Agreement between the Government of the State of QATAR and the Government of the Republic of ECUADOR for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income
Agreement between the Government of the State of QATAR and the Government of the Republic of ECUADOR for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income
The Government of the State of Qatar and the Government of the Republic of Ecuador,
Desiring to conclude an Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income,
Have agreed as follows:
Contents
Article 3 - General Definitions
Article 5 - Permanent Establishment
Article 6 - Income from Immovable Property
Article 8 - Shipping and Air Transport
Article 9 - Associated Enterprises
Article 14 - Independent Personal Services
Article 15 - Dependent Personal Services
Article 17 - Artistes and Sportspersons
Article 18 - Pensions and Annuities
Article 19 - Government Service
Article 20 - Teachers and Researchers
Article 21 - Students, Business Trainees or Apprentices
Article 23 - Elimination of Double Taxation
Article 24 - Non-Discrimination
Article 25 - Limitation of Benefits
Article 26 - Mutual Agreement Procedure
Article 27 - Exchange of Information
Article 28 - Members of Diplomatic Missions and Consular Posts
Article 1
Persons Covered
This Agreement shall apply to persons who are residents of one or both of the Contracting States.
Article 2
Taxes Covered
This Agreement shall apply to taxes on income imposed on behalf of a Contracting State or of its political subdivisions or local authorities, irrespective of the manner in which they are levied.
There shall be regarded as taxes on income, all taxes imposed on total income or on elements of income, including taxes on gains from the alienation of movable or immovable property.
The existing taxes to which this Agreement shall apply are, in particular:
in the case of Qatar:
Taxes on income;
(hereinafter referred to as "Qatari tax");
in the case of Ecuador:
The income tax;
(hereinafter referred to as "Ecuadorian tax").
The Agreement shall apply also to any identical or substantially similar taxes, that are imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any substantial changes, which have been made in their respective taxation laws.
Article 3
General Definitions
For the purposes of this Agreement, unless the context otherwise requires:
the term "Qatar" means the State of Qatar and, when used in the geographical sense it means the State of Qatar's lands, internal waters, territorial sea including its bed and subsoil, the air space over them, the exclusive economic zone and the continental shelf, over which the State of Qatar exercises sovereign rights and jurisdiction in accordance with the provisions of international laws and the Qatar's national laws and regulations;
the term "Ecuador" means the Republic of Ecuador. When used in a geographical sense, the term "Ecuador" means the territory of Ecuador, including the territorial sea thereof, subsoil and other territories over which Ecuador exercises sovereignty, sovereign rights or jurisdiction in accordance with its local and international laws;
the terms "a Contracting State" and "the other Contracting State" mean Qatar or Ecuador, as the
context requires;
the term "person" includes an individual, a company and any other body of persons;
the term "company" means any body corporate or any entity that is treated as a body corporate
for tax purposes;
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;
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;
the term "competent authority" means:
in the case of Qatar, the Minister of Economy and Finance, or his authorized representative, and
in the case of Ecuador, the General Director of the Internal Revenue Service (Servicio de Rentas Internas) or his authorized representative;
the term "national", in relation to a Contracting State, means:
any individual possessing the nationality of a Contracting State; and
any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State.
As regards the application of the Agreement at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Agreement applies; any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State.
Article 4
Resident
For the purposes of this Agreement, the term "resident of a Contracting State" means:
in the case of Qatar, any individual who has a permanent home, his center of vital interest, or habitual abode in Qatar and a company incorporated or having its place of effective management in Qatar. The term also includes the State of Qatar and any political subdivision, local authority or statutory body thereof;
in the case of Ecuador, any person who, under the law of Ecuador, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature, and also includes the Ecuadorian State and any political subdivision or local authority thereof. This term, however, does not include any person who is liable to tax in Ecuador in respect only of income from sources in Ecuador.
Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:
he shall be deemed to be a resident only of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident only of the Contracting State with which his personal and economic relations are closer (center of vital interests);
if the State in which he has his center of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, he shall be deemed to be a resident only of the Contracting State in which he has an habitual abode;
if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident only of the Contracting State of which he is a national;
if the residence status of an individual cannot be determined in accordance with the provisions of subparagraphs (a), (b) and (c) above, then the competent authorities of the Contracting States shall settle the question by mutual agreement.
Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident only of the State of which it is a national. If it is a national of both Contracting States, they shall endeavor to settle the question through a mutual agreement procedure. In absence of such agreement between the competent authorities of the Contracting States, such person shall not have the right to demand any relief or tax exemption under this Agreement.
Article 5
Permanent Establishment
For the purposes of this Agreement, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on.
The term "permanent establishment" includes especially:
a place of management;
a branch;
an office;
a factory;
a workshop;
a sales outlet;
a farm or plantation, and
a mine, an oil or gas well, a quarry or any other place of exploration, extraction or exploitation of natural resources.
The term "permanent establishment" also encompasses:
a building site, a construction, assembly or installation project or supervisory activity in connection with such site or project, but only where such site, project or activity continues for a period or periods aggregating more than six months within any twelve- month period; and
the furnishing of services, including consultancy services, by an enterprise through employees or other personnel engaged by the enterprise for such purpose, but only if the activities of that nature continue (for the same or a connected project) within a Contracting State for a period or periods aggregating more than 183 days within any twelve-month period.
Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall be
deemed not to include:
the use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise;
the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display;
the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;
the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise;
the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character;
the maintenance of a fixed place of business solely for any combination of activities mentioned in subparagraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.
Notwithstanding the provisions of paragraphs 1 and 2, where a person - other than an agent of an independent status to whom paragraph 7 applies- is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 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.
Notwithstanding the preceding provisions of this Article, an insurance enterprise of a Contracting State shall, except in regard to re-insurance, be deemed to have a permanent establishment in the other Contracting State if it collects premiums in the territory of that other State or insures risks situated therein through a person other than an agent of an independent status to whom paragraph 7 applies.
An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, and conditions are made or imposed between that enterprise and the agent in their commercial and financial relations which differ from those which would have been made between independent enterprises, he will not be considered an agent of an independent status within the meaning of this paragraph.
The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.
Article 6
Income from Immovable Property
Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.
The term "immovable property" shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships and aircrafts shall not be regarded as immovable property.
The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.
The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.
Article 7
Business Profits
The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.
Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.
In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere, which are allowed under the provisions of the domestic law of the Contracting State in which the permanent establishment is situated.
In so far as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article.
No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.
For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.
Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article.
Article 8
Shipping and Air Transport
Profits 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.
For the purposes of this Article:
the term "profits" includes:
the gross revenue arising from the operation of ships or aircraft in international traffic, and
interest on sums generated directly from the operation of ships or aircraft in international traffic, provided that such interest is incidental to the operation.
the term "operation of a ship or aircraft" by an enterprise, also includes:
charter or rental of ships or aircraft on a bareboat basis;
rental of containers and related equipment. if the charter or rental income is incidental to profits from the operation -by that enterprise- of ships or aircraft in international traffic.
The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.
Article 9
Associated Enterprises
Where:
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 either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.
Where a Contracting State includes in the profits of an enterprise of that State - and taxes accordingly - profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State - if it is in agreement - shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Agreement and the competent authorities of the Contracting States shall if necessary consult each other.
Article 10
Dividends
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 Contracting State.
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:
5 percent of the gross amount of the dividends if the beneficial owner is a company that owns directly at least 10 percent of the voting stock of the company paying the dividends;
10 percent of the gross amount of the dividends in all other cases;
The provisions of this paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.
Notwithstanding the provisions of paragraphs 1 and 2, dividends paid by a company which is a resident of a Contracting State shall be taxable only in the other Contracting State if the beneficial owner of the dividends is:
In the case of Qatar:
the Government, a political subdivision or a local authority;
the following entities as long as they are wholly owned by the State of Qatar:
Qatar Investment Authority,
Qatar Holding,
Qatar Retirement Fund,
Qatar Development Bank,
Qatar Central Bank,
Qatar International Oil Company, and
Any other State's entities as may be specified, according to the domestic legislation and notified to the competent authority of the other Contracting State;
In the case of Ecuador:
the Government, a political subdivision or a local authority;
the following entities as long as they are wholly owned by the Government of Ecuador:
The Central Bank of Ecuador, and
Any other governmental institutions as may be specified, according to the domestic legislation and notified to the competent authority of the other Contracting State.
The term "dividends" as used in this Article means income from shares or other rights, not being debt- claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the Contracting State of which the company making the distribution is a resident.
The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other Contracting State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply.
Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the 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 to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.
Article 11
Interest
Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other Contracting State.
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 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 of the interest. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of these limitations.
Notwithstanding the provisions of paragraphs 1 and 2, interest arising in a Contracting State and paid to the Government of the other Contracting State shall be exempt from tax in the first mentioned State.
For the purposes of paragraph 3, the term "Government" shall include:
In the case of Qatar:
the Government, a political subdivision or a local authority;
the following entities as long as they are wholly owned by the State of Qatar:
Qatar Investment Authority,
Qatar Holding,
Qatar Retirement Fund,
Qatar Development Bank,
Qatar Central Bank,
Qatar International Oil Company, and
Any other State's entities as may be specified, according to the domestic legislation and notified to the competent authority of the other Contracting State;
In the case of Ecuador:
the Government, a political subdivision or a local authority;
the following entities as long as they are wholly owned by the Government of Ecuador:
The Central Bank of Ecuador, and
Any other governmental institutions as may be specified, according to the domestic legislation and notified to the competent authority of the other Contracting State.
The term "interest" as used in this Article means income from debt claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article.
The provisions of paragraphs 1 and 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 establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.
Interest shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base, in connection with which the indebtedness on which the interest is paid and such interest is borne by such a permanent establishment or fixed base then such interest shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base, is situated.
Where, by reason of a special relationship between the payer and the beneficial owner of the interest or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.
Article 12
Royalties
Royalties arising in a Contracting State and beneficially owned by a resident of the other Contracting State may be taxed in that other State.
However, such royalties may also be taxed in the Contracting State in which they arise 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 per cent of the gross amount of the royalties.
The term "royalties" as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, or films or tapes used for radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience.
The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply.
Royalties shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment or fixed base, then such royalties shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.
Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.
Article 13
Capital Gains
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.
Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such fixed base, may be taxed in that other State.
Gains 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 the Contracting State where the alienator is a resident.
Gains derived by a resident of a Contracting State from the alienation of shares or deriving more than 50 per cent of their value directly or indirectly from immovable property situated in the other Contracting State may be taxed in that other State.
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.
Article 14
Independent Personal Services
Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State except in the following circumstances, when such income may also be taxed in the other Contracting State:
if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; in that case, only so much of the income as is attributable to that fixed base may be taxed in that other Contracting State; or
if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the aggregate 183 days in any twelve-month period commencing or ending in the taxable year concerned; in that case, only so much of the income as is derived from his activities performed in that other State may be taxed in that other State.
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, accountants and auditors.
Article 15
Dependent Personal Services
Subject to the provisions of Article 16, 18 and 19, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.
Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first- mentioned State if:
the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 (one hundred eighty three) days in any twelve-month period commencing or ending in the taxable year concerned; and
the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and
the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.
Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State may be taxed in that Contracting State.
Article 16
Directors' Fees
Directors' fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State.
Article 17
Artistes and Sportspersons
Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theater, motion picture, radio or television artiste, or a musician, or as a sportsperson, from his/her personal activities as such exercised in the other Contracting State, may be taxed in that other State.
Where income in respect of personal activities exercised by an entertainer or a sportsperson in his/her capacity as such accrues not to the entertainer or sportsperson himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or sportsperson are exercised.
Income derived by a resident of a Contracting State from activities exercised in the other Contracting State as envisaged in paragraphs 1 and 2 of this Article, shall be exempted from tax in that other State if the visit to that other State is supported wholly by funds of either Contracting State, a political subdivision or a local authority thereof, or takes place under a cultural agreement or arrangement between the Governments of the Contracting States.
Article 18
Pensions and Annuities
Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration, in consideration of past employment, and annuities paid to a resident of a Contracting State shall be taxable only in that State.
The term "annuity" means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time under an obligation to make the payments in return for
adequate and full consideration in money or money's worth.
Notwithstanding the provisions of paragraph 1 pensions paid and other payments made under public schemes, which are parts of the social security system of a Contracting State or a local authority thereof, shall be taxable only in that Contracting State.
Article 19
Government Service
Salaries, wages and other similar remuneration, other than a 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 subdivision or authority shall be taxable only in that State.
However, such salaries, wages and other 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 other State who:
is a national of that other State; or
did not become a resident of that other State solely for the purpose of rendering the services.
Any pension paid by, or out of funds created 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 subdivision or authority shall be taxable only in that State.
However, such pensions shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.
The provisions of Articles 15, 16, 17 and 18 of this Agreement shall apply to salaries, wages, pensions and other similar remuneration in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof.
Article 20
Teachers and Researchers
An individual who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who, at the invitation of the Government of the first-mentioned Contracting State or of a university, college, school, museum or other cultural institution in that first-mentioned Contracting State or under an official programme of cultural exchange, is present in that Contracting State for a period not exceeding two consecutive years solely for the purpose of teaching, giving lectures or carrying out research at such institution shall be exempt from tax in that Contracting State on his remuneration for such activity.
The provisions of paragraph 1 of this Article shall not apply to income from research if such research is undertaken not in the public interest but for the private benefit of a specific person or persons.
Article 21
Students, Business Trainees or Apprentices
Payments which a student or business trainee or 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 the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State.
In respect of grants, scholarship and remuneration from employment not covered by paragraph 1, a student, business trainee or apprentice described in paragraph 1 shall, in addition, be entitled during such education or training to the same exemptions, reliefs or reductions in respect of taxes available to residents of the State which he is visiting.
Article 22
Other Income
Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Agreement shall be taxable only in that State.
The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, derived by a resident of a Contracting State, if the recipient of such income carries on business in the other Contracting State through a permanent establishment situated therein, or performs in the other State independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply.
Article 23
Elimination of Double Taxation
In the case of Qatar double taxation shall be eliminated as follows:
Where a resident of Qatar derives income which, in accordance with the provisions of this Agreement, is taxable in Ecuador, then Qatar shall allow as a deduction from the tax on income of that resident an amount equal to the income tax paid in Ecuador provided that such deduction shall not exceed that part of the tax, as computed before the deduction is given, which is attributable to the income derived from Ecuador.
In the case of Ecuador, double taxation shall be eliminated as follows:
where a resident of Ecuador derives income which, in accordance with the provisions of this Agreement, may be taxed in Qatar, Ecuador shall, subject to the provisions of subparagraphs b) and c), exempt such income from tax;
where a resident of Ecuador derives items of income which, in accordance with the provisions of Articles 10, 11 and 12 may be taxed in Qatar, Ecuador shall allow as a deduction from the tax on the income of that resident an amount equal to the tax paid in Qatar. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable to such items of income derived from Qatar;
where in accordance with any provision of this Agreement income derived by a resident of Ecuador is exempt from tax in Ecuador, Ecuador may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income.
Article 24
Non-Discrimination
Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States.
The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favorably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.
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 disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State.
Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected 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 of the first- mentioned State are or may be subjected.
In this Article the term "taxation" means taxes which are the subject of this Agreement.
Article 25
Limitation of Benefits
Notwithstanding the provisions of any other Article of this Agreement, a resident of a Contracting State shall not receive the benefits or any reduction in or exemption from tax provided for in the Agreement by the other Contracting State if the main purpose or one of the main purposes of such resident or a person connected with such resident was to obtain the benefits of the Agreement.
Article 26
Mutual Agreement Procedure
Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Agreement, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 of Article 24, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Agreement.
The competent authority shall endeavor, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Agreement. Any agreement reached will be implemented, notwithstanding any time limits in the domestic legislation of the Contracting States.
The competent authorities of the Contracting States shall endeavor to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. They may also consult together for the elimination of double taxation in cases not provided for in the Agreement.
The competent authorities of the Contracting States may communicate with each other directly, including through a joint commission consisting of themselves or their representatives, for the purpose of reaching an agreement in the sense of the preceding paragraphs.
Article 27
Exchange of Information
The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant for carrying out the provisions of this Agreement or to the administration or enforcement of the domestic laws of the Contracting States concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their political subdivisions or local authorities, insofar as the taxation thereunder is not contrary to the Agreement. The exchange of information is not restricted by Articles 1 and 2 of this Agreement.
Any information received under paragraph 1 of this Article 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) concerned with the assessment or collection of, the enforcement or prosecution in respect of, the determination of appeals in relation to, the taxes referred to in paragraph 1 of this Article. 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.
In no case shall the provisions of paragraphs 1 and 2 of this Article be construed so as to impose on a Contracting State the obligation:
to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;
to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;
to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information the disclosure of which would be contrary to public policy (ordre public).
If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall use its information gathering measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 of this Article but in no case shall such limitations be construed to permit a Contracting State to decline to supply information solely because it has no domestic interest in such information.
In no case shall the provisions of paragraph 3 of this Article be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.
Article 28
Members of Diplomatic Missions and Consular Posts
Nothing in this Agreement shall affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements.
Article 29
Entry into Force
The Contracting State shall notify the other in writing, through diplomatic channels, of the completion of the procedures required by their laws for the bringing into force of this Agreement. The Agreement shall enter into force on the date of the later of these notifications.
The provisions of this Agreement shall have effect:
with regard to taxes withheld at source, in respect of amounts paid or credited on or after the first day of January of the calendar year immediately following the year in which the Agreement enters into force; and
with regard to other taxes, in respect of taxable years beginning on or after the first day of January of the calendar year immediately following the year in which the Agreement enters into force.
Article 30
Termination
This Agreement shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Agreement, through diplomatic channels, by giving written notice of termination 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.
This Agreement shall cease to have effect:
with regard to taxes withheld at source, in respect of amounts paid or credited on or after the first day of January of the calendar year immediately following the year in which the notice is given; and
with regard to other taxes, in respect of taxable years beginning on or after the first day of January of the calendar year immediately following the year in which the notice is given,
In WITNESS WHEREOF, the undersigned, duly authorized thereto, have signed this Agreement.
Done at DOHA on the 22/10/2014, in two identical originals each in the Arabic, Spanish and English languages, all texts being equally authentic. In case of any divergence the English text shall prevail.
Protocol
At the moment of signing the Agreement between the Government of the State of Qatar and the Government of the Republic Of Ecuador for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, the undersigned have agreed upon the following provisions which shall be an integral part of the Agreement.
With reference to paragraph 3 of Article 7:
It is understood that the Contracting State where the permanent establishment is located shall recognize its expenses if it complies with the formal requirements set out in the domestic laws of that Contracting State.
With reference to Article 16:
It is understood that the term "board of directors" includes "management board".
With reference to paragraph 1 of Article 17:
It is understood that the income referred to in this paragraph shall include the income that the resident obtains from any personal activity exercised in the other Contracting State relating to its reputation as entertainer or sportsperson.
With reference to paragraph 3 of Article 18:
It is understood that the term "annuities" means annuities paid by the Government of a Contracting State, its political subdivisions or local authorities, according to its domestic law.
With reference to paragraph 2 of Article 21:
It is understood that the "exemptions, reliefs or reductions" referred to in this paragraph are granted according to the domestic law of the Contracting State which the student, business trainee or apprentice is visiting.
With reference to Article 24:
In the case of Qatar, its understood that the non taxation of Qatari nationals under Qatari tax law shall not be regarded as a discrimination under the provision of this article.
With reference to Article 27:
The competent authority of a Contracting State shall provide information upon request, understanding that its provisions shall not prevent the Contracting States from exchanging information automatically or spontaneously;
The competent authority of the requested Contracting State shall forward the requested information as promptly as possible to the competent authority of the requesting Contracting State. To ensure a prompt response, the competent authority of the requested Contracting State shall:
confirm receipt of a request in writing to the competent authority of the requesting Contracting State and shall notify the competent authority of the requesting Contracting State of deficiencies in the request, if any, within 60 days of receipt of the request; and
provide the requested information to the competent authority of the requesting Contracting State within a maximum period of 90 days as of receipt of the request; or provide an update if the requested State has been unable to provide the information within the 90 days period to the requesting State, including to inform the competent authority of that State of the nature of the obstacles encountered, the reasons of its inability or the reasons of its refusal, if any.
In WITNESS WHEREOF, the undersigned, duly authorised thereto, have signed this Protocol.
Done at DOHA on the 22/10/2014 in two identical originals each in the Arabic, Spanish and English languages, all texts being equally authentic. In case of any divergence the English text shall prevail.
About This Tax Treaty
This Double Taxation Avoidance Agreement between UAE and Ecuador provides:
- Elimination of double taxation on income and capital
- Prevention of tax evasion and avoidance
- Clear residence rules for tax purposes
- Reduced withholding taxes on cross-border payments