The Government of the People's Republic of China and the Government of the Republic of turkey 　 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. This Agreement shall apply to taxes on income imposed on behalf of a Contracting States or of its political subdivisions or 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 on capital appreciation. 　　3. The existing taxes to which the Agreement shall apply are, in particular: 　　(a) in the case of Turkey: 　　(i) the income tax (Gelir Vergisi); 　　(ii) the corporation tax (Kurumlar Vergisi); 　　(iii)the levy imposed on the income tax and the corporation tax (Gelir Vergisi ve Kurumlar Vergisi Uzerinden Allnan Fon Pay1); 　　(hereinafter referred to as "Turkish tax"); 　　(b) in the case of China; 　　(i) the individual income tax; 　　(ii) the income tax for enterprises with foreign investment and foreign enterprises; and 　　(iii)the local income tax; 　　(hereinafter referred to as "Chinese 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 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) (i) the term "Turkey" means the territory of the Turkish Republic including its territorial waters, continental shelf and exclusive economic zone, within which it exercises sovereign rights if exploration and exploitation of resources of the seabed and its sub-soil and of superjacent waters; 　　(ii) the term "China" means the People's Republic of China; when used in 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 seabed and its sub-soil and superjacent water resources in accordance with international law; 　　(b) the terms "a Contracting States" and " the other Contracting States" mean Turkey or China, as the context requires; 　　(c) the term "tax" means Turkish tax or Chinese tax, 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 States" and "enterprise of the other Contracting States" mean respectively an enterprise carried on by a resident of a Contracting States and an enterprise carried on by a resident of the other Contracting States; 　　(g) the term "nationals" means: 　　(i) all individuals possessing the nationality of a Contracting States; 　　(ii) all legal persons, partnerships, associations and other entities deriving their status as such from the law in force in a Contracting States; 　　(h) the term "international traffic" means any transport by a ship, aircraft or land vehicle operated by an enterprise which has its legal head office in a Contracting States, except when the ship, aircraft or land vehicle is operated solely between places in the other Contracting States; 　　(i) the term "competent authority" means: 　　(i) in the case of Turkey, the Ministry of Finance or its authorized representatives; and 　　(ii) in the case of China, the State Tax Bureau or its authorized representative. 　　2. As regards the application of this Agreement by a Contracting States, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting States concerning the taxes to which the Agreement applies. 　　Article 4 Resident 　　1. For the purposes of this Agreement, the term "resident of a Contracting States" means any person who, under the laws of that Contracting States, is liable to tax therein by reason of his domicile, residence, legal head office 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 of the Contracting States 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 States 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 not a permanent home available to him in either Contracting States, he shall be deemed to be a resident of the Contracting States in which he has an habitual abode; 　　(c) if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting States of which he is a national; 　　(d) if he is a national of both Contracting States or of neither of them ,the competent authorities of the Contracting States 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 States, then it shall be deemed to be a resident of the Contracting States in which its legal head office 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. Th 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 twelve months; 　　(b) the furnishing of services, including consultancy services, by an enterprise f a Contracting States through employees or other engaged personnel in the other Contracting States, provided that such activities continue for the same project or a connected project for a period of more than twelve months. 　　4. Notwithstanding the preceding provisions of this Article, 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 of the fixed place of business resulting from this combination is of a preparatory or auxiliary 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 in a Contracting States on behalf of an enterprise of the other Contracting States and 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 States 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 States shall not be deemed to have a permanent establishment in the other Contracting States merely because it carries on business in that other Contracting States 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. 　　7. The fact that a company which is a resident of a Contracting States controls or is controlled by a company which is a resident of the other Contracting States, 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 form Immovable Property 　　1. Income derived by a resident of a Contracting States from immovable property (including income from agriculture or forestry) situated in the other Contracting States may be taxed in that other Contracting States. 　　2. The term "immovable property" shall have the meaning which it has under the law of the Contracting States 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, fishing places of every kind, 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, of the fight 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 form the direct use, letting or use in any other form of immovable property. 　　4. The provisions of paragraph 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 States shall be taxable only in that Contracting States unless the enterprise carries on business in the other Contracting States 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 States but only so much of them as is a attributable to that permanent establishment. 　　2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting States carries on business in the other Contracting States through a permanent establishment situated therein, there shall in each Contracting States 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. 　　4. 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. 　　5. Where profits include items of income which are dealt with separately other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article. 　　Article 8 Shipping, Air and Land Transport 　　1. Profits derived by an enterprise of a Contracting States form the operation of ships, aircraft or land vehicles in international traffic shall be taxable only in that Contracting States. 　　2. The provisions of paragraph 1 of this Article shall also apply to profits derived 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 States participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting States, or 　　(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting States and an enterprise of the other Contracting States, 　　and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ form those which would be made between independent enterprises, then any profits which would, but from 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 States includes in the profits of an enterprise of that Contracting States-and taxes accordingly-profits on which an enterprise of the other has been charged to tax in that other Contracting States and the profits so included are by the first mentioned Contracting States claimed to be profits which would have accrued to the enterprise of the first-mentioned Contracting States if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other Contracting States shall make an appropriate adjustment to the amount of the tax charged there in on those profits, where that other Contracting States 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 States shall, if necessary, consult each other. 　　Article 10 Dividends 　　1. Dividends paid by a company which is a resident of a Contracting States to a resident of the other Contracting States may be taxed in that other Contracting States. 　　2. However, such dividends may also be taxed in the Contracting States of which the company paying the dividends is a resident and according to the laws of that Contracting States, 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 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 States, carries on business in the other Contracting States of which the company paying the dividends is a resident, through a permanent establishment situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply. 　　5. Where a company which is a resident of a Contracting States derives profits or income from the other Contracting States, that other Contracting States 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 States or insofar as the holding in respect of which there dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other Contracting States, 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 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) Turkey and paid to the Government of China or to the People's Bank of China or to the Bank of China or the Industrial Bank of China International Trust and Investment Corporation shall be exempt from Turkish tax; 　　(b) China and paid to the Government of Turkey or the Central Bank of Turkey (Turkiye Cumhuriyet Merkez Bankasl) or to the Turkish Eximbank (Turkiye ;Ihracat Kredi Bankasl )or to the Development Bank of Turkey (Turkiye Dalkinma Bankasi) shall be exempt form Chinese tax. 4. The term "interest" as used in this Article means income from Government securities, bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures, whether or not secured by mortgage and whether or not carrying a right to participate in debtor's profits and debt-claims of every kind as well as all other income assimilated to income from lent by the taxation law of the Contracting States in which the income arises. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article. 　　5. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the interest, being a resident of a Contracting States, carries on business in the other Contracting States in which the interest arises, through a permanent establishment situated therein, and the debt-claim in respect of which the interest in paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply. 　　6. Interest shall be deemed to arise in a contracting State when the payer is the Government of that Contracting State, a political subdivision and 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 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 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 the 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 payment 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 Contracting State. 　　2. However, such royalties may also be taxes 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 may 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 recording for radio or television broadcasting, and patent, know-how, trade mark, design or model, plan, secret formula or process, or for the use of, or the right 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 royalties arise, through a permanent establishment situated therein , and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply. 　　5. Royalties shall be deemed to arise in a Contracting State when the payer is the Government of that Contracting State, a political subdivision, a local authority there of or 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 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 an 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. 　　Article13 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 Contracting State may be taxes in that other Contracting 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 a fixed base, may be taxed in that other Contracting State. 　　3. Gains derived by an enterprise of a Contracting State from the alienation of ships, aircraft or land vehicles operated in international traffic, or movable property pertaining to the operation of such ships, aircraft or land vehicles, shall be taxable only in that Contracting State. 　　4. Gains form 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 form the alienation of any property other than referred to in paragraphs 1 to 4 shall be taxable in the Contracting State of which the alienator is a resident. However, the capital gains mentioned in the foregoing sentence and derived form the other Contracting State, shall be taxable in the other Contracting State if the time period does not exceed one year between acquisition and alienation.