AGREEMENT

Between

the Government of the Hashemite Kingdom of Jordan

and

the Government of the Czech Republic for the avoidance of double taxation

and the prevention of fiscal evasion  with respect to taxes on income

the Government of the Hashemite Kingdom of Jordan  and The Government of the Czech Republic,

desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income,

have agreed as follows:

Article 1

PERSONS COVERED

         This  Agreement   shall apply to persons who are residents of one or both of

           the Contracting States.

Article 2

TAXES COVERED

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

2.         There shall be regarded  as taxes on income all taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property.

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

a)         in  Jordan:

(i)        the income tax;

(ii)       the distribution tax;

(iii)     the social service tax;

          ( hereinafter referred  to as ” Jordanian tax” );

 b)        in the Czech Republic:

(i)        the tax on income of individuals;

(ii)      the tax on income of legal persons;

            ( hereinafter referred  to as ”Czech tax” ).

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

Article  3

GENERAL  DEFINITIONS

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

a)        

(i)        the term ”Jordan”  means the territories of the Hashemite Kingdom of Jordan, the territorial waters of Jordan and the seabed and subsoil of the territorial waters, and includes any area extending beyond the limits of the territorial waters of     Jordan and the seabed and subsoil of any such area, which has been or may hereafter be designated, under the laws of Jordan and in accordance with international law, as an area over which Jordan has sovereign  rights for the purposes of exploring and exploiting the natural resources, whether living or non-living ;

(ii)     the term ”the Czech Republic” means the territory of the Czech Republic over which, under Czech legislation and in accordance with international law, the sovereign rights of the Czech Republic are exercised;   

b)         the terms ”a Contracting State” and ”the other Contracting State” mean the Czech Republic or Jordan, as the context requires;

c)         the term  ”person” includes an individual, a company and any other body of    persons;

d)         the term ”company” means any body corporate or any entity which is treated as a body corporate for tax purposes ;

e)         the terms ”enterprise of a Contracting State” and ”enterprise of the other Contracting State” mean respectively an enterprise carried on by a resident of  a Contracting State and an enterprise carried on by a resident of the other Contracting State;

f)         the term  ”international traffic” means any transport by a ship or aircraft operated by a resident of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;

g)         the term ”competent authority” means :

(i)                in Jordan,  the Minister of Finance or his authorised representative ;    

(ii)             in the Czech Republic, the Minister of Finance or his authorised representative;

h)         the term ”national” means :

(i)   any individual possessing the nationality of a Contracting State;

(ii)  any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State .

2.         As regards the application of the Agreement at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Agreement applies, any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State.

Article 4

RESIDENT

 1.       For the purposes of this Agreement, the term ”resident of a Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature, and also includes that State and any political subdivision or local authority thereof.   This term, however, does not include any person who is liable to tax in that State in respect only of income from sources in that State .

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

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

b)         if  the State in which he has his centre of vital interests cannot be  determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident  only of the State in         which he has an habitual abode;

c)         if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national;

d)         if the status of an individual cannot be determined according to sub-paragraphs a) to c) , the  competent authorities of the Contracting States shall settle the question by mutual agreement .

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

Article  5

PERMANENT ESTABLISHMENT

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

2.         The term ”permanent establishment” includes especially :

a)         a place of management;

b)         a branch;

c)         an office;

d)         a factory;

e)         a workshop;

f)         a sales outlet;

g)         a warehouse in relation to a person carrying on business in the field of storage;

h)         a mine, an oil or gas well, a quarry or any other place of extraction or exploration of natural resources.

3.         The term ”permanent establishment” likewise encompasses :

a)         a building site, a construction, assembly or installation project or supervisory activities in connection therewith, but only where such site, project or activities continue for a period of more than six months;            

b)         the furnishing of services, including consultancy or  managerial services, by an enterprise of a Contracting  State through employees or other personnel engaged by the enterprise for such purpose, but only where activities of that nature continue in the territory of the other Contracting State for a period or periods exceeding in the aggregate six months within any twelve month period.

 4.         Notwithstanding the preceding provisions of this Article, the term ”permanent establishment” shall be deemed not to include:

a)         the use of facilities solely for the purpose of storage or display 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 or display;

c)         the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

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

e)         the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character;

f)         the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs a) to e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.

5.         Notwithstanding the provisions of paragraphs 1 and 2, where a person - other than an agent of an independent status to whom paragraph 6 applies - is acting in a Contracting State on behalf of an enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent establishment in the first-mentioned State in respect of any activities which that person undertakes for the enterprise, if such a person :

a)         has and habitually exercises in that State an authority to conclude contracts in the name of the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph; or

b)         has no such authority, but habitually maintains in the first-mentioned State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise.

 6.        An enterprise of a  Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business . However, when the  activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, he will not be considered an agent of an independent status within the meaning of this  paragraph.

7.         The fact that a company which is a resident of  a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

Article 6

INCOME FROM IMMOVABLE PROPERTY

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

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

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

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

Article  7

BUSINESS  PROFITS

1.                  The profits of an enterprise of a  Contracting State shall  be taxable only in that State unless the enterprise carries on business  in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable  to:

a)                that  permanent establishment ;  or

b)                 sales in that other State of goods or merchandise of the same or similar      kind as those sold through that permanent establishment .

2.         Subject to the provisions of paragraph 3, where an enterprise of a Contracting State  carries on business  in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment .

3.         In the determination of the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the  business of the permanent establishment, including executive and general administrative expenses so  incurred, whether in the State in which the permanent establishment is situated or elsewhere. However, no such deduction shall be allowed in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties , fees or other similar payments in return for the use of patents or other rights, or by way of commission, for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the permanent establishment. Likewise, no account shall be taken, in the determination of the profits of a permanent establishment, for amounts charged (otherwise than towards reimbursement of actual expenses), by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties , fees or other similar payments in return for the use of patents or other rights, or by way of commission for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the head office of the enterprise or any of its other offices.

4.         Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article.

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

6.         For the purposes of  the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.

7.         Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article.

Article  8

SHIPPING AND AIR  TRANSPORT

 1.       Profits derived by a resident of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State.

 2.         The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.  

Article  9

ASSOCIATED ENTERPRISES  

           Where

a)                  an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other  Contracting State, or

b)                 the same persons participate directly or indirectly in the management,    control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and  in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

Article 10

 DIVIDENDS

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

2.         However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the dividends.

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

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

4.         The provisions of  paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a  Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of  Article 7 or Article 14, as the case may be, shall apply.

5.         Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company¢s undistributed profits to a tax on the company¢s undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.           

Article 11

INTEREST

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

 2.         However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged  shall not exceed 10 per cent of the gross amount of the interest.

 3.         Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State and derived and beneficially owned by the Government of the other Contracting State, including political subdivisions and local authorities thereof, the Central Bank or any financial institution wholly owned by that Government, shall be exempt from tax in the first -mentioned State .

4.           The term ”interest” as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right  to participate in the debtor's profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures, as well as income assimilated to income from money lent. The term shall not include any item of income which is treated as a dividend under the provisions of Article 10 of this Agreement.

5.         The provisions of  paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

6.         Interest shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.

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

Article 12

ROYALTIES

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

2.         However, such royalties may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the royalties.

3.         The term ”royalties” as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, and films or tapes for television or radio broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or any industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience.

4.         The provisions of  paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein,  and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

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

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

Article 13

CAPITAL GAINS

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

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

3.         Gains derived by a resident of a Contracting State from the alienation of ships or aircraft operated in international traffic or of movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that State.

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

Article 14

INDEPENDENT PERSONAL SERVICES

1.         Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State, except in the following circumstances, when such income may also be taxed in the other Contracting State:

a)                 if he has a fixed base regularly  available to him in the other Contracting State for the purpose of performing his activities; in that case, only so much of the income as is attributable to that fixed base may be taxed in that other State; or 

b)                 if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the aggregate 183 days in any twelve month period commencing or ending in the fiscal year concerned; in that case, only so much of the income as is derived from his activities performed in that other State may be taxed in that other State.

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

Article 15

DEPENDENT PERSONAL SERVICES

1.         Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

2.         Notwithstanding the provisions of paragraph 1,  remuneration derived by a resident of a Contracting State in respect of an employment  exercised in the other Contracting State shall be taxable only in the first-mentioned State if all the following conditions are met:

a)         the  recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve month period commencing or ending in the fiscal year concerned,  and

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

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

3.         The term ”employer” mentioned in sub-paragraph b) of paragraph 2 means the person having right on the work produced and bearing the responsibility and risk connected with the performance of the work.

4.         Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment  exercised aboard a ship or aircraft operated by a resident of a Contracting State in international traffic, may be taxed in that State.

Article 16

DIRECTORS’  FEES

            Directors’ fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors  or any other similar organ of a company which is a resident of the other Contracting State may be taxed in that other Contracting State.

Article 17

ARTISTES AND SPORTSMEN

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

2.         Where income in respect of personal activities exercised by an entertainer or a sportsman in his capacity as such accrues not to the entertainer or  sportsman himself but to another person, that income may, notwithstanding the provisions of  Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or sportsman are exercised.

Article 18

PENSIONS AND ANNUITIES

1.         Subject to the provisions of  paragraph 2 of Article 19 of this Agreement, pensions and other similar remuneration paid to a resident of a Contracting State from sources in the other Contracting State in consideration of past employment and annuities paid to such resident from such sources shall be taxable only in that other State.

2.         The term  ”annuities” means stated sums payable to an individual periodically at stated times during his life or during a specified or ascertainable period of time under an obligation to make the payments in return for adequate and full consideration in money or money’s  worth.

Article  19

GOVERNMENT SERVICE

 1.        

a)         Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

b)         However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who :

(i)        is a national of that State; or

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

 2.        

a)         Any pension paid by, or out of funds created by, a Contracting State      or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

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

3.         The provisions of  Articles 15, 16,17 and 18 shall apply to salaries, wages and other similar remuneration, and to pensions, in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof .

Article 20

STUDENTS AND TRAINEES

1.         Payments which a  student or business  trainee who is or was immediately before visiting  a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State.

2.                 In respect of grants, scholarships and remuneration from employment not covered by paragraph 1, a student or business trainee described in paragraph 1 shall , in addition, be entitled during such education or training to the same exemptions, reliefs or reductions in respect of taxes available to residents of the  Contracting State which he is visiting.

Article 21

OTHER INCOME

           Items of income of a resident of a Contracting State, which are not expressly mentioned in the foregoing Articles of this Agreement shall be taxable only in that State. However, if such income is derived from sources within the other Contracting State, it may also be taxed in that other State.

Article  22

ELIMINATION OF DOUBLE TAXATION

 

1.                  In the case of a resident of Jordan, double taxation shall be eliminated as follows:

Where a resident of Jordan derives income from the Czech Republic, the amount of the tax on that income paid in the Czech Republic in accordance with the provisions of this Agreement, shall, subject to the provisions of Jordanian domestic law, be credited against the tax levied in Jordan on that resident. The amount of credit, however, shall not exceed the amount of the Jordanian tax on that income computed in accordance with its taxation laws and regulations.

 2.                  In the case of a resident of the Czech Republic, double taxation shall be eliminated as follows:

a)                      The Czech Republic, when imposing taxes on its residents, may include in the tax base upon which such taxes are imposed the items of income which according to the provisions of this Agreement may also be taxed in Jordan,  but shall allow as a deduction from the amount of tax computed on such a base an amount equal to the tax paid in Jordan. Such deduction shall not, however, exceed that part of the Czech tax, as computed before the deduction is given, which is appropriate to the income which, in accordance with the provisions of this Agreement, may be taxed in Jordan.

b)                      Where in accordance with any provision of the Agreement income derived by  a  resident  of  the Czech  Republic  is  exempt  from  tax  in  the  Czech Republic, the Czech Republic may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income.

Article  23

NON - DISCRIMINATION

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

 2.    The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or a fixed base available to a resident of a Contracting State in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises or residents of that other State carrying on the same activities.

 3.        Nothing in this Article shall be construed as obliging a Contracting State to  grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.

4.         Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected.

5.         Except where the provisions of Article 9, paragraph 7 of Article 11, or paragraph 6 of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State.

Article 24

MUTUAL AGREEMENT PROCEDURE

 1.        Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Agreement, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 of Article 23, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Agreement.

2.        The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States.

3.     The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. They may also consult together for the elimination of double taxation in cases not provided for in the Agreement.

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

Article 25

EXCHANGE OF INFORMATION

1.     The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Agreement or of the domestic laws of the Contracting States concerning taxes covered by the Agreement insofar as the taxation thereunder is not contrary to the Agreement and in particular for the prevention of fraud or evasion in relation to such taxes. The exchange of information is not restricted by Article 1. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the Agreement. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions.

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

a)                 to carry out administrative measures at variance with the laws and       administrative practice of that or of the other Contracting State;

b)                to supply information which is not obtainable under the  laws or in the   normal course of the administration of that  or of the other Contracting State;

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

Article 26

MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

Nothing in this Agreement shall affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements.

Article  27

LIMITATIONS ON BENEFITS

1.     The provisions of this Agreement (except the provisions of Article 25) shall not apply to companies or other persons enjoying a special tax treatment (as for example to the rate of the tax and computation of the tax base) by virtue  of the laws or the administrative practice of either of the Contracting States. Neither shall they apply to income derived from such companies or other persons by a resident of the other Contracting State.

2.    Benefits provided under this Agreement shall not be granted also to        companies of either Contracting State if the purpose of the establishment of such companies was solely to obtain benefits under this Agreement that would not otherwise be available.

3.       The provisions of this Agreement shall in no case prevent either Contracting State from the application of the provisions of its domestic laws aiming at the prevention of fiscal evasion, in particular the provisions on thin capitalisation, transfer pricing, etc.

         Article  28

ENTRY INTO FORCE

Each of the Contracting States shall notify to the other, through the  diplomatic channels, the completion of the procedures required by its  domestic law for the bringing into force of this Agreement. This Agreement shall enter into force on the date of the later of these notifications and its provisions shall have effect:

a)         in respect of taxes withheld at source, to income paid or credited on or after 1st January in the calendar year next following that in which the Agreement enters into force;

b)           in respect of other taxes on income, to income in any taxable year  beginning on or after 1st January in the calendar year next following that in which the Agreement enters into  force.

 Article 29

TERMINATION

This Agreement shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Agreement, through the diplomatic channels, by giving notice of termination at least six months before the end of any calendar year following after the period of five years from the date on which the Agreement enters into force. In such event, the Agreement shall cease to have effect:

a)        in respect of taxes withheld at source, to income paid or credited on or after 1st January in the calendar year  next following that in which the notice is given;

b)       in respect of other taxes on income, to income in any taxable year beginning on or after 1st January in the calendar year  next following that in which the notice is given.

          In witness whereof the undersigned, being duly authorised thereto, have signed this Agreement .

           Done in duplicate at ……………………….. this ……….. day of ………………………….., 200…. in the Czech, Arabic and English languages. All texts being equally authentic. In the case of any divergence, the English text shall prevail.

For the Government of                                                                  For the Government of  

the Hashemite Kingdom of Jordan                                               the Czech Republic                             

……………….……………………               ……..……………………………...