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C O N V E N T I O N

BETWEEN THE GOVERNMENT OF THE REPUBLIC OF ALBANIA

AND THE GOVERNMENT OF THE RUSSIAN FEDERATION FOR

THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO

TAXES ON INCOME AND ON CAPITAL

Date of Conclusion: 12 April 1995

Entry into force: December 1997Effective date: 1 January 1998

A r t i c l e 1

PERSONAL SCOPE

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

A r t i c l e 2

TAXES COVERED

1. This Convention shall apply to taxes on income andon capital imposed on behalf of a Contracting State orof its local authorities, irrespective of the manner inwhich they are levied.

2. There shall be regarded as taxes on income and oncapital all taxes imposed on total income, on totalcapital, or on elements of income or of capital,including taxes on gains from the alienation of movableor immovable property, as well as taxes on capitalappreciation.

3. The existing taxes to which the Convention shallapply are in particular:

a) In Albania :


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(i) the profit tax;

(ii) the small business taxes;

(iii) the individual income tax;

(iv) the taxes on property;

(hereinafter referred to as "Albanian Tax");

b) In the Russian Federation:

(i) the taxes on income and profits imposed inaccordance with the laws of the RussianFederation "On taxes on profits ofenterprises and organizations" and "Onincome tax on individuals";

(ii) the taxes on property imposed in accordancewith the laws of the Russian Federation "Ontax on property of enterprises" and "Ontaxes on property of individuals";

(hereinafter referred to as "Russian tax").

4. The Convention shall apply also to any identical orsubstantially similar taxes which are imposed after thedate of signature of the Convention in addition to, or

in place of, the existing taxes. The competentauthorities of the Contracting States shall notify eachother of any significant changes which have been made intheir respective taxation laws.

A r t i c l e 3

GENERAL DEFINITIONS

1. For the purposes of this Convention unless the

context otherwise requires:

a) the term "Albania" means the Republic of Albania, andwhen used in a geographical sense means the territory ofthe Republic of Albania including territorial waters andair space over them as well as any area beyond theterritorial seas of the Republic of Albania which, inaccordance with international law and the laws of theRepublic of Albania, is an area within which theRepublic of Albania may exercise rights with respect tothe seabed and subsoil and their natural resources;


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b) the term "the Russian Federation" when used ingeographical sense, means its territory, including itsinland waters and territorial sea, air space over themas well as continental shelf and the exclusive economiczone, where the Russian Federation has sovereign rightsand exercises jurisdiction in conformity with the

federal law and international law. The terms "theRussian Federation" and "Russia" are equivalent;

c) the terms "a Contracting State" and "the otherContracting State" mean Albania or the RussianFederation as the context requires;

d) the term "person" includes an individual, a companyand any other body of persons;

e) the term "company" means any body corporate or anyentity which is treated as a body corporate for tax

purposes;

f) the terms "enterprise of a Contracting State" and"enterprise of the other Contracting State" meanrespectively an enterprise carried on by a resident of aContracting State and an enterprise carried on by aresident of the other Contracting State;

g) the term "national" means:

(i) in the case of Albania:

-any individual possessing the nationality of

Albania;

-any legal person, partnership and associationderiving its status as such from the laws inforce in Albania;

(ii) in the case of the Russian Federation:any individual possessing the citizenship ofthe Russian Federation;

h) the term "international traffic" means any transportby a ship, an aircraft or a road-transport vehicle

operated by an enterprise of a Contracting State, exceptwhen the ship, aircraft or road-transport vehicle isoperated solely between places in the other ContractingState;

i) the term "competent authority" means :

(i) in the case of Albania the Minister of Financeor his authorized representative;

(ii) in the case of Russian Federation the Ministryof Finance or its authorized representative.


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A r t i c l e 5

PERMANENT ESTABLISHMENT

1. For the purposes of this Convention, the term

"permanent establishment" means a fixed place ofbusiness through which the business of an enterprise iswholly or partly carried on.

2. The term "permanent establishment" includesespecially:

a) a place of management;

b) a branch;

c) an office;

d) a factory;

e) a workshop; and

f) a mine, an oil or gas well, a quarry or any otherplace of extraction of natural resources.

3. A building site or construction or installation orassembly project constitutes a permanent establishmentonly if it lasts more than 12 months.

4. Notwithstanding the preceding provisions of this

Article the term "permanent establishment" shall bedeemed not to include:

a) the use of facilities solely for the purpose ofstorage, display or delivery of goods or merchandisebelonging to the enterprise;

b) the maintenance of a stock of goods or merchandisebelonging to the enterprise solely for the purpose ofstorage, display or delivery;

c) the maintenance of a stock of goods or merchandise

belonging to the enterprise solely for the purpose ofprocessing by another enterprise;

d) the maintenance of a fixed place of business solelyfor the purpose of purchasing goods or merchandise or ofcollecting information, for the enterprise;

e) the maintenance of a fixed place of business solelyfor the purpose of carrying on, for the enterprise, anyother activity of a preparatory or auxiliary character.

5. Notwithstanding the provisions of paragraphs 1 and


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2, where a person -other than an agent of an independentstatus to whom paragraph 6 applies- is acting on behalfof an enterprise and has, and habitually exercises, in aContracting State an authority to conclude contracts inthe name of the enterprise, that enterprise shall bedeemed to have a permanent establishment in that State

in respect of any activities which that personundertakes for the enterprise, unless the activities ofsuch person are limited to those mentioned in paragraph4 which, if exercised through a fixed place of business,would not make this fixed place of business a permanentestablishment under the provisions of that paragraph.

6. An enterprise of a Contracting State shall not bedeemed to have a permanent establishment in the otherContracting State merely because it carries on businessin that other State through a broker, general commissionagent or any other agent of an independent status,

provided that such persons are acting in the ordinarycourse of their business. 7. The fact that a companywhich is a resident of a Contracting State controls oris controlled by a company which is a resident of theother Contracting State, or which carries on business inthat other State (whether through a permanentestablishment or otherwise), shall not of itselfconstitute either company a permanent establishment ofthe other.

A r t i c l e 6

INCOME FROM IMMOVABLE PROPERTY

1. Income derived by a resident of a Contracting Statefrom immovable property (including income fromagriculture or forestry) situated in the otherContracting State may be taxed in that other State.

2. The term "immovable property" shall have the meaningwhich it has under the law of the Contracting State inwhich the property in question is situated. The termshall in any case include property accessory to

immovable property, livestock and equipment used inagriculture and forestry, rights to which the provisionsof general law respecting landed property apply,usufruct of immovable property and rights to variable orfixed payments as consideration for the working of, orthe right to work, mineral deposits, sources and othernatural resources; ships, aircraft or road-transportvehicles shall not be regarded as immovable property.

3. The provisions of paragraph 1 shall apply to incomederived from the direct use, letting, or use in anyother form of immovable property.


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permanent establishment of goods or merchandise for theenterprise.

6. For the purposes of the preceding paragraphs, theprofits 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 thecontrary.

7. Where profits include items of income which aredealt with separately in other Articles of thisConvention, then the provisions of those Articles shallnot be affected by the provisions of this Article.

A r t i c l e 8

INTERNATIONAL TRANSPORT

1. Profits from the operation of ships, aircraft orroad-transport vehicles in international traffic shallbe taxable only in the Contracting State in which theplace of effective management of the enterprise issituated.

2. The provisions of paragraph 1 shall also apply toprofits from the participation in a pool, a jointbusiness or an international operating agency.

A r t i c l e 9

ADJUSTMENTS TO INCOME IN CASES WHERE PERSONS

PARTICIPATE DIRECTLY OR INDIRECTLY IN THE MANAGEMENT,

CONTROL OR CAPITAL OF OTHER PERSONS

1. Where :

a) an enterprise of a Contracting State participatesdirectly or indirectly in the management, control or

capital of an enterprise of the other Contracting State,or

b) the same persons participate directly or indirectlyin the management, control or capital of an enterpriseof a Contracting State and an enterprise of the otherContracting State,

and in either case conditions are made or imposedbetween the two enterprises in their commercial orfinancial relations which differ from those which wouldbe made between independent enterprises, then any


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profits which would have accrued to one of theenterprises, but, by reason of those conditions, havenot so accrued, may be included in the profits of thatenterprise and taxed accordingly.

2. Where a Contracting State includes in the profits of

an enterprise of that State -and taxes accordingly-profits on which an enterprise of the other ContractingState has been charged to tax in that other State andthe profits so included are profits which would haveaccrued to that enterprise of the first-mentioned Stateif the conditions made between the two enterprises havebeen those which would have been made betweenindependent enterprises, then that other State shallmake an appropriate adjustment to the amount of the taxcharged therein on those profits. In determining suchadjustment due regard shall be had to the otherprovisions of this Convention and the competent

authorities of the Contracting States shall if necessaryconsult each other.

A r t i c l e 10

DIVIDENDS

1. Dividends paid by a company which is a resident of aContracting State to a resident of the other ContractingState may be taxed in that other State.

2. However, such dividends may also be taxed in theContracting State of which the company paying thedividends is a resident, and according to the laws ofthat State, but the tax so charged shall not exceed 10percent of the gross amount of the dividends.

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

3. The term "dividends" as used in this Article means

income from shares, not being debtclaims, participatingin profits, as well as income from other corporaterights which is subjected to the same taxation treatmentas income from shares by the laws of the State of whichthe company making the distribution is a resident.

4. The provisions of paragraphs 1 and 2 shall not applyif the beneficial owner of the dividends, being aresident of a Contracting State, carries on business inthe other Contracting State of which the company payingthe dividends is a resident, through a permanentestablishment situated therein, or performs in that


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other State independent personal services from a fixedbase situated therein, and the holding in respect ofwhich the dividends are paid is effectively connectedwith such permanent establishment or fixed base. In suchcase, the provisions of Article 7 or Article 14, as thecase may be, shall apply.

5. Where a company which is a resident of a ContractingState derives profits or income from the otherContracting State, that other State may not impose anytax on the dividends paid by the company, except insofaras such dividends are paid to a resident of that otherState or insofar as the holding in respect of which thedividends are paid is effectively connected with apermanent establishment or a fixed base situated in thatother State, nor subject the company's undistributedprofits to a tax on the company's undistributed profits,even if the dividends paid, or the undistributed profits

consist wholly or partly of profits or income arising insuch other State.

A r t i c l e 11

INTEREST

1. Interest arising in a Contracting State and paid toa resident of the other Contracting State may be taxedin that other State.

2. However, such interest may also be taxed in theContracting State in which it arises and according tothe laws of that State, but if the recipient is thebeneficial owner of the interest the tax so chargedshall not exceed 10 per cent of the gross amount of theinterest.

3. The term "interest" as used in this Article meansincome from debt-claims of every kind, whether or notsecured by mortgage and in particular, income fromgovernment securities and income from bonds and

debentures, including premiums and prizes attaching tosuch securities, bonds or debentures. Penalty chargesfor late payment shall not be regarded as interest forthe purpose of this Article.

4. The provisions of paragraphs 1 and 2 shall not applyif the recipient of the interest, being a resident of aContracting State, carries on business in the otherContracting State in which the interest arises, througha permanent establishment situated therein, or performsin that other State independent personal services from afixed base situated therein and the debt-claim in


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respect of which the interest is paid is effectivelyconnected with such permanent establishment or fixedbase. In such case the provisions of Article 7 orArticle 14, as the case may be, shall apply.

5. Interest shall be deemed to arise in a Contracting

State when the payer is that State itself, a politicalsubdivision, a local authority or a resident of thatState. 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 ora fixed base in connection with which the indebtednesson which the interest is paid was incurred, and suchinterest is borne by such permanent establishment orfixed base, than such interest shall be deemed to arisein the Contracting State in which the permanentestablishment or fixed base is situated.

6. Where by reason of a special relationship betweenthe payer and the beneficial owner or between both ofthem and some other person, the amount of the interest,having regard to the debt-claim for which it is paid,exceeds the amount which would have been agreed upon bythe payer and the beneficial owner in the absence ofsuch relationship, the provisions of this Article shallapply only to the last-mentioned amount. In such casethe excess part of the payments shall remain taxableaccording to the laws of each Contracting State, dueregard being had to the other provisions of thisConvention.

A r t i c l e 12

ROYALTIES

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

2. However, such royalties may also be taxed in the

Contracting State in which they arise and according tothe laws of that State, but if the recipient is thebeneficial owner of the royalties, the tax so chargedshall not exceed 10 per cent of the gross amount of theroyalties.

3. The term "royalties" as used in this Article meanspayments of any kind received as a consideration for theuse of, or the right to use, any copyright of literary,artistic or scientific work including cinematographfilms and films or tapes for radio or televisionbroadcasting, any patent, trade mark, design or model,


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plan, secret formula or process, or for the use of orthe right to use industrial, commercial, or scientificequipment, or for information concerning industrial,commercial or scientific experience.

4. The provisions of paragraphs 1 and 2 shall not apply

if the beneficial owner of the royalties, being aresident of a Contracting State, carries on business inthe other Contracting State in which the royaltiesarise, through a permanent establishment situatedtherein, or performs in that other State independentpersonal services from a fixed base situated therein,and the right or property in respect of which theroyalties are paid is effectively connected with suchpermanent establishment or fixed base. In such case theprovisions of Article 7 or Article 14, as the case maybe, shall apply.

5. Royalties shall be deemed to arise in a ContractingState when the payer is that State itself, a politicalsubdivision, a local authority, or a resident of thatState. Where, however, the person paying the royalties,whether he is a resident of a Contracting State or not,has in a Contracting State a permanent establishment ora fixed base in connection with which the liability topay the royalties was incurred, and such royalties areborne by such permanent establishment or fixed base,then such royalties shall be deemed to arise in theState in which the permanent establishment or fixed baseis situated.

6. Where, by reason of a special relationship betweenthe payer and the beneficial owner or between both ofthem and some other person, the amount of the royalties,having regard to the use, right or information for whichthey are paid, exceeds the amount which would have beenagreed upon by the payer and the beneficial owner in theabsence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount.In such a case, the excess part of the payments shallremain taxable according to the laws of each ContractingState, due regard being had to the other provisions ofthis Convention.

A r t i c l e 13

CAPITAL GAINS

1. Gains derived by a resident of a Contracting State


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from the alienation of immovable property, referred toin Article 6 and situated in the other Contracting Statemay be taxed in that other State.

2. Gains from the alienation of movable propertyforming part of the business property of a permanent

establishment which an enterprise of a Contracting Statehas in the other Contracting State or of movableproperty pertaining to a fixed base available to aresident of a Contracting State in the other ContractingState for the purpose of performing independent personalservices, including such gains from the alienation ofsuch a permanent establishment (alone or with the wholeenterprise) or of such a fixed base, may be taxed inthat other State.

3. Gains derived by a resident of a Contracting Statefrom the alienation of ships or aircraft or road-

transport vehicles operated in international traffic ormovable property pertaining to the operation of suchships, aircraft or road-transport vehicles shall betaxable only in that State.

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

A r t i c l e 14

INDEPENDENT PERSONAL SERVICES

1. Income derived by a resident of a Contracting Statein respect of professional services or other activitiesof an independent character shall be taxable only inthat State, unless he has a fixed base regularlyavailable to him in the other Contracting State for thepurpose of performing his activities. If he has such afixed base, the income may be taxed in the other Statebut only so much of it as is attributable to that fixedbase.

2. The term "professional services" includes especiallyindependent scientific, literary, artistic, educationalor teaching activities as well as the independentactivities of physicians, dentists, lawyers, engineers,architects and accountants.

A r t i c l e 15

DEPENDENT PERSONAL SERVICES


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1. Subject to the provisions of Articles 16, 18, 19, 20and 21, salaries, wages and other similar remunerationderived by a resident of a Contracting State in respectof an employment shall be taxable only in that Stateunless the employment is exercised in the other

Contracting State. If the employment is so exercised,such remuneration as is derived therefrom may be taxedin that other State.

2. Notwithstanding the provisions of paragraph 1,remuneration derived by a resident of a ContractingState in respect of an employment exercised in the otherContracting State shall be taxable only in the first-mentioned State if:

a) the recipient is present in the other State for aperiod or periods not exceeding in the aggregate 183

days in the calendar year concerned, and

b) the remuneration is paid by, or on behalf of, anemployer who is not a resident of the other State, and

c) the remuneration is not borne by a permanentestablishment or a fixed base which the employer has inthe other State.

3. Notwithstanding the provisions of paragraphs 1 and2, remuneration derived in respect of an employmentexercised aboard a ship, aircraft, or road-transportvehicle operated in international traffic by a resident

of a Contracting State, may be taxed in that State.

4. Notwithstanding the preceding provisions of this Article salaries and other remuneration derived by aresident of a Contracting State as a journalist or acorrespondent in the other Contracting State fromsources outside that other State, for a period notexceeding two years are not taxed in that other State.

A r t i c l e 16

DIRECTORS' FEES

1. Directors' fees and other similar payments derivedby a resident of a Contracting State in his capacity asa member of the board of directors or any similar organof a company which is a resident of the otherContracting State may be taxed in that other State.

A r t i c l e 17


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ARTISTES AND SPORTSMEN

1. Notwithstanding the provisions of Articles 14 and15, income derived by a resident of a Contracting State

as an entertainer, such as a theatre, motion picture,radio or television artiste, or a musician, or as asportsman, from his personal activities as suchexercised in the other Contracting State, may be taxedin that other State.

2. Where income in respect of personal activitiesexercised by an entertainer or a sportsman in hiscapacity as such accrues not to the entertainer orsportsman himself but to another person, that incomemay, notwithstanding the provisions of Articles 7, 14and 15, be taxed in the Contracting State in which the

activities of the entertainer or sportsmen areexercised.

3. Notwithstanding the provisions of paragraphs 1 and 2income derived by entertainers or sportsmen who areresidents of a Contracting State shall be exempt fromtax in the other Contracting State in which theseactivities are exercised if the activities are exercisedwithin the framework of a visit which is substantiallysupported by the first-mentioned State, a localauthority or a public institution thereof.

A r t i c l e 18

PENSIONS

Subject to the provisions of paragraph 2 of Article 19,pensions and other similar remuneration paid to aresident of a Contracting State in consideration of pastemployment shall be taxable only in that State.

A r t i c l e 19

GOVERNMENT SERVICES


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1. a) Remuneration, other than a pension, paid by aContracting State or a local authority thereof to anindividual in respect of services rendered to that Stateor authority shall be taxable only in that State.

b) However, such remuneration shall be taxable only in

the other Contracting State if the services are renderedin that other State and the individual is a resident ofthat State who:

(i) is a national of that State; or

(ii) did not become a resident of that State solelyfor the purpose of rendering the services.

2. a) Any pension paid by, or out of funds created by, aContracting State or a local authority thereof to anindividual in respect of services rendered to that State

or local authority shall be taxable only in that state.

b) However, such pension shall be taxable only in theother Contracting State if the individual is a residentof and a national of that State.

3. The provisions of Articles 15, 16 and 18 shall applyto remuneration and pensions in respect of servicesrendered in connection with a business carried on by aContracting State or a local authority thereof.

A r t i c l e 20

STUDENTS AND BUSINESS APPRENTICES

Payments which a student or business apprentice whois or was immediately before visiting a ContractingState a resident of the other Contracting State,receives solely for the purpose of his education ortraining shall not be taxed in that State provided thatsuch payments arise from sources outside that State.

A r t i c l e 21

TEACHERS AND RESEARCHERS

1. Where a professor, a teacher or a researcher who isor was immediately before visiting a Contracting State


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a resident of the other Contracting State is present inthe first-mentioned State for a period not exceeding twoyears for the purpose of carrying out advanced study orresearch or for teaching at a university, college,school or other educational institution, anyremuneration received for such work shall not be taxed

in the first-mentioned State, provided that suchremuneration is derived by him from outside that Stateand is subject to tax in the other State.

2. This Article shall not apply to income from researchif such research is undertaken primarily for the privatebenefit of a specific person or persons.

A r t i c l e 22

OTHER INCOME

1. Items of income of a resident of a ContractingState, wherever arising, not dealt with in the foregoing Articles of this Convention shall be taxable only inthat State.

2. The provisions of paragraph 1 shall not apply toincome, other than income from immovable property asdefined in paragraph 2 of Article 6, if the recipient ofsuch income, being a resident of a Contracting State,carries on business in the other Contracting State

through a permanent establishment situated therein, orperforms in that other State independent personalservices from a fixed base situated therein, and theright or property in respect of which the income is paidis effectively connected with such permanentestablishment or fixed base. In such case the provisionsof Article 7 or Article 14, as the case may be, shallapply.

3. Notwithstanding the provisions of paragraphs 1 and2, items of incomes of a resident of a Contracting Statenot dealt with in the foregoing Articles of this

Convention and arising in the other Contracting Statemay also be taxed in that other State.

A r t i c l e 23

CAPITAL

1. Capital represented by immovable property, referredto in Article 6, owned by a resident of a Contracting


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State and situated in the other Contracting State, maybe taxed in that other State.

2. Capital represented by movable property forming partof the business property of a permanent establishmentwhich an enterprise of a Contracting State has in the

other Contracting State or by movable propertypertaining to a fixed base available to a resident of aContracting State in the other Contracting State for thepurpose of performing independent personal services, maybe taxed in that other State.

3. Capital of a resident of a Contracting Staterepresented by ships, aircraft or road-transportvehicles operated in international traffic and bymovable property pertaining to the operation of suchships, aircraft or vehicles shall be taxable only inthat State.

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

A r t i c l e 24

ELIMINATION OF DOUBLE TAXATION

Double taxation shall be eliminated as follows:

a) in Albania:

(i) Where a resident of Albania derives income or ownscapital which in accordance with the provisions of thisConvention may be taxed in the Russian Federation,Albania shall allow as a deduction from its tax on theincome of that resident an amount equal to the incometax paid in the Russian Federation and as adeduction from its tax on the capital of that resident,an amount equal to the capital tax paid in the RussianFederation. Such deduction shall not, however, exceedthat part of the Albanian income tax or capital tax as

computed before the deduction is given which isattributable, as the case may be, to the income or thecapital which may be taxed in the RussianFederation.

(ii) Where in accordance with any provision of theConvention income derived or capital owned by a residentof Albania is exempt from tax in Albania, Albania maynevertheless, in calculating the amount of tax on theremaining income or capital of such resident,take into account the exempted income or capital.


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b) in the russian Federation:

where a resident of the Russian Federation derivesincome or owns capital which in accordance with theprovisions of this Convention may be taxed in Albania,the Russian Federation shall allow as a deduction from

its tax on the income or on the capital of that residentan amount equal to the income tax or capital tax paid inAlbania. Such deduction shall not, however, exceed thatpart of the Russian income tax or capital tax ascomputed before the deduction is given.

A r t i c l e 25

NON-DISCRIMINATION

1. Nationals of a Contracting State shall not besubjected in the other Contracting State to any taxationor any requirement connected therewith which is other ormore burdensome than the taxation and connectedrequirements to which nationals of that other State inthe same circumstances are or may be subjected. Thisprovision shall notwithstanding the provisions ofArticle 1 also apply to persons who are not residents ofone or both of the Contracting States.

2. The taxation on a permanent establishment which anenterprise of a Contracting State has in the other

Contracting State shall not be less favourably levied inthat other State than the taxation levied on enterprisesof that other State carrying on the same activities.This provision shall not be construed as obliging aContracting State to grant to residents of the otherContracting State any personal allowances, reliefs andreductions for taxation purposes on account of civilstatus or family responsibilities which it grants to itsown residents.

3. Except where the provisions of Article 9, paragraph6 of Article 11 or paragraph 6 of Article 12, apply,

interest, royalties and other disbursements paid by anenterprise of a Contracting State to a resident of theother Contracting State shall, for the purpose ofdetermining the taxable profits of such enterprise, bedeductible under the same conditions as if they had beenpaid to a resident of the first-mentioned State.Similarly, any debts of an enterprise of a ContractingState to a resident of the other Contracting Stateshall, for the purpose of determining the taxablecapital of such enterprise, be deductible under the sameconditions as if they had been contracted to a residentof the first-mentioned State.


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4. Enterprises of a Contracting State, the capital ofwhich is wholly or partly owned or controlled, directlyor indirectly, by one or more residents of the otherContracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement

connected therewith which is more burdensome than thetaxation and connected requirements to which othersimilar enterprises of the first-mentioned State are ormay be subjected.

5. The provisions of this Article shall,notwithstanding the provisions of Article 2, apply totaxes of every kind and description, except indirecttaxes.

A r t i c l e 26

MUTUAL AGREEMENT PROCEDURE

1. Where a person considers that the actions of one orboth of the Contracting States result or will result forhim in taxation not in accordance with the provisions ofthis Convention, he may, irrespective of the remediesprovided by the domestic law of those States, presenthis case to the competent authority of the ContractingState of which he is a resident or, if his case comesunder paragraph 1 of Article 25, to that of the

Contracting State of which he is a national. The casemust be presented within three years from the firstnotification of the action resulting in taxation not inaccordance with the provisions of the Convention.

2. The competent authority shall endeavour, if theobjection appears to it to be justified and if it is notitself able to arrive at a satisfactory solution, toresolve the case by mutual agreement with the competentauthority of the other Contracting State, with a view tothe avoidance of taxation which is not in accordancewith the Convention. Any agreement reached shall be

implemented notwithstanding any time limits in thedomestic law of the Contracting States.

3. The competent authorities of the Contracting Statesshall endeavour to resolve by mutual agreement anydifficulties or doubts arising as to the interpretationor application of the Convention. They may also consulttogether for the elimination of double taxation in casesnot provided for in the Convention.

4. The competent authorities of the Contracting Statesmay communicate with each other directly for the purpose


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of reaching an agreement in the sense of the precedingparagraphs. When it seems advisable in order to reachagreement to have an oral exchange of opinions, suchexchange may take place through a commission consistingof representatives of the competent authorities of theContracting States.

A r t i c l e 27

EXCHANGE OF INFORMATION

1. The competent authorities of the Contracting Statesshall exchange such information as is necessary forcarrying out the provisions of this Convention or of thedomestic laws of the Contracting States concerning taxes

covered by the Convention insofar as the taxationthereunder is not contrary to the Convention. Theexchange of information is not restricted by Article 1.Any information received by a Contracting State shall betreated as secret in the same manner as informationobtained under the domestic laws of that State and shallbe disclosed only to persons or authorities (includingcourts and administrative bodies) involved in theassessment or collection of, the enforcement orprosecution in respect of, or the determination ofappeals in relation to, the taxes covered by theConvention. Such persons or authorities shall use theinformation only for such purposes. They may disclose

the information in public court proceedings or injudicial decisions.

2. In no case shall the provisions of paragraph 1 beconstrued so as to impose on a Contracting State theobligation:

a) to carry out administrative measures at variance withthe laws and administrative practice of that or of theother Contracting State;

b) to supply information which is not obtainable under

the laws or in the normal course of the administrationof that or of the other Contracting State;

c) to supply information which would disclose any trade,business, industrial, commercial or professional secretor trade process or information, the disclosure of whichwould be contrary to public policy (ordre public).

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EMPLOYEES OF DIPLOMATIC AND CONSULAR ESTABLISHMENTS

Nothing in this Convention shall affect the fiscalprivileges of the employees of diplomatic and consularestablishments under the general rules of international

law or under the provisions of special agreements.

A r t i c l e 29

ENTRY INTO FORCE

1. This Convention shall be ratified in bothContracting States.

2. The Convention shall enter into force upon theexchange of instruments of ratification and itsprovisions shall have effect in respect of incomederived or of capital owned on or after the first day ofJanuary of the calendar year following that of the entryinto force of the Convention.

A r t i c l e 30

TERMINATION

This Convention shall remain in force untilterminated by a Contracting State. Either ContractingState may terminate the Convention, through diplomaticchannels by giving the written notice of termination atany time after five years from the date on which theConvention enters into force. In such event, theConvention shall cease to have effect in respect ofincome derived or on capital owned on or after the firstday of January of the calendar year next following thatin which the notice of termination is given.

In witness whereof the undersigned being duly authorizedthereto have signed this Convention.

Done at Moscow, on 12 April 1995, in duplicate inAlbanian, Russian and English languages, all three textsbeing equally authentic. In case of divergence betweenthe texts, the English text shall be the operative one.

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