Act (1996:1511) on the double taxation treaty between Sweden and Canada

Transcription

1 Act (1996:1511) on the double taxation treaty between Sweden and Canada SFS : 1996:1511 Ministry / Authority : Ministry of Finance S3 Issued : Modified SFS 2011:1381 Other text : Only the Swedish text is included in the annex Change Records : SFSR (Lagrummet) Source : Cabinet Office / Lagrummet Contents Transitional provisions 1 The agreement for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income as Sweden and Canada signed on 27 August 1996 shall apply as law in this country. The contract is written in Swedish, English and French. All texts being equally authentic. The Swedish and English text in an appendix to this Act. 2 Agreement taxation rules apply only to the extent that these entail reduction of the charge in Sweden that would otherwise exist. 3 Repealed by Act (2011:1381). 4 Case, which according to Article 27 paragraph 3 of the Agreement shall be settled by the competent authority of a Contracting State shall, on the Swedish side, decided by the Tax Agency. Is such a matter of special importance or otherwise of such a nature that it should be decided by the Government, shall Tax Agency with its own opinion to refer the matter to the Ministry of Finance. Tax Board's decision under this Act may not be appealed. Act (2003:717). Transitional provisions 1996: This Act comes into force on 1 July 1998, shall apply to income derived on or after 1 January 1998 or later. 2nd The Act repeals the Act (1984:175) concerning double taxation tion treaty

2 between Sweden and Canada and the Ordinance (1984:931) on the double taxation treaty between Sweden and Canada. The repealed statutes still apply for income derived before 1 January 1998 and on capital chargeable in 1998 or earlier. In cases of major tax relief would have been granted under the repealed statutes apply, however, these still on income derived before 1 July Act (1998:259). Annex AGREEMENT BETWEEN SWEDEN AND CANADA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME Government of Sweden and the Government of Canada, desiring to conclude an Agreement for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income, have agreed as follows: Article 1 Persons to whom this Agreement applies This Agreement shall apply to persons who are residents of a Contracting State or of both Contracting States. Article 2 Taxes covered by the Agreement 1. The existing taxes to which the Agreement shall apply are: a) in Canada: the income taxes levied by the Government of Canada in accordance with "the Income Tax Act" (hereinafter referred to as "Canadian tax"); b) in Sweden: 1) the state income tax, the sailors' tax and coupon tax included, 2) the income tax on non-residents, 3) the income tax on non-resident artistes and 4) the municipal income tax (hereinafter referred to as "Swedish tax") second The Agreement shall also apply to any identical or similar taxes imposed after the date of signature of this Agreement in addition to, or in place of, the taxes referred to in paragraph 1. Competent authorities of the Contracting States shall notify each other of any significant changes that have been taken in each tax laws. Article 3

3 Terms and definitions 1. Unless the context otherwise requires, the purposes of this Agreement, the following terms as defined below: a) 1) "Canada" means, when used in a geographical sense, means the territory of Canada, including: A) each outside Canada's territorial waters in accordance with international law and Canadian law genomic represents an area within which Canada may exercise rights with respect to the seabed and subsoil and their natural resources; B) the sea and airspace above every area referred to in A) with respect to activities in connection with the exploration or exploitation of natural resources referred to in A); 2) "Sweden" means the Kingdom of Sweden and, when used in a geographical sense, means the territory of Sweden, the Swedish territorial and other maritime areas over which Sweden in accordance with international law, exercises sovereign rights or jurisdiction b) the terms "a Contracting State" and "the other Contracting State" mean Canada or Sweden, as the context requires; c) the term "person" includes an individual, an estate, a "trust", corporation, partnership or association; d) "company" means any body corporate or any entity which is treated as a taxable entity; e) 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; f) "competent authority" means: 1) in Canada, "the Minister of National Revenue" or his befullmäktige representative; 2) in Sweden, the Minister of Finance, his befullmäktige representative or the authority which is designated as a competent authority for the purposes of this Agreement; g) "tax" means Canadian or Swedish tax, as the context requires; h) "national" means: 1) natural persons who are nationals of a Contracting State, 2) any legal person, partnership or association incorporated under the laws in force in a Contracting State; i) the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State. 2nd Where a Contracting State shall apply the latter considered at any given time, unless the context otherwise requires, any term not defined therein shall have the meaning which it has at the time of the application under their laws concerning the taxes to which the Convention applies.

4 Article 4 Resident 1. For the purposes of this Convention, the term "resident of a Contracting State": a) under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other similar circumstance. The term "resident of a Contracting State" does not include any person who is liable to tax in that State in respect only of income from sources in that State; b) This state or a political subdivision or a local authority or any body or public body belonging to such State, subdivision or authority. 2nd Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status as follows: a) he shall be deemed to be a resident only of the State in which he has a permanent home available to him; if he has a permanent home available in both States, he shall be deemed to be a resident only of the State with which his personal and economic relations are closer (center of vital interests); b) if it can not be determined State in which he has his center of vital interests or if he is not in either State has a permanent home available to him, he shall be deemed to be a resident only of the State in which he has an habitual abode; c) if he has an habitual abode in both States or if he does not reside permanently in any of them, he is deemed to have a resident only of the State in which he is a national, d) if he is a national of both States or if he is not a citizen of any of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. third Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, the competent authorities of the Contracting States shall endeavor to establish his residence by mutual agreement. In the absence of such agreement, such person shall not be deemed to be a resident of one of the Contracting States for the purposes of Articles 6-21 and Article 23. Article 5 Permanent establishment 1. For the purposes of this Convention, the term "permanent establishment" means a fixed place of business through which an enterprise is wholly or partly carried on. 2nd The term "permanent establishment" includes especially: a) a place of management, b) branch, c) an office, d) a factory, e) a workshop;

5 f) a mine, an oil or gas well, a quarry or other fixed place of business that relates to exploration or exploitation of natural resources. third A building site, a construction or installation project constitutes a permanent establishment only if it lasts more than twelve months. 4th Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall not include: a) the use of facilities solely for the storage, display or delivery of goods or merchandise belonging, b) the maintenance of a company belonging inventories purpose of storage, display or delivery, c) the maintenance of one belonging to the enterprise solely for the inventory of processing by another enterprise;, d) the maintenance of a fixed place of business solely for the purchase of merchandise or of collecting information, for the enterprise, e) the maintenance of a fixed place of business solely 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 paragraphs ae, provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character. 5th If a person - other than an independent status to whom paragraph 6 applies - is acting for a company and of a Contracting State has, and habitually exercises, an authority to conclude contracts in the name, this is regarded companies - notwithstanding the provisions of paragraphs 1 and 2 - have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise. This does not apply if 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. Enterprises of a Contracting State is considered to have a permanent establishment in the other Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of independent status, provided that such persons are acting in the ordinary course of business. 7. The fact that a company which is a resident of a Contracting State controls or is controlled by a company resident in the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of and for 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

6 (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State. 2nd The term "immovable property" shall have the meaning which it has under the law of a Contracting State in which the property is located. The term includes accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, buildings, usufruct of fixed payments for the use of, or the right to work, mineral deposits, sources and other natural resources. Ships and aircraft shall not be immovable property. third The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or other use of real property, and on gains from the alienation of such property. 4th The provisions of paragraphs 1 and 3 shall also apply to income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services. Article 8 Sea and air transport 1. Income derived by an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that Contracting State. 2nd Notwithstanding the provisions of paragraph 1 of Article 7, when an enterprise of a Contracting State for a fiscal year in significant quantities using a ship or aircraft for traffic between places in the other Contracting State, that other State may tax the income from this activity. 3rd The provisions of paragraph 1 shall apply to profits derived by the air transport consortium Scandinativan Airlines System (SAS), but only in respect of the portion of income that corresponds to the participation held in that consortium by AB Aero Transport (ABA), the Swedish partner of Scandinavian Airlines System (SAS ). 4th The provisions of paragraphs 1, 2 and 3 shall also apply to defined therein profits derived by an enterprise of a Contracting State through participation in a pool, a joint business or an international operating agency. 5th For the purposes of this article, the expressions: a) "income": 1) gross revenues derived directly from the operation of ships or aircraft in international traffic, and 2) interest on the amount directly from the operation of ships or luftartyg in international traffic, provided that the interest income in relation to the business in general is of secondary importance; b) "operation of ships or luftartyg in international traffic" by an enterprise: 1) the charter or rental of ships or aircraft, 2) the rental of containers and related equipment, and

7 3) the disposition of ships, aircraft, containers and related equipment, provided that such charter, hire or transfer, in respect of its operation of ships or aircraft in international traffic, is of secondary importance. Article 9 Associated enterprises 1. Where a) an enterprise of a Contracting State participates directly or indirectly in the management or control of an enterprise of the other Contracting State, or takes part in this company's capital, 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, or takes part in both of these companies any capital, observed the following. Between the two enterprises in their commercial or financial relations made or imposed conditions which differ from those which would be avtalts 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 that enterprise and taxed accordingly. 2nd Where a Contracting State includes in the profits of an enterprise of that State, and taxes accordingly, income derived by an enterprise of that other Contracting State shall be taxable for in that other State and the profits so included are profits which would have accrued to the enterprise in the first-mentioned State if the conditions made between the enterprises had been those which would be made between independent enterprises, then that other State shall make an appropriate adjustment to the skatteblopp imposed on the income of that State. In determining such adjustment, due to the other provisions of this Agreement and the competent authorities of the Contracting States shall if necessary consult each other. The provisions of this paragraph shall not apply after the expiry of the periods specified in the internal law of the State that prompted the adjustment. Article 10 Dividends 1. Dividends paid by a company resident in a Contracting State to a resident of the other Contracting State may be taxed in that other State. 2nd 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 beneficial owner of the dividends is a resident of that other Contracting State, the tax so charged shall not exceed:

8 a) 5 per cent of the gross amount, unless the person entitled to utredlningen is a company which directly controls at least 10 percent of the voting power, or holds directly at least 25 per cent of the capital of the distributing company; b) Notwithstanding the provisions of subparagraph), 10 per cent of the gross amount of the dividends paid by a foreign investment company domiciled in Canada to a resident in Sweden who is entitled to the dividend, which directly controls at least 10 percent of the voting power, or direct holds at least 25 per cent of the capital of the distributing company; and c) 15 per cent of the gross amount of other cases. The provisions of this paragraph shall not affect the company's taxable profits out of which dividends are paid. third The term "dividends" as used in this Article means income from shares, mining shares, founders' shares or other rights, not being debt-claims, participating in profits, and income under the laws of the State in which the distributing company is resident for tax purposes are treated in the same way as income from shares. 4th The provisions of paragraph 2 shall not apply if the beneficial owner of the dividends is 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 from where 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. 5th Where a company which is a resident of a Contracting State derives income from the other Contracting State, that other State may not tax the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as its holding in respect of which 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, even if the dividends paid or the undistributed profits consist wholly or partly of income arising in such other State. 6. The provisions of this Agreement shall not prevent a Contracting State from taxing the income of the company attributable to a permanent establishment in that State in addition to the tax which would be chargeable to income derived by a company resident in that State, provided that such income in the previous tax not been subjected to such additional tax. This additional tax may not exceed 5 percent of such income. For the purposes of this provision, the term "income" income under Article 7 is attributable to such permanent establishment in that State (including gain from the disposition of property referred to in Article 13, paragraph 2, which forms part of the permanent establishments operating assets ) for one year and previous years after deducting:

9 a) operating losses that are attributable to such permanent establishments (including losses from the alienation of property forming part of the business property of such permanent establishments) in such year and previous years. b) all taxes, other than the additional tax referred to herein, as in this State based on such income; c) the profits reinvested in that State, provided in cases where the State is Canada, the amount of such deduction shall, in respect of the calculation of deductions for investment in Canadian property, determined under current Canadian legislation with recent amendments to the regulations which are not affect the general principle hereof; and d) five hundred thousand Canadian dollars or the equivalent in Swedish currency, reduced by an amount equal to the deduction obtained under the provisions of this paragraph d) of 1) the company, or 2) other companies associated with this from the same or similar activities as those carried out by the company. In applying d) is considered to companies associated with a company directly or indirectly controls the other company or both companies directly or indirectly controlled by the same person or people, or companies dealing with each other on terms that differ from those which would be made between independent companies. 7. The provisions of paragraph 6 shall also apply to income derived from a property company, sale of immovable property in a Contracting State, whether the company has a permanent establishment in that State or not, but only to the extent that such income may be taxed in that State in accordance with the provisions of Article 6 or Article 13, paragraph Notwithstanding the provisions of paragraph 2, the dividends arising in a Contracting State and paid to an organization formed and operating in the other Contracting State exclusively to administer or provide benefits under one or more pension plans, plans for the Safeguarding of old age or other benefits for employees be exempt from tax in the first-mentioned State, provided that: a) the organization is the rightful owner of the shares for which the dividend is paid, the shares are held as an investment and is generally exempt from tax in the other State; b) the organization does not own, directly or indirectly, more than 5 percent of the capital or 5 percent of the distributing company's voting power; and c) the distributing company's shares are of a kind that is regularly traded on a recognized exchange. 9. The term "recognized stock exchange" as used in paragraph 8: a) with respect to dividends derived from Canada, a Canadian stock exchange for the purposes of "Income Tax Act", recognized as such;

10 b) in respect of dividends derived from Sweden, a Swedish stock exchange or market authorized under Swedish law; and c) any other stock exchange approved by correspondence between the competent authorities of the Contracting States. 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 State. 2nd Such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, as if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount. third Notwithstanding the provisions of paragraph 2 are taxed interest arising in a Contracting State and paid to a resident of the other Contracting State in which the interest only in that other State if the interest represents: a) penalty for late payment; b) the payment by the Central Bank of a Contracting State; or c) payment with respect to indebtedness arising from the sale or provision of credit of equipment, goods or services by a resident of that other State, except in the case where the sale or supply occurred, or the interest rate paid, between SMEs Associated referred to in Article 9 paragraph 1 a) or b). 4th Notwithstanding the provisions of paragraph 2 a) taxable interest arising from a avalsslutande State and paid on account of any debt that Contracting State, a political subdivision or a local authority has, only in the other Contracting State if the beneficial owner of the interest is a resident of that other State; b) taxable interest arising from Sweden and paid to a resident of Canada, only in Canada if it is paid on account of a loan made, guaranteed or insured, or a credit extended, guaranteed or insured by "the Export Development Corporation"; c) taxable interest arising from Canada and paid to a resident of Sweden, in Sweden only if the interest is paid in respect of a loan made, guaranteed or insured, or a credit extended, guaranteed or insured by the Export Credits Guarantee Board; and d) the interest arising in a Contracting State and paid to a resident of the other Contracting State shall set up and functioning exclusively for administering and providing benefits under one or more pension plans, plans for the Safeguarding of old age or other benefits for employees, be exempt from tax in the first-mentioned State, provided that: 1) the person of the interest and is generally exempt from tax in the other State; and 2) the interest is not charged on the basis of a business or from a related person. 5th The term "interest" as used in this Article means income from any kind of claim,

11 whether secured by mortgage or not. Profits, and in particular capital securities issued by the state, and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. As well as income which according to the State from which the income arises treated the same for tax purposes as income from lending. The term "interest" does not include income dealt with in Article 8 and Article The provisions of paragraph 2 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 driftstälale therein, or performs in that other State independent personal services from fixed base, the 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 Interest shall be deemed to arise in a Contracting State when the payer is a resident of that State. If, 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, and such interest is borne by such permanent establishment or fixed base, interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 8. Where by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, with respect to the claim for which it is paid, exceeds the amount which would have been agreed between the payer and the beneficial owner if such relationship existed, the provisions of this Article shall apply only to the last mentioned amount. In such case, the excess amount under the laws of each Contracting State, due to the other provisions of this Agreement. Article 12 Royalty 1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2nd Royalties may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed 10 percent of gross royalties. third Notwithstanding the provisions of paragraph 2 shall a) royalties for the use of copyright and other similar remuneration for the production or reproduction of literary, dramatic, musical or other artistic works (with the exception of the cinema and works appearing on film or videotape or other means of reproduction associated with televionsutsändning); and

12 b) royalties for the use of, or the right to use software or any patent or for information concerning industrial, commercial or scientific experience (with the exception of any information obtained due to the lease or franchise agreement), which is derived from a Contracting State, paid to a resident of the other Contracting State in which the royalties shall be taxable only in that other State. 4th The term "royalties" in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright, patent, trademark, design or model, plan, secret formula or process or other intangible assets, and the use of, or the right to use industrial, commercial or scientific equipment or for information concerning industrial, commercial or scientific experience. The term also includes payments of any kind for cinema and works appearing on film, videotape or other means of åtgergivande associated with televionsutständningar. 5th The provisions of paragraphs 2 and 3 shall not apply if the beneficial owner of the royalties is 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 where fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with providing such permanent establishment or fixed base. In such case the provisions of Article 7 or Article Royalties shall be deemed to arise in a Contracting State when ubetalaren is a resident of that State. If, 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, is considered 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 of the royalties, or between both of them and some other person, with respect 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 of the royalties, if such relationship existed, the provisions of this Article shall apply only to the last mentioned amount. In such case, the excess amount under the laws of each Contracting State, due 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. 2nd 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

13 in the other Contracting State or of movable property pertaining to a fixed base for the practice of soul permanent personal services with resident of a Contracting State has in the other Contracting State may be taxed in that other State. The same applies to profits from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such fixed base. third Gains from the alienation of ships or aircraft operated in international traffic by an enterprise of a Contracting State or movable property pertaining to the operation of such ships or aircraft shall be taxable only in that State. 4th Gains derived by a resident of a Contracting State from the alienation of a) shares (other than those that are listed on a recognized stock exchange in the other Contracting State) forming part of a substantial proportion of the share capital of a company resident in the other State, whose value mainly derived from immovable property situated in this other State; or b) a substantial interest in a partnership, "trust" or estate, which is incorporated under the laws of the other Contracting State and whose value is principally derived from immovable property situated in that other State may be taxed in that other State. For the purposes of this paragraph, the term "immovable property" the shares referred to in a) or such shares in a partnership, "trust" or estate referred to in b). However, the term "real property" is not property (except rental property) on which the Company, trading company "the trust" or estate business is conducted. 5th Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3 and 4 shall be taxable only in the Contracting State of which the alienator is a resident. 6. The provisions of paragraph 5 shall not affect a Contracting State entitled to under the law of that State taxing profits from the alienation of property which förvärvaras the natural person who is a resident of the other Contracting State and who has been a resident of the first-mentioned State at any time during the past six years immediately preceding the alienation of the property. Article 14 Putrajaya Independence profession 1. Income derived by an individual resident of a Contracting State from the performance of professional services or other independent activities shall be taxable only only in that State unless he in the other Contracting State has a fixed base regularly available to him in order to pursue the activity. If he has or had such a fixed base, the income may be taxed in the other State but only so much of them as is attributable to that fixed be emitting device. 2nd 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.

14 Article 15 Individual business 1. If not bestämmlserna in Articles 16, 18 and 19, salaries, wages and other remuneration derived by a resident of a Contracting State in respect of employment only in that State unless the employment is exercised in the other Contracting State. If services are rendered in that other State, such remuneration as is derived therefrom may be taxed there. 2nd 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, only in the first-mentioned State if: a) the recipient is present in the other State for a period or periods have been combined does not exceed 183 days in any twelve month period commencing or ending in the calendar year concerned, and b) the remuneration is paid by the employer who is not a resident of the other State or on behalf of, and c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. third Notwithstanding the preceding provisions of this Article, remuneration for employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State may be taxed in that State. Where a resident of Sweden derives income of an employment exercised aboard an aircraft operated in international traffic by the air transport consortium Scandinavian Airlines System (SAS), are taxed in the stone only in Sweden. Article 16 Directors' fees Directors' fees and other similar remuneration derived by a resident of a Contracting State in his capacity as a member of the board of directors or a similar organ of a company resident in the other Contracting State may be taxed in that other State. Article 17 Artistes and Athletes 1. Notwithstanding the provisions of Articles 7, 14 and 15, income derived by a resident of a Contracting State from his personal activities in the other Contracting State as an entertainer, such as theater, motion picture, radio or television artiste, or a musician, or be taxed in that other State. 2nd 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

15 another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the artist or athlete are exercised. third The provisions of paragraph 2 shall not apply if it is established that neither the entertainer, athlete or person related to him directly or indirectly involved in the control of, or in the profits derived by the person referred to in that paragraph. Article 18 Pensions and annuities 1. Pension, payment under the social security legislation included herein, and annuities arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in the State from which they are derived. 2nd Pension, payment under the social security legislation included herein, and annuities deemed to arise in a Contracting State when the payer is a resident of that State. third Notwithstanding the other provisions of this Agreement shall a) war pensions and allowances (including pensions and allowances been discontinued for war veterans or paid as a result of war damage) arising in a Contracting State and paid to a resident of the other Contracting State shall be exempt from tax in that other State to the extent they would have been undantana from taxation if they are received by a resident of the first-mentioned State; b) alimony and other similar amounts (child support have been included), as arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in the other State but the amount to be taxed in that other State shall not exceed the amount that would have been taxable in the first-mentioned State if the recipient were a resident. Article 19 Government service 1. a) Salaries, wages and similar remuneration (excluding pension) paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or political subdivision or local authority shall be taxable only in this state. b) Such wages and similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the individual is a resident of that State and 1) is a citizen of this State, or 2) is not a resident of that State solely for the work. 2nd The provisions of paragraph 1 shall not apply to salaries, wages or other remuneration in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or local authority.

16 Article 20 Students Students, craft or business apprentice 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 education or training shall not be taxed in that State for the amount he receives for his maintenance, education or training, provided that such payments arise from sources outside that State. Article 21 Other income 1. Subject to the provisions of paragraph 2 therein shall be taxable income of a resident of a Contracting State not dealt with in the foregoing articles of agreement only in that State irrespective of where the income arises. 2nd Such income may, however, if it is acquired by a resident of a Contracting State from sources within the other Contracting State may also be taxed in the State from which are derived the laws of this state. In the case of income from the estate or "trust" a resident of Canada, with the exception of "trusts" in cases where deductions for contributions, however, may tax in Canada, provided that the income is taxable in Sweden, not to exceed 15 percent of the revenue gross amount. third The provisions of paragraph 1 shall not apply to income, except in the case of income from immovable property as defined in Article 6, paragraph 2, 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 State independent personal services from a fixed base, 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. Article 22 Without the elimination of double taxation 1. Regarding Canada will double undvikar follows: a) In accordance with applicable requirements of Canadian law on the settlement of the Canadian tax of tax payable in any country other than Canada, and taking into account future changes to these provisions (which shall not affect the general principle hereof), shall - unless greater deduction or relief is granted under Canadian law - Swedish tax on income or gains arising in Sweden deducted from any Canadian tax on such income or gain.

17 b) In accordance with applicable requirements of Canadian law on the taxation of income from foreign subsidiaries ochmed consideration of future changes to these provisions (Vilkla not affect the general principle hereof), the company resident in Canada in the determination of Canadian tax - the calculation of the taxable income - tax deduction for dividends received from the tax-free surplus from foreign affiliates resident in Sweden. c) Where the income derived by a resident of Canada is exempt from tax in Canada under any provision of this Agreement, Canada may nevertheless the computation of tax on other income into account such exempt income. 2nd Regarding Sweden, double taxation shall be avoided as follows: a) Where a resident of Sweden derives income which, according to Canadian law and in accordance with the provisions of this Agreement may be taxed in Canada, the Sweden - having regard to the provisions of Swedish legislation concerning credit for foreign tax (as the version they may hereafter get through to change without changing the general principle hereof) - from the Swedish tax on such income, an amount equal to the tax paid in Canada for income. b) Where a resident of Sweden derives income which, under the provisions of this Agreement shall be taxable only in Canada, Sweden - the determination of Swedish progressive tax - take into account the income which is taxable only in Canada. c) Notwithstanding a) above, dividends paid by a company resident in Canada to a company resident in Sweden exempt from Swedish tax under the provisions of Swedish law on tax exemption for dividends received by the Swedish company from subsidiaries abroad. third For the purposes of this Article, income or gains derived by a resident of a Contracting State which, under this Agreement may be taxed in the other Contracting State derived from sources in that other State. Article 23 Prohibition of discrimination 1. Nationals of a Contracting State shall not 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.notwithstanding the provisions of Article 1, this provision shall also apply to natural persons who are not residents of one or both of the Contracting States. 2nd Taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall, in that other State may not be less favorable than the taxation levied on enterprises of that other State carrying on the same activities. third The provisions of this Article shall be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs or

18 skattebedsättning on account of civil status or family responsibilities which it grants to residents of their own state. 4th Except where the provisions of Article 9, paragraph 1, Article 11, paragraph 8 of Article 12, paragraph 7, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall be deductible in determining the taxable income of the company on the same terms as paid to a resident of the first-mentioned State. 5th The provisions of paragraph 4 shall affect the application of provisions of a Contracting State inerna tax laws; as a) treat a deduction for interest expense (including future amendments to the regulations that do not alter the basic principle therein) and in force date of the signature of this Agreement; or b) after the signing introduction of a Contracting State and which are designed for a person who is not domiciled in this State, under the laws there, should not get a tax treatment that is more favorable than that of a resident of that State receives in a similar situation. 6. Enterprises of a Contracting State, the capital wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not in the first-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises (whose capital is wholly or partly owned or controlled, directly or indirectly, by one or more residents of a third State) in the first-mentioned State are or may be subjected. 7. In this article, the term "taxation" means taxes to which the Convention applies. Article 24 Mutual Agreement Procedure 1. If a person believes that a Contracting State or both Contracting States made arrangements for him in result or will result in taxation not in accordance with the provisions of this Agreement, he may, without prejudice to his right to avail themselves of the remedies provided in these States' domestic legal order, in writing, present his case to the competent authority of the Contracting State of which he is a resident and the reasons for his request to amend taxation. 2nd If the competent authority referred to in paragraph 1, that the opposition is 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 for the purpose of avoiding taxation not in accordance with the Agreement. 3rd The competent authorities of the Contracting States shall by mutual agreement any difficulties or tvivelmål arising as to the interpretation or application of the agreement. 4th The competent authorities of the Contracting States may consult together for the

19 elimination of double taxation in cases not covered by the agreement and can communicate directly with each other in implementing the agreement. Article 25 Exchange of Information 1. The competent authorities of the Contracting States shall exchange such information as is relevant for carrying out the provisions of this aval or in the Contracting States' domestic laws concerning taxes covered by the Agreement insofar as the taxation thereunder is not contrary to the Agreement. The exchange of information is not restricted by Article 1. Notices received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved sets, or collection of the taxes covered by the Agreement or is dealing with complaints regarding these taxes. 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. 2nd The provisions of paragraph 1 be construed so meföra obliging a Contracting State to a) to carry out administrative measures at variance with the laws and administrative practice of that Contracting State or of the other Contracting State, b) to supply information which is not obtainable under the laws or in the normal administrative practice of that Contracting State or of the other Contracting State, c) leave 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). third If a Contracting State requests information under this Article, the other Contracting State shall endeavor to obtain the information which the request relates in the same way as if its own beskattnng was involved, notwithstanding that the other state at this time does not need such information. If the competent authority of a Contracting State special requests, the competent authority of the other Contracting State shall endeavor to provide information under this Article in the desired shape, such as depositions of witnesses and copies of unedited original documents (including books, papers, statements, protokll, accounts, and writings) to the same extent such depositions and documents can be obtained under the laws and administrative practices of that other State with respect to its own taxes. 4th For the purposes of this Article, this Agreement shall, notwithstanding the provisions of Article 2, apply to: a) all taxes levied by the Government of Canada; and b) all taxes levied by the Swedish government, municipalities and counties. Article 26

20 Diplomatic agents and consular officers 1. The provisions of this Agreement shall affect the fiscal privileges which, under international law or under the provisions of special agreements diplomatic agents or consular officers. 2nd Notwithstanding Article 4, an individual who is a member of a Contracting State's diplomatic mission, consular or permanent representation, which is situated in the other Contracting State or in a third State, pursuant to the Agreement is considered to be a resident of the sending State; if he which is subject to the same obligations in respect of taxes on all their income derived by a resident of the sending State. third The agreement does not apply to international organization, its agencies or officials, nor to the person, who is a member of a third State or group of States, diplomatic missions, consular or permanent representation and who are in a Contracting State and not in either avalsslutande State subject to the same obligations in relation to tax on their entire income of a resident there. Article 27 Other provisions 1. The provisions of this Agreement shall in no way limit such tax reductions, tax breaks, credits, or tax deductions allowed a) under the law of a Contracting State in the determination of tax levied in that State, or b) pursuant to another agreement that a Contracting State are included. 2nd The provisions of this Agreement shall not prevent a Contracting State to tax the amounts included in the income of a resident of that State by reason of the holding of interest in a partnership, "trust", or controlled foreign entity. third Fees paid for et years, with the acquisition activities performed during the year, by or for an individual who is a resident of a Contracting State to a pension plan recognized for tax purposes in the other Contracting State shall, for a period not exceeding a total of 60 months, for tax purposes in the first-mentioned State are treated in the same manner as fees which are paid to a pension plan recognized for tax purposes in the first-mentioned State, provided that a) such individual regularly contributed to such a pension plan for a period immediately before he became a resident of the first-mentioned State; and b) the competent authority of the first Member State finds that the pension plan corresponds to a pension plan recognized for tax purposes in that State. For the purposes of this paragraph as uttycket "retirement plan" include pension plan established under the social security system in a avtalssluande state. 4th For the purposes of Article XXII (Consultation) of paragraph 3 of the General Agreement for Trade in Services Agreement, the Contracting States agree that, notwithstanding that paragraph, any dispute between the states as to whether a measure falls within the scope of this Agreement or not and which may be referred to