Article 14 Independent Personal Services 1. Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that Contracting State except in one of the following circumstances when such income may also be taxed in the other Contracting State. (a) if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; in that case, only so much of the income as is attributable to that fixed base may be taxed in that other Contracting State; (b) if his stay in the other Contracting State is for a period or periods exceeding in the aggregate 183 days in the calendar year concerned; in that case, only so much of the income as is derived from his activities performed in that other Contracting State may be taxed in that other Contracting State. 2. The term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants. Article 15 Dependent Personal Services 1. Subject to the provisions of Articles 16, 18, 19, 20 and 21, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that Contracting State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other Contracting State. 2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if: (a) the recipient is present in the other Contracting State for a period or periods not exceeding in the aggregate 183 days in the calendar year concerned; and (b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other Contracting State; and (c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other Contracting State. 3. Notwithstanding the provisions of paragraphs 1 and 2, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated by an enterprise of a Contracting State in international traffic, shall be taxable only in the Contracting State in which the place of head office (effective management) of the enterprise is situated. Article 16 Directors' Fees 1. Directors' fees and similar other payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other Contracting State. 2. Salaries, wages and other similar remuneration derived by a resident of a Contracting State in his capacity as an official in a top-level managerial position of a company which is a resident of the other Contracting State may be taxed in that other Contracting State. Article 17 Artistes and Athletes 1. Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as an athlete, from his personal activities as such exercised in the other Contracting State, may be taxed in that other Contracting State. 2, Where income in respect of personal activities exercised by an entertainer or an athlete in his capacity as such accrues not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised. 3. Notwithstanding the provisions of paragraphs 1 and 2, income derived by entertainers or athletes who are residents of a Contracting State from the activities exercised in the other Contracting State under a plan of cultural exchange between the Government of the both Contracting States shall be exempt from tax in that other Contracting State. Article 18 Pensions and Annuities Subject to the provisions of paragraph 2 of Article 19, pensions, annuities and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that state. Article 19 Government Service 1. (a) Remuneration, other than pension, paid by the Government of a Contracting State or a local authority thereof to an individual in respect of services rendered to the Government of that Contracting State, or a local authority thereof, in the discharge of functions of a government nature, shall be taxable only in that Contracting State. (b) However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other Contracting State and the individual is a resident of that other Contracting State who: (i) is a national of that other Contracting State; or (ii) did not become a resident of that other Contracting State solely for the purposes of rendering the services. 2. (a) Any pension paid by, or out of funds to which contributions are made by, the Government of a Contracting State or a local authority thereof to an individual in respect of be taxable only in that Government of that Contracting State or a local authority thereof shall be taxable only in that Contracting State. (b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that other Contracting State. 3. The provisions of Articles 15, 16, 17 and 18 shall apply to remuneration and pensions in respect of services rendered in connection with a business carried on by the Government of a Contracting State or a local authority thereof. Article 20 Teachers and Researchers An individual who is, or immediately before visiting a Contracting State was, a resident of the other Contracting State and is present in the first-mentioned Contracting State for the primary purpose of teaching, giving lectures or conducting research at a university, college, school, or educational institution or scientific research institution accredited by the Government of the first-mentioned State shall be exempt from tax in the first-mentioned Contracting State, for a period of five years from the date of his first arrival in the first-mentioned Contracting State, in respect of remuneration for such teaching, lectures or research. Article 21 Students and Trainees A student, business apprentice or trainee who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education, training shall be exempt from tax in that first-mentioned State on the following payments or income received or derived by him for the purpose of his maintenance, education or training: (a) payments derived from sources outside the first-mentioned Contracting State for the purpose of his maintenance, education, study, research or training; (b) grants, scholarships or awards supplied by the Government of the first-mentioned Contracting State, or a Scientific, educational, cultural or other tax-exempt organization; and (c) income derived from personal services performed in the first-mentioned Contracting State. Article 22 Other Income 1. Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Agreement shall be taxable only in that Contracting State. 2. The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other Contracting State independent personal services from a fixed base situated therein, and the right or property in respect of which the income 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. Article 23 Capital 1. Capital represented by immovable property referred to in Article 6, owned by a resident of a Contracting State and situated in the other Contracting State, may be taxed in that other Contracting State. 2. Capital represented by 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 by 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, may be taxed in that other State. 3. Capital represented by ships and aircraft operated in international traffic and by boats engaged in inland waterways transport, and by movable property pertaining to the operation of such ships, aircraft and boats, shall be taxable only in the Contracting State in which the place of head office (effective management) of the enterprise is situated. 4. All other elements of capital of a resident of a Contracting State shall be taxable only in that State. Article 24 Methods of Elimination of Double Taxation 1. The laws in force in either of the Contracting States shall continue to govern the taxation in the respective Contracting State except where provisions to the contrary are made in this Agreement. 2. It is agreed that double taxation shall be avoided in accordance with the following paragraphs of this Article. 3. In the case of Kuwait: If a resident of Kuwait owns items of income and capital which are taxable in China, Kuwait may tax these items of income and capital and may give credit for the Chinese taxes suffered in accordance with the provisions of its domestic law. In such a case, Kuwait may deduct from the taxes so calculated the tax paid in China but in an amount not exceeding that proportion of the aforesaid Kuwait tax which such items of income beat to the entire income. 4. In the case of China: (a) Where a resident of China derives income from Kuwait, the amount of tax on that income payable in Kuwait in accordance with the provisions of this Agreement may be credited against the Chinese tax imposed on that resident. The amount of credit shall not, however, exceed the amount of the Chinese tax on that income computed in accordance with the taxation laws and regulations of China. (b) Where the income derived from Kuwait is a dividend paid by a company which is a resident of Kuwait to a company which is a resident of China and which owns not less than 10 percent of the shares of the company paying the dividend, the credit shall take into account the tax paid to Kuwait by the company paying the dividend in respect of its income. 5. For the purposes of the credit referred to in paragraph 3, the amount of Chinese tax imposed on items of income under Articles 10, 11 and 12 shall be deemed to have been paid at: (a) (i) 10 percent of the gross amount of dividends paid by a joint venture with Chinese and foreign investment; (ii) 20 percent of the gross amount of other dividends; (b) 20 percent of the gross amount of interest; (c) 20 percent of the gross amount of royalties. 6. For the purposes of the credit referred to in paragraph 3, Chinese tax payable shall be deemed to include the amount of Chinese tax which would have been paid if the Chinese tax had not been exempted, reduced or refunded in accordance with: (a) the provisions of Articles 5 and 6 of (the Income Tax Law of the People's Republic of China Concerning Joint Ventures with Chinese and Foreign Investment) and the provisions of Article 3 of (the Detailed Rules and Regulations for the Implementation of the Income Tax Law of the People's Republic of China Concerning Joint Ventures with Chinese and Foreign Investment); (b) the provisions of Articles 4 and 5 of (the Income Tax Law of the People's Republic of China Concerning Foreign Enterprises); (c) the provisions concerning reduction in or exemption from income tax in paragraphs 1, 2 and 3 of Articles 1 and 2 and paragraphs 1 and 2 of Article 3 of (the Interim Provisions of the State Council of China on Reduction in or Exemption from Enterprise Income Tax and the Industrial and commercial Consolidated Tax for Special Economic Zones and Fourteen Coastal Cities); (d) the provisions of any reduction in, exemption from or refund of tax designed to promote economic development in China which may be introduced under the laws of China. 7. Where in accordance with the laws of Kuwait, taxes covered by this Agreement are exempted or reduced in accordance with special investment incentive measures for a limited period of time, such taxes which have been exempted or reduced shall be deemed to have been paid for the purposes of paragraph 4 of this Article. Article 25 Non-Discrimination 1. The nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. 2. The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. 3. Nothing in this Article shall be construed as obliging a contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reduction for taxation purposes on account of civil status or family responsibilities which it grants to its own residents. 4. Nothing in this Article shall affect the right of a Contracting State to grant an exemption or reduction of taxation to its own nationals who are residents of that Contracting State. Such exemption or reduction shall not apply to a resident of the other Contracting State who participates directly or indirectly in the capital of a company established in the first-mentioned Contracting State. 5. Nothing in this Article shall be interpreted as obliging a Contracting State to extend to the residents of the other Contracting State, the benefit of any tax treatment, preference or privilege which may be accorded to residents of other States in accordance with special agreements. 6. In this Article, the term "taxation" means taxes which are the subject of this Agreement. Article 26 Mutual Agreement Procedure 1. Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this Agreement, he may, irrespective of the remedies provided by the domestic laws of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 of Article 25, to that of the Contracting State of which he is a national. The case must be presented within tree years from the first notification of the action resulting in taxation not in accordance with the provisions of this Agreement. 2. The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with the provisions of this Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the domestic laws of the Contracting States. 3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of this Agreement. They may also consult together for the elimination of double taxation in cases not provided for in this Agreement. 4. The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of paragraphs 2 and 3. When it seems advisable for reaching agreement, representatives of the competent authorities of the Contracting States may meet together for an oral exchange of opinions. Article 27 Exchange of Information 1. The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Agreement or of the domestic laws of the Contracting States concerning taxes covered by the Agreement. Insofar as the taxation thereunder is not contrary to this Agreement, in particular for the prevention of evasion of such taxes. The exchange of information is not restricted by Article 1. Any information received by a Contracting State shall be treated as secret and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the Agreement. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. 2. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation: (a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State; (b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; (c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (ordre public). Article 28 Diplomatic Agents and Consular Officers Nothing in this Agreement shall affect the fiscal privileges of diplomatic agents or consular officers under the general rules of international law or under the provisions of special agreements. Article 29 Miscellaneous 1. The competent authorities of the Contracting States shall mutually agree on arrangements concerning the manner in which the limitations and exemptions contained in the foregoing Articles are to be implemented. 2. This Agreement shall not affect the right of a resident of a Contracting State to benefit from tax and investment incentives, exemptions and allowances provided for by the other Contracting State in accordance with its domestic laws and regulations. Article 30 Entry into Force 1. This Agreement shall enter into force on the thirtieth day after the date on which diplomatic notes indicating the completion of internal legal procedures necessary in each Contracting State for the entry into force of this Agreement have been exchanged. 2. This Agreement shall have effect in both Contracting States: (a) in respect of taxes which are levied for tax year beginning on or after January 1, 1989; (b) in respect of taxes withheld at source on dividends, interest and royalties paid on or after January 1, 1989. Article 31 Duration and Termination This Agreement shall remain in force for a period of five years and shall be automatically extended for another period of five years and shall thereafter be renewable for similar periods accordingly unless either Contracting State notifies the other in writing, six months before the expiry of the first or any subsequent period, of its intention to terminate the Agreement. In such event, the Agreement shall cease to have effect: (a) in respect of taxes which are levied for any tax period beginning on or after first day of January of the year next following that in which the notice is given; (b) in respect of taxes withheld at source on dividends, interest and royalties paid on or after first day of January of the year next following that in which the notice is given. IN WITNESS THEREOF the undersigned, being duly authorized thereto, have signed this Agreement. DONE at Kuwait in duplicate, this 27th day of Jumada I 1410H, corresponding to this 25th day of December, 1989, in the Chinese, Arabic and English languages, all texts being equally authentic. In case of divergency, the English text shall prevail. For the Government of the People's For the Government of the State of Republic of China Kuwait