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ARTICLE 9

Ship and Aircraft Operations

(1) Notwithstanding the provisions of Article 8, profits derived by a resident of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State.

(2) Notwithstanding the provisions of paragraph 1, such profits may be taxed in the other Contracting State where they are profits from ship operations confined solely to places in that other State.

(3) The provisions of paragraphs 1 and 2 of this Article shall also apply to profits referred to in this Article derived by a resident of a Contracting State from their participation in a pool, a joint business or an international operating agency.

(4) In this Article:

  • (a) the term "profits" includes:
    • (i) profits, net profits, gross receipts and revenues derived directly from the operation of ships or aircraft in international traffic;
    • (ii) interest on sums generated directly from the operation of ships or aircraft in international traffic which is incidental to such operation;
    • (iii) income from the sale of tickets on behalf of an aircraft enterprise;
    • (iv) income from selling of engineering services to a third party and any other income arising from other technical services which are incidental to the operation of an aircraft enterprise; and
    • (v) income from air and shipping operations arising from their investment in bonds, shares and securities or any other form of investment which is incidental to these operations.
  • (b) The term "operation of ships or aircraft" includes:
    • (i) the charter or rent of ships or aircraft;
    • (ii) the rent of containers and related equipment; and
    • (iii) the alienation of ships or aircraft, containers and related equipment,
  • provided that such charter, rent or alienation is incidental to the operation of ships or aircraft in international traffic.

(5) For the purposes of paragraph 2, profits derived from the carriage by ship, of passengers, livestock, mail, goods or merchandise which are shipped in a Contracting State for discharge at a place in that State shall be treated as profits from ship operations confined solely to places in that State.