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CONVENTION BETWEEN THE REPUBLIC OF AUSTRIA
AND THE STATE OF ISRAEL FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND CAPITAL
Chapter I
Scope of the Convention
Article 1
Personal scope
[ ]
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 and on capital
imposed on behalf of each Contracting State or of its political
sub-divisions or local authorities, irrespective of the manner in
which they are levied.
2.There shall be regarded as taxes on income and on capital all
taxes imposed on total income, on total capital, or on elements of
income or of capital, including taxes on gains for the alienation of
movable or immovable property, as well as taxes on capital
appreciation.
3.The existing taxes to which the Convention shall apply, are in
particular:
(a) In the case of Israel
(i) the income tax (including capital gains tax);
(ii) the company tax;
(iii) the security charge;
(iv) the national property taxes; and
(v) the tax on gains from the sale of land under the Land
Appreciation
Tax Law;
(hereinafter referred to as "Israeli tax");
(b) In the case of Austria
(i) the income tax;
(ii) the corporation tax;
(iii) the contribution from income for the promotion of residential
building
and for the equalisation of family burdens;
(iv) the contribution from income to the emergency fund;
(v) the tax on commercial and industrial enterprises, including the
tax
levied on the sum of wages;
(vi) the capital tax;
(vii) the contribution from capital to the emergency fund;
(viii) the land tax;
(ix) the tax on agricultural and forestry enterprises;
(x) the directors' tax;
(xi) the tax on the value of vacant plots;
(xii) the tax on property eluding death duties;
(xiii) the contributions from agricultural and forestry enterprises
to the fund
for the equalization of family burdens;
(xiv) the special tax on income;
(xv) the special tax on capital;
(hereinafter referred to as "Austrian tax").
4. The Convention shall also apply to any identical or substantially
similar taxes which
are subsequently imposed in addition to, or in place of, the
existing taxes. The competent
authorities of the Contracting States shall notify to each other any
major changes which have
been made in their respective taxation laws.
Chapter II
Definitions
Article 3
General definitions
[ ]
1. In this Convention, unless the context otherwise requires:
(a) the term "Israel" means the State of Israel;
(b) the term "Austria" means the Republic of Austria;
(c) the term "person" comprises individuals, companies and all other
entities which
are treated as taxable units under the taxation laws in force in
either Contracting
State;
(d) the term "company" means any body corporate or any entity which
is treated as a
body corporate for tax purposes;
(e) the terms "enterprise of a Contracting State" and "enterprise of
the other
Contracting State" mean respectively an enterprise carried on by a
resident of a
Contracting State an enterprise carried on by a resident of the
other Contracting
State;
(f) the term "competent authority" means in the case of Israel, the
Minister of Finance
or his authorized representative; and in the case of Austria, the
Federal Minister of
Finance.
2.Where according to this Convention income from sources within one
of the Contracting
States shall not be taxable or shall be taxable only at a reduced
rate in that State and, under
the law in force in the other Contracting State the said income is
subject to tax by reference to
the amount thereof which is remitted to or received in that other
Contracting State and not by
reference to the full amount thereof, then the exemption or
reduction in the first-mentioned
Contracting State resulting from this Convention shall apply only to
such income as is
remitted to the other Contracting State. This shall not apply in the
case of Article 15,
paragraph 2, Article 20 and Article 21.
3.As regards the application of the Convention by a Contracting
State any term not otherwise
defined shall, unless the context otherwise requires, have the
meaning which it has under the
laws of that Contracting State relating to the taxes which are the
subject of the Convention.
Article 4
Fiscal domicile
[ ]
1.For the purposes of this Convention, the term "resident of a
Contracting State" means any
person who, under the law of that State, is liable to taxation
therein by reason of his domicile,
residence, place of management or any other criterion of a similar
nature.
2. Where by reason of the provisions of paragraph 1 an individual is
a resident of both
Contracting States, then this case shall be determined in accordance
with the following rules:
(a) 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 closest
(centre of vital
interests);
(b) 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;
(c) 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.
3. 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 this 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" shall include especially:
(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop;
(f) a mine, quarry or other place of extraction of natural
resources;
(g) a building site or construction or assembly project which exists
for more than
twelve months.
3.The term "permanent establishment" shall not be deemed to include:
(a) the use of facilities solely for the purpose of storage, display
or delivery of goods
or merchandise belonging to the enterprise;
(b) the maintenance of a stock of goods or merchandise belonging to
the enterprise
solely for the purpose of storage, display or delivery;
(c) the maintenance of a stock of goods or merchandise belonging to
the enterprise
solely for the purpose of processing by another enterprise;
(d) the maintenance of a fixed place of business solely for the
purpose of purchasing
goods or merchandise, or for collecting information, for the
enterprise;
(e) the maintenance of a fixed place of business solely for the
purpose of advertising,
for the supply of information, for scientific research or for
similar activities which
have a preparatory or auxiliary character, for the enterprise.
4.A person acting in a Contracting State on behalf of an enterprise
of the other Contracting
State -- other than an agent of an independent status to whom
paragraph 5 applies -- shall be
deemed to be a permanent establishment in the first-mentioned State
if he has, and
habitually exercises in that State, an authority to conclude
contracts in the name of the
enterprise unless his activities are limited to the purchase of
goods or merchandise for the
enterprise.
5.An enterprise of a Contracting State shall not be deemed to have a
permanent
establishment in the other Contracting State merely because it
carries on business in that
other State through a broker, general commission agent or any other
agent of an independent
status, where such persons are acting in the ordinary course of
their business.
6. 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.
Chapter III
Taxation of income
Article 6
Income from immovable property
[ ]
1. Income form immovable property may be taxed in the Contracting
State in which such
property is situated.
2.The term "immovable property" shall be defined in accordance with
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, boats and aircraft shall not be regarded
as immovable property.
3.The provisions of paragraph 1 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
professional 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.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 purpose 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 laid down 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 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.
8.The provisions of paragraphs 1 to 7 shall also apply to income
derived by the sleeping
partner of a sleeping partnership (Stille Gesellschaft) of the
Austrian law.
Article 8
Shipping and air transport
[ ]
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.The provisions of paragraph 1 shall likewise apply in respect of
participations in pools of
any kind by Israeli or Austrian enterprises engaged in air
transport.
Article 9
Associated enterprises
[ ]
Where
(a) an enterprise of a Contracting State participates directly or
indirectly in the
management, control or capital of an enterprise of the other
Contracting state, or
(b) the same persons participate directly or indirectly in the
management, control or
capital of an enterprise of a Contracting State and an enterprise of
the other
Contracting State,
and in either case conditions are made or imposed between the two
enterprises in their
commercial of 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.
Article 10
Dividends
[ ]
1.Dividends paid by a company which is a resident of a Contracting
State to a resident of the
other Contracting State may be taxed in that other State.
2.However, such dividends may be taxed in the Contracting State of
which the company
paying the dividends is a resident, and according to the law of that
State, but the tax so
charged shall not exceed 25 per cent of the gross amount of the
dividends.
This paragraph shall not affect the taxation of the company in
respect of the profits out of
which the dividends are paid.
3.The term "dividends" as used in this Article means income from
shares, founders' shares or
other rights, not being debt-claims, participating in profits, as
well as income from other
corporate rights assimilated to income from shares by the taxation
law of the State of which
the company making the distribution is a resident.
4.Dividends paid by a company resident in one of the Contracting
States to a company
resident in the other Contracting State shall be excluded from the
tax base in that other State,
but only in so far as such dividends would be excluded from the tax
base by virtue of the
national tax laws in case both companies would have had their
residence in that other State,
provided, further, that the company receiving the dividends owns at
least 25 per cent of the
voting power of the company paying the dividends.
5.The provisions of paragraphs 1 and 2 shall not apply if the
recipient of the dividends, being
a resident of a Contracting State, has in the other Contracting
State, of which the company
paying the dividends is a resident, a permanent establishment with
which the holding by
virtue of which the dividends are paid is effectively connected. In
such a case, the provisions
of Article 7 shall apply.
6.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 to persons who are not residents of that other State, or
subject the company's
undistributed profits to a tax on undistributed profits, even if the
dividends paid or the
undistributed profits consist wholly or partly of profits or income
arising in such other State.
Article 11
Interest
[ ]
1. Interest arising in a Contracting State and paid to a resident of
the other Contracting State
may be taxed in that other State.
2.However, such interest may be taxed in the Contracting State in
which it arises, and
according to the law of that State, but the tax so charged shall not
exceed 15 per cent of the
amount of the interest.
3.The term "interest" as used in this Article means income from
Government securities,
bonds or debentures, whether or not secured by mortgage and whether
or not carrying a right
to participate in profits, and debt-claims of every kind as well as
all other income assimilated
to income from money lent by the taxation law of the State in which
the income arises.
4.The provisions of paragraphs 1 and 2 shall not apply if the
recipient of the interest, being a
resident of a Contracting State, has in the other Contracting State
in which the interest arises
a permanent establishment with which the debt-claim from which the
interest arises is
effectively connected. In such a case, the provisions of Article 7
shall apply.
5. Interest shall be deemed to arise in a Contracting State when the
payer is that State itself,
a political subdivision, a local authority or 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 in connection with which
the indebtedness on
which the interest is paid was incurred, and such interest is borne
by such permanent
establishment, such interest shall be deemed to arise in the
Contracting State in which the
permanent establishment is situated.
6.Where, owing to a special relationship between the payer and the
recipient or between both
of them and some other person, the amount of the interest paid,
having regard to the debtclaim
for which it is paid, exceeds the amount which would have been
agreed upon by the
payer and the recipient in the absence of such relationship, the
provisions of this Article shall
apply only to the last-mentioned amount. In that case, the excess
part of the payments shall
remain taxable according to the law of each Contracting State, due
regard being had to the
other provisions of this Convention.
Article 12
Royalties
[ ]
1.Copyright royalties and other payments, arising in a Contracting
State and paid to a
resident of the other Contracting State as consideration for the use
of, or the right to use, any
literary, dramatic, musical or artistic work (excluding royalties
and like payments, whether
recurring or not, in respect of motion picture films or films for
use in connection with
television) shall be taxable only in the Contracting State of which
the recipient is a resident.
2.Subject to the provisions of paragraph 1, royalties arising in a
Contracting State and paid to
a resident of the other Contracting State may be taxed in that other
State; however, the
Contracting State in which the royalties arise may tax such
royalties according to its own
laws, but the rate of tax shall not exceed 10 per cent of such
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 video tapes for use
in connection with
television, any patent, trade mark, design or model, plan, secret
formula or process, or for the
use of, or the right to use, industrial, commercial, or scientific
equipment, or for information
concerning industrial, commercial or scientific experience.
4. The provisions of paragraphs 1 and 2 shall not apply if the
recipient of the royalties,
being a resident of a Contracting State, has in the other
Contracting State in which the
royalties arise a permanent establishment with which the right or
property giving rise to the
royalties is effectively connected. In such case, the provisions of
Article 7 shall apply.
5.Royalties shall be deemed to arise in a Contracting State when the
payer is that State itself,
a political subdivision, a local authority or a resident of that
State. Where, however, the
person paying the royalty, whether he is a resident of a Contracting
State or not, has in a
Contracting State a permanent establishment in connection with which
the right on which the
royalty is paid was incurred, and such royalty is borne by such
permanent establishment,
such royalty shall be deemed to arise in the Contracting State in
which the permanent
establishment is situated.
6.Where, owing to a special relationship between the payer and the
recipient or between both
of them and some other person, the amount of the royalties paid,
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 recipient in the absence of such
relationship, the
provisions of this Article shall apply only to the last-mentioned
amount. In that case, the
excess part of the payments shall remain taxable according to the
law of each Contracting
State, due regard being had to the other provisions of this
Convention.
Article 13
Capital gains
[ ]
1.Gains from the alienation of immovable property, as defined in
paragraph 2 of Article 6,
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 for the purpose of performing professional
services, including such gains
from the alienation of such a permanent establishment (alone or
together with the whole
enterprise), may be taxed in the other State. However, gains from
the alienation of movable
property of the kind referred to in paragraph 3 of Article 23 shall
be taxable only in the
Contracting State in which such movable property is taxable
according to the said Article.
3.Gains from the alienation of any property other than those
mentioned in paragraphs 1 and
2, shall be taxable only in the Contracting State of which the
alienator is a resident. However,
in the case of the alienation of shares of a company which are not
negotiable through the
Stock Exchange of the country of which such company is a resident or
other rights therein,
the country where property of such a company is situated may tax the
capital gains relating to
such property, but the rate of tax shall not exceed 15 per cent.
Article 14
Independent personal services
[ ]
1. Income derived by a resident of a Contracting State in respect of
professional
services or other independent activities of a similar 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, engineers, architects, dentists and accountants.
Article 15
Dependent personal services
[ ]
1.Subject to the provisions of Articles 16, 18 and 19, salaries,
wages and other similar
remuneration derived by a resident of a Contracting State in respect
of an employment shall
be taxable only in that State unless the employment is exercised in
the other Contracting
State. If the employment is so exercised, such remuneration as is
derived therefrom may be
taxed in that other State.
2.Notwithstanding the provisions of paragraph 1, remuneration
derived by a resident of a
Contracting State in respect of an employment exercised in the other
Contracting State shall
be taxable only in the first-mentioned State if:
(a) the recipient is present in the other State for a period or
periods not exceeding in
the aggregate 183 days in the fiscal year concerned, and
(b) the remuneration is paid by, or on behalf of, an employer who is
not a resident of
the other State, and
(c) 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 in respect of an
employment exercised aboard a ship or aircraft in international
traffic or aboard a boat
engaged in inland waterways transport, may be taxed in the
Contracting State in which the
place of effective management of the enterprise is situated.
Article 16
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 17
Artists and athletes
[ ]
Notwithstanding the provisions of Articles 14 and 15, income derived
by public entertainers,
such as theatre, motion picture, radio or television artists, and
musicians, and by athletes,
from their personal activities as such may be taxed in the
Contracting State in which these
activities are exercised.
Article 18
Pensions and annuities
[ ]
1. Subject to the provisions of paragraph 1 of Article 19, pensions
and other similar
remuneration paid to a resident of a Contracting State shall be
taxable only in that State. The
same rule shall apply to annuities derived from sources within a
Contracting State and paid to
a resident of the other Contracting State.
2.As used in this Article:
(a) the term "pension" means periodic payments made in consideration
of past
services;
(b) the term "annuity" means a stated sum payable periodically at
stated times, during
life or during a specified or ascertainable period of time, under an
obligation to
make the payments in return for adequate and full consideration in
money or
money's worth.
Article 19
Governmental functions
[ ]
1. Remuneration, including pensions, paid by, or out of funds
created by, a Contracting
State or a political subdivision or a local authority thereof to any
individual, who is not a
national of the other Contracting State, in respect of services
rendered to the first-mentioned
State or subdivision or local authority thereof in the discharge of
functions of a governmental
nature may be taxed in that State.
2.The provisions of Articles 15, 16 and 18 shall apply to
remuneration or pensions in respect
of services rendered in connection with any trade or business
carried on by one of the
Contracting States or a political subdivision or local authority
thereof.
Article 20
Students
[ ]
A person who is or was formerly a resident of a Contracting State,
who is temporarily present
in the other Contracting State solely as a student at a university,
college or school, or as a
commercial or technical apprentice, or as a recipient of a grant,
allowance or award for the
primary purpose of study or research from a religious, charitable,
scientific or educational
organisation, shall not be taxed in that other State --
(a) in respect of remittances from abroad for the purpose of his
maintenance,
education or training or in respect of a scholarship grant;
(b) in respect of any amount representing remuneration for services
rendered in that
other State, provided that such services are in connection with his
studies or
training or are necessary for the purpose of his maintenance.
However, this
provision shall not apply to such cases where the studies or
training have a
secondary character as compared with the services for which the
remuneration is
paid, or for a period exceeding five years from the commencement of
the studies.
Article 21
Professors, teachers and researchers
[ ]
Subject to the provisions of Article 15, a person who is or was
formerly a resident of a
Contracting State who, at the invitation of a university, college or
other institute of higher
education or scientific research in the other Contracting State,
visits that other State solely for
the purpose of teaching or scientific research at such an
institution shall not be taxed in that
other State on his remuneration for such teaching or research for a
period not exceeding two
years.
Article 22
Income not expressly mentioned
[ ]
Items of income of a resident of a Contracting State which are not
expressly mentioned in the
foregoing Articles of this Convention shall be taxable only in that
State.
Chapter IV
Taxation of capital
Article 23
Capital
[ ]
1.Capital represented by immovable property, as defined in paragraph
2 of Article 6, may be
taxed in the Contracting State in which such property is situated.
2.Capital represented by movable property forming part of the
business property of a
permanent establishment of an enterprise, or by movable property
pertaining to a fixed base
used for the performance of professional services, may be taxed in
the Contracting State in
which the permanent establishment or fixed base is situated.
3.Ships and aircraft operated in international traffic, and 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.
Chapter V
Elimination of double taxation
Article 24
Exemption method
[ ]
1.Where a resident of a Contracting State derives income or owns
capital which, in
accordance with the provisions of this Convention, may be taxed in
the other Contracting
State, the first-mentioned State shall, subject to the provisions of
paragraph 2, exempt such
income or capital from tax but may, in calculating tax on the
remaining income or capital of
that person, apply the rate of tax which would have been applicable
if the exempted income
or capital had not been so exempted.
2. Where a resident of a Contracting State derives income which in
accordance with the
provisions of Articles 10, 11, 12 and 13, paragraph 3, may be taxed
in the other Contracting
State, the first-mentioned State shall allow as a deduction from the
tax on the income of that
person an amount equal to the tax paid in that other Contracting
State. Such deduction shall
not, however, exceed that part of the tax, as computed before the
deduction is given, which is
appropriate to the income derived from that other Contracting State.
The provisions of this paragraph shall also apply when the Israeli
income tax appropriate to
dividends, interest, royalties or capital gains has been wholly
relieved or reduced for a limited
period of time as if no such relief had been given or no such
reduction had been allowed.
However, the deduction of tax shall not exceed the amount of tax
which may be imposed in
Israel according to the provisions provided for in Article 10,
paragraph 2, Article 11,
paragraph 2, Article 12, paragraph 2 and Article 13, paragraph 3.
Chapter VI
Special provisions
Article 25
Non-discrimination
[ ]
1.The 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 are or may be subjected.
2.The term "nationals" means
(a) all individuals possessing the nationality of a Contracting
State;
(b) all legal persons, partnerships and associations deriving their
status as such
from the law in force in a Contracting State.
3.The taxation of 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.
4.Enterprises of a Contracting State, the capital of which is wholly
or partly owned or
controlled, directly or indirectly, by one or more residents of the
other Contracting State, shall
not be subjected in the first-mentioned Contracting 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 that
first-mentioned State are or may be
subjected.
5. In this Article the term "taxation" means taxes of every kind and
description.
Article 26
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 this
Convention, he may, notwithstanding the remedies provided by the
national laws of those
States, present his case to the competent authority of the
Contracting State of which he is a
resident.
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 Convention.
3.The competent authorities of the Contracting States shall
endeavour to resolve by mutual
agreement any difficulties or doubts arising as to the
interpretation or application of the
Convention. They may also consult together for the elimination of
double taxation in cases
not provided for in the 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
paragraph. 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 27
Exchange of information
[ ]
1.The competent authorities of the Contracting States shall exchange
such information as is
necessary for the carrying out of this Convention and of the
domestic laws of the Contracting
States concerning taxes covered by this Convention insofar as the
taxation thereunder is in
accordance with this Convention. Any information so exchanged shall
be treated as secret
and shall not be disclosed to any persons or authorities other than
those concerned with the
assessment or collection of the taxes which are the subject of the
Convention.
2. In no case shall the provisions of paragraph 1 be construed so as
to impose on one
of the Contracting States the obligation:
(a) to carry out administrative measures at variance with the laws
or the
administrative practice of that or of the other Contracting State;
(b) to supply particulars which are not obtainable under the laws or
in the normal
course of the administration of that or of the other Contracting
State;
(c) 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).
Article 28
Diplomatic and consular officials
[ ]
1. Nothing in this Convention shall affect the fiscal privileges of
diplomatic or consular
officials under the general rules of international law or under the
provisions of special
agreements.
2. Insofar as, due to fiscal privileges granted to diplomatic or
consular officials under the
general rules of international law or under the provisions of
special international treaties,
income or capital are not subject to tax in the receiving State, the
right to tax shall be
reserved to the sending State irrespective of the provisions of this
Convention.
Chapter VII
Final provisions
Article 29
Entry into force
[ ]
1.This Convention shall be ratified and the instruments of
ratification shall be exchanged at
Jerusalem as soon as possible.
2.This Convention shall enter into force upon the exchange of
instruments of ratification and
its provisions shall have effect:
(a) In the case of Israel: in respect of Israeli taxes for the tax
years beginning on or
after the first day of April 1968 or for any special tax year ending
after the said
date;
(b) In the case of Austria: in respect of Austrian taxes for the tax
years beginning on
or after the first day of January 1968.
Article 30
Termination
[ ]
The Convention shall remain in force until denounced by one of the
Contracting States. Either
Contracting State may denounce the Convention, through diplomatic
channels, by giving
notice of termination at least six months before the end of any
calendar year after the year
1973. In such event, the Convention shall cease to have effect --
(a) In the case of Israel: for any tax year beginning on or after
the first day of April in
the calendar year next following that in which the notice is given.
(b) In the case of Austria; for any tax year beginning on or after
the first day of
January of the calendar year next following that in which the notice
is given.
In witness whereof the Plenipotentiaries of the two States have
signed the Convention and
have affixed thereto their seals.
Done at Vienna this 29th day of January 1970, in duplicate in the
English language.
EXCHANGE OF LETTERS
I
Vienna, the 29th January, 1970
Dear Sir,
The Convention between the Republic of Austria and the State of
Israel for the avoidance of
double taxation with respect to taxes on income and capital being
signed today, I have the
honour, on behalf of the Government of Israel to inform you that
annuities, pensions and
other payments to be made either periodically or in a lump sum,
which are paid by the
Republic of Austria, a political subdivision thereof or a
corporation of public law of the
Republic of Austria or out of funds created by the Republic of
Austria, a political subdivision
thereof or a corporation of public law of the Republic of Austria to
an individual as indemnity
for damages caused by warfare or political and religious persecution
or for reasons of
descent, are not taxable in Israel. The Government of Israel
declares that no changes will be
made on this subject in future.
I have the honour to propose, that this letter and your letter of
confirmation shall constitute an
agreement to be part of the aforementioned Convention.
Accept, dear Sir, the assurance of my high consideration.
Zeev Shek
Mr. Dr. Josef Hammerschmidt
Director General in the
Federal Ministry of Finance
Vienna
II
Vienna, the 29th January, 1970
Dear Sir,
With reference to the Convention, signed today, between the Republic
of Austria and the
State of Israel for the avoidance of double taxation with respect to
taxes on income and
capital, you have informed me of the following:
[see I]
I have the honour to inform you, that the proposal contained in the
last paragraph of your
letter meets my approval. Your letter and this letter of
confirmation shall therefore constitute
an agreement to be part of the aforementioned Convention.
Accept, dear Sir, the assurance of my high consideration.
Hammerschmidt
His Excellency
Mr. Zeev Shek
Ambassador of the State of Israel
Vienna
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