AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE's REPUBLIC OF CHINA AND THE GOVERNMENT OF THE REPUBLIC OF FINLAND FOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION WITH RESPECT
颁布时间:1986-05-12
The Government of the People's Republic of China and the Government of
the Republic of Finland,
Desiring to conclude an Agreement for the avoidance of double taxation
and the prevention of fiscal evasion with respect to taxes on income,
Have agreed as follows:
Article 1 Personal Scope
This Agreement shall apply to persons who are residents of one or both
of the Contracting States.
Article 2 Taxes Covered
1. The existing taxes to which this Agreement shall apply are:
(a) in Finland:
(i) the state income tax;
(ii) the communal tax;
(iii) the church tax; and
(iv) the tax withheld at source from non-residents' income;
(hereinafter referred to as "Finnish tax");
(b) in China:
(i) the individual income tax;
(ii) the income tax concerning joint ventures with Chinese and foreign
investment;
(iii) the income tax concerning foreign enterprises;
(iv) the local income tax; and
(v) the tax withheld at source from non-residents' income;
(hereinafter referred to as "Chinese tax").
2. The Agreement shall apply also to any identical or substantially
similar taxes which are imposed after the date of signature of the
Agreement in addition to, or in place of, the existing taxes. The
competent authorities of the Contracting States shall notify each other of
any substantial changes which have been made in their respective taxation
laws within a reasonable period of time after such changes.
Article 3 General Definitions
1. For the purposes of this Agreement, unless the context otherwise
requires:
(a) the term "Finland" means the Republic of Finland and, when used in
a geographical sense, means the territory of the Republic of Finland, and
any area adjacent to the territorial seas of the Republic of Finland
within which, under the laws of Finland and in accordance with
international law, the rights of Finland with respect to the exploration
for and exploitation of the natural resources of the sea bed and its
sub-soil may be exercised;
(b) the term "China" means the People's Republic of China and, when
used in a geographical sense, means all the territory of the People's
Republic of China, including its territorial sea, in which the laws
relating to Chinese tax apply, and all area beyond its territorial sea,
including the sea bed and sub-soil thereof, over which China has
jurisdiction in accordance with international law and in which the laws
relating to Chinese tax apply;
(c) the terms "a Contracting State" and "the other Contracting State"
mean Finland or China, as the context requires;
(d) the term "person" includes an individual, a company and any other
body of persons;
(e) the term "company" means any body corporate or any entity which is
treated as a body corporate for tax purposes;
(f) the terms "enterprise of a Contracting State" and "enterprise of
the other Contracting State" mean respectively an enterprise carried on by
a resident of a Contracting State and an enterprise carried on by a
resident of the other Contracting State;
(g) the term "national" means:
(i) in respect of Finland, any individual possessing the nationality
of Finland and any legal person, partnership and association deriving its
status as such from the laws in force in Finland;
(ii) in respect of China, any individual possessing the nationality
of China and any juridical person created or organised under the laws of
China and any organisation without juridical personality treated for the
purposes of Chinese tax as a juridical person created or organised under
the laws of China;
(h) the term "international traffic" means any transport by a ship or
aircraft operated by an enterprise which has its place of head office or
effective management in a Contracting State, except when the ship or
aircraft is operated solely between places in the other Contracting State;
(i) the term "competent authority" means:
(i) in the case of Finland, the Ministry of Finance or its authorised
representative;
(ii) in the case of China, the Ministry of Finance or its authorised
representative.
2. As regards the application of the Agreement by a Contracting State
any term not defined therein shall, unless the context otherwise requires,
have the meaning which it has under the law of that State concerning the
taxes to which the Agreement applies.
Article 4 Resident
1. For the purposes of this Agreement, the term "resident of a
Contracting State" means any person who, under the laws of that State, is
liable to tax therein by reason of his domicile, residence, place of head
office or management or any other criterion of a similar nature.
2. Where by reason of the provisions of paragraph 1 an individual is a
resident of both Contracting States, then the competent authorities of the
Contracting States shall determine by mutual agreement the Contracting
State of which that individual shall be deemed to be a resident for the
purposes of the Agreement.
3. Where by reason of the provisions of paragraph 1 a person other
than an individual is a resident of both Contracting States, then it shall
be deemed to be a resident of the State in which its place of head office
of effective management is situated.
Article 5 Permanent Establishment
1. For the purposes of this Agreement, the term "permanent
establishment" means a fixed place of business through which the business
of an enterprise is wholly or partly carried on.
2. The term "permanent establishment" includes especially:
(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop; and
(f) a mine, an oil or gas well, a quarry or any other place of
extraction of natural resources.
3. The term "permanent establishment" likewise encompasses:
(a) a building site, a construction, assembly or installation project
or supervisory activities in connection therewith, but only where such
site, project or activities continue for a period of more than six months;
(b) the furnishing of services, including consultancy services, by an
enterprise of a Contracting State through employees or other personnel in
the other Contracting State, provided that such activities continue (for
the same project or a connected project) for a period or periods
aggregating more than six months within any twelve-month period.
4. Notwithstanding the provisions of paragraphs 1 to 3, the term
"permanent establishment" shall be deemed not to include:
(a) the use of facilities solely for the purpose of storage, display
or delivery of goods or merchandise belonging to the enterprise;
(b) the maintenance of a stock of goods or merchandise belonging to
the enterprise solely for the purpose of storage, display or delivery;
(c) the maintenance of a stock of goods or merchandise belonging to
the enterprise solely for the purpose of processing by another enterprise;
(d) the maintenance of a fixed place of business solely for the
purpose of purchasing goods or merchandise or of collecting information,
for the enterprise;
(e) the maintenance of a fixed place of business solely for the
purpose of carrying on, for the enterprise, any other activity of a
preparatory or auxiliary character;
(f) the maintenance of a fixed place of business solely for any
combination of activities mentioned in sub-paragraphs (a) to (e), provided
that the overall activity character.
5. Notwithstanding the provisions of paragraphs 1 and 2, where a
person--other than an agent of an independent status to whom the
provisions of paragraph 6 apply--is acting on behalf of an enterprise of a
Contracting State and has, and habitually exercises, in the other
Contracting State an authority to conclude contracts in the name of the
enterprise, that enterprise shall be deemed to have a permanent
establishment in the last-mentioned State in respect of any activities
which that person undertakes for the enterprise, unless the activities of
such person are limited to those mentioned in paragraph 4 which, if
exercised through a fixed place of business, would not make this fixed
place of business a permanent establishment under the provisions of that
paragraph.
6. An enterprise of a Contracting State shall not be deemed to have a
permanent establishment in the other Contracting State merely because it
carries on business in that other State through a broker, general
commission agent or any other agent of an independent status, provided
that such persons are acting in the ordinary course of their business.
However, when the activities of such an agent are devoted wholly or almost
wholly on behalf of that enterprise, he will not be considered an agent of
an independent status within the meaning of this paragraph.
7. The fact that a company which is a resident of a Contracting State
controls or is controlled by a company which is a resident of the other
Contracting State, or which carries on business in that other State
(whether through a permanent establishment or otherwise), shall not of
itself constitute either company a permanent establishment of the other.
Article 6 Income from Immovable Property
1. Income derived by a resident of a Contracting State from immovable
property situated in the other Contracting State may be taxed in that
other State.
2. The term "immovable property" shall have the meaning which it has
under the law of the Contracting State in which the property in question
is situated. The term shall in any case include property accessory to
immovable property, livestock and equipment used in agriculture and
forestry, rights to which the provisions of general law respecting landed
property apply, usufruct of immovable property and rights to variable or
fixed payments as consideration for the working of, or he right to work,
mineral deposits, sources and other natural resources. Ships and aircraft
shall not be regarded as immovable property.
3. The provisions of paragraph 1 shall apply to income derived from
the direct use, letting, or use in any other form of immovable property.
4. The provisions of paragraphs 1 and 3 shall also apply to the income
from immovable property of an enterprise and to income from immovable
property used for the performance of independent personal services.
Article 7 Business Profits
1. The profits of an enterprise of a Contracting State shall be
taxable only in that State unless the enterprise carries on business in
the other Contracting State through a permanent establishment situated
therein. If the enterprise carries on business as aforesaid, the profits
of the enterprise may be taxed in the other State but only so much of them
as is attributable to that permanent establishment.
2. Subject to the provisions of paragraph 3, where an enterprise of a
Contracting State carries on business in the other Contracting State
through a permanent establishment situated therein, there shall in each
Contracting State be attributed to that permanent establishment the
profits which it might be expected to make if it were a distinct and
separate enterprise engaged in the same or similar activities under the
same or similar conditions and dealing wholly independently with the
enterprise of which it is a permanent establishment.
3. In determining the profits of a permanent establishment, there
shall be allowed as deductions expenses which are incurred for the
purposes of the permanent establishment, including executive and general
administrative expenses so incurred, whether in the State in which the
permanent establishment is situated or elsewhere. However, no such
deduction shall be allowed in respect of amounts, if any, paid (otherwise
than towards reimbursement of actual expenses) by the permanent
establishment to the head office of the enterprise or any of its other
offices, by way of royalties, fees or other similar payments in return for
the use of patents or other rights, or by way of commission, for specific
services performed or for management, or, except in the case of a banking
enterprise, by way of interest on moneys lent to the permanent
establishment. Likewise, no account shall be taken, in the determination
of the profits of a permanent establishment, for amounts charged
(otherwise than towards reimbursement of actual expenses), by the
permanent establishment to the head office of the enterprise or any of its
other offices, by way of royalties, fees or other similar payments in
return for the use of patents or other rights, or by way of commission for
specific services performed or for management, or, except in the case of a
banking enterprise, by way of interest on moneys lent to the head office
of the enterprise or any of its other offices.
4. Insofar as it has been customary in a Contracting State to
determine the profits to be attributed to a permanent establishment on the
basis of an apportionment of the total profits of the enterprise to its
various parts, nothing in paragraph 2 shall preclude that Contracting
State from determining the profits to be taxed by such an apportionment as
may be customary. The method of apportionment adopted shall, however, be
such that the result shall be in accordance with the principles contained
in this Article.
5. No profits shall be attributed to a permanent establishment by
reason of the mere purchase by that permanent of goods or merchandise for
the enterprise.
6. For the purposes of paragraphs 1 to 5, the profits to be attributed
to the permanent establishment shall be determined by the same method year
by year unless there is good and sufficient reason to the contrary.
7. Where profits include items of income which are dealt with
separately in other Articles of this Agreement, then the provisions of
those Articles shall not be affected by the provisions of this Article.
Article 8 Shipping and Air Transport
1. Profits from the operation of ships or aircraft in international
traffic shall be taxable only in the Contracting State in which the place
of head office or effective management of the enterprise is situated.
2. If the place of head office or 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. The provisions of paragraph 1 shall also apply to profits from the
participation in a pool, a joint business or an international operating
agency.
Article 9 Associated Enterprises
1. Where
(a) an enterprise of a Contracting State participates directly or
indirectly in the management, control capital of an enterprise of the
other Contracting State, or
(b) the same persons participate directly or indirectly in the
management, control or capital of an enterprise of a Contracting State and
an enterprise of the other Contracting State,
and in either case conditions are made or imposed between the two
enterprises in their commercial or financial relations which differ from
those which would be made between independent enterprises, then any
profits which would, but for those conditions, have accrued to one of the
enterprises, but, by reason of those conditions, have not so accrued, may
be included in the profits of that enterprise and taxed accordingly.
2. Where a Contracting State includes in the profits of an enterprise
of that State and taxes accordingly profits on which an enterprise of the
other Contracting State has been charged to tax in that other State and
the profits so included are by the first-mentioned State claimed to be
profits which would have accrued to the enterprise of the first-mentioned
State if the conditions made between the two enterprises had been those
which would have been made between independent enterprises, then that
other State shall make an appropriate adjustment to the amount of tax
charged therein on those profits, where that other State considers the
adjustment justified. In determining such adjustment, due regard shall be
had to the other provisions of this Agreement and the competent
authorities of the Contracting State shall if necessary consult each
other.
Article 10 Dividends
1. Dividends paid by a company which is a resident of a Contracting
State to a resident of the other Contracting State may be taxed in that
other State.
2. However, such dividends may also be taxed in the Contracting State
of which the company paying the dividends is a resident and according to
the laws of that State, but if the recipient is the beneficial owner of
the dividends the tax so charged shall not exceed 10 per cent of the gross
amount of the dividends.
The provisions of this paragraph shall not affect the taxation of the
company in respect of the profits out of which the dividends are paid.
3,The term "dividends " as used in this Article means
income from shares, or other rights, not being debtclaims, participating
in profits, as well as income from other corporate rights which is
subjected to the same taxation treatment as income from shares by the laws
of the State of which the company making the distribution is a resident.
4. The provisions of paragraphs 1 and 2 shall not apply if the
beneficial owner of the dividends, being a resident of a Contracting
State, carries on business in the other Contracting State of which the
company paying the dividends is a resident, through a permanent
establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein, and the
holding in respect of which the dividends are paid is effectively
connected with such permanent establishment or fixed base. In such case
the provisions of Article 7 or Article 14, as the case may be, shall
apply.
5. Where a company which is a resident of a Contracting State derives
profits or income from the other Contracting State, that other State may
not impose any tax on the dividends paid by the company, except insofar as
such dividends are paid to a resident of that other State or insofar as
the holding in respect of which the dividends are paid is effectively
connected with a permanent establishment or a fixed base situated in that
other State, nor subject the company's undistributed profits to a tax on
the company's undistributed profits, even if the dividends paid or the
undistributed profits consist wholly or partly of profits or income
arising in such other State.
Article 11 Interest
1. Interest arising in a Contracting State and paid to a resident of
the other Contracting State may be taxed in that other State.
2. However, such interest may also be taxed in the Contracting State
in which it arises and according to the laws of that State, but if the
recipient is the beneficial owner of the interest the tax so charged shall
not exceed 10 per cent of the gross amount of the interest.
3. Notwithstanding the provisions of paragraph 2, interest arising in
a Contracting State and derived by the other Contracting State, a local
authority thereof, the Central Bank of that other State or any financial
institution wholly owned by that other State, or by any other resident of
that other State with respect to debt-claims indirectly financed by that
other State, a local authority thereof, the Central Bank of that other
State or any institution wholly owned by that other State, shall be exempt
from tax in the first-mentioned State.
4. The term "interest" as used in this Article means income from
debt-claims of every kind, whether or not secured by mortgage and whether
or not carrying a right to participate in the debtor's profits, and in
particular, income from government securities and income from bonds or
debentures, including premiums and prizes attaching to such securities,
bonds or debentures. Penalty charges for late payment shall not be
regarded as interest for the purpose of this Article.
5. The provisions of paragraphs 1 to 3 shall not apply if the
beneficial owner of the interest, being a resident of a Contracting State,
carries on business in the other Contracting State in which the interest
arises, through a permanent establishment situated therein, or performs in
that other State independent personal services from a fixed base situated
therein, and the debt-claim in respect of which the interest is paid is
effectively connected with such permanent establishment or fixed base. In
such case the provisions of Article 7 or Article 14, as the case may be,
shall apply.
6. Interest shall be deemed to arise in a Contracting State when the
payer is that State itself, a local authority or a resident of that State.
Where, however, the person paying the interest, whether he is a resident
of a Contracting State or not, has in a Contracting State a permanent
establishment or a fixed base in connection with which the indebtedness on
which the interest is paid was incurred, and such interest is borne by
such permanent establishment or fixed base, then such interest shall be
deemed to arise in the State in which the permanent establishment or fixed
base is situated.
7. Where, by reason of a special relationship between the payer and
the beneficial owner or between both of them and some other person, the
amount of the interest, having regard to the debt-claim for which it is
paid, exceeds the amount which would have been agreed upon by the payer
and the beneficial owner in the absence of such relationship, the
provisions of this Article shall apply only to the last-mentioned amount.
In such case, the excess part of the payments shall remain taxable
according to the laws of each Contracting State, due regard being had to
the other provisions of this Agreement.
Article 12 Royalties
1. Royalties arising in a Contracting State and paid to a resident of
the other Contracting State may be taxed in that other State.
2. However, such royalties may also be taxed in the Contracting State
in which they arise and according to the laws of that State, but if the
recipient is the beneficial owner of the royalties the tax so charged
shall not exceed 10 per cent of the gross amount of the royalties.
3. The term "royalties" as used in this Article means payments of any
kind received as a consideration for the use of, or the right to use, any
copyright of literary, artistic or scientific work including cinematograph
films and films or tapes for radio or television broadcasting, any patent,
know-how, trade mark, design or model, plan, secret formula or process, or
for the use of, or the fight to use, industrial, commercial or scientific
equipment, or for information concerning industrial, commercial or
scientific experience.
4. The provisions of paragraphs 1 and 2 shall not apply if the
beneficial owner of the royalties, being a resident of a Contracting
State, carries on business in the other Contracting State in which the
royalties arise, through a permanent establishment situated therein, or
performs in that other State independent personal services from a fixed
base situated therein, and the right or property in respect of which the
royalties are paid is effectively connected with such permanent
establishment or fixed base. In such case the provisions of Article 7 or
Article 14, as the case may be, shall apply.
5. Royalties shall be deemed to arise in a Contracting State when the
payer is that State itself, a local authority or a resident of the State.
Where, however, the person paying the royalties, whether he is a resident
of a Contracting State or not, has in a Contracting State a permanent
establishment or a fixed base in connection with which the liability to
pay the royalties was incurred, and such royalties are borne by such
permanent establishment or fixed base, then such royalties shall be deemed
to arise in the State in which the permanent establishment or fixed base
is situated.
6. Where, by reason of a special relationship between the payer and
the beneficial owner or between both of them and some other person, the
amount of the royalties, having regard to the use, right or information
for which they are paid, exceeds the amount which would have been agreed
upon by the payer and the beneficial owner in the absence of such
relationship, the provisions of this Article shall apply only to the
last-mentioned amount. In such case, the excess part of the payments shall
taxable according to the laws of each Contracting State, due regard being
had to the other provisions of this Agreement.
Article 13 Capital Gains
1. 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.
2. Gains from the alienation of movable property forming part of the
business property of a permanent establishment which an enterprise of a
Contracting State has in the other Contracting State or of movable
property pertaining to a fixed base available to a resident of a
Contracting State in the other Contracting State for the purpose of
performing independent personal services, including such gains from the
alienation of such a permanent establishment (alone or with the whole
enterprise) or of such fixed base, may be taxed in that other State.
3. Gains derived by a resident of a Contracting State from the
alienation of ships or aircraft operated in international traffic or
movable property pertaining to the operation of such ships or aircraft,
shall be taxable only in the Contracting State in which the place of head
office or effective management of the enterprise is situated.
4. Gains from the alienation of shares of the capital stock of a
company the property of which consists directly or indirectly principally
of immovable property situated in a Contracting State may be taxed in that
Contracting State.
5. Gains derived by a resident of a Contracting State from the
alienation of any property other than that referred to in paragraphs 1 to
4 and arising in the other Contracting State may be taxed in that other
State.