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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.

ARTICLE 8

Shipping and Air Transport

(1) Profits derived from the operation of ships, aircraft in international traffic shall be taxable in Contracting State in which the place of effective management of the enterprise is situated.

(2) If the place of effective management of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship is a resident.

(3) Notwithstanding the provisions of paragraph (1), profits from sources within a Contracting State derived by an enterprise of the other Contracting State from the operation of ships, aircraft in international traffic may be taxed in the first-mentioned State but the tax so charged shall not exceed whichever is lesser of either:

  • (a) 1 percent of the gross revenues derived from sources in that State; or
  • (b) 50 percent of rate imposed on profits (income) of the same kind derived under similar circumstances in the Contracting State.

(4) The provisions of paragraph (1) shall also apply to profits from the participation in a pool, a joint business or an international operating agency.