The government of the People's Republic of China and the Government of the Malta. 　　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 l Personal Scope This Agreement shall apply to persons who are residents of one or both of the Contracting States. Article 2 Taxes Covered 1．This Agreement shall apply to taxes on income imposed on behalf of a Contracting State or of its local authorities, irrespective of the manner in which they are levied． 　　2. There shall be regarded as taxes on income all taxes imposed on total income, or on elements of income including taxes on gains from the alienation of movable or immovable property, as well as taxes on capital appreciation. 　　3.The existing taxes to which the Agreement shall apply are : 　　(a) in the People's Republic of China: 　　(i) the individual income tax; 　　(ii) the income tax for enterprises with foreign investment and foreign enterprises; 　　(iii) the local income tax; (hereinafter referred to as "Chinese tax"); 　　(b) in Malta: 　　the income tax; (hereinafter referred to as "Malta tax"). 　　4. This Agreement shall also apply to any identical or substantially similar taxes which are imposed after the date of signature of this Agreement in addition to, or in place of , the existing taxes referred to in paragraph　3. The competent authorities of the Contraction States shall notify each other of any significant 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 "China" means the People's Republic of China; when used in a geographical sense, means all the territory of the People's Republic of China, including its territorial sea, in which the Chinese laws relating to taxation apply , and any area beyond its territorial sea, within which the People's Republic of China has sovereign rights of exploration for and exploitation of resources of the sea-bed and its sub-soil and superjacent water resources in accordance with international law; 　　(b) the term "Malta", when used in a geographical sense, means the Island of Malta, the Island of Gozo and the other islands of the Maltese archipelago including the territorial waters thereof, and any area outside the territorial sea of Malta which in accordance with international law, has been or may hereafter be designated, under the law of Malta concerning the Continental Shelf , as an area within which the rights of Malta with respect of the sea-bed and sub-soil and their natural resources may be exercised; 　　(c) the terms "a Contraction State" and "the other Contraction State" mean China or Malta 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 term "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 "nationals "means: 　　(i) in respect of China, all individuals possessing the nationality of China and all juridical persons created or organised under the laws of China as well as any organisations without juridical personality treated for tax purposes as juridical persons created or organised under the laws of china. 　　(ii) In respect of Malta, any citizen of Malta and nay legal person, partnership or association deriving its status as such from the law in force in Malta; 　　(h) The term "international traffic" means any transport by a ship or aircraft operated by an enterprise which has its place of head office (i. E. 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 china, the State Tax Bureau or its authorized representative; and (ii) in the case of Malta, the Minister responsible for finance or his authorized representative. 　　2. As regards the application this Agreement by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State concerning the taxes to which this 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 Contracting State, is liable to tax therein by reason of his domicile, residence, place of head office (i.e. effective 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 his status shall be determined as follows: 　　(a) He shall be deemed to be a resident solely of the Contracting State in which he has a permanent home available to him ; if he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (centre of vital interests); 　　(b) If the State in which he has his centre of vital interests cannot be determined , or if he has no permanent home available to him in either Contracting State, he shall be deemed to be a resident solely of the State in which be has a habitual abode; 　　(c) If he has a habitual abode in both Contracting State or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national; 　　(d) If he is a national of both Contracting State or of neither of them, the competent authorities of the Contracting State shall settle the question by mutual agreement. 　　3. Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting State, then it shall be deemed to be a resident solely of the Contracting State in which the place of office(i.e. 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 in 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; 　　(f) a mine, an oil or gas well, an offshore drilling site, a quarry or any other place of extraction of natural resources. 　　(g)a building site, a construction, assembly or installation project or supervisory activities in connection therewith, where such site, project or activities continue for a period of more than 8 months; 　　(h) the furnishing of services, including consultancy services, by an enterprise of a contracting State through employees or other engaged 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 8 months. 　　3. Notwithstanding the provisions of paragraphs 1 and 2 , 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; 　　(e) the maintenance of a fixed palace 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 nay combination of activities mentioned in subparagraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character. 　　4.A person engaged in a Contracting State in activities which are complementary or auxiliary to activities in connection with either the exploration of the sea-bed and its sub-soil or the exploitation of natural resources situated there is deemed to exercise such activities through a permanent establishment in that State. 　　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 in a Contracting State on behalf of an enterprise of the other Contracting State, has and habitually exercises an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in the first-mentioned contracting 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 3 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 Contracting 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 shall not be considered an agent of an independent status within the meaning of this paragraph if the transactions between the agent and the enterprise were not made under arm's length conditions. 　　7.The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is 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 Contracting 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 the fight to work or to explore for, 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 Contracting 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 Contracting 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 or with other enterprises with which it deals.. 　　3.In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the business 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. 　　4.Nothing in this Article shall affect the application of any law of a Contracting State relating to the determination of the profits to be attributed to a permanent establishment by the method of exercise of discretion or the making of an estimate in cases where the information available to the competent authority of that State is inadequate to determine those profits ,provided that that law shall be applied so far as the information available to the competent authority permits ,consistently with the principles of this Article. 　　5. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment 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 International Traffic 　　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 (i. e. effective management) of the enterprise is situated. 　　2. If the place of head office (i.e. 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 　　Where 　　(a) an enterprise of a Contracting State participates directly or indirectly in the management, control or 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.Nothing in this Article shall affect the application of any law of a Contracting State relating to the determination of the profits to be attributed to a permanent establishment by the method of exercise of discretion or the making of an estimate in cases where the information available to the competent authority of that State is inadequate to determine those profits, provided that that law shall be applied, so far as the information available to the competent authority permits, consistently with the principles of this Article 　　3. Where a Contracting State includes in the profits of an enterprise of that Contracting State, and taxes accordingly, profits on which an enterprise of the other Contracting State has been charged to tax in that other Contracting State, and the profits so included are 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 Contracting State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be bad 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 resident of the other Contracting State may be taxed in tat other Contracting 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 Contracting State, but : 　　(a) where the dividends are paid by a company which is a resident of China to a resident of Malta who is the beneficial owner thereof, the Chinese tax so charged shall not exceed 10 per cent of the gross amount of the dividends; 　　(b) Where the dividends are paid by a company which is a resident of Malta to a resident fo China who is the beneficial owner thereof, the Malta tax on the gross amount of the dividends shall not exceed that chargeable on the profits out of which the dividends are paid. 　　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 debt-claims, 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 Contracting 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 Contracting 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 Contracting State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or fixed base situated in that other Contracting 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 Contracting 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 Contracting State. 　　2. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that Contracting State, but if the recipient is the beneficial owner of the interest. 　　3. Notwithstanding the provisions of paragraph2, interest arising in a Contracting State shall be exempt from tax in that State if it is derived by the Government of the other Contracting State , a local authority thereof or such institution as may be agreed upon by both Contracting State, provided that such institution is wholly owned or controlled by that Government or local authority. 　　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, and 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 Contracting 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 14, as the case may be, shall apply. 　　6. Interest shall be deemed to arise in a Contracting State when the payer is the Government of that Contracting State , a local authority thereof or a resident of that Contracting 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 which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment of fixed base, then such interest shall be deemed to arise in the Contracting 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 bad 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 Contracting State. 　　2. However, such royalties may also be taxed in the Contracting State in which they arise, and according to the laws of that Contracting 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 Contracting 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 the Government of that Contracting State, a local authority thereof a resident of that Contracting 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 Contracting 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 remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. 　　Article 13 Alienation of Property 　　1. Income or gains from the alienation of immovable property, as defined in Article 6, may be taxed in the Contracting State in which such property is situated. 　　2. Income or 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. 　　3. .Income 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 income or gains from the alienation of such a independent personal services, including such a permanent establishment (alone or together with the whole enterprise) or of such fixed base, may be taxed in the other Contracting State. 　　4. Income or gains from the alienation of ships and aircraft operated in international traffic or movable property pertaining to the operation of such means of transportation shall be taxable only in the Contracting State in which the place of head office(i.e. effective management) of the enterprise is situated. 　　5. Income or gains from the alienation of shares other than those mentioned in paragraph 2 representing a participation of at least 25 per cent in a company which is a resident of a Contracting State be taxed in that Contracting State. 　　6. Income or gains from the alienation of any property other than that referred to in paragraphs 1 to 5, shall be taxable only in the Contracting State of which the alienator is a resident.