Agreement between the Government of the UNITED ARAB EMIRATES and the Government of the ISLAMIC FEDERAL REPUBLIC OF THE COMOROS for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital Gains

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

1. This Agreement shall apply to taxes on income and capital gains imposed on behalf of a Contracting State or of its political administrative subdivisions or local authorities, irrespective of the manner in which they are levied.

2. There shall be regarded as taxes on income and on capital gains all taxes imposed on total income, on total capital, including taxes on gains from the alienation of movable and immovable property, and taxes on the total amounts of wages and salaries paid by enterprises.

3. The existing taxes to which this Agreement shall apply are in particular:

   1. In the case of the United Arab Emirates:

      1. Income Tax.

      2. Corporate Tax.

      (hereinafter referred to as "UAE Tax")

   2. In the case of the Islamic Federal Republic of the Comoros:

      1. Income Tax.

      2. Corporate Tax.

      3. Tax on Capital Gains.

      (hereinafter referred to as "Comoros Tax")

4. The Agreement shall also apply to any identical or substantially similar taxes that are imposed after the date of signature of this Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes that have been made in their respective taxation laws.

Article 3
Income from Hydrocarbons

Nothing in this Agreement shall affect the right of either of the Contracting States, or any of their local governments or local authorities, to apply their domestic laws and regulations regarding taxes on income, profits, and capital derived from hydrocarbons and related activities situated in the territory of the respective Contracting State, as the case may be.

Article 4
General Definitions

1. For the purposes of this Agreement, unless the context otherwise requires:

   1. The term "United Arab Emirates" means the United Arab Emirates.

   2. The term "Islamic Federal Republic of the Comoros" means the Islamic Federal Republic of the Comoros.

   3. The terms "Contracting State" and "the other Contracting State" mean the United Arab Emirates or the Federal Republic of the Comoros, as the context requires; and the term "Contracting States" means the United Arab Emirates and the Federal Republic of the Comoros.

   4. The term "person" includes an individual, a company, a legal entity, or any other body of persons.

   5. The term "company" means any body corporate or any entity that is treated as a body corporate for tax purposes.

   6. The term "enterprise" applies to the carrying on of any business.

   7. 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.

   8. 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.

   9. The term "competent authority" means:

      1. In the case of the United Arab Emirates: The Ministry of Finance or its authorized representative.

      2. In the case of the Islamic Federal Republic of the Comoros: The Ministry of Finance or its authorized representative.

   10. The term "national", in relation to a Contracting State, means:

       1. Any individual possessing the nationality of that Contracting State.

       2. Any legal person, partnership, or association deriving its status as such from the laws in force in that Contracting State or a political subdivision or local government thereof.

2. As regards the application of this 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 laws 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 5
Resident

1. For the purposes of this Agreement, the term "resident of a Contracting State" means:

   1. In the case of the United Arab Emirates:

      1. An individual who, under the laws of the United Arab Emirates or any of its political subdivisions or local governments, is considered a national.

      2. Any person other than an individual who is established or recognized under the laws of the United Arab Emirates or any political subdivision or local government thereof.

   2. In the case of the Islamic Federal Republic of the Comoros:

      Any person who, under the laws of that State, 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 that State and any political subdivision or local authority thereof.

      However, this term shall not include any person who is liable to tax in that State only in respect of income from sources in that State or capital situated therein.

2. For the purposes of paragraph 1, a resident of a Contracting State includes:

   1. The Government of that Contracting State and any political-administrative subdivision, local government, or local authority thereof;

   2. Any person other than an individual owned or managed directly or indirectly by that State or any political subdivision, local government, or local authority thereof;

   3. A qualified government entity;

   4. A pension fund;

   5. Charitable, religious, educational, and cultural organizations.

3. Where by reason of the provisions of paragraph (1) of this Article an individual is a resident of both Contracting States, then his status shall be determined as follows:

   1. He shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (center of vital interests).

   2. If the Contracting 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 State, he shall be deemed to be a resident of the State in which he has an habitual abode.

   3. If he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national.

   4. If he is a national of both Contracting States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

4. Where by reason of the provisions of paragraph (1) of this Article a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the Contracting State in which its place of effective management is situated.

Article 6
Permanent Establishment

1. For the purposes of this Agreement, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

2. The term "permanent establishment" includes especially:

   1. A place of management;

   2. A branch;

   3. An office;

   4. A factory;

   5. A workshop;

   6. A mine, an oil or gas well, a quarry, or any other place of exploration or extraction of natural resources and any related activities, including an offshore drilling site.

3. A building site, a construction, assembly or installation project, or supervisory activities in connection therewith, or a drilling rig or ship used for the exploration or exploitation of natural resources, constitutes a permanent establishment only if such project or activities continue for a period of more than six months.

4. The furnishing of services, including consultancy or management services, by an enterprise of a Contracting State through employees or other personnel engaged by the enterprise for such purpose, in the other Contracting State constitutes a permanent establishment only if activities of that nature continue for a period or periods aggregating more than six months.

5. Notwithstanding the provisions of this Article, the term "permanent establishment" shall be deemed not to include:

   1. The use of facilities solely for the purpose of storage, display, or delivery of goods or merchandise belonging to the enterprise;

   2. The maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display, or delivery;

   3. The maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

   4. The maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information for the enterprise;

   5. The maintenance of a fixed place of business solely for the purpose of advertising, collecting information, scientific research, or similar activities which have a preparatory or auxiliary character for the enterprise;

   6. 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;

   7. The maintenance of a fixed place of business solely for any combination of activities mentioned in subparagraphs (a) to (f), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.

6. Notwithstanding the provisions of paragraphs (1) and (2) of this Article, 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 (5) 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.

7. 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.

8. 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 7
Income from Immovable Property

1. 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 Contracting State.

2. The term "immovable property" shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships and aircraft shall not be regarded as immovable property.

3. The provisions of paragraph (1) of this Article shall apply to income derived from the direct use, letting, or use in any other form of immovable property.

4. The provisions of paragraphs (1) and (3) of this Article 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.

5. The provisions of paragraphs (1) and (3) of this Article shall not apply if the beneficial owner of the income is the State itself, local authorities, political-administrative subdivisions, local governments, or their financial institutions.

Article 8
Business Profits

1. 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 Contracting State but only so much of them as is attributable to that permanent establishment.

2. Subject to the provisions of paragraph (3) of this Article, 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.

3. In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere.

4. Insofar 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) of this Article 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.

5. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

6. For the purposes of 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.

7. Where profits include items of income or gains 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 9
Shipping and Air Transport

Notwithstanding the provisions of Article 8 of this Agreement:

1. Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

2. If the place of effective management of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship is a resident.

3. For the purposes of this Article, profits from the operation of ships or aircraft in international traffic include:

   1. Profits from the rental on a bareboat basis of ships or aircraft;

   2. Profits from the use, maintenance, or rental of containers, including trailers and related equipment for the transport of containers, used for the transport of goods or merchandise.

4. In the case of the United Arab Emirates, the provisions of paragraph 1 of this Article shall also apply to profits derived from:

   1. Participation in a pool, a joint business, or an international operating agency.

   2. The sale of tickets on behalf of another enterprise.

   3. Income from training schemes.

   4. Income from selling technical engineering to a third party.

   5. Income derived from deposits in banks, bonds, shares, stocks, and other debt instruments.

Article 10
Associated Enterprises

1. Where:

   1. 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

   2. the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State,

   and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

2. Where a Contracting State includes in the profits of an enterprise of that Contracting State - and taxes accordingly - profits on which an enterprise of the other Contracting State has been charged to tax in that other Contracting State, and the profits so included are profits which would have accrued to the enterprise of the first-mentioned Contracting State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Agreement and the competent authorities of the Contracting States shall, if necessary, consult each other.

Article 11
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. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

   The term "dividends" as used in this Article means income from shares or other rights (not being debt-claims) participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident.

3. The provisions of paragraph (1) of this Article 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, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment. In such case the provisions of Article 8 or Article 15 of this Agreement shall apply.

4. 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 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 12
Interest

1. Interest arising in a Contracting State and beneficially owned by a resident of the other Contracting State shall be taxable only in that other Contracting State.

2. 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.

3. The provisions of paragraph (1) of this Article 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 Articles 8 and 15 of this Agreement shall apply.

4. 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 was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.

5. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.

Article 13
Royalties

1. Royalties arising in a Contracting State and beneficially owned by a resident of the other Contracting State shall be taxable only in that other State.

2. 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, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial, or scientific experience.

3. The provisions of paragraph (1) of this Article shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise through a permanent establishment situated therein, or performs in that other Contracting State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 8 or Article 15 of this Agreement shall apply.

4. Royalties shall be deemed to arise in a Contracting State when the payer is a resident of that Contracting State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment or fixed base, then such royalties shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.

5. 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 of the Contracting States, due regard being had to the other provisions of this Agreement.

Article 14
Capital Gains

1. Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 7 and situated in the other Contracting State may be taxed in that other State, but the tax imposed shall be reduced by an amount equal to 50% of such tax.

2. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such fixed base, may be taxed in that other State.

3. 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 that Contracting State in which the place of effective management is situated.

4. Gains from the alienation of any property other than that referred to in paragraphs 1, 2 and 3, shall be taxable only in the Contracting State of which the alienator is a resident.

Article 15
Independent Personal Services

1. 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 unless he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities. If he has such a fixed base, the income may be taxed in the other Contracting State but only so much of it as is attributable to that fixed base.

2. The term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, architects, dentists and accountants.

Article 16
Income from Employment

1. Subject to the provisions of Articles 17, 19, 20 and 21 of this Agreement, 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.

2. Notwithstanding the provisions of paragraph (1) of this Article, 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:

   1. The recipient is present in the other Contracting State for a period or periods not exceeding in the aggregate 183 days in any 12 month period commencing or ending in the fiscal year concerned; and

   2. The remuneration is paid by, or on behalf of, an employer who is not a resident of the other Contracting State; and

   3. The remuneration is not borne by a permanent establishment which the employer has in the other State.

3. 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 shall be taxable only in the State in which the place of effective management is situated.

4. An individual who is a national of a Contracting State and an employee of an enterprise of that Contracting State the principal activity of which is the operation of aircraft in international traffic, and who derives remuneration in respect of duties performed in the other Contracting State, shall be taxable only in that Contracting State.

Article 17
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 Contracting State.

Article 18
Artistes and Sportspersons

1. Notwithstanding the provisions of Articles 8, 15 and 16 of this Agreement, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsperson, from his personal activities as such exercised in the other Contracting State, may be taxed in that other Contracting State.

2. Where income in respect of personal activities exercised by an entertainer or a sportsperson in his capacity as such accrues not to the entertainer or sportsperson himself but to another person, that income may, notwithstanding the provisions of Articles 8, 15 and 16 of this Agreement, be taxed in the Contracting State in which the activities of the entertainer or sportsperson are exercised.

3. Notwithstanding the preceding provisions of this Article, income derived by entertainers or sportspersons who are residents of a Contracting State from activities exercised in the other Contracting State under a cultural exchange program between the Governments of both Contracting States shall be exempt from tax in that other State.

Article 19
Pensions and Annuities

Subject to the provisions of paragraph (2) of Article 20 of this Agreement, pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that Contracting State.

Article 20
Government Service

1. 1. 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 Contracting State or political subdivision or local authority shall be taxable only in that State.

   2. 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 who:

      1. Is a national of that State;

      2. Did not become a resident of that State solely for the purpose of rendering the services.

2. 1. Notwithstanding the provisions of paragraph (1), any pension and any similar remuneration 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 political subdivision or local authority shall be taxable only in that State.

   2. However, such pension and other similar remuneration shall be taxable in the other Contracting State if the individual is a resident of, and a national of, that other State.

3. The provisions of Articles 16, 17, 18 and 19 shall apply to salaries, wages, remuneration, and pensions 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 21
Students

1. Payments which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for 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 any case, scholarships and other grants shall not be taxable in either of the Contracting States.

2. Remuneration which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State derives from an employment which he exercises in the first-mentioned State for a period or periods not exceeding in the aggregate 183 days in the fiscal year concerned shall not be taxed in the first-mentioned State if the employment is directly related to his studies or training in that other State.

Article 22
Other Income

1. 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.

2. The provisions of paragraph (1) shall not apply to income, other than income from immovable property as defined in paragraph (2) of Article 7, if the beneficial owner of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base 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 8 or Article 15 of this Agreement shall apply.

3. Notwithstanding the provisions of paragraphs (1) and (2), items of income of an individual who is a resident of a Contracting State and arising in the other Contracting State may be taxed in that other State.

Article 23
Government Income and Institutions

1. Notwithstanding any other provisions of this Agreement, except Article 3, the Government of a Contracting State shall be exempt from tax in the other Contracting State in respect of any income derived by that Government from that other Contracting State.

2. For the purposes of paragraph 1 of this Article, the term "Government" means:

   1. In the case of the Islamic Federal Republic of the Comoros, it means:

      1. The Government of the Federal Republic of the Comoros;

      2. Any institution the capital of which is wholly owned by the Government of the Islamic Federal Republic of the Comoros, including one of its political subdivisions and local authorities, as may be agreed upon from time to time between the Governments of the Contracting States through the exchange of diplomatic notes;

   2. In the case of the United Arab Emirates, it means the Government of the United Arab Emirates and includes:

      1. The Central Bank of the United Arab Emirates;

      2. Abu Dhabi Investment Authority;

      3. International Petroleum Investment Company;

      4. Abu Dhabi Investment Council;

      5. Investment Corporation of Dubai; and

      6. Any other similar institution the capital of which is wholly owned by the Government of the United Arab Emirates, including one of its political subdivisions and local authorities, as may be agreed upon from time to time between the Governments of the Contracting States through the exchange of diplomatic notes:

         1. Political subdivisions, local authorities, local administrations, and local governments.

         2. The Central Bank of the United Arab Emirates, Abu Dhabi Investment Authority, Abu Dhabi Fund for Development, Abu Dhabi Investment Council, Emirates Investment Authority, Dubai World, and Pension Fund.

         3. Any institution or entity as agreed upon from time to time between the Contracting States.

Article 24
Capital

1. Capital represented by immovable property referred to in Article 7 of this Agreement, owned by a resident of a Contracting State and situated 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 in international traffic by an enterprise of a Contracting State and by movable property pertaining to the operation of such ships and aircraft shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

4. All other elements of capital of a resident of a Contracting State shall be taxable only in that State.

Article 25
Methods for Elimination of Double Taxation

1. 1. Where a resident of the Islamic Federal Republic of the Comoros derives income or owns capital which, in accordance with the provisions of this Agreement, may be taxed in the United Arab Emirates, the Islamic Federal Republic of the Comoros shall allow:

      1. As a deduction from the tax on the income of that resident, an amount equal to the income tax paid in the United Arab Emirates;

      2. As a deduction from the tax on the capital of that resident, an amount equal to the capital tax paid in the United Arab Emirates.

      Such deduction in either case shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable, as the case may be, to the income or the capital which may be taxed in the Islamic Federal Republic of the Comoros.

   2. Where in accordance with any provision of the Agreement income derived or capital owned by a resident of the Islamic Federal Republic of the Comoros is exempt from tax in the Islamic Federal Republic of the Comoros, the Union of the Comoros may nevertheless, in calculating the amount of tax on the remaining income or capital of such resident, take into account the exempted income or capital.

2. In the case of the United Arab Emirates:

   1. Where a resident of the United Arab Emirates derives income or profits which, in accordance with the provisions of this Agreement, may be taxed in the Islamic Federal Republic of the Comoros, the United Arab Emirates shall allow:

      1. As a deduction from the tax on the income of that resident, an amount equal to the income tax paid in the Islamic Federal Republic of the Comoros;

      2. As a deduction from the tax on the capital of that resident, an amount equal to the capital tax paid in the Islamic Federal Republic of the Comoros.

      Such deduction in either case shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable, as the case may be, to the income or the capital which may be taxed in the United Arab Emirates.

   2. Where in accordance with any provision of the Agreement income derived or capital owned by a resident of the United Arab Emirates is exempt from tax in the United Arab Emirates, the United Arab Emirates may nevertheless, in calculating the amount of tax on the remaining income or capital of such resident, take into account the exempted income or capital.

Article 26
Non-Discrimination

1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is more burdensome than the taxation and connected requirements to which nationals and residents of that other Contracting State in the same circumstances are or may be subjected, in particular with respect to residence. Notwithstanding the provisions of Article 1, this provision shall apply to persons who are not residents of one or both of the Contracting States.

2. Residents of a Contracting State shall not be subjected in either Contracting State to any taxation or any requirement connected therewith which is more burdensome than the taxation and connected requirements to which nationals of the State concerned in the same circumstances are or may be subjected, in particular with respect to residence.

3. Notwithstanding the provisions of paragraphs (1), (2), and (3), nothing in this Article shall be construed as affecting the right of the Contracting States to grant exemptions or reductions of taxation in accordance with their domestic laws, regulations, or administrative practices to their nationals who are residents of the other Contracting State. However, such exemption or reduction shall not apply in respect of such proportion of the capital of companies owned by persons who are nationals of the other Contracting State.

4. The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably 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.

5. Except where the provisions of paragraph (1) of Article 10, paragraph (5) of Article 12, or paragraph (5) of Article 13 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. Similarly, any debts of an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable capital of such enterprise, be deductible under the same conditions as if they had been contracted to a resident of the first-mentioned State.

6. An enterprise 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 more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned Contracting State are or may be subjected.

7. The provisions of this Article shall not be construed as a legal obligation on a Contracting State to grant to residents of the other Contracting State the benefits of any treatment, preference, or privilege which may be granted to any other State or its residents by virtue of a customs union, economic union, free trade zone, or by virtue of any regional or internal arrangement relating wholly or mainly to the movement of capital and/or taxation, to which the first-mentioned State may be a party.

8. The provisions of this Article shall, notwithstanding the provisions of Article 2, apply to taxes of every kind and description.

Article 27
Miscellaneous Provisions

1. The provisions of this Agreement shall not be construed to restrict in any manner any exclusion, exemption, deduction, credit, or other allowance now or hereafter granted:

   1. By the laws of a Contracting State in the determination of the tax imposed by that Contracting State;

   2. By any other special arrangement on taxation between the Contracting States or between one of the Contracting States and residents of the other Contracting State.

Article 28
Mutual Agreement Procedure

1. 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. 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.

2. The competent authority shall endeavour, 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 shall be implemented notwithstanding any time limits in the domestic law 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 Agreement. They may also consult together for the elimination of double taxation in cases not provided for in the Agreement.

4. The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs.

Article 29
Exchange of Information

1. 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 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.

2. Any information received under paragraph 1 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, or the determination of appeals in relation to the taxes referred to in paragraph 1, or the oversight of the above. 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.

3. In no case shall the provisions of paragraphs 1 and 2 be construed so as to impose on a Contracting State the obligation:

   1. To carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;

   2. 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;

   3. 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).

4. 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), 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.

5. In no case shall the provisions of paragraph (3) 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 30
Diplomatic and Consular Privileges

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 31
Amendments

Upon mutual agreement between the Contracting States, amendments and additions may be made to this Agreement, arranged in separate protocols which shall form an integral part of this Agreement. Such amendments shall enter into force in accordance with the provisions of Article 32 of this Agreement.

Article 32
Entry into Force

1. Each of the Contracting States shall notify the other in writing, through diplomatic channels, of the completion of the procedures required by its law for the ratification of this Agreement.

2. This Agreement shall enter into force on the date of receipt of the later of these notifications of the completion of the legal procedures required for the entry into force of this Agreement, and shall have effect:

   1. In respect of taxes withheld at source, on income derived on or after the first day of January in the calendar year next following the year in which the Agreement enters into force.

   2. In respect of other taxes on income and capital, for taxable periods beginning on or after the first day of January in the calendar year next following the year in which the Agreement enters into force.

Article 33
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 after the expiration of a period of five years from the date of its entry into force.

In such event, the Agreement shall cease to have effect:

1. In respect of taxes withheld at source, on income derived on or after the first day of January in the calendar year next following the year in which the notice is given.

2. In respect of other taxes on income and capital, for taxable periods beginning on or after the first day of January in the calendar year next following the year in which the notice is given.

Protocol

At the signing of this Agreement between the United Arab Emirates and the Islamic Federal Republic of the Comoros for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital, the undersigned have agreed that the following provisions shall form an integral part of this Agreement:

1. With reference to Article 10:

   It is understood that the re-examination of transactions between associated enterprises of a Contracting State shall be subject to prior consultation between the competent authorities of the Contracting States. However, the re-writing of the accounts of associated enterprises shall not be permitted if the transactions have been conducted in accordance with prevailing market prices (arm's length principle).

2. With reference to Article 14:

   For the purpose of interpreting Article 14, it is understood that paragraph (4) of Article 14 includes capital gains derived from the alienation of shares or any other interests of a similar nature in a company, other than those referred to in Article 14, derived by a resident of a Contracting State, including the government financial institutions or investment companies of that State.