background image
Note: This Treaty may be impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). MLI impact on Tax Treaties is available with the Orbitax International Tax Research & Compliance Expert.

ARTICLE 13

Capital Gains

(1)

  • (a) Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.
  • (b) Gains from the alienation of shares, parts or other rights in a company, trust or any other institution or entity whose assets or property are made for more than 50 percent of their value or derive more than 50 percent of their value-directly or indirectly via the interposition of one or more other corporations, trusts, institutions or entities-of immovable property referred to in Article 6 and situated in a Contracting State or rights over such property, may be taxed in that State. For the purposes of the application of this provision, immovable property assigned by such a company for its own business activity shall not be taken into consideration.

(2) Gains from the alienation of movable property forming part of the assets of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) may be taxed in that other State.

(3) Gains from the alienation of aircraft operated in international traffic or movable property pertaining to their operation shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

(4) Gains from the alienation of shares or units forming part of a substantial shareholding in the capital of a company which is a resident of a Contracting State may be taxed in that State.

One considers that there is a substantial shareholding when the transferor, alone or with related persons, has at his disposal, directly or indirectly, shares or units which together give the right to 25 percent or more of the profits of the company.

(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.