a Contracting State
shall not be subjected in either 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 the State concerned in the same circumstances
are or may be subjected.
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3. The taxation on a permanent establishment that 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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4. 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 that
it grants to its own residents.
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5. The provisions of this Article shall apply to taxes that are the
subject of this Convention.
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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 that person in
taxation not in accordance with the provisions of this
Convention, that person may, irrespective of the remedies
provided by the domestic law of those States, address to the
competent authority of the Contracting State of which that
person is a resident or, if that person's case comes under
paragraph 1 of Article 23, to that of the Contracting State of
which that person is a national, 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 resulting in taxation
not in accordance with the provisions of 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 national 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
that 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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6. If any difficulty or doubt arising as to the interpretation or
application of the Convention cannot be resolved by the
competent authorities pursuant to the preceding paragraphs of
this Article, the case may be submitted for arbitration if both
competent authorities and the taxpayer agree and the taxpayer
agrees in writing to be bound by the decision of the arbitration
board. The decision of the arbitration board in a particular case
shall be binding on both States with respect to that case. The
procedure shall be established in an exchange of notes between
the Contracting States.
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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 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 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. In no case shall the provisions of paragraph 1 be construed
so as to impose on a Contracting State the obligation:
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(a) to carry out administrative measures at variance with the
laws and the administrative practice of that or of the other
Contracting State;
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(b) to supply information that is not obtainable under the laws
or in the normal course of the administration of that or of the
other Contracting State; or
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(c) to supply information that 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).
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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, even though
the other State does not, at that time, need such information. 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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1. Nothing in this Convention shall affect the fiscal privileges
of members of diplomatic missions or consular posts under the
general rules of international law or under the provisions of
special agreements.
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2. Notwithstanding the provisions of Article 4, an individual
who is a member of a diplomatic mission, consular post or
permanent mission of a Contracting State that 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 that individual is liable in the sending State to the same
obligations in relation to tax on 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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The Convention shall enter into force on the date of the last
written notification, delivered through diplomatic channels,
confirming the completion of the procedures required by each
Contracting State to bring the Convention into force and its
provisions shall have effect:
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(a) in respect of taxes withheld at the source on amounts paid
or credited to non-residents, on or after the first day of January
of the calendar year next following the year in which the
Convention enters into force, and
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(b) in respect of other taxes, for taxation years beginning on
or after the first day of January of the calendar year next
following the year in which the Convention enters into force.
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This Convention shall remain in force until terminated by a
Contracting State. Either Contracting State may terminate the
Convention after a period of five years following its entry into
force by giving a written notice of termination, through
diplomatic channels, at least six months before the end of any
calendar year. In such event, the Convention shall cease to have
effect:
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(a) in respect of taxes withheld at the source on amounts paid
or credited to non-residents, on or after the first day of January
of the calendar year next following the year in which the notice
of termination is given, and
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(b) in respect of other taxes, for taxation years beginning on
or after the first day of January of the calendar year next
following the year in which the notice of termination is given
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IN WITNESS WHEREOF the undersigned, duly authorized
to that effect, have signed this Convention.
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DONE in two originals at Chisinau on July 4, 2002, in the
English, French and Moldovan languages, each version being
equally authentic.
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FOR THE GOVERNMENT F
OR THE GOVERNMENT OF CANADA: OF THE REPUBLIC OF MOLDOVA:
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Raphael Girard Zinaida Grecianii
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At the moment of signing the Convention between the
Government of Canada and the Government of the Republic of
Moldova for the avoidance of double taxation and the prevention
of fiscal evasion with respect to taxes on income, the undersigned
have agreed upon the following provisions which shall form an
integral part of the Convention.
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1. With reference to paragraph 1 of Article 2, it is understood
that, in the case of Moldova, the Convention shall also apply to
taxes on income imposed on behalf of its administrative
territorial units and its local authorities.
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2. With reference to subparagraph (d) of paragraph 1 of Article
3, the term ``person'', in the case of Moldova, includes a legal
person.
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3. It is understood that the term ``political subdivision'', in the
case of Moldova, includes an administrative territorial unit.
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4. With reference to paragraph 2 of Article 9, it is understood
that the other Contracting State is only required to make the
appropriate adjustment to the extent it considers that the
adjustment made in the first-mentioned State is justified both in
principle and in amount.
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5. The provisions of the Convention shall not be construed to
restrict in any manner any exemption, allowance, credit or other
deduction accorded by the laws of a Contracting State in the
determination of the tax imposed by that State.
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6. 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 controlled foreign affiliate, in which that resident has an
interest.
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7. The Convention shall not apply to any company, trust or
partnership that is a resident of a Contracting State and is
beneficially owned or controlled, directly or indirectly, by one or
more persons who are not residents of that State, if the amount of
the tax imposed on the income of the company, trust or
partnership by that State is substantially lower than the amount
that would be imposed by that State if all of the shares of the
capital stock of the company or all of the interests in the trust or
partnership, as the case may be, were beneficially owned by one
or more persons who were residents of that State.
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8. For the purposes of paragraph 3 of Article XXII
(Consultation) 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
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. Any doubt as
to the interpretation of this paragraph shall be resolved under
paragraph 4 of Article 24 of the Convention or, failing agreement
under that procedure, pursuant to any other procedure agreed to
by both Contracting States.
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9. Where under any provision of this Convention any income
is relieved from tax in a Contracting State and, under the law in
force in the other Contracting State a person, in respect of that
income, 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 the Convention in the first-mentioned
Contracting State shall apply only to so much of the income as
is taxed in the other Contracting State.
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IN WITNESS WHEREOF the undersigned, duly authorized
to that effect, have signed this Protocol.
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DONE in two originals at Chisinau on July 4, 2002, in the
English, French and Moldovan languages, each version being
equally authentic.
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FOR THE GOVERNMENT F
OR THE GOVERNMENT OF CANADA: OF THE REPUBLIC OF MOLDOVA:
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Raphael Girard Zinaida Grecianii
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