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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.

PROTOCOL

At the moment of signing of the Agreement between the Islamic Republic of Iran and the Republic of Ecuador for the Avoidance of Double Taxation, Exchange of Information and the Prevention of Income Tax Evasion with respect to taxes on income, the undersigned have agreed upon the following provisions, which shall form an integral part of the Agreement:

(1) In view of Article 7, Paragraph 3: the Contracting State where the permanent establishment is located shall recognize the expenses of the permanent establishment provided that the formal requirements established in the internal legislation of that Contracting State are followed.

(2) For the purposes of Article 8, Paragraph 1: it is understood that profits derived from auxiliary and casual activities by an enterprise with international traffic activities, are considered as the profits of that enterprise from the international traffic activities.

(3) For the purposes of the Article 8: the profits deriving from the operation of ships or aircraft, used mainly for the transportation of passenger or goods exclusively between places located within a Contracting State may be subject to tax in such State.

(4) The application of the provisions of Article 26 (Exchange of Information) may be, if necessary, duly dealt with through the mutual agreement of the competent authorities of both Contracting States to sign a Memorandum of Understanding that will contain the required administrative measures. However, the lack of the mutual agreement may not prevent the application of Article 26.

DONE in duplicate in Quito, on 9th of September 2011, Solar Hijra corresponding to 18/6/1390, in the Persian, Spanish and English languages, all texts being equally authentic. In case of any divergence of interpretation, the English text shall prevail.

IN WITNESS WHEREOF, the undersigned, duly authorized thereto, by their respective Governments, have signed this Protocol.

FOR THE GOVERNMENT OF THE ISLAMIC REPUBLIC OF IRAN:

FOR THE GOVERNMENT OF THE REPUBLIC OF ECUADOR: