DTC agreement between Brunei Darussalam and Lao People's Democratic Republic

8/7/2019 DTC agreement between Brunei Darussalam and Lao People's Democratic Republic

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AGREEMENTBETWEEN

THE GOVERNMENT OF ms MAJESTY THE SULTAN ANDYANG DI-PERTUAN OF BRUNEI DARUSSALAM

ANDTHE GOVERNl\1ENT OF THE LAO PEOPLE'S DEMOCRATIeREPUBLICFOR THE AVOIDANCE OF DOUBLE TAXATION AND THE

PREVENTION OF FISCAL EVASION WITHRESPECT TO TAXES ON INCOME

The Government ofHis Majestythe Sultan and Yang Di-Pertuan of Brunei Darussalam and theGovernment of the Lao People's Democratie Republic,Desiring to conclude an Agreement for the avoidance of double taxation and the prevention offiscal evasion with respect to taxes on income,Have agreed as follows:

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Article 1PERSONS COVERED

This Agreement shaH apply to persons who are residents and Govemments of one or both of theContracting States.

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Article 2TAXESCOVERED

1. This Agreement shaH apply to taxes on income imposed on behalf of a Contracting Stateor of its political subdivisions or local authorities, irrespective of the manner in whichthey are levied.2 There shaH be regarded as taxes on income aIl taxes imposed on total income or onelements of income, including taxes on gains from the alienation of movable orimmovable property, taxes on the total amounts ofwages or salaries paid by enterprises,

as weIl as taxes on capital appreciation.3. The existing taxes to which this Agreement shaH apply are in particular:

a) in the case ofBrunei Darussalam:Ci) income tax imposed under Income Act (Cap. 35); and(ii) petroleum profits tax imposed under Income Tax (Petroleum) Act(Cap.119).(hereinafter referred to as "Brunei Darussalam tax");

b) in the case of Lao People's Democratic Republic (hereinafter refelTed to as "LaoPDR"):(i) the tax on profits (income) of enterprises and organizations; and(ii) the tax on income of individuals;(hereinafter referred to as "Lao tax").

4. This Agreement shaH apply also to any identical or substantially similar taxes which aresubsequently imposed in addition to, or in place of, the existing taxes referred to inparagraph 3 above. The competent authorities of the Contracting States shaIl notifY eachother of any significant changes which have been made in their respective taxation Iawswithin a reasonable period of time after such changes and furnish c o p i ~ s of relevantenactments and regulation.5. If by reason of changes made in the taxation law of either Contracting State, i t appearsdesirable to amend any Article of this Agreement without affecting the general principlesthereof, the necessary amendment may be made by mutual consent by means of an

exchange of diplomatic notes or in any other manner in accordance with theirconstitutional procedures.

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Article 3GENERAL DEFlNITIONS

1. For the purposes ofthis Agreement, unless the context otherwise requires:(a) the term "Brunei Darussalam" means the territory of Brunei Darussalam as

defined in its laws and the adjacent areas over which Brunei Darussalam hassovereignty, sovereign rights or jurisdiction in accordance with the provisions ofthe United Nations Convention on the Law of the Sea, 1982;

(b) _QIe term "Lao PDR" means the territory of the Lao People's DemocratieRepublic; when used in a geographical sense, it means ail it s national territory,including its territorial water and any area beyond its territorial waters withinwhich Lao PDR, by the Lao People's Deniocratic Republic legislation and inaccordance with international law, has sovereign rights of exploration for andexploitation ofnatural resources ofriverbed and its subsoil and supeIjacent waterresources;

(c) the tenu "Government" means:(i) in the case of Brunei Darussalam:

(1) the Brunei Currency and Monetary Board;(2) the Brunei Investment Agency;(3) the Employees Trust Fund Board;(4) any local or statutory authority or body exempt from tax in BruneiDarussalam;(5) anybody corporate wholly owned by the Government of BruneiDarussalam (as defmed in this Article); and(6) such institutions as may be agreed from time to time between the

competen t authorities of the Contracting States.(ii) in the case of Lao PDR:

(1) the Bank of the Lao PDR;(2) the local authorities;(3) the statutory bodies;(4) any body corporate wholly owned by the Government of Lao PDR(as defmed in this Article); and(5) such institutions as may be agreed from time to time between thecompetent authorities of the Contracting States.

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(d) the terms "a Contracting State" and "the other Contracting State" mean BruneiDarussalam or Lao PDR as the context requires;Ce) the term "tax" means Brunei Darussalam tax or Lao tax as the context requires;(f) the term "person" includes an individual, a company, a body of persons and any

other entity that is treated as a taxable entity under the tax laws of the respectiveContracting States;(g) the term "company" means any body corporate or any other entity which lS

treated as a company under the tax laws of the respective Contracting States;(h) the terms "enterprise of a Contracting State" and "enterprise of the other

Contracting State" mean respectively an enterprise carried on by a resident of aContracting State and an enterprise carried on by a resident of the otherContracting State;

(i) the term "national" means:(1) any natural person who is accorded the status of a national under theapplicable laws of a Contracting State; .(2) any legal person, partnership or association deriving its stahlS as such fromthe laws in force in a Contracting State;

G) the. term "international traffic" means carriage of passengers, mails, livestock orgoods by a ship or aircraft which is operated by an enterprise of one of theContracting States, except when the ship or aircraft is operated solely betweenplaces in the other Contracting State or solely between such places and one ormore structures used for the exploration or exploitation of natural resourcessituated in waters adjacent to the territorial waters ofthat other Contracting State;

(k) the term "competent authority" means:(1) in the case of Brunei Darussalam, the Minister of Finance or his

authorised representative;(2) in the case of Lao PDR, the Minister of Finance or his authorised

representative.

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2. As regards the application oftrus Agreement at any time by a Contracting State, any terrnnot detined therein shaH, unless the context otherwise requires, have the meaning that ithas at that time under the law of that Contracting State for the purposes of the taxes towhich this Agreement applies, any meaning under the applicable tax laws of thatContracting State prevailing over a meaning given to the terro under other laws of thatContracting State.

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(Article 4

RESIDENT

1. For the pUlposes ofthis Agreement, the term "resident of a Contracting State" means anyperson who, under the laws of that Contracting State, is liable to tax therein by reason ofbis domicile, residence, place of management or any other criterion of a similar nature,and also includes that Contracting State and any political subdivision or local authoritythereof.

2. Where by reason of the provisions of paragraph l an individual is a resident of bothContracting States, then bis status shaH be determined as follows:

(a) He shall be deemed to be a resident of the Contracting State in wbich he has a. permanent home availabIe to him; if he has a permanent home available ta him inboth Contracting States, he shall be deemed to be a resident onIy of theContracting State with which bis personaI and economic relations are doser(centre ofvital interests);

(b) If the Contracting State in wbich he has his centre of vital interests cannot bedeterrnined, or if he has not a permanent home available to him in eitherContracting State, he shaH be deemed to be a resident onIy of the ContractingState in which he has an habituaI abode;(c) If he has an habituaI abode in both Contracting States or in neither of them, heshaH be deemed to be a resident onIy of the Contracting State of which he is anational;(d) If he is a national of bath Contracting States or of neither of them, the competentauthorities of he Contracting States shaH settle the question by mutuaI agreement.

3. Where by reason of the provisions of paragraph 1 a person other than an individual is aresident of both Contracting States, then it shaH be deemed to be a resident of theContracting State in which the control and management of it s business is exercised. If itsplace of control and management cannot be determined, the competent authorities of theContract ing States shaH settle the question by mutual agreement.

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(Article 5

PERMANENT ESTABLISHMENT

1. For the pUI'Poses of this Agreement, the term "permanent establishmenf' means a fixedplace of business tbrougb wruch the business of an enterprise is wholly or partly carriedon.

2. The tenu "permanent establishment" includes especially:(a) a place of management;(b) a branch;(c) an office;(d) a factory;(e) a workshop ;(f) a mine, an oil or gas weil, a quarry or any otber place of extraction or exploration

of natural resources, drilling rig or working srup used for the -exploration orexploitation of natural resources including timber or other forest produce;

(g) a farm or plantation;(h) a warehouse, in relation to a person providing storage facilities for others;(i) a store or premises used as a sales outlet;G) a building site, a construction, installation or assembly project or supervisory

activities in connection therewith, where such site, project or activity continuesfor a period of more than 6 months;

(k) the furnishing of services, including consultancy services by a resident of one ofthe Contracting States through employees or other personnel, where activities ofthat nature continue for the same or a connected project within the otherContracting State for a period or periods aggregating more than 3 months withinany twelve-month periods.

3. Notwithstanding the preceding provisions of this Article, the tenn "permanentestablishment" sball be deemed no t 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;Cc) the maintenance of a stock of goods or merchandise belonging to the enterprise

solely for the purpose of processing by another enterprise;

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(d) the maintenance of a fixed place of business solely for the purpose of purchasinggoods or merchandise, or of collecting information for the enterprise;Ce) 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 preparatOly or auxiliary character, for the enterprisejCf) the maintenance of a fixed place of business solely for any combination ofactivities mentioned in sub-paragraphs (a) to Ce), provided that the overall activity

of the fixed place of business resulting from this combination is of a preparatoryor auxiliary character.

4. Notwithstanding the provisions of paragraphs 1 and 2, where a person - other than anagent of an independent status ta whom paragraph 6 applies - is acting iIl a ContractingState on behalf of an enterprise of the other Contracting State, that enterprise shaH bedeemed to have a permanent establishment in the first-mentioned Contracting State inrespect of any activities which that person undertakes for the enterprise, if such a person:(a) has and habitually exercises in that Contracting State an authority to conclude

contracts in the name of the enterprise, unless the activities of such person arelimited to those mentioned in paragraph 3 which, if exercised through a fixedplace of business would not make this fixed place of business a permanentestablishment u n d ~ r the provisions of that paragraph;(b) has no such authority, but habitually maintains in the fll'st-mentioned ContractingState a stock of goods or merchandise from which he regularly delivers goods ormerchandise on behalf of the enterprise; or(c) manufactures or pro cesses in that Contracting State for the enterprise goods ormerchandise belonging to the enterprise.

5. An insurance enterprise of a Contracting State shaH, except in regard to reinsurance, bedeemed to have a permanent establishment in the other Contracting State if it collectspremiums in that other Contracting State or insures risks situated therein through anemployee or through a representative who is not an agent of an independent status withinthe meaning ofparagraph 6.

6. An enterprise of a Contracting State shall not be deemed to have a permanentestablishment in the other Contracting State merely because it carries on business in thatother Contracting State through a broker, general commission agent or any other agent ofan independent status, provided that such persons are acting in the ordinary course oftheir business. However, when the activities of such an agent are devoted wholly oralmost wholly on behalf of that enterprise or on behalf of that enterprise and other

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enterprises, which are controlled by it or have a controlling interest in it, he will not beconsidered an agent of independent status withn the meaning of this paragraph.7. The fact that a company which s a resident of a Contracting State controis or iscontrolled by a company which is a resident of the other Contracting State, or whichcarries on business in that other Contracting State (wh ether through a permanentestablishment or otherwise), shaH not of itself constitute either company a permanentestablishment of the other.

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Article 6INCOME FROM IMMOVABLE PROPERTY1. 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 taxedin that other Contracting State.

2. The teIm "immovable property" shall have the meaning which it has under the law of theContracting State in which the property in question is situated. The term shaH in any caseinclude property accessory to immovable property, livestock and equipment used inagriculture, forestry and fishery, rights to which the provisions of general la w respectinglanded property apply, usufruct of immovable property and rights to variable or fixedpayments as consideration for the working of, or the right to work, mineraI deposits,sources and other naturaI resources; ships, boats and aircraft sha11 not be regarded asimmovable property. .

3. The provisions of paragraph 1 sha11 apply to income derived from the direct use, lettingor use in any other form ofimmovable property.

4. The provisions of paragraphs 1 and 3 sha11 also apply to the income from immovableproperty of an enterprise and to income from immovable property used for theperformance of independent personal services.

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Article 7BUSINESS PROFITS1. The profits of an enterprise of a Contracting State shaH be taxable only in thatContracting State unless the enterprise carries on business in the other Contracting Statethrough a permanent establishment situated therein. If the enterprise cardes on businessas aforesaid, the profits of the enterprise may be taxed in the other Contracting State butonly so much ofthem as is attributable to (a) that permanent establishment; (b) sales inthat other Contracting State of goods or merchandise of the same or similar kind as thosesold throughthat permanent establishment; or Cc) other business activitiescarted onmthat other Contracting State of the same or similar kind as those effected through thatpermanent establishment.2. Subject ta the provisions of paragraph 3, where an enterprise of a Contracting Statecarnes on business in the other Contracting State through a permanent establishmentsituated therein, there shaH in each Contracting State be attributed ta that permanentestablishment the profits which it might be expected ta make if it were a distinct andseparate enterprise engaged in the same or similar activities under the same or sirnilarconditions and dealing wholly independently with the enterprise of which it is apermanent establishment.3. In determining the profits of a permanent establishment, there shaH be aHowed asdeductioris expenses which are incurred for the purposes of the business of the permanentestablishment including executive and general adrinistrative expenses sa incurred,whether in the Contracting State in which the permanent establishment is situated or

elsewhere, provided that such deductions are in accordance with the provisions of andsubject ta the limitations of the tax laws of that Contrac ting State.4. In sa far as it has been customary in a Contracting State ta determine the profits ta beattributed to a permanent establishment on the basis of an apportionme:nt of the totalprofits of the enterprise ta Hs various parts, nothing in paragraph 2 shaH preclude thatContracting State from determining the profits ta be taxed by such apportionment as maybe customary; the method of apportionment adopted shall, however, be such that theresult shaH be in accordance wi th the principles la id down in this Article.5. No profits shaH be attributed to a pennanent establishment by reason of the merepurchase 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 permanentestablishment shaH be detennined by the same method year by year unless there s goodand sufficient reason to the contrary.

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7. Where profits include items ofincome which are deaIt with separately in other Articles ofthis Agreement, then the provisions of those Articles shall not be affected by theprovisions ofthis Article.

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Article 8SHIPPING AND AIR TRANSPORT

Profits of an enterprise of a Contracting State from the operation of ships or aircraft ininternational traffic shaH be taxable only in that Contracting State.For the purposes of this Article, profits from the operation of ships or aircraft IDinternational traffic shall include:(a) profit from the rentaI of ships or aircraft; and(b) profit from the use, maintenance or rentaI of containers (including trailers and

related equipment for the transport of containers) used for the transport of goodsor merchandise,where such rentaI or such use, maintenance or rentaI, as the case may be, is incidental tothe operation of ships or aircraft in international traffic.

3. For the purposes of this Article, interest on bank accounts directly connected with theoperation of ships or aircraft in international traffic shall be regarded as profits derivedfrom the operation of such ships or aircraft, and the provisjons of Article Il shaH notapply in relation to sueh interest.4. The provision of paragraphs 1, 2 and 3 shaH also apply to profits derived from theparticipation in a pool, a joint business or in an international operating ageney.5. The terrn "operation of srups or aireraft" means business of transportation by sea or by air

of passengers, mail, livestoek or goods earried on by the owners, lessees or eharterers ofships or aireraft, ineluding the sales of tickets for sueh transportation on behalf of otherenterprises, the incidental lease of ships or aireraft and any other aetivity directlyeonnected with sueh transportation.6. For the pUl-poses of tbis Article, paragraph 3 of Article 14 and paragraph ::1 of Article 16,notwithstanding paragraph l(h) of Article 3, the term "enterprise of Contraeting State" inrelation to the operation of aireraft in international traffie means;

(a) in the case of Brunei Darussalam, Royal Brunei Airline and any other air transportenterprise carried on by a resident of Brunei Darussalam;

(b) in the case of Lao PDR, Lao Airline and other air transport enterprise carried ohby a resident of Lao PDR.

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Article 9ASSOCIATED ENTERPRISES

1. Where

2.

(a) an enterprise of a Contracting State participates directly or indirectly in themanagement, control or capital of an enterprise of the other Contrac:ting 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 otherContractingState, . . ..

and in either case conditions are made or imposed between the two enterprises in theircommercial or financial relations which differ from those which would be made betweenindependent enterprises, then any profits which would, but for those conditions, haveaccrued to one of the enterprises bu t by reason of those conditions, have not so accrued,may be included in the profits ofthat enterprise and taxed accordingly.Where a Contracting State includes in the profits of an enterprise of that ContractingState - and taxes accordingly - profits on which an enterprise of the other ContractingState has been charged to tax in that other Contracting State and the profits so includedare profits which would have accrued to the enterprise of the frrst-mentioned ContractingState if the conditions made between the two enterprises had been thOS(! which wouldhave been made between independent enterprises, then that other Contracting State shaHmake an appropriate adjustment to the amount of the tax charged therein on those profits.In determining such adjustment, due regard shaH be had to the other provisions of thisAgreement and the competent authorities of the Contracting States shaH, if necessary,consuIt each other.

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Article 10DIVIDENDS

1. Dividends paid by a company which is a resident of a Contracting State to a resident ofthe other Contracting State may be taxed in that other Contracting State.2. However, such dividends may also be taxed in the Contracting State of which thecompany paying the dividends is a resident and according to the laws of that Contracting

State, but if the beneficial owner of the dividends is a resident of the other ContractingState, the tax so charged shalLnotexceed:(a) five (5) per cent of the gross amount of the dividends if the beneficial owner is a

company (other than a partnership) which holds directly at least ten (la) per centof the capital of the company paying the dividends;(b) ten (la) per cent of the gross amount of the dividends in all other cases.The competent authorities of the Contracting States shall by mutual agreement settle themode of application of this limitation.The provisions ofthis paragraph shaH not affect the taxation of the company in respect ofthe profits out of which the dividends are paid.

3. Notwithstanding the provisions of paragraph 2, dividends arising in a Contracting Stateand paid to the Government of the other Contracting State shaH be exempt from tax inthe fust-mentioned Contracting State.

4. The tenn "dividends" as used in this Article means income from shares, 'Jouissance"shares or 'jouissance" rights, mining shares, founders' shares or other rights, not beingdebt-claims, participating in profits, as well as income from other corporate rights whichis subjected to the same taxation treatment as income from shares by the laws of theContracting State of which the company making the distribution is a resident.

5. The provisions of paragraphs 1 and 2 shaH not apply if the beneficiaJ owner of thedividends, being a resident of a Contracting State, carries on business in the otherContracting State of which the company paying the dividends is a resident, through apermanent establishment situated therein, or perfonns in that other Contracting Stateindependent personal services from a fixed base situated therein, and the holding inrespect of which the dividends are paid is effectively connected with such pennanentestablishment or fixed base. In such case, the provisions of Article 7 or Article 15, as thecase may be, shaH apply.

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Where a company which is a resident of a Contracting State derives profits from the otherContracting State, that other Contracting State may not impose any tax on the dividendspaid by the company except in so far as such dividends are paid to a resident ofthat otherContracting State or in so far as the holding in respect of which the dividends are paid iseffectively connected with a permanent establishment or a fixed base situated in thatother Contracting State, nor subject the company's undistriblited profits to a tax on thecompany's undistributed profits, ev en if the dividends paid or the undistributed profitsconsist whol ly or partly of profits or income arising in such other Contracting State.The provision of this Article shaH not apply if t was the main purpose or one of the mainpurposes of anyperson c o n c e r n e ~ w ! t l " ! the c[i::i!tiQJ] orassigrunentoftheshares-orotherrigl1is- in respect o r w h i c h t h ~ dividend is paid to take advantage of this AJ1icle by meansof that creation or assignment.

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Article 11INTEREST

1. Interest arising in a Contracting State and paid to a resident of the other Contracting Statemay be taxed in that other Contracting States.

2. However, such interest may a1so be taxed in the Contracting State in whieh it arises andaccording to the laws of that Contracting State, but if the beneficial owner of the interestis a resident of the other Contracting 8tate, the tax sa charged shaU not exceed ten (10)per cent of the gr08S amemnt of he interest

3.

The competent authorities of the Contracting States shaU by mutual agreement settle themodeofapplication ofthis limitation.Notwithstanding the provisions ofparagraph 2, interest arising in a Contracting State andpaid ta the Government of the other Contracting State shaH be exempt from tax in thefrrst-mentioned Contracting State.

4. The term "interest" as used in this Article means income from debt daims of every kind,whether or not secured by mortgage and whether or not carrying a right to participate inthe debtors profits, and in particular, income from government securities and incomefrom bonds or debentures, including premiums and prizes attaching to such securities,bonds or debentures, as weU as incarne assimilated to income from money lent by thetaxation laws of the Contracting State in which the incomearises inc1uding interest ondeferred payment sales. Penalty charges for late payment shaH not be regarded as interestfor the purpose ofthis Article.

5. The provisions of paragraphs 1 and 2 shaU not apply if the beneficial owner of theinterest, being a resident of a Contracting State, carries on business in the otherContracting State in which the interest arises, tlrrough a permanent establishment situatedtherein, or perforrns in that other Contracting State independent personal services from afixed base situated therein, and the debt-c1aim in respect of which the interest is paid iseffectively conn ected with (a) such permanent establishment or fixed base or with (b)business activities referred to in (c) of paragraph 1 of Article 7. In :3Uch case, theprovisions ofArticle 7 or 15, as the case may be, shaH apply.6. Interest shall be deemed to arise in a Contracting State when the payer is a resident ofthat Contracting State. Where, however, the persan paying the interest, whether he is a

resident of a Contracting State or not, has in a Contracting State a permanentestablishment or fixed base in connec ian with which the indebtedness on which theinterest is paid was incurred, and such interest is borne by such permanent establishment

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or fixed base, then such interest shaH deemed ta arise in the Contracting .State in wruchthe permanent establishment or fixed base is situated.7. Where, by reason of a special relationship between the payer and the beneficial owner orbetween bath of them and sorne other persan, the amount of the interest, having regard to

the debt-claim for which it is paid, exceeds the amount which would have been agreedupon by the payer and the beneficial owner in the absence of such rel ati onship theprovisions of this Article shaH apply only ta the last-mentioned amount. ln such case, theexcess prut of the payments shaH remain taxable according to the laws of eachContracting State, due regard being had to the other provisions ofthis Agreement.8. The provisions of this Article shaH not apply if it was the main pUl-pose or one of themain purposes of any persan concemed with the creation or assignment of the debt-claimin respect of which the interest is paid to take advantage of this Article by means of thatcreation or assignment.

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Article 12ROYALTIES

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

2. However, such royalties may also be taxed in a Contracting State in which they arise andaccording to the laws ofthat Contracting State, bu t if the beneficial owner of he royaltiesis a resident of the other Contracting State, the tax so charged shaH no t exceed ten (10)pel' centofthe grossamount of he royalties. .

3.

The competent authorities of the Contracting States shaH by mutual agreement settle themode of application of this limitation.Notwithstanding the provisions of paragraph 2, royalties arising in a Contracting Stateand paid to the Government of the other Contracting State shall be exempt from tax inthe first-mentioned Contracting State.

4. Th e terro "royalties" as used in this Article means payments of any kincl received as aconsideration for the use of, or the right to use, any copyright of literary, artistic orscientific work including .computer software, cinematograph films, or films or tapes ordiscs used for radio or television broadcasting, any patent, trade mark, design or model,plan, secret formula or process, or for the use of, or the right to use, industrial,commercial or scientific equipment, or for information concerning industrial, commercialor scientific experience.

5.

6.

The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of theroyalties, being a resident of a Contracting State, carries on business in the otherContracting State in which the royalties arise, through a permanent establishment situatedtherein, or performs in that other Contracting State independent personal services from afixed base situated therein, and the right or property in respect of which the royalties arepaid is effectively connected with (a) such permanent establishment or fixed base or with(b) business activities referred to in Cc) of paragraph 1 of Article 7. In such case, theprovisions of Article 7 or 15, as the case may be, shaH apply.Royalties shan be deemed to arise in a Contracting State when the payer Is a resident ofthat Contracting State. Where, however, the person paying the royalties, whether he is aresident of a Contracting State or no , has in a Contracting State a permanentestablishment or a fixed base in connection with which the liability to pa y the royaltieswas incurred, and such royalties are borne by such permanent establishment or fixedbase, then such royalties sha11 be deemed to arise in the Contracting state in which thepermanent establishment or fixed base is situated.

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7. Where, by reason of a special relationship between the payer and the beneficial owner orbetween both of them and sorne other person, the amount of the royalties, having regardto the use, right or information for which they are paid, exceeds the amount which wouldhave been agreed upon by the payer and the beneficial owner in the absence of suchrelationship, the provisions of tbis Article shaH apply only to the last-mentioned amount.In such case, the excess part of the payments shaH remain taxable according to the lawsof each Contracting State, due regard being had to the other provisions of this Agreement.

8. The provisions of this Article shaH not apply if it was the main p u r p O s ( ~ or one of themain- purposes-ofany-pers-onconceme-awithtlie-creatOii-o-f assign:meiifofTheriglifS-ill-respect of which the royalties are paid to take advantage of this Article by means of thatcreation or assignment.

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Article 13TECHNICAL FEES

1. Technical fees arising in a Conn'acting State which are derived by a resident of the otherContracting State may be taxed in that other Contracting State.

2. However, such technical fees may also be taxed in the Contracting State in which theyarise and according ta the laws of that Contracting State, bu t if the beneficial owner ofthe technical fees is a resident of the other Contracting State, the tax sa charged shaH notexceed-ten (-l-G}-per- cent-of-the gross--amount ofthe-tecbnic-atfees:--- -.-----------------

3. The term "technical Jees" as used in this Article means payments of any kind ta anypersan, other than ta an employee of the persan making the payments, in considerationfor any services of a technical, managerial or consultancy nature.

4. The provisions of paragraphs 1 and 2 shall no t apply if the beneficial owner of thetechnical fees, being a resident of a Contracting State, carries on business in the otherContracting State in which the technical fees arise through a permanent establishmentsituated therein, or performs in that other Contracting State independent personal servicesfrom a fixed base situated therein, and the technical fees are effectively connected with(a) such pennanent establishment or fixed base or with (b) business activities referred toin Cc) of paragraph 1 of Article 7. In such case, the provisions of Article 7 or Article 15,as the case ma y be, shaH apply.

5. Technical fees shaH be deemed ta arise in a Contracting State when the payer is a residentof that Contracting State. Where, however, the persoq paying the technica:I fees, whetherhe is a resident of that Contracting State or not, has in that Contracting State a permanentestablishment or a fixed base in connection with which the liability to pay the technicalfees was incurred, and such technical fees are borne by such permanent e:3tablishment orfixed base, then such technical fees shall be deemed ta arise in the Contracting State inwhich the permanent establishment or fixed base is situated.

6. Where, by reason of a special relationship between the payer and the beneficial owner orbetween bath of them and sorne other persan, the amount of the technical fees paidexceeds, for whatever reason, the amount which would have been agreed upon by thepayer and the beneficial owner in the absence of such relationship, the provisions of thisArticle shaH apply only ta the last-mentioned amount. In such case, the excess part of thepayments shaH remain taxable according ta the laws of each Contracting State, dueregard being had ta the other provisions ofthis Agreement.

7. The provisions of this Article shall no t apply if it was the main purpose or one of themain purposes of any persan concemed with the creation or assignment of the rights in

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respect of wbich the technical fees are paid to take advantage of tbis Artic:le by means ofthat creation or assignment.

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Article 14CAPITAL GAINS

1. Gains derived by a resident of a Contracting State from the alienation of immovableproperty referred to in Article 6 and situated in the other Contraeting State may be taxedin that other Contraeting State.

2 Gains from the alienation of movable property fOIn1ing part of business property of apeIn1anent establishment wmch an enterprise of a C o n t r a e t i n g _ ~ 1 l g : _ h t s j n ~ j h e _ o t h ~ ContiaC1iiig -Stilte-O-io[ m o v a b l e - p r o p e r t Y p - e l i a ~ i t o ; f ~ ~ d - b a ~ e available to a residentof a Contraeting State in the other Contracting State for the purpose of performingindependent personal services, ineluding sueh gaiIis from the alienation of sueh apermanent establishment ( alone or with the whole enterprise) or of such fixed base, maybe taxed in that other Contracting State.

3. Gains derived by an enterprise of a Contracting State from the alienation of ships oraireraft operated in international traffie or movable property pertaining to the operation ofsuch ships or aireraft shall be taxable only in that Contraeting State.4. Gains from the alienation of any property other than that referred to in paragraphs l, 2and 3, shail be taxable only in the Contracting State ofwmeh the alienator is a resident.5. Notwithstanding the provisions of paragraphs 1 and 2 of tms Article, gains arising in aContraeting State and paid to the Government of the other Contraeting State shall beexempt from tax in the first-mentioned Contraeting State.

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Article 15~ E P E N D E N T P E R S O N A L S E R V I C E S

1. Incorne derived by a resident of a Contracting State in respect ofprofessional services orother activities of an independent character shaH be taxable only in that Cqntracting Stateunless he has a fixed base regularly available to him in the other Contracting State for thepurpose of performing ms activities or he is present in that other Contracting State for aperiod or periods in the aggregate 183 days within any twelve month period commencingor ending in the fiscal year concerIl._ed. I f 1 ! ~ J l a ~ ~ u c h J L f i x e d _ b a ~ e _ o I I e m a i n s - - i n - t h a t - o t h e r -. Cntract.i.ngState f o r - t h e - ; i ; ~ ~ ~ ~ d period or periods, the income may be taxed in theother Contracting State but only so much of it as is attributable to that fixed base or isderived in that other Contracting State during the afo.resaid period or periods.

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

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Article 16DEPENDENTPERSONALSERVlCES

1. Subject to the provisions of Articles 17, 19,20 and 21, salaries, wages and other similarremuneration derived by a resident of a Contracting State in respect of an employmentshaH be taxable only in that Contracting State unless the employment is exercised in theother Contracting State. If the employment is so exercised, such remuneration as isderived therefrom may be taxed in that other Contracting State.

2;- . - . N D t w i t h s t a n d m g - t l r e p r o v i s i o n s - - 6 f p a r a g r a p 1 i - T ~ r e m u n e r a t l o n - - o r - r n c o I n , e - d e r i v e d b y a resident of a Contracting State in respect of an employment exercised in the otherContracting State shal l be taxable only in the frrst-mentioned Contracting State if:Ca) the recipient is present in the other Contracting State for a period or periods notexceeding in theaggregate 183 days in any twelve month period c:ommencing orending in the fiscal year concerned, and(b) the remuneration or income is paid by, or on behalf of, an employer who is not a

resident of the other Contracting State, andCc) the rernuneration 1S not borne by a permanent establishment or a fixed base whichthe employer has in the other Contracting State.

3. Notwithstanding the preceding paragraphs of this Article, remuneration derived by anyemployee of an enterprise of a Contracting State in respect of an employment exercisedaboard a ship or aircraft operated in international traffic, may be taxed in that ContractingState.

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Article 17DIRECTOR'S FEES

1. Directors' fees and similar payments derived by a resident of a Contracting State in biscapacity as member of board of directors or any other similar organ of a company wbichis a resident of the other Contracting State may be taxed in that other Contl"acting State.

2. The remuneration wbich a person to whom paragraph 1 applies derived from thecompany in respect of the discharge of day-to-day function of a managerial or technicat __nature shan be taxedinaccofci"Uice-wrtlltIie"provlilons ofArtlCle16:-----------------

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Article 18ARTISTES AND SPORTSPERSONS

1. Notwithstanding the provisions of Aliicle 15 and 16, income derived by a resident of aContracting State as an entertainer, such as a theatre, motion picture, radio or televisionartiste, or a musician, or as a sportsperson, from his personal activities as such exercisedin the other Contracting State, may be taxed in that other Conu'acting State.2, Where income in respect of personal activities exercised by an entertainer or asportsprsoni ll Iiiscapacity assuchaccrues noTio thatentertalner-or s p - o r t ! ~ p e r ~ o n h l m s ~ i T but to another person, that income may, notwithstanding the provisions of Article 7, 15,

and 16, be taxed in the Contracting State in which the activities of the entertainer orsportsperson are exercised,3. Notwithstanding the provisions of paragraphs 1 and 2, income derived .from activitiesreferred to in paragraph 1 shall be exempt from tax in the Contracting Sta.te in which theactivities are exercised if the visits to that Contracting State are wholly or substantiallysupported by public funds of the other Contracting State or a political subdivision, a localauthority or a statutory body thereof.

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Article 19PENSIONS AND SOCIAL SECVRITY PAYMENTS

1. Subject to the prOVISIOns of paragraph 2 of Article 20, pension and other similarremuneration paid to a resident of a Contacting State in consideration of past employmentshall be taxable only in that Contracting State.2. Notwithstanding the provisions of paragraph 1, pensions paid and other payment madeunder a public scheme which is part of the social security system of a Contracting State----- shaH oe-taxabfe -iily-mtnat-COntriciing"State-:- - - - - - ~ - - _ . - ------- ~ - - - - - - . _ . - . - - - - - - ~ - - - - - - - ~ - - - - . - - - - - -

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Article 21STUDENTS AND TRAINEES

1. An individual who is a resident of a Contracting State immediately before making avisit to the other Contracting State and is temporarily present in the other ContractingState solely:Ca) as a student at a recognized university, college, school or other similar

recognized education institution in that other Contracting State;

Cc) as a recipient of a grant, allowance or award for the primary purpose of study,researchor training from the Government of either Contracting State or from ascientific, educational, religious or charitable organization or under a technicalassistance programme entered into by the Government of either Contracting State,

shaH be exempt from tax ofthat other Contracting State on:Ci) all remuneration from abroad for the purposes of his maintenance, education,study, research or training;(ii) the amount of such grant, allowance or award; and(iii) any remuneration in respect of services in that other Contracting State providedthe services are performed in connection with his study, research oi training or arenecessary for the purposes ofhis maintenance.

2. An individual who was a resident of a Contracting State immediately before visiting theother Contracting State and is temporarily present in that other Contracting State solely asa trainee for the purpose of acquiring technica1, professional or business experience, shaHfor a period not exceeding four years from the date of ms first arrivaI in that otherContracting State in connection with that visit be exempt from tax in that otherContracting State in respect of:(a) aIl remittances from abroad for the purpose ofhis maintenance or training; and(b) any remuneration for personal services rendered in that other Contracting State inso far as the amount does not exceed non taxable income under the law of that

Contracting State.3. The benefits of paragraphs 1 and 2 of this Article shaH not be concurrently cumulative.

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Article 22TEACHERS AND RESEARCHERS

A teacher or researcher who is a resident of a Contraeting State imme,diately beforemaking a visit to the other Contraeting State and who, at the invitation of any approveduniversity, eollege, sehool , other similar edueational institution or seentifie researehinstitution, visits that other Contraeting State for a period not exeeeding two years fromthe date of his arrivaI in that other Contraeting State solely for the p u r p o s ~ of teaehing orreseareh or both at sueh edueational or researeh institution, shall be exempt from tax in1 a r O l E . e T G i f r a c t i i i g ~ S T a T e on inyremuneraHon derived from such teachi:J;g o r ~ researeh.

2. The tenn "approved" in paragraph 1 refers to the approval given by the Contracting Statein which the university, college, school or other similar edueational institution ' orscientific research institution is situated. '

3. This Article shaH not apply to income from research ifsuch researeh is undertakenprimarily for the private benefit of a specifie persan or persons.

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Article 24METHODS FO R ELIMINATION OF DOUBLE TAXATION:

1. In the case of Brunei Darussalam, double taxation shall be eliminated as fOllows:(a) Where a resident of Brunei Darussalam derives income wruch, in a:ccordance with

the provisions of this Agreement, may be taxed in Lao PDR, Brunei DarussalamshaH, subject to its laws regarding allowances as a credit against Bru;o.ei Darussalamtax of tax payable in any country other than Brunei Darussalam, aHow as a _- ----------- .. ~ - - - - " - . - - - _ . ~ . - - - - - . - - ~ .. - - - ~ ~ ~ - - - . - - ~ - - - - - - ~ _ _ _ t _ _ _ - - - - ~ - - - - -deduction from the tax on the income of that resident an amount equal to theincome tax paid in Lao PDR, whether directly or by deduction. ~ , u c h deductionshaH not, however, exceed that part of the income tax (as comp{lted before thededuction is given) which is attributable to the income wruch may be taxed in LaoPDR.

. '(b) Where the income derived from Lao PDR is a dividend paid by a company which isa resident of Lao PDR to a company which is a resident of Brunei parussalam andwhich owns not less than ten (10) per cent of the shares of the company paying thedividend, the credit shaH take into account the tax paid to Lao PDR 1:!y the companypaying the dividend in respect of its income.

2. In the case of Lao PDR, double taxation shaH be eliminated as foHows:(a) Where a resident of Lao PDR derives income which, in accordance

provisions of this Agreement, may be taxed in Brunei Darussalam, Lao PDR shaHallow as a deduction from Lao tax on the income of that resident an amount equal tothe tax paid in Brunei Darussalam. Such deduction shaH not, howe\{er, exceed thatpart of the Lao tax, as computed before the deduction is given, WhicJ,l is attributableto such items of ncome.

(b) Where the income derived from Brunei Darussalam is a dividend paiet by a companywhich is a resident of Brunei Darussalam to a company which is a resident of LaoPDR and which owns not less ilian ten (10) per cent of the shares Mthe companypaying the dividend, the credit shaH take into account the tax ]Jaid to BruneiDarussalam by the company paying the dividend in respect of its inc()me.

3. For the purposes of paragraphs 1 and 2, the term "income tax paid" ir,l a ContractingState shaH be deemed to include the tax which would have been payable but for the taxincentives granted under the laws of that Contracting State and wruch c ~ r e designed topromote economic development.

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NON-DISCRIMINATION

1. Nationals of a Contracting State shall not be subjected in the other Contracting State toany taxation or any requirement connected therewith which is other or m ~ ) f e burdensomethan the taxation and connected requirements to which nationals ofthat otl,ler ContractngState in the same circumstances, in particular with respect to residence,: are or may besubjected.- -2.- --Tfie-ta:iiflonon-i! pennanentestaolisnmenTor'-fixed- b a s e w b I : 1 a n - e n t e ; P r i ~ f ; ' -Contracting State has in the othe r Contracting State shall not be less favowably levied inthat other Contracting State than the taxation levied on enterprises; of that otherContracting State carrying on the sameactivit ies. This provi sion shaH not be construed asobliging a Contracting State to grant to residents of the other C o n t r a ~ : t i n g State anypersonal allowances, relief and reductions for taxation purposes on a c c o u ~ t of civil statusor family responsibilities which it grants to its own residents.

3. Enterprises of a Contracting State, the capital of which is wholly or partly owned orcontrolled, directly or indirectly, by one or more residents of the other Cointracting State,shall not be subjected in the frrst-mentioned Contracting State to any ~ a x a t i o n or anyrequirement connected therewith which is other or !pore burdensome t h ~ n the taxationand connected requirements to which other similar enterprises of that frrst-mentionedContracting State are or may be subjected. 4. Except where the provisions of paragraph 1 of Article 9, paragraph 8: of Article I l,paragraph 7 of Article 12 and paragraph 6 of Article 13 apply, interest roy\ilties, technicalfees and other disbursements paid by an enterprise of a Contracting State :to a resident ofthe other Contracting State shaH, for the purpose of determining the tro:able profits ofsuch enterprise; be deductible under the same conditions as if they had ibeen paid to aresident of the first-mentioned Contracting State. '

5. The provisions of this Article shaH apply to the taxes which are the ,subject of thisAgreement.6. Where a Contracting State grants tax incentive to its nationals design,:ed to promoteeconomic or social development in accordance with its national policy 1and criteria, itshaH not be construed as discrimination under this Article.

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Article 26MUTUALAGREEMENTPROCEDURE

1. Wllere a persan considers that the actions of one or both of the Contracting States resultor will result for him in taxation not in accordance with the provisions of tls Agreement,he may, notwithstanding the remedies provided by the domestic laws re1ated to taxationof those Contracting States, present his case to the competent authority of the ContractingState of which he is a resident or, if his case cornes under paragraph 1 o'f Article 25, tothat of the Contracting State of wmch ~ _ ~ _ a national. The case must p'rese_nted within_-Thiee Y-irs-tromthe fustn-otlf!cationof the action resulting in taxation not in accordancewith the provisions of this Agreement.

2. The competent authority sha11 endeavour, if the objection appears to it to "!Je justified andif it is not itself able ta arrive at a satisfactory solution, to resolve the I ~ a s e by mutualagreement with the competent authority of the other Contracting State, w i ~ h a view to theavoidance of taxation which is not in accordance with this Agreement. Any agreementreached sha11 be implemented notwithstanding any time lints in the dome:stic laws of theContracting States.

3. The competent authorities of the Contracting States sha11 endeavour to res:olve by mutualagreement any difficulties or doubts arising as to the interpretation or application of thisAgreement. They may a1so consult together for the elimination of dou,hle taxationcases not provided for in tls Agreement.

4. The competent authorities of the Contracting States may c ~ m m u n i c a t e ',J'Vith each otherfor the pWl'0se of reaching an agreement in the sense of the preceding par',Lgraphs.

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Article 27EXCHANGE INFORMATION

1. The competent authorities of the Cont racting States shaH exchange such information as isnecessary for carrying out the provisions of this Agreement or of the dome,;stic laws of theContracting States concerning taxes covered by this Agreement, in so far: as the taxationthereunder is not contrary ta this Agreement, in particular for the prevell1:ion of fraud orevasion of such taxes. The exchange of information is not restricted by! Article 1. Anyinformation received by a Contracting State shall be treated as secret in th;e saIlle manner----as-ilifb-fIJ:la.uonohtameounder the domestic laws of the Contracting State and shall bedisclosed oruy to persons or authorities (including courts and admini;;trative bodies)concemed with the assessment, collection of, the enforcement or prosecl:1tion in respectof, or the determination of appeals in relation to, the taxes covered by ~ h i s Agreement.Such persons or authorities shaH use the information oruy for such purpOS(!S including thedisclosure of such information in public court proceedings or in judicial de:cisions.

2. In no case shaH the provisions of paragraph 1 be construed so as to imposeContracting State the obligation:(a) to carry out administrative measures at variance with the )aws

administrative practice of that or the other Contracting State;(b) ta supply information which is not obtainable under the laws or in the normalcourse of the administration of that or of the other Contracting S t a t ; ~ ; (c) ta supply information which would disclose any trade, busin;ess, industrial,

commercial or professional secret or trade process, or information', the disclosureof which would be contrary to public policy (ordre public). '

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Article 28MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

Notbing in tbis Agreement shaH affect the fiscal privileges ofmembers of d i p l o m ~ t i c missions orconsular posts under the general rules of international law or under the provisions of specialagreements.

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Article 29ENTRY INTO FORCE

1. This Agreement shaH enter into force on the thirtieth day after the :datediplomatie notes indieating the eompletion of the internaI legal proeedur,es neeessary ineaeh Contraeting State for the bringing mto force of this Agreemnt have beenexehanged. '2. This Agreement shaH have effeet for the year of assessment beginning on j')r after the frrst~ - - - ~ - - - d a y - - O L J a n u a . r : Y - i n - t h e - c a l e n d a l ' - y e a f - - i m m e d i a t 6 1 y - - f ( ) l l e w i n g - t h e - y e a r - : - i n - w h i c h - t l n ~ - - - + ~ ' 1 :

Agreement enters into foreeand subsequent years of assessment.

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Article 30TERMINATION

Tms Agreement sha11 remain in force until term.inated by a Contracting State. Eitller Contracting1State may terminate tms Agreement, through diplomatie channels, by giving written notice oftermination on or before the thirtieth of June of any calendar year after the p e r i ~ d of five yearsfrom the year in wmch this Agreement enters into force. In such event, this Agreement shallcease to have effect for the year of assessment beginning on or after the first da:y of January inthe second calendar year following the year in wmch the notice is given and subsequent years of1---asseSfTment.-----IN WITNESS WHEREOF, the undersigned, being duly authorised thereto, h':lve signed thisAgreement.

Done in duplicate at Bandar Seri Begawan, Brunei Darussalam this 22nd day: of April TwoThousand and Six, in English language.

For the Government ofHis Majesty the Sultanand Yang Di-Pertuan ofBrunei Darussalam

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For the Govel:nmentof the Lao Pe(?ple'sDemocratie Republic1

Documents

DTC agreement between Brunei Darussalam and Lao People's Democratic Republic