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PROTOCOL

At the signing of the Convention concluded today between the Government of the United Arab Emirates and the Government of the United Arab Emirates and the Government of the Republic of Italy for the avoidance of double taxation with respect to taxes on income and the prevention of fiscal evasion the undersigned have agreed upon the following additional provisions which shall form an integral part of the said Convention.

(1) It is understood that:

  • (a) With reference to Article 1, paragraph 3, the expression "expenses which are incurred for the purposes of the permanent establishment" means the expenses directly connected with the activity of the permanent establishment;
  • (b) With reference to Article 8, profits from the operation in international traffic of ships or aircraft shall include:
    • (i) Profits derived from the rental on a bareboat basis of ships or aircraft used in international traffic
    • (ii) Profits derived from the use or rental of containers if such profits are incidental to the other profits from the operation of ships or aircraft in international traffic.
  • (c) With reference to Article 9 , if a redetermination has been made by one Contracting State with respect to a person, the other Contracting State Sail, to the extent it agrees that such redetermination reflects arrangements or conditions which would be made between independent persons, make appropriate adjustments with respect persons who are related to such person and are subject to the taxing jurisdiction of the Static any such adjustment shall be made only in accordance with the mutual agreement procedure provided for by Article 25 of this Convention;
  • (d) With reference to Article 15, the provisions of paragraph 3 of this Article shall also apply to the remuneration received by the employees of air transport enterprises of one Contracting state performing activities in the other Contracting State;
  • (e) With reference to paragraph 6 of Article 24, domestic provisions for the prevention of fiscal evasion and tax avoidance shall include the provisions for the limitation of the deduction of expenses and other negative elements deriving from transactions between enterprises of a Contracting State and enterprises situated in the other Contracting state.
  • (f) With reference to paragraph 1 of Article 25, the expression irrespective of the remedies provided by the domestic law means that the mutual agreement procedure is not alternative with the national contentious proceedings which shall be, in any case, preventively initiated, when the claim is related with an assessment of the Italian taxes not in accordance with this Convention;
  • (g) The provision of paragraph 3 of Article 28 shall not affect the competent authorities of the Contracting States from the carrying out, by mutual agreement, of other practices for the allowance of the reductions for taxation purposes provided for in this Convention.
  • (h). Notwithstanding the provisions of Article 29 of this Convention, the provision of Article 8, Article 13, paragraph 3 and Article 22, paragraph 3 of this Convention, shall have effect for taxes levied on profits derived from the operation of ships or aircrafts in international traffic as from January 1, 1988. The Contracting States shall in no case lodge tax collection requirements relating to any taxable year prior to the date mentioned in the present paragraph.
  • (i) it is understood that income derived from petroleum and related activities is not covered by the provisions of this Convention.

DONE in duplicate at Abu Dhabi this Sunday 22nd of January 1995 in the English, Arabic and Italian languages, all texts being equally authoritative, except in the case of doubt, when the English text shall prevail.

FOR THE GOVERNMENT OF THE UNITED ARAB EMIRATES:

FOR THE GOVERNMENT OF THE REPUBLIC OF ITALY: