UK/ITALY DOUBLE TAXATION CONVENTION 1 April 1991 for ...

1 UK/ITALY DOUBLE TAXATION CONVENTIONSIGNED 21 OCTOBER 1988 Entered into force 31 December 1990 Effective in United Kingdom from 1 January 1991 for petroleum revenue tax, from1 April 1991 for corporation tax and from 6 April 1991 for income tax and capitalgains taxEffective in italy from 1 January 1991 DOUBLE TAXATION Agreements are reproduced under the terms of Crown CopyrightPolicy Guidance issued by 1 (Personal scope)Article 2 (Taxes covered)Article 3 (General definitions)Article 4 (Fiscal domicile)Article 5 (Permanent establishment)Article 6 (Income from immovable property)Article 7 (Business profits)Article 8 (Shipping and air transport)Article 9 (Associated enterprises)Article 10 (Dividends)Article 11 (Interest)Article 12 (Royalties)Article 13 (Capital gains)Article 14 (Independent personal services)Article 15 (Dependent personal services)Article 16 (Directors fees)Article 17 (Artistes and athletes)Article 18 (Pensions)Article 19 (Government service)Article 20 (Teachers)Article 21 (Students and business apprentices)Article 22 (Other income)Article 23 (Miscellaneous rules applicable to certain offshore activities)

2 Article 24 (Elimination of DOUBLE TAXATION )Article 25 (Non-discrimination)Article 26 (Mutual agreement procedure)Article 27 (Exchange of information)Article 28 (Members of diplomatic or permanent missions and consular posts)Article 29 (Refunds)Article 30 (Entry into force)Article 31 (Termination)Exchange of notesCONVENTION BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN ANDNORTHERN IRELAND AND THE GOVERNMENT OF THE ITALIAN republic FOR THE AVOIDANCEOF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ONINCOMEThe Government of the United Kingdom of Great Britain and Northern Ireland andthe Government of the Italian republic ;Desiring to conclude a new CONVENTION for the Avoidance of DOUBLE TAXATION and thePrevention of Fiscal Evasion with respect to Taxes on Income.

3 Have agreed as follows:ARTICLE 1 Personal scopeThis CONVENTION shall apply to persons who are residents of one or both of theContracting to contentsARTICLE 2 Taxes covered(1) The existing taxes to which the CONVENTION shall apply are:(a) in the case of the United Kingdom:(i) the income tax;(ii) the corporation tax;(iii) the capital gains tax;(iv) the petroleum revenue tax;(hereinafter referred to as "United Kingdom tax");(b) in the case of italy :(i) the personal income tax (l'imposta sul reddito delle persone fisiche);(ii) the corporate income tax (l'imposta sul reddito delle persone giuridiche);(iii) the local income tax (l'imposta locale sui redditi);whether or not collected by withholding at source (hereinafter referred to as"Italian tax").

4 (2) This CONVENTION shall also apply to any identical or substantially similar taxes whichare imposed by either Contracting State after the date of signature of this CONVENTION inaddition to, or in place of, the taxes of that Contracting State referred to in paragraph (1)of this Article. The competent authorities of the Contracting States shall notify each otherof any substantial changes which have been made in their respective TAXATION to contentsARTICLE 3 General definitions(1) For the purposes of this CONVENTION , unless the context otherwise requires:(a) the term "United Kingdom" means Great Britain and Northern Ireland, includingany area outside the territorial sea of the United Kingdom which in accordance withinternational law has been or may hereafter be designated, under the laws of theUnited Kingdom concerning the Continental Shelf, as an area within which the rightsof the United Kingdom with respect to the sea bed and sub-soil and their naturalresources may be exercised.

5 (b) the term " italy " means the Italian republic and includes any area beyond theterritorial waters of italy which, in accordance with the laws of italy concerning theexploration and exploitation of natural resources, may be designated as an area withinwhich the rights of italy with respect to the sea bed and sub-soil and their naturalresources may be exercised;(c) the terms "a Contracting State" and "the other Contracting State" mean the UnitedKingdom or italy , as the context requires;(d) the term "person" comprises an individual, a company and any other body ofpersons, but does not include partnerships which are not treated as bodies corporatefor tax purposes in either Contracting State;(e) the term "company" means any body corporate or any entity which is treated as abody corporate for tax purposes;(f) the terms "enterprise of a Contracting State" and "enterprise of the otherContracting State" mean respectively an enterprise carried on by a resident of aContracting State and an enterprise carried on by a resident of the other ContractingState.

6 (g) the term "national" means:(i) in relation to the United Kingdom, any British citizen or any British subject notpossessing the citizenship of any other Commonwealth country or territory, providedhe has the right of abode in the United Kingdom; and any legal person, partnership,association or other entity deriving its status as such from the law in force in theUnited Kingdom;(ii) in relation to italy , any individual possessing the citizenship of italy andany legal person, partnership and association deriving its status as such fromthe law in force in italy ;(h) the term "international traffic" means any transport by a ship or aircraft operatedby an enterprise which has its place of effective management in a Contracting State,except when the ship or aircraft is operated solely between places in the otherContracting State;(i) the term "competent authority" means, in the case of the United Kingdom, theCommissioners of Inland Revenue or their authorised representative, and, in the caseof italy , the Ministry of Finance;(j) the term "tax" means United Kingdom tax or Italian tax, as the context requires.

7 (2) As regards the application of this CONVENTION by a Contracting State any term nototherwise defined shall, unless the context otherwise requires, have the meaning which ithas under the laws of that Contracting State relating to the taxes which are the subject ofthe to contentsARTICLE 4 Fiscal domicile(1) For the purposes of this CONVENTION , the term "resident of a Contracting State" meansany person who, under the laws of that State, is liable to TAXATION therein by reason of hisdomicile, residence, place of management or any other criterion of a similar nature. Butthis term does not include any person who is liable to tax in that Contracting State only ifhe derives income from sources therein.

8 (2) Where by reason of the provisions of paragraph (1) of this Article an individual is aresident of both Contracting States, then his status shall be determined in accordance withthe following rules:(a) he shall be deemed to be a resident of the Contracting State in which he has apermanent home available to him. If he has a permanent home available to him inboth Contracting States, he shall be deemed to be a resident of the Contracting Statewith which his personal and economic relations are closer (centre of vital interests);(b) if the Contracting State in which he has his centre of vital interests cannot bedetermined, or if he has no permanent home available to him in either ContractingState, he shall be deemed to be a resident of the State in which he has an habitualabode.

9 (c) if he has an habitual abode in both Contracting States or in neither of them, heshall be deemed to be a resident of the Contracting State of which he is a national;(d) if he is a national of both Contracting States or of neither of them, the competentauthorities of the Contracting States shall settle the question by mutual agreement.(3) Where by reason of the provisions of paragraph (1) of this Article a person other thanan individual is a resident of both Contracting States, then it shall be deemed to be aresident of the Contracting State in which its place of effective management is to contentsARTICLE 5 Permanent establishment(1) For the purposes of this CONVENTION , the term "permanent establishment" means afixed place of business in which the business of an enterprise is wholly or partly carriedon.

10 (2) The term "permanent establishment" shall include especially:(a) a place of management;(b) a branch;(c) an office;(d) a factory;(e) a workshop;(f) a mine, an oil or gas well, a quarry or any other place of extraction or exploitationof natural resources;(g) a building site or construction or assembly project which exists for more thantwelve months.(3) The term "permanent establishment" shall not be deemed to include:(a) the use of facilities solely for the purpose of storage, display or delivery of goodsor merchandise belonging to the enterprise;(b) the maintenance of a stock of