On the ratification of the Convention between the Government of the Republic of Kazakhstan and the Government of the Grand Duchy of Luxembourg for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital and the Protocol between the Government of the Republic of Kazakhstan and the Government of the Grand Duchy of Luxembourg on Amendments and Additions to the Convention between the Government of the Republic of Kazakhstan and the Government of the Grand Duchy of Luxembourg for the Avoidance of Double Taxation and prevention of tax evasion with respect to taxes on income and capital, signed in Astana on June 26, 2008
The Law of the Republic of Kazakhstan dated November 11, 2013 No. 138-V SAM.
To ratify the Convention between the Government of the Republic of Kazakhstan and the Government of the Grand Duchy of Luxembourg for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital, signed in Astana on June 26, 2008, and the Protocol between the Government of the Republic of Kazakhstan and the Government of the Grand Duchy of Luxembourg on Amendments and Additions to the Convention between the Government of the Republic of Kazakhstan and the Government of the Grand Duchy of Luxembourg on the Avoidance of Double Taxation and the Prevention of Tax Evasion in Respect of Taxes on Income and Capital, signed in Astana on June 26, 2008, done in Luxembourg on May 3, 2012.
President
Republic of Kazakhstan
N. NAZARBAYEV
Convention between the Government of the Republic of Kazakhstan and the Government of the Grand Duchy of Luxembourg for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital (Entered into force on December 11, 2013 - Bulletin of International Treaties of the Republic of Kazakhstan 2014, No. 1, art. 3)
The Government of the Republic of Kazakhstan and the Government of the Grand Duchy of Luxembourg,
Desiring to conclude a Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income and Capital,
We have agreed on the following:
Article 1 Persons to whom the Convention applies
This Convention applies to persons who are residents of one or both of the Contracting States.
Article 2 Taxes covered by the Convention
1. This Convention shall apply to taxes on income and on capital imposed on behalf of a Contracting State or of its central or local authorities, irrespective of the manner in which they are levied.
2. Taxes on income and capital are all types of taxes levied on the total amount of income, on the total amount of capital, or on individual elements of income or capital, including taxes on income from the alienation of movable or immovable property, taxes on the total amount of wages or salaries paid by enterprises, as well as taxes on value gains capital.
3. The existing taxes to which this Convention applies are in particular:
a) in the Grand Duchy of Luxembourg:
(i) Personal income tax;
(ii) Corporate tax;
(iii) the capital tax; and
(iv) the communal trade tax (hereinafter referred to as the "Luxembourg Tax");
b) in the Republic of Kazakhstan:
(i) Corporate income tax;
(ii) Individual income tax;
(iii) the corporate and individual property Tax (hereinafter referred to as the "Kazakhstan Tax").
4. This Convention also applies to any identical or substantially similar taxes on income and capital that are imposed after the date of entry into force of the Convention in addition to or in place of the existing taxes. The competent authorities of the Contracting States will notify each other of any significant changes in their respective tax laws.
Article 3 General provisions
1. For the purposes of this Convention, unless the context otherwise requires, the term:
a) "Luxembourg" means the Grand Duchy of Luxembourg and, when used geographically, means the territory of the Grand Duchy of Luxembourg.;
b) "Kazakhstan" means the Republic of Kazakhstan, and when used geographically, the term "Kazakhstan" includes the State territory of the Republic of Kazakhstan and the zones in which Kazakhstan can exercise its sovereign rights and jurisdiction, in accordance with its legislation and international treaties to which it is a party.;
(c) "Person" includes an individual, a company, and any other body of persons;
(d) "Company" means any corporate entity or any economic unit that is treated as a corporate entity for tax purposes;
(e) "Enterprise" applies to the conduct of any business activity;
(f) "Enterprise of a Contracting State" and "enterprise of the other Contracting State" mean, respectively, an enterprise operated by a resident of a Contracting State and an enterprise operated by a resident of the other Contracting State;
(g) "International carriage" means any carriage by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated exclusively between locations in the other Contracting State;
(h) "Competent authority" means:
(i) in Luxembourg: the Minister of Finance or his authorized representative;
(ii) in Kazakhstan: the Ministry of Finance or its authorized representative;
(i) "National person" means:
(i) any natural person having the nationality of a Contracting State;
(ii) any legal person, partnership or association which has acquired such status on the basis of the legislation in force in that Contracting State;
(j) "Business activity" includes the performance of professional services and other activities of an independent nature;
j) "Contracting State" and "other Contracting State" means Kazakhstan or the Grand Duchy of Luxembourg, depending on the context;
(l) "Capital" for the purposes of article 21 of this Convention means movable and immovable property and includes (but is not limited to) cash, shares or other documents confirming property rights, promissory notes, bonds or other debentures, as well as patents, trademarks, copyrights or other similar right or property;
(m) "Pool" for the purposes of this Convention also means an association of persons engaged in the joint operation of containers for the transportation of goods in international traffic, the profits from the operation of which are formed into a common fund and distributed in accordance with the pool agreement.
2. As regards the application at any time of this Convention by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has at that time under the laws of that State in respect of taxes to which the Convention applies, any meaning of the term under the applicable tax laws of that State shall prevail over the meaning assigned to the term under other laws of that State.
Article 4 Resident
1. For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax there on the basis of his domicile, residence, nationality, place of management, or any other criterion of a similar nature, and also includes the State itself, any of its central and local authorities. However, this term does not include any person who is subject to taxation in that State, only in respect of income from sources in that State or in respect of capital held therein.
2. If by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, his status shall be determined as follows:
a) he is considered a resident only of the State in which he has a permanent home at his disposal; if he has a permanent home at his disposal in both States, he is considered a resident only of the State in which he has closer personal and economic relations (center of vital interests);
(b) If the State in which he has his centre of vital interests cannot be determined, or if he does not have a permanent home available to him in any State, he shall be deemed to be a resident only of the State in which he habitually resides.;
(c) If he has his habitual residence in both States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national.;
(d) If the resident status cannot be determined in accordance with subparagraphs (a) to (c), the competent authorities of the Contracting States shall resolve the matter by mutual agreement.
3. If by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then he shall be deemed to be a resident only of the State in which his place of effective management is situated.
Article 5 Permanent establishment
1. For the purposes of this Convention, the term "permanent establishment" means a permanent place of business through which the business activities of an enterprise are carried out in whole or in part.
2. The term "permanent establishment" includes, in particular::
a) place of management;
b) separation;
c) the office;
d) the factory;
(e) A workshop; and
(f) A mine, mine, oil or gas well, quarry, installation, facility or any other place of exploration or extraction of natural resources.
3. A construction site or a construction or installation project forms a permanent establishment only if they have existed for more than 12 months.
4. Notwithstanding the preceding provisions of this article, the term "permanent establishment" is not considered to include:
a) the use of facilities solely for the purpose of storing, displaying or delivering goods or merchandise belonging to the enterprise;
b) the maintenance of stocks of goods or merchandise belonging to the enterprise solely for the purposes of storage, display or delivery;
(c) The maintenance of a stock of goods or merchandise belonging to an enterprise solely for the purposes of processing by another enterprise;
d) the maintenance of a permanent place of business solely for the purpose of purchasing goods or merchandise, or for collecting information for the enterprise;
(e) The maintenance of a permanent place of business solely for the purpose of carrying out any other preparatory or auxiliary activity by the enterprise;
(f) The maintenance of a permanent place of business solely for the purpose of carrying out any combination of the activities listed in subparagraphs (a) to (e), provided that the combined activities of the permanent place of business resulting from such combination are of a preparatory or auxiliary nature.
5. Notwithstanding the provisions of paragraphs 1 and 2, if a person other than an agent with an independent status to whom paragraph 6 applies acts in a Contracting State on behalf of an enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent establishment in the first-mentioned Contracting State in respect of any activity that that person undertakes for the company if such a person:
(a) Has and habitually exercises in that State the authority to conclude contracts on behalf of the enterprise, unless the activities of such enterprise are limited to the activities referred to in paragraph 4, which, if carried out through a permanent place of business, does not transform that permanent place of business into a permanent establishment in accordance with the provisions of this paragraph; or
(b) Does not have such authority, but usually maintains in the first-mentioned State a stock of goods or merchandise from which it regularly supplies goods or merchandise on behalf of the enterprise. The provisions of the above-mentioned proposal will not apply unless it is proved that, in order to avoid taxation in the first-mentioned State, such a person regularly carries out not only the supply of goods or products, but also carries out virtually all types of activities related to the sale of goods or products, without actually concluding the sales contract itself.
6. An enterprise shall not be considered as having a permanent establishment in a Contracting State solely because it carries on business in that State through a broker, 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 that is a resident of a Contracting State controls or is controlled by a company that is a resident of the other Contracting State or that carries on business in that other State (either through a permanent establishment or otherwise) By itself, it does not turn one of these companies into a permanent establishment of the other.
Article 6 Income from immovable property
1. Income earned by a resident of a Contracting State from immovable property (including income from agriculture or forestry) located in the other Contracting State may be taxed in that other State.
2. The term "immovable property" has the meaning that it has under the laws of the Contracting State in which the property in question is located. The term in any case includes property ancillary to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of common law in relation to land ownership apply, the usufruct of immovable property and rights to variable or fixed payments as compensation for the development or right to develop mineral resources, sources and other natural resources; sea, river and air vessels are not considered as immovable property.
3. The provisions of paragraph 1 shall apply to income derived from the direct use, rental or use of immovable property in any other form.
4. The provisions of paragraphs 1 and 3 also apply to income from immovable property of an enterprise.
Article 7 Profit from entrepreneurial activity
1. The profits of an enterprise of a Contracting State are taxable only in that State, unless the enterprise carries on business in the other Contracting State through a permanent establishment located there. If an enterprise carries out business activities as indicated above, the profits of the enterprise may be taxed in another State, but only in the part that relates to such a permanent establishment.
2. With respect to paragraph 1 of this article, profits derived from the sale of goods or products that are similar or identical to goods or products sold through a permanent establishment, as well as profits derived from other business activities that are similar or identical in nature to business activities carried out through a permanent establishment, may be taxed in the State of, where the permanent establishment is located, but only in the part that belongs to this permanent establishment.
3. Subject to the provisions of paragraph 4, if an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment located there, then in each Contracting State that permanent establishment includes the profits that it could receive if it were a separate and separate enterprise engaged in the same or similar activities, under such circumstances under the same or similar conditions and operated in complete independence from the enterprise of which it is a permanent establishment.
4. When determining the profit of a permanent establishment, it is allowed to deduct expenses that are properly documented and incurred for the purposes of the permanent establishment, including reasonably allocated administrative and general administrative expenses, regardless of whether these expenses are incurred in the State where the permanent establishment is located or outside it.
5. No profit is credited to a permanent establishment based solely on the purchase by that permanent establishment of goods or merchandise for the enterprise.
6. For the purposes of the preceding paragraphs, profits attributable to a permanent establishment are determined in the same way from year to year, unless there is a sufficient and compelling reason to change this procedure.
7. If profits include types of income that are specifically mentioned in other articles of this Convention, the provisions of these articles are not affected by the provisions of this article.
8. This article also applies to income from partnership participation. It also applies to remuneration received by a partner from participation in a partnership for activities in the service of the partnership and for the provision of loans or for the transfer of property, if such remuneration, according to the legislation of the Contracting State in which the permanent establishment is located, relates to income received by the partner from that permanent establishment.
Article 8 Sea and air transport
1. Profits earned by a resident of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that Contracting State.
2. The provisions of paragraph 1 shall also apply to profits from participation in a pool, joint venture or international vehicle operating organization.
Article 9 Associated enterprises
1. If
(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 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 the cases mentioned in sub-paragraphs (a) and (b), conditions are created or established between two enterprises in their commercial or financial relations that are different from those that would take place between two independent enterprises, then any profit that could be credited to one of them, but due to the presence of these conditions is not it was accrued to him, can be included in the profit of this enterprise and, accordingly, taxed.
2. If a Contracting State includes in the profits of an enterprise of that State and, accordingly, taxes profits in respect of which an enterprise of the other Contracting State has been taxed in that other State, and the profits so included are profits that would have accrued to an enterprise of the first-mentioned State if the relationship between the two enterprises had been such which exist between independent businesses, then this other state will make an appropriate adjustment to the amount of tax levied on such profits. In determining such an adjustment, the other provisions of this Convention should be taken into account and the competent authorities of the Contracting States should consult with each other, if necessary.
Article 10 Dividends
1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.
2. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed:
a) 5 percent of the total amount of dividends if the actual owner is a company (other than a partnership) that directly owns at least 15 percent of the capital of the company paying the dividends;
b) 15 percent of the total amount of dividends in all other cases.
This paragraph does not affect the taxation of the company in respect of the profits from which the dividends are paid.
2-1. Notwithstanding the provisions of paragraph 2, dividends paid by a company which is a resident of one Contracting State shall be taxable only in the other Contracting State if the beneficial owner of the dividends is:
(a) in Kazakhstan:
(i) The Government of the Republic of Kazakhstan or a central or local authority;
(ii) The National Bank of the Republic of Kazakhstan; or
(iii) any other institution wholly owned by the Government of the Republic of Kazakhstan, which may be agreed from time to time between the competent authorities of the Contracting States;
(b) in Luxembourg:
(i) The Government of Luxembourg or a local authority;
(ii) The Central Bank of Luxembourg;
(iii) "Société Nationale de Crédit et d'Investissement" (National Credit and Investment Company); or
(iv) any other institution wholly owned by the Government of Luxembourg, which may be agreed from time to time between the competent authorities of the Contracting States.
3. The term "dividends", as used in this article, means income from shares, shares of jouissance or rights of jouissance, shares of mining companies, shares of founders or other rights that are not debt claims that give the right to participate in profits, as well as income from other corporate rights that are subject to the same tax regulation., as income from shares in accordance with the laws of the state in which the company is resident, distributing profits and the investor's share in the profits of a commercial, industrial, mining or fishing enterprise, paid in proportion to the profit and on the basis of its capital expenditures, as well as interest and payments on debt obligations, if, moreover, a fixed interest rate, the right of assignment (allocation) is granted for additional interest, varying in accordance with retained earnings.
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, who 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 located there and the holding company in respect of which the dividends are paid is actually associated with such permanent establishment. In such a case, the provisions of article 7 shall apply.
5. If a company that is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not levy any tax on dividends paid by that company, except in cases where such dividends are paid to a resident of that other State or the holding company in respect of which the dividends are paid actually belongs to a permanent establishment located in in this other state, and the company's undistributed profits are not taxed on undistributed profits., even if the dividends paid or retained earnings consist wholly or partly of profits or income arising in that other State.
6. Nothing in this Convention may be interpreted as preventing a Contracting State from taxing the profits of a company relating to a permanent establishment in that State in addition to the tax assessed on the profits of a company that is a national of that State, provided that any additional tax so assessed does not exceed 10 per cent. the amount of such profit that was not subject to such additional taxation in previous taxable years. For the purposes of this paragraph, profits shall be determined after deduction of all taxes other than the additional tax referred to in this paragraph levied in the Contracting State in which the permanent establishment is located.
The footnote. Article 10 as amended by the Law of the Republic of Kazakhstan dated 14.10.2020 No. 367-VI.
Article 11 Interest
1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
2. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the recipient, being 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 total amount of the interest.
3. Notwithstanding the provisions of paragraph 2:
a) interest arising in the Republic of Kazakhstan will be exempt from tax in the Republic of Kazakhstan if it is paid:
(i) The Government of Luxembourg;
(ii) the local authority of Luxembourg;
(iii) The Central Bank of Luxembourg;
(iv) Societe Nationale de Credit et d,Investissement;
(v) any other organization wholly owned by the Government of Luxembourg, which may be agreed upon between the competent authorities of the Contracting States;
b) interest arising in Luxembourg will be exempt from tax in Luxembourg if it is paid:
(i) The Government of the Republic of Kazakhstan;
(ii) any central or local authority of the Republic of Kazakhstan;
(iii) The National Bank of the Republic of Kazakhstan;
(iv) Kazyna Sustainable Development Fund;
(v) any other organization wholly owned by the Government of the Republic of Kazakhstan, which may be agreed upon between the competent authorities of the Contracting States;
4. Notwithstanding the provisions of paragraph 2:
a) interest arising in Kazakhstan and paid to a Luxembourg resident is exempt from tax in Kazakhstan if it is paid in respect of a loan granted, guaranteed or insured, or any other debt claim, or a loan guaranteed or insured by "L,Offise du Ducroire".
b) interest arising in Luxembourg and paid to a resident of Kazakhstan is exempt from tax in Luxembourg if it is paid in respect of a loan granted, guaranteed or insured, or any other debt claim, or a loan guaranteed or insured by the State Insurance Corporation for Export Credit and Investment Insurance Joint Stock Company.
5. The term "interest", as used in this article, means income from debt claims of any kind, secured or unsecured and giving or not giving the right to participate in debtors' profits, and in particular income from government/government securities and income from bonds or debentures, including premiums and winnings for such securities, bonds, or debentures. However, the term "interest" does not include the income referred to in article 10. Penalties for late payments are not considered as interest for the purposes of this article.
6. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the interest, who is a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises through a permanent establishment located there and the debt claim in respect of which the interest is being paid actually relates to such permanent establishment. In such a case, the provisions of article 7 shall apply.
7. Interest shall be deemed to arise in a Contracting State if the payer is a resident of that State. If, however, the person paying the interest, regardless of whether he is a resident of a Contracting State or not, has a permanent establishment in a Contracting State in connection with which the debt on which the interest is being paid has arisen and such interest is being paid by such permanent establishment, such interest shall be deemed to arise in the State in which where such a permanent establishment is located.
8. If, due to a special relationship between the payer and the actual owner of interest, or between both of them and any other person, the amount of interest related to the debt claim on the basis of which it is paid exceeds the amount that would have been agreed between the payer and the actual owner of interest in the absence of such a relationship, the provisions of this The articles apply only to the last mentioned amount. In such a case, the excess part of the payment will continue to be taxable in accordance with the laws of each Contracting State, taking into account the other provisions of this Convention.
9. The provisions of this article shall not apply if the main purpose or one of the main purposes of any person involved in the creation or transfer of debt claims in respect of which interest is paid was to benefit from this article by creating or transferring these debt claims.
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 in accordance with the laws of that Contracting State, but if the recipient, being the beneficial owner of the royalties, is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the total amount of the royalties.
3. The term "royalties", as used in this article, means payments of any kind received as remuneration for the use or for granting the right to use any copyright in works of literature, art or science, including software, cinematographic films, any patent, trademark, design or model, plan, secret formula or process, or for information related to industrial, commercial or scientific experience, and payments for the use or right to use industrial, commercial or scientific equipment.
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, who is a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise through a permanent establishment located there and the right or property in respect of which the royalties are paid is actually connected with such permanent establishment. In such a case, the provisions of article 7 shall apply.
5. Royalties shall be deemed to arise in a Contracting State if the payer is a resident of that State. If, however, the person paying the royalties, regardless of whether he is a resident of a Contracting State or not, has a permanent establishment in a Contracting State in connection with which an obligation to pay royalties has arisen and such royalties are paid by that permanent establishment, then such royalties shall be deemed to have arisen in the State in which the permanent establishment is located.
6. If, as a result of a special relationship between the payer and the actual owner of the royalties, or between both of them and any other person, the amount of royalties related to the use, right or information on the basis of which it is paid exceeds the amount that would have been agreed between the payer and the actual owner in the absence of such a relationship, the provisions This article applies only to the last mentioned amount. In such a case, the excess part of the payment is subject to taxation in accordance with the laws of each Contracting State, taking into account the other provisions of this Convention.
7. The provisions of this article shall not apply if the primary purpose or one of the primary purposes of any person involved in the creation or transfer of rights in respect of which royalties are paid was to benefit from this article through such creation or transfer of rights.
Article 13 Income from the increase in the value of property
1. Income earned by a resident of a Contracting State from the alienation of immovable property as defined in Article 6 and located in the other Contracting State may be taxed in that other State.
2. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, including gains from the alienation of such permanent establishment (alone or in combination with the entire enterprise), may be taxed in that other State.
3. Income earned by a resident of a Contracting State from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft shall be taxable only in that Contracting State.
4. Income received as a result of alienation:
a) shares, with the exception of shares that are traded on a substantial and regular basis on an officially recognized Stock Exchange, participation rights or other rights in the capital of a company or other legal entity (regardless of whether it is a resident of a Contracting State), whose property mainly consists of immovable property located in a Contracting State; or
(b) Interests in a partnership (regardless of whether it is a resident of a Contracting State), taking into account the extent to which it is related to immovable property located in a Contracting State, may be taxed in that State.
For the purposes of this paragraph, the term "immovable property" includes shares of companies referred to in subparagraph (a) or shares in a partnership.
5. Gains from the alienation of any property other than that referred to in the preceding paragraphs shall be taxable only in the Contracting State of which the alienator is a resident.
Article 14 Income from employment
1. Subject to the provisions of articles 15, 17 and 18, salaries, wages and other similar remuneration earned by a resident of a Contracting State in connection with an employment shall be taxable only in that State, unless the employment is performed in the other Contracting State. If the employment is carried out in this way, such remuneration received in connection with it may be taxed in that other State.
2. Notwithstanding the provisions of paragraph 1, remuneration earned by a resident of a Contracting State in connection with an employment performed in the other Contracting State shall be taxable only in the first-mentioned State if:
(a) The recipient is present in another State for a period or periods not exceeding a total of 183 days in any twelve-month period beginning or ending in the relevant calendar year; and
(b) The remuneration is paid by or on behalf of an employer who is not a resident of another State; and
(c) The remuneration costs are not borne by a permanent establishment that the employer has in another State.
3. Notwithstanding the preceding provisions of this article, remuneration derived by a resident of a Contracting State in respect of an employment performed on board a ship or aircraft operated in international traffic may be taxed in that Contracting State.
Article 15 Directors' fees
Directors' fees and other similar payments received by a resident of a Contracting State in his capacity as a member of the board of directors of a company that is a resident of the other Contracting State may be taxed in that other State.
Article 16 Artists and athletes
1. Notwithstanding the provisions of Articles 7 and 14, income earned by a resident of a Contracting State as an artist, such as a theater, motion picture, radio or television artist, or a musician, or as an athlete, from his personal activities carried on in the other Contracting State, may be taxed in that other State.
2. Where income from personal activities exercised by an entertainer or a sportsman in that capacity accrues not to the entertainer or sportsman himself but to another person, that income may, notwithstanding the provisions of articles 7 and 14, be taxed in the Contracting State in which the activities of the entertainer or sportsman are exercised.
Article 17 Pensions
1. Subject to the provisions of paragraph 2 of article 18, pensions and other similar payments paid in respect of past employment to a resident of a Contracting State shall be taxable only in that State.
2. Notwithstanding the provisions of paragraph 1, pensions and other payments made in accordance with the social security laws of a Contracting State shall be taxable only in that State.
3. Notwithstanding the provisions of paragraph 1, pensions and other similar remuneration (including lump-sum payments) arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in the first-mentioned State, provided that such payments are made from deposits paid or from reserves created in accordance with or on behalf of the recipient's pension scheme and such contributions, reserves or pensions or other similar remuneration were subject to taxation in the first-mentioned State in accordance with the usual norms of its tax legislation.
Article 18 Public service
1. (a) Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting State or its central or local authorities to an individual in respect of services rendered to that State or its central or local authorities, shall be taxable only in that State.
(b) However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State.:
(i) Is a national of that State; or
ii) has not become a resident of that State solely for the purpose of performing his service.
2. (a) Any pension paid by a Contracting State or its central or local authorities to an individual in respect of services rendered to that State or its central or local authorities shall be taxable only in that State.
(b) However, such pension is taxable only in the other Contracting State if the individual is a resident of and a national of that other State.
3. The provisions of articles 14, 15, 16 and 17 shall apply to salaries, wages and other similar remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or its central or local authorities.
Article 19 Teachers, teachers and students
1. Payments that a student or trainee who is or was a resident of the other Contracting State immediately prior to his arrival in a Contracting State and is located in the first-mentioned State solely for the purpose of obtaining education or internship receives for the purposes of his maintenance, education or internship shall not be taxed in that State, provided that the sources of these payments the amounts are located outside this state.
2. An individual who has arrived in a Contracting State at the invitation of that State or a university, college, school, museum or other cultural institution of that State, or under an official cultural exchange program for a period not exceeding two years, solely for the purpose of teaching, lecturing or conducting research in such institutions and who is or was directly prior to this visit, a resident of the other Contracting State is exempt from tax in the first-mentioned State on his remuneration for such activities., provided that such remuneration is received by him from outside this State.
Article 20 Other income
1. The income of a resident of a Contracting State, irrespective of its source, which is not mentioned in the preceding articles of this Convention, shall be taxable only in that State.
2. The provisions of paragraph 1 shall not apply to income other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment located therein, and the right or property in connection with which the payment was made income is indeed associated with such a permanent establishment. In such a case, the provisions of article 7 shall apply.
Article 21 Capital
1. Capital represented by immovable property referred to in Article 6, owned by a resident of a Contracting State and located in the other Contracting State, may be taxed in that other State.
2. Capital represented by movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State may be taxed in that other State.
3. Capital represented by ships and aircraft operated by a resident of a Contracting State in international traffic and movable property pertaining to the operation of such ships or aircraft shall be taxable only in that Contracting State.
4. All other elements of the capital of a resident of a Contracting State are taxable only in that State.
Article 22 Elimination of double taxation
1. Taking into account the provisions of the Luxembourg Law on the avoidance of double taxation, which does not affect its basic principles, double taxation is eliminated as follows:
(a) If a Luxembourg resident receives income or owns capital that, in accordance with the provisions of this Convention, may be taxed in Kazakhstan, Luxembourg, subject to the provisions of subparagraphs (b) and (c), shall exempt that income or capital from taxation, but may, in order to calculate the amount of tax on the remaining income or capital of the resident, apply the same tax rates as if the income would not have been exempt.
b) If a resident of Luxembourg earns income that, in accordance with the provisions of articles 10, 11, 12 and 16, can be taxed in Kazakhstan, Luxembourg will allow deduction from personal income tax or from corporate tax of this resident an amount equal to the tax paid in Kazakhstan. However, such a deduction should not exceed that part of the tax calculated before the deduction, which relates to such types of income received in Kazakhstan.
(c) The provisions of subparagraph (a) shall not apply to income earned by a Luxembourg resident or capital owned by him, if Kazakhstan applies the provisions of this Convention in order to exempt income or capital from tax or applies the provisions of paragraph 2 of articles 10, 11 or 12 to such income.
2. In the case of Kazakhstan, double taxation is eliminated as follows:
a) If a resident of Kazakhstan earns income or owns capital that, in accordance with the provisions of this Convention, may be taxed in Luxembourg, Kazakhstan will allow:
i) deduct from the income tax of that resident an amount equal to the income tax paid in Luxembourg;
ii) deduct from the capital tax of this resident an amount equal to the capital tax paid in Luxembourg.
In any case, these deductions should not exceed the portion of the income or capital tax calculated before the deduction is granted, which, depending on the circumstances, relates to income or capital that may be taxed in Luxembourg.
(b) If, in accordance with any provision of the Convention, the income or capital earned by a resident of Kazakhstan is exempt from tax in Kazakhstan, Kazakhstan may nevertheless take into account the tax-exempt income or capital when calculating the amount for the remainder of that resident's income or capital.
Article 23 Non-discrimination
1. Nationals of a Contracting State shall not be subject in the other Contracting State to any taxation or any related obligation other or more burdensome than taxation and related obligations to which nationals of that other State are or may be subject in the same circumstances, in particular with respect to residency.
2. The taxation of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourable in that other State than the taxation of enterprises of that other State engaged in similar activities. This provision should not be interpreted as obliging a Contracting State to grant residents of the other Contracting State any personal tax benefits, discounts and deductions for tax purposes based on their civil status or marital status, which it grants to its residents.
3. Except where the provisions of paragraph 1 of Article 9, paragraph 8 of Article 11 or paragraph 6 of Article 12 apply, interest, royalties and other payments made by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purposes of determining the taxable profits of such enterprise, be deductible on the same terms as if they were paid a resident of the first mentioned State. Similarly, any debt owed by an enterprise of a Contracting State to a resident of the other Contracting State must, for the purposes of determining the taxable capital of such enterprise, be deductible under the same conditions as debt owed to a resident of the first-mentioned State.
4. Enterprises of a Contracting State whose capital is wholly or partly owned or controlled directly or indirectly by one or more residents of the other Contracting State shall not be subject in the first-mentioned State to any taxation or any obligations related thereto which are other or more burdensome than the taxation and related obligations to which they are subject or other similar enterprises of the first mentioned State may be at risk.
5. The provisions of this article shall apply to the taxes described in this Convention.
Article 24 Mutual agreement procedure
1. If a person considers that the actions of one or both of the Contracting States lead to his taxation not in accordance with the provisions of this Convention, he may, regardless of the remedies provided for by the domestic law of those States, submit his case to the competent authority of the Contracting State of which he is a resident, or, if his case falls under the paragraph 1 of Article 23, to the competent authority of the Contracting State of which it is a national. The application must be submitted within three years from the date of the first notification of actions leading to taxation not in accordance with the provisions of this Convention.
2. The competent authority shall endeavour, if it considers the application to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to avoiding taxation not in accordance with the Convention. Any agreement reached will be executed regardless of any time limits provided for by the national laws of the Contracting States.
3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. They may also consult with each other in order to eliminate double taxation in cases not provided for by the Convention.
4. The competent authorities of the Contracting States may enter into direct contacts with each other, including through a joint commission consisting of representatives of the competent authorities of the Contracting States, in order to achieve agreement within the meaning of the preceding paragraphs.
Article 25 Exchange of information
1. The competent authorities of the Contracting States shall exchange information necessary to comply with the provisions of this Convention or the domestic laws of the Contracting States in respect of taxes to which the Convention applies, to the extent that taxation under that law does not conflict with this Convention. Any information received by a Contracting State shall be treated as confidential in the same manner as information obtained under the domestic law of that State and shall be disclosed only to persons or authorities (including courts and administrative authorities) engaged in the assessment or collection, enforcement or prosecution, or consideration of appeals concerning taxes subject to The Convention. Such persons or authorities should use the information only for these purposes. They may disclose this information during an open court hearing or when making court decisions.
2. In no case shall the provisions of paragraph 1 be interpreted as imposing an obligation on the Contracting States.:
(a) To take administrative measures contrary to the laws and administrative practices of that or another Contracting State;
(b) To provide information that cannot be obtained under the laws or in the ordinary course of administrative practice of that or the other Contracting State;
c) to provide information that 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 (public order).
3. If information is required by a Contracting State in accordance with this Article, the other State shall use its information to achieve the required information, even if that other State may not need such information for its own tax purposes. The obligation contained in the previous sentence is subject to the limitations of paragraph 2, but in no case would such a limitation be considered as allowing a State to refuse to provide information solely because it has no intrinsic interest in such information.
Article 26 Assistance in tax collection
1. The Contracting States shall assist each other in collecting income claims. Such assistance is limited to articles 1 and 2. The competent authorities of the Contracting States may, by mutual agreement, establish procedures for the application of this article.
2. The term "income claim" used in this article means the amount due in respect of the taxes referred to in article 2, to the extent that taxation does not conflict with this Convention or any other international treaty to which the Contracting States are parties, as well as interest, administrative penalties and the costs of fees and security, related to this amount.
3. If a revenue claim of a Contracting State must be fulfilled in accordance with the laws of that State and is enforced by a person who is currently unable, in accordance with the laws of that State, to prevent its collection, such revenue claim, at the request of the competent authority of that State, shall be recognized for collection purposes by the competent authority of the other Contracting State. Such income claim is subject to collection by that other State, in accordance with the provisions of its legislation applicable to the collection of its own taxes, as if the income claim were a revenue claim of that other State.
4. If a revenue claim of a Contracting State is a claim in respect of which that State may, in accordance with its legislation, take security measures in order to ensure collection, such revenue claim shall, at the request of the competent authority of that State, be recognized for the purpose of taking security measures by the competent authority of the other Contracting State. This other State shall take security measures in respect of this income claim in accordance with the provisions of its legislation, as if this income claim were a revenue claim of this other State, even if at the time of taking such measures the income claim is not implemented in the first-mentioned State or belongs to a person who has the right to prevent its collection.
5. Notwithstanding the provisions of paragraphs 3 and 4, an income claim recognized by a Contracting State for the purposes of paragraphs 3 or 4 in that State is not subject to time limits or prioritization applied to income claims in accordance with the laws of that State with respect to the nature of the claim. In addition, a revenue claim accepted by a Contracting State for the purposes of paragraphs 3 or 4 in that State does not have priority applicable to that revenue claim under the laws of the other Contracting State.
6. Court cases concerning the existence, legality or amount of a revenue claim of a Contracting State shall not be brought before the courts or administrative authorities of the other Contracting State.
7. If, after the request has been sent by a Contracting State in accordance with paragraph 3 or 4 and before the other Contracting State has collected and transferred the relevant income claim to the first-mentioned State, the relevant income claim ceases to be valid.:
(a) In the case of a request conforming to paragraph 3, when the revenue claim of the first-mentioned State can be fulfilled in accordance with the laws of that State and belongs to a person who, at the moment, cannot, in accordance with the laws of that State, prevent its collection; or
(b) In the case of a request pursuant to paragraph 4, where a revenue claim of the first-mentioned State in respect of which that State may, in accordance with its law, take measures to preserve the amount of the revenue claim in order to ensure collection, the competent authorities of the first-mentioned State shall immediately notify the competent authorities of the other State of this fact and, at the option of the other State, The first mentioned State may suspend or withdraw its request.
8. In no case shall the provisions of this article be interpreted as imposing obligations on the Contracting States.:
(a) To take administrative measures contrary to the laws and administrative practices of that or another Contracting State;
b) take measures contrary to State policy (public order);
(c) Provide assistance if the other Contracting State has not taken all appropriate measures to collect or preserve the income claim, as appropriate, in accordance with its legislation or administrative practice.;
(d) To provide assistance in cases where the administrative burden on that State is disproportionate to the benefits received by the other Contracting State.
Article 27 Employees of diplomatic missions and consular institutions
Nothing in this Convention affects the tax privileges of employees of diplomatic missions and consular institutions to whom such privileges are granted by the general rules of international law or in accordance with the provisions of special agreements.
Article 28 Exclusion of certain companies
This Convention does not apply to holding companies established in accordance with special Luxembourg legislation, in particular, the Law of July 31, 1929 and the Decree of December 17, 1938, and also does not apply to income that a resident of Kazakhstan receives from such companies, and to shares and other securities of such companies owned by the specified person.
Article 29 Entry into force
1. This Convention is subject to ratification and shall enter into force on the date of receipt of the last written notification that the Contracting States have completed the internal procedures necessary for its entry into force.
2. This Convention applies:
(a) In respect of taxes withheld at source on income earned on or after January 1 of the calendar year following the year of entry into force of this Convention;
(b) In respect of other taxes on income and on capital imposed in any fiscal year beginning on or after 1 January of the calendar year following the year of entry into force of this Convention.
Article 30 Amendments
By mutual agreement of the Contracting States, amendments and additions to this Convention may be made by protocols that will form an integral part of this Convention.
Article 31 Termination
1. This Convention shall remain in force until terminated by one of the Contracting States. Any Contracting State may terminate the Convention by giving written notice of termination through diplomatic channels at least six months before the end of any calendar year following the expiration of a period of five years from the date of its entry into force.
2. The Convention ceases to be in force:
a) with respect to taxes withheld at source on income received on or after January 1 of the calendar year following the year of receipt of the notification;
(b) In respect of other taxes on income and capital payable in any tax year beginning on or after January 1 of the calendar year following the year of receipt of the notification.
IN WITNESS WHEREOF, the undersigned, being duly authorized thereto, have signed this Convention.
Done in duplicate in Astana on June 26, 2008, in the Kazakh, French, Russian and English languages, all texts being equally authentic.
For the Government
For the Government
Republic of Kazakhstan
The Grand Duchy of Luxembourg
Protocol between the Government of the Republic of Kazakhstan and the Government of the Grand Duchy of Luxembourg on Amendments and Additions to the Convention between the Government of the Republic of Kazakhstan and the Government of the Grand Duchy of Luxembourg on the Avoidance of double Taxation and the prevention of fiscal evasion with respect to taxes on income and capital, signed in Astana on June 26, 2008
The Government of the Republic of Kazakhstan and the Government of the Grand Duchy of Luxembourg, wishing to conclude a Protocol on Amendments and Additions to the Convention between the Government of the Republic of Kazakhstan and the Government of the Grand Duchy of Luxembourg for the Avoidance of Double Taxation and the Prevention of Tax Evasion in Respect of Taxes on Income and Capital, signed in Astana on June 26, 2008 (hereinafter - the "Convention"), have agreed on the following:
Article 1
Paragraph 3 of article 5 (permanent establishment) The Convention should be worded as follows:
"3. The term "permanent establishment" also includes:
a) a construction site, a construction, installation or assembly facility, or monitoring services related to them, if only such a site or facility has existed for more than 12 months or such services have been provided for more than 12 months;
(b) The provision of services, including consulting services, by an enterprise of a Contracting State through employees or other personnel employed by the enterprise for such purposes, but only if activities of this nature continue (for such or a related project) within the other Contracting State for more than 12 months.".
Article 2
In paragraph 5 of article 11 (percentages) of the Convention, delete the sentence: "Penalties for late payments are not considered as interest for the purposes of this article.".
Article 3
Article 25 (exchange of information) The Convention should be worded as follows:
"Article 25 Information exchange
1. The competent authorities of the Contracting States shall exchange information necessary for the implementation of the provisions of this Convention or the administration or application of national legislation relating to taxes of any kind and description levied on behalf of the Contracting States or their central or local authorities, insofar as taxation is not contrary to this Convention. The exchange of information is not limited to article 1.
2. Any information received by a Contracting State shall be considered confidential, as well as information obtained in accordance with the national legislation of that Contracting State, and will be disclosed only to persons or authorities (including courts and administrative authorities) engaged in the assessment or collection, enforcement or prosecution, or consideration of appeals in respect of taxes referred to in paragraph 1. Such persons or authorities may use the information only for such purposes. They may disclose information during an open court hearing or when making court decisions.
3. The provisions of paragraphs 1 and 2 may not be interpreted as imposing an obligation on a Contracting State.:
(a) To take administrative measures contrary to the laws and administrative practices of that or another Contracting State;
(b) To provide information that cannot be obtained under the laws or in the ordinary course of administrative practice of that or the other Contracting State;
(c) To provide information that 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 publik).
4. If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall take measures to collect the requested information, even if such information is not required by that other State for its own tax purposes. The obligation contained in the previous sentence is subject to the limitations of paragraph 3, but such limitations cannot be interpreted as allowing a Contracting State to refuse to provide information solely because there is no intrinsic interest in such information.
5. The provisions of paragraph 3 may not be interpreted as authorizing a Contracting State to refuse to provide information solely because the holder of the information is a bank, another financial institution, a nominee holder or a person acting as an agent or attorney, or because the information concerns a person with ownership rights."
Article 4
For the purpose of applying article 25 of the Convention:
The competent authority of the requesting Contracting State shall provide the following information to the competent authority of the requested Contracting State when submitting a request for information in order to obtain relevant information on the request:
a) last name, first name, name of the natural or legal person being investigated or checked;
(b) A comment on the requested information, including its nature and the form in which the requesting State wishes to receive the information from the requested State;
(c) The tax purposes for which the information is requested;
(d) The grounds for assuming that the requested information is located in the requested State or in the possession or under the control of a person subject to the jurisdiction of the requested State;
f) surname, first name, name and address of the person suspected of having the requested information, if known.;
(f) A statement that the requesting State has used all available means in its territory to obtain information, with the exception of those that would lead to disproportionate difficulties.
Information is exchanged in English.
Article 5
1. This Protocol is subject to ratification. The Contracting States shall notify each other in writing through diplomatic channels of the completion of the internal procedures necessary for the entry into force of this Protocol.
2. This Protocol shall enter into force on the date of receipt of the last of the notifications referred to in paragraph 1. The provisions of this Protocol shall apply for taxable periods beginning on or after the first of January of the calendar year following the year of entry into force of this Protocol.
In witness whereof, the undersigned, being duly authorized thereto, have signed this Protocol.
Done in Luxembourg city on May 03, 2012, in two copies in the Kazakh, Russian, French and English languages, all texts being equally authentic.
For the Government
For the Government of the Great
Republic of Kazakhstan
The Duchy of Luxembourg
RCPI's note!
The following is the text in English and French.
President
Republic of Kazakhstan
© 2012. RSE na PHB "Institute of Legislation and Legal Information of the Republic of Kazakhstan" of the Ministry of Justice of the Republic of Kazakhstan
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