Article 1
Persons Covered

This Convention shall apply to persons who are residents of one or both of the Contracting States.

Article 2
Taxes Covered

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

2. There shall be regarded as taxes on income all taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property, taxes on salaries and other similar remuneration as well as taxes on capital appreciation.

3. The existing taxes which are the subject of the present Convention are:

   1. In the case of the United Arab Emirates:

      1. the individual income tax

      2. the corporate tax

      (Hereinafter referred to as 'U.A.E tax ')

   2. In the case of Lebanon:

      1. the tax on the profits of industrial, commercial and non commercial professions;

      2. the tax on salaries, wages and pensions;

      3. the tax on income derived from movable capital;

      4. the tax on income from built property;

      (hereinafter referred to as 'Lebanese tax')

4. This Convention shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of this Convention in addition to, or in place of, the existing taxes referred to in paragraph 3. The competent authorities of the Contracting States shall notify each other of any significant changes which have been made in their taxation laws within a reasonable period of time after such changes.

Article 3
General Definitions

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

   1. the terms a 'Contracting State' and 'the other Contracting State' means the United Arab Emirates or Lebanon as the context requires;

   2. the terms 'United Arab Emirates' when used in a geographical sense means all the territory of the United Arab Emirates including its territorial waters, islands, special economic zone, continental shelf and airspace. It includes also natural resources in the sea-bed and marine sub-soil over which the United Arab Emirates exercise its sovereign rights in conformity with its national legislations and international law;

   3. the term 'Lebanon' means the territory of the Lebanese Republic including its territorial sea as well as the special economic zone over which Lebanon exercises its jurisdiction and sovereign rights in accordance with its internal law and international law, relating to the exploration and exploitation of the natural, biological, and mineral resources existing in the sea waters, sea-bed and subsoil of these waters;

   4. the term 'tax' means U.A.E tax or Lebanese tax as the context requires;

   5. the term 'person' includes an individual, a company and any other body of persons legally set up in either of the Contracting States;

   6. the term 'Corporate' means any body corporate or any entity that is treated as a body corporate for tax purposes;

   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 'national' means any individual possessing the nationality of a Contracting State and any legal person, partnerships and associations deriving their status as such from the law in force in that Contracting State;

   9. the term 'international traffic' means any transport by a ship, aircraft, railway or road vehicle operated by an enterprise which has its place of management in a Contracting State, except when such transport is operated solely between places situated in the other Contracting State;

   10. the term 'Competent authority' means:

       1. in the case of United Arab Emirates, the Minister of Finance and Industry or his authorized representative;

       2. in the case of Lebanon, the Minister of Finance or his authorized representative.

2. As regards the application of this Convention by a Contracting State any term not defined therein shall, unless the context otherwise requires, have the meaning that it has under the laws of that State for the purposes of the taxes to which the Convention applies.

Article 4
Resident

1. For the purposes of this Convention, the term 'resident of a Contracting State' means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. But this term does not include any person who is liable to tax in that State in respect only of income from sources in that State or capital situated therein.

2. For the purposes of paragraph 1 of this Article the term 'resident' shall include:

   1. the Government of a Contracting State or its political subdivisions or its local authorities or its administrative territorial units.

   2. any governmental institution legally set up such as the Central Bank, funds, institutions, commissions, agencies or any similar entities set up in a Contracting State.

   3. any governmental entities set up in a Contracting State in the capital of which this State hold a participation with other governments

3. 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:

   1. he shall be deemed to be a resident 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 of the Contracting State with which his personal and economic relations are closer (centre of vital interest);

   2. if the Contracting State, in which he has his centre of vital interests, cannot be determined, or if he has not a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the Contracting 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 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 5
Permanent Establishment

1. For the purposes of the present Convention, the term 'permanent establishment' means a fixed place of business in which the business of the 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 farm or a plantation;

   7. a mine, an oil or gas well, a quarry or other place of extraction of natural resources.

3. The term 'permanent establishment' likewise encompasses:

   1. a building site, a construction, assembly or installation project or supervisory activities in connection therewith, but only where such site, project or activities continue for a period of more than nine months in any period of twelve months;

   2. the furnishing of services, including consultancy services, by an enterprise of a Contracting State through employees or other personnel engaged for such purposes in the other Contracting State, provided that such activities continue for the same project or a connected project for a period of more than nine months in any period of twelve months.

4. Notwithstanding the preceding 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 or 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 sale of goods or merchandise belonging to the enterprise displayed in the frame of an occasional temporary fair or exhibition after the closing of the said fair or exhibition;

   5. the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, 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 sub-paragraphs 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.

5. 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.

6. Notwithstanding the preceding provisions of this Article, an insurance company, except for reinsurance, of a Contracting State shall be deemed to have a permanent establishment in the other Contracting State if it collects premiums on the territory of the other State or it insures risks situated therein through a person, other than an agent of an independent status to whom paragraph 7 applies.

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, a 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 to either company a permanent establishment of the other.

Article 6
Income from Immovable Property

1. Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other 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 all 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, aircrafts, boats, railway and road vehicles 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 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.

Article 7
Business Profits

1. The profits of an enterprise of a Contracting 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.

2. 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.

3. In the determination of 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 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 embodied in this Article.

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

6. For the purposes of the preceding sub-Articles, 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, which are dealt with separately in other articles of this Convention, then the provisions of those articles shall not be affected by the provisions of this article.

Article 8
Air, Shipping and Road Transport

1. Notwithstanding provision of article 7 of the present convention, income derived by an enterprise of a Contracting State from the operation of ships, aircrafts, trains or road vehicles in international traffic shall be taxable only in that Contracting State .

2. For the purposes of this Article, profits from the operation of ships or aircrafts or trains or road vehicles in international traffic shall include profits derived from the rental on a bareboat basis of ships or aircrafts or trains or road vehicles wherever rented, used or maintained according to the case depending on the operation of ships, aircrafts, trains or road vehicles in international traffic.

3. 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

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.

      Where 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 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 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 shall m ake 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 the present Convention and the competent authorities of the Contracting States shall, if necessary, consult each other.

Article 10
Dividends

1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State shall be taxed only in that other Contracting State.

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

2. The term 'dividends' as used in this Article means income from shares, 'jouissance' shares or 'jouissance' rights, mining shares, founders' 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 taxation laws of the State of which the company making the distribution is a resident.

1. The provisions of paragraphs 1 and 2 shall not apply if the effective (beneficial) owner of the dividends, being a resident of a Contracting State, carries on business in other Contracting State of which the company paying the dividends is a resident,

   through a permanent establishment situated therein, or performs in that other State 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.

2. 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
Interests

1. The interest arising in a Contracting State and paid to a resident of the other Contracting State shall be taxed only in that other 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 paragraphs 1 and 2 shall not apply if the effective (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.

4. Interest shall be deemed to arise in a Contracting State when the payer is a resident of that Contracting State according to article 4 of the present convention.

   However if the payer 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 a case, the interest shall be deemed to arise in the Contracting 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 the present Convention.

Article 12
Royalties

1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, such royalties may also be taxed in the Contracting State in which they arise and according to the laws of that State, the tax so charged shall not exceed 5% (5 per cent) of the gross amount of the royalties.

3. 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, and films or tapes for television or radio broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for information (industrial secret) concerning industrial, commercial or scientific experience.

4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, exercising an industrial or commercial activities 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 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 of Article 14, as the case may be, shall apply.

5. Royalties shall be deemed to arise in a Contracting State when the payer is 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 in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment, then such royalties shall be deemed to arise in the Contracting State in which the permanent establishment or the fixed base is situated.

6. 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 a 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 the present Convention.

Article 13
Capital Gains

1. Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 situated in the other Contracting State may be taxed in the Contracting State in which such property is situated.

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 the Contracting State in which the place of effective management of the enterprise 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 14
More Advantageous Fiscal Privileges

Where a Contracting State grants more advantageous tax privileges to a third country than those mentioned in the present Convention in accordance with any convention, protocol or other special directives, that advantageous treatment shall be applied for residents of that other Contracting State from the date of entry into force of such convention, protocol or those special directives.

Article 15
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 two subsequent circumstances, when such income may also be taxed in the other Contracting State:

1. if he has a fixed base regularly available to him in the other Contracting State for the purposes of performing his activities; or

2. if he is present in the other Contracting State for a period or periods exceeding in the aggregate 183 days in any twelve- month period commencing or ending in the fiscal year concerned.

In the cases referred to in subparagraph a) or b) the income may be taxed in the other Contracting State but only so much of it as is attributable to the fixed base or is derived from the activities performed in the period in which the resident was present 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 and accountants.

Article 16
Dependent Personal Services

1. Subject to the provisions of articles 16, 1819, 20 and 21 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 there from may be taxed in the 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 State for a period or periods not exceeding in the aggregate 183 days in any period of twelve months commencing or ending in the calendar year concerned; and

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

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

3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised abroad a ship or aircraft or railway or road vehicle in international traffic, may be taxed in the Contracting State in which the place of effective management of the enterprise is situated.

Article 17
Directors' Fees

Directors' fees and 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 18
Artistes and Athletes

1. Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artists, or musicians, or by sportsmen, from their personal activities, as such exercised in the other Contracting State, may be taxed in that other State.

2. Notwithstanding the provisions of paragraphs 1 and 2, income derived from the activities referred to in paragraph 1 performed under a cultural agreement between the Contracting States shall be exempt from tax in the Contracting State in which the activities are exercised.

Article 19
Pensions

1. Subject to the provisions of sub-Article 2 of the Article 19 pensions and similar remuneration paid to a resident of a Contracting State shall be taxable only in that State.

2. Notwithstanding the provisions of paragraph 1 of this Article pensions and other similar payments made under the social security legislation of a Contracting State shall be taxable only in that State.

Article 20
Government Functions

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 State or subdivision or 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; or

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

1. Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority or the administrative territorial units thereof to an individual in respect of services rendered to that State or subdivision or authority or administrative territorial units.

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

3. The provisions of Articles 15, 16 and 18 shall apply to remunerations or pensions in respect of services rendered in connection with business carried on by one of the Contracting State or a political or administrative subdivision or a local authority or the administrative territorial units thereof.

Article 21
Students and Trainees

1. 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 Contracting State solely for the purpose of his education or training shall be exempt from tax in the first-mentioned Contracting State on payments made to him for the purposes of his maintenance, education or training provided that such payments arise from sources outside that State.

2. Concerning grants, scholarships or awards for a service not included in paragraph 1, the student or the trainee mentioned in paragraph 1, shall furthermore, during the period of his study or training, be awarded the same exemptions, aids and deductions available to residents when he visits a Contracting State, concerning taxes on the condition that such grants, scholarships or awards are in relation with his educational or training program.

Article 22
Teachers, Professors and Researchers

1. An individual who is or was a resident of a Contracting State immediately before making a visit to the other Contracting State and who, at the invitation of any university, college, school or other similar non-profitable educational institution, which is recognized by the Government of that other Contracting State, is present in that other Contracting State for a period not exceeding three years from the date of his first arrival in that other Contracting State, solely for the purpose of teaching or research or both, at such educational institution shall be exempt from tax in that other Contracting State on his remuneration for teaching or research.

2. 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 23
Other Income

1. Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of the present Convention shall be taxable only in that State.

2. However, any such income derived by a resident of a Contracting State from sources in the other Contracting State may also be taxed in that other State.

3. The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment 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 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 24
Taxation of Capital

1. Capital represented by immovable property, as defined in paragraph 2 of Article 6, owned by a resident of a Contracting State and situated in the other Contracting State shall be taxed in the Contracting States in which they are situated.

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 or by movable property pertaining to a fixed base.

3. Capital represented by ships, boats, aircraft, railway and road vehicles operated by an enterprise of a Contracting State in international traffic, and movable property pertaining to the operation of such means of transport 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
Avoidance of Double Taxation

1. Where a resident of a Contracting State derives items of income referred to in articles 10, 11 and 12, or derives profits or gains or owns capital which may be taxed in the other contracting state according to its domestic legislation and in accordance with the provisions of this Convention, he shall be allowed a deduction from the tax on the income, items of income, profits, gains or capital, an amount equal to the income tax paid in that other State.

   However, such deduction shall not exceed the amount of tax in the first-mentioned State on that income, items of income, profits, gains or capital, calculated in accordance with the rules and regulations of the taxation authorities in that Contracting State.

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 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.

2. Stateless persons who are residents of a Contracting State shall not be subjected in either 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 the State concerned in the same circumstances are or may be subjected.

3. 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. The provisions of this Article 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.

4. Except where the provisions of Article 9, paragraph 5 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. Similarly, any debt 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.

5. 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 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.

Article 27
Mutual Agreement Procedure

1. Where a resident of a Contracting State 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 present Convention, he may, notwithstanding the remedies provided by the national laws of those States, present his case to the competent authority of the State of which he is a resident or if his case comes under paragraph 1 of Article 25 of the present Convention 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 present Convention.

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 an appropriate 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 not in accordance with the present Convention. 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 present Convention. They may also consult together for the elimination of double taxation in cases not provided for in the present Convention.

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. When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States.

Article 28
Exchange of Informations

1. The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of the present Convention or of the domestic laws of the Contracting States concerning taxes covered by the present Convention, insofar as the taxation there under is not contrary to the present Convention.

   Any information received by a Contracting State shall be treated as secret and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the present Convention. They may disclose the information in public court proceedings or in judicial decisions.

2. In no case shall the provisions of paragraph 1 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 (order public).

Article 29
Diplomatic and Consular Officials

Nothing in the present Convention shall affect the fiscal privileges of diplomatic or consular officials under the general rules of international law or under the provisions of special Conventions.

Article 30
Entry Into Force

This Agreement shall be ratified and shall enter into force on the 30th day after the date of the last notification indicating that both States have complied with the domestic legal procedures required in each State for its entry into force.

The Agreement shall apply:

1. in respect of taxes withheld at source to the 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; and

2. in respect of other taxes on profit, income and on capital derived on or after the first day of January in the calendar year next following the year in which the Agreement enters into force.

Article 31
Termination

1. This Agreement shall remain in force for an unlimited period.

2. Either of the Contracting States may give to the other Contracting State, through diplomatic channels, written notice of termination on or before the thirtieth day of June in any calendar year from the fifth year following that in which the Agreement entered into force. In such event, this Agreement shall cease to have effect:

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

   2. in respect of other taxes on profit, income and on capital derived on or after the first day of January in the calendar year next following the year in which the notice of termination is given.

In witness whereof the undersigned, being duly authorized thereto, have signed the protocol. Done at Abu Dhabi in duplicates in Arabic, on this Sunday 17/05/1998 (21 Mouharram 1419 Hejri)

Protocol

At the signing of the Convention between the Government of the Lebanese Republic and the Government of the United Arab Emirates, the Contracting Parties have agreed upon the following additional provisions which shall form an integral part of the said Convention.

1. With respect to article 8:

The national air companies are :

1. In case of the United Arab Emirates:

2. in case of the Lebanese Republic:

• In case of the United Arab Emirates:
• in case of the Lebanese Republic:

or any other air company that is established in a Contracting State and the other Contracting State shall be notified for that purpose.

In witness whereof the undersigned, being duly authorized thereto, have signed the protocol. Done at Abu Dhabi in duplicates in Arabic, on this Sunday 17/05/1998 (21 Mouharram 1419 Hejri)