AGREEMENT
BETWEEN THE GOVERNMENT OF
HASHEMITE
KINGDOM OF JORDAN
AND
THE
GOVERNMENT OF
THE
ISLAMIC REPUBLIC OF
IRAN
FOR THE
AVOIDANCE OF
DOUBLE TAXATION AND EXCHANGE OF
INFORMATION WITH RESPECT TO TAXES ON
INCOME
THE GOVERNMENT OF
THE HASHEMITE KINGDOM OF JORDAN
AND
THE GOVERNMENT OF
THE ISLAMIC REPUBLIC OF IRAN
Hereinafter referred to as the
Contracting States;
Desiring to
conclude an Agreement for the avoidance
of double taxation and the exchange of
information with respect to taxes on
income,
HAVE AGREED
AS FOLLOWS:
Article 1
PERSONAL SCOPE
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 each Contracting
State or its 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
income from the alienation of movable or
immovable property, taxes on the total
amounts of wages or salaries paid by
enterprises, as well as taxes on capital
appreciation.
3. The
existing taxes to which the Agreement
shall apply are:
a)
in the case of the
Islamic Republic of Iran:
(i)
the income tax
(ii)
the property
tax
(hereinafter referred to as
“Iranian tax”),
b) in
the case of the Hashemite Kingdom of
Jordan:
(i)
the income tax;
(ii)
the distribution tax;
(iii)
the social service tax;
(hereinafter referred to as “Jordanian
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 within a
reasonable period of any 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, the meanings
of the terms are as follows:
a)
(i) the
term “Islamic Republic of Iran” means
the territory under the sovereignty and
or jurisdiction of the Islamic Republic
of Iran;
(ii) 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 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.
b) the
term “person” means:
(i) an
individual,
(ii) a
company or any other body of persons;
c) the
term “company” means any body corporate
or any entity, which is treated as a
body corporate for tax purposes;
d) the
term “registered office” means head
office registered under the relevant
laws of either Contracting State;
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,
boat, aircraft, or road vehicle and
railway operated by an enterprise of a
Contracting State, except when the ship,
boat, aircraft or road vehicle and
railway is operated solely between the
places situated in one of the
Contracting States;
g) the
term “competent authority” means:
(i) in the
case of the Islamic Republic of Iran,
the Minister of Economic Affairs and
Finance or his authorized
representative;
(ii) in the
case of the Hashemite Kingdom of Jordan,
the Minister of Finance or his
authorized representative;
h) the term
“national” means:
(i) any
individual possessing the nationality of
a Contracting State;
(ii) any
legal person, deriving its status as
such from the laws in force in a
Contracting State.
2. As
regards the application of the Agreement
by a Contracting State, any term not
defined therein shall, unless the
context otherwise requires, have the
meaning which it has under the laws of
that State concerning the taxes to which
the Agreement applies.
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 the
State is liable to tax therein by reason
of his residence, domicile, place of
registration or any other criterion of a
similar nature, and also includes that
State or any 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 of this
Article 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 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 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 of the
Contracting State in which he has an
habitual abode;
c) if he
has an habitual abode in both
Contracting States or in neither of
them, he shall be deemed to be a
resident of the State of which he is a
national;
d) if he is
a national of neither of the States, and
or if under the previous paragraphs, he
may not be deemed a resident of one of
the Contracting States, then the
competent authorities of the Contracting
States shall settle the question by
mutual agreement.
3. Where, a
person other than an individual is a
resident of both Contracting States,
then it shall be deemed to be a resident
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 an
enterprise of a Contracting State wholly
or partly carries on the business in the
other Contracting State.
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 mine, an oil or gas
well, a quarry or any other place of
exploration, exploitation and/or
extraction of natural resources ;
g) a warehouse or premises used as sales outlet.
3.
a)
a building site, a
construction, assembly or installation
project or supervisory activities in
connection therewith, constitutes a
"permanent establishment “ but only
where such site, project or activities
continue for a period of more than 12
months.
b) the
furnishing of services, including
consultancy services, by an enterprise
through employees or other personnel
engaged by the enterprise for such
purposes, but only where activities of
that nature continue (for the same or a
connected project) within the country
for a period or periods aggregating more
than 6 months within any twelve month
period.
4.
Notwithstanding the preceding provisions
of this Article, the following
activities of an enterprise of a
Contracting State in the other
Contracting State shall be deemed not to
be treated as carrying on through the
permanent establishment:
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 advertising,
and/or scientific research, for that
enterprise and/or carrying on 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 subparagraphs 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 independent
status to whom paragraph 6 applies) is
acting in a Contracting State on behalf
of an enterprise and has and habitually
exercises in a Contracting State an
authority to conclude contracts in the
name of the enterprise, that enterprise
shall be deemed to have a permanent
establishment in that State in respect
of any activities which that person
undertakes for the enterprise unless the
activities of such a person are limited
to those mentioned in paragraph 4 which,
if exercised through a fixed place of
business would not make this fixed place
of business a permanent establishment
under the provisions of that paragraph.
6. An
enterprise of a Contracting State shall
not be deemed to have a permanent
establishment in the other Contracting
State merely because it carries on
business in that other State through a
broker, general commission agent or any
other agent of an independent status,
where such persons are acting in the
ordinary course of their business.
However,
when the activities of such an agent are
devoted wholly or almost wholly on
behalf of that enterprise, he shall not
be considered an agent of an independent
status if the transactions between the
agent and the enterprise were not made
under arm's length conditions.
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
shall be taxed in that other State.
2. The term
"immovable property" shall have the
meaning, which it has under the laws 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 including
oil, gas and quarries. Ships, boats,
aircraft, or road vehicles and railway
shall not be regarded as immovable
property.
3. The
provisions of paragraph 1 of this
Article shall apply to income derived
from the direct use, letting, or use in
any other form of immovable property.
4. The
provisions of paragraphs 1 and 3 of this
Article shall also apply to the income
from immovable property of an enterprise
and to the 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; (b)
sales in that other State of goods or
merchandise of the same or similar kind
as those sold through that permanent
establishment; or (c) other business
activities carried on that other State
of the same or similar kind as those
effected through that permanent
establishment.
2. Subject
to the provisions of paragraph 3, of
this Article 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
determining the profits of a permanent
establishment, there shall be allowed as
deductions expenses including executive
and general administrative expenses,
insofar as they are incurred for the
purposes of the permanent establishment,
whether incurred in the State in which
the permanent establishment is situated
or elsewhere.
4. Insofar
as it has been customary in a
Contracting State to determine the
profits to be attributed to a permanent
establishment on the basis of an
apportionment of the total profits of
the enterprise to its various parts,
nothing in paragraph 2 shall preclude
that Contracting State from determining
the profits to be taxed by such an
apportionment as may be customary. The
method of apportionment adopted shall,
however, be such that the result shall
be in accordance with the principles
embodied in this Article.
5. No
profits shall be attributed to a
permanent establishment by reason of the
mere purchase by that permanent
establishment of goods or merchandise
for the enterprise.
6. 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
INTERNATIONAL
TRAFFIC
Profits
derived by an enterprise of a
Contracting State from the operation of
ships, boats, aircraft, or road
vehicles, and railway, in international
traffic shall be taxable only in that
Contracting State.
Article 9
ASSOCIATED
ENTERPRISES
1. 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, have accrued to one of the
enterprises, but, by reason of those
conditions, have not so accrued, may be
included in the profits of that
enterprise and taxed accordingly.
2. Where a
Contracting State includes in the
profits of an enterprise of that State -
and taxes accordingly - profits on which
an enterprise of the other Contracting
State has been charged to tax in that
other Contracting State and the profits
so included are profits which would have
accrued to the enterprise of the
first-mentioned State if the conditions
made between the two enterprises had
been those which would have been made
between independent enterprises, then
that other Contracting State shall make
an appropriate adjustment to the amount
of the tax charged therein on those
profits. In determining such adjustment,
due regard shall be had to the other
provisions of this Agreement and the
competent authorities of the Contracting
States shall, if necessary consult each
other.
Article 10
DIVIDENDS
1.
Dividends paid by a company, which is a
resident of a Contracting State to a
resident of the other Contracting State,
may be taxed in that other Contracting
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 recipient is the resident of the
other Contracting State and the
beneficial owner of the dividends the
tax so charges shall not exceed:
a)
5 percent of the gross
amount of the dividends if the
beneficial owner of the dividends is a
company which has owned at least 25
percent of the capital of the company
paying the dividends;
b)
7.5 percent of the gross
amount of the dividends in all other
cases.
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" in this Article means
income from shares, " Jouissance "
shares or " Jouissance “ rights,
founders' shares or other rights (not
being debt-claims, participating in
profits), as well as income from other
corporate rights which is subjected to
the same taxation treatment as income
from shares by the laws of the State of
which the company making the
distribution 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 Contracting 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
Contracting 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
Contracting 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 Contracting 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
Contracting 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 recipient is the resident of the
other Contracting State and the
beneficial owner of the interest the tax
so charged shall not exceed
5 percent of the gross amount of
the interest.
3. The term
" interest " as used in this Article
means income from debt-claims of every
kind, whether or not secured by
mortgage, and whether or not carrying a
right to participate in the debtor's
profits, and in particular, income from
government securities and income from
bonds or debentures, including premiums
and prizes attaching to such securities,
bonds or debentures. Penalty charges for
late payment shall not be regarded as
interest for the purpose of this
Article.
4.
Notwithstanding the provisions of
paragraph 2, interest arising in a
Contracting State and derived by the
other Contracting State, ministries,
other Governmental institutions,
municipalities, Central Bank and other
banks wholly owned by the other
Contracting State, shall be exempted
from tax in the first-mentioned State.
5. The
provisions of paragraphs 1 and 2 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 Contracting State
independent personal services from a
fixed base situated there in, 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 that
State itself, a local authority or a
resident of that State. Where, however,
the person paying the interest, whether
he is a resident of a Contracting State
or not, has in a Contracting State a
permanent establishment or a fixed base,
in connection with which the
indebtedness on which the interest is
paid and such interest is borne by such
a permanent establishment or fixed base
then such interest shall be deemed to
arise in the Contracting 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 Contracting 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 recipient is the beneficial
owner of the royalties the tax so
charged shall not exceed 10 percent 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
cinematographic films and recordings for
radio and television, any patent, trade
mark, design or model, plan, secret
formula or process, or for information
concerning industrial, commercial or
scientific experience or for the use of,
or the right to use, industrial,
commercial or scientific equipment.
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 Contracting State
independent personal services from a
fixed base, 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 that
State itself, a local authority or 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 right or
property giving rise to the royalties is
effectively connected, and such
royalties are borne by such permanent
establishment, or fixed base then such
royalties shall be deemed to arise in
the Contracting 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 paid, having regard to the
use, right to use 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 a 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,
with due regard 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 Contracting
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 Contracting State.
3. Gains
derived by an enterprise of a
Contracting State from the alienation of
ships, boats, aircraft or road vehicles
and railway operated in international
traffic or movable property pertaining
to the operation of such ships, boats,
aircraft or road vehicles and railway
shall be taxable only in that
Contracting State.
4. Gains
derived by a resident of a Contracting
State from the alienation of shares or
other corporate rights in a company the
assets of which directly or indirectly
consist mainly of immovable property
situated in the other Contracting State
may be taxed in that other Contracting
State.
5. Gains
from the alienation of any property
other than that referred to in
paragraphs 1, 2, 3 and 4 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 unless he has a fixed
base regularly available to him in the
other Contracting State for the purpose
of performing his activities or he is
present in that other State for period
or periods exceeding in the aggregate
(183) days within any twelve-month
periods. If he has such a fixed base or
remains in that other State for the
aforesaid period or periods, the income
may be taxed in that other State but
only so much of it as is attributable to
that fixed base or is derived in that
other State during the aforesaid period
or periods.
2. The term
“professional services” includes
especially independent scientific,
literary, artistic, educational or
teaching activities as well as the
independent activities of physicians,
engineer’s experts, lawyers, architects,
dentists, and accountants.
Article 15
DEPENDENT
PERSONAL SERVICES
1. Subject
to the provisions of Articles 16, 18, 19
and 20, of this Agreement 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 done in the other
Contracting State. If the employment is
so done, such remuneration as is derived
therefrom may be taxed in that other
Contracting State.
2.
Notwithstanding the provisions of
paragraph 1 remuneration derived by a
resident of a Contracting State in
respect of an employment exercised in
the other Contracting State shall be
taxable only in the first-mentioned
State, if:
a)
the recipient is present in that other
Contracting 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 that other Contracting
State; and
c)
the remuneration is not borne by a
permanent establishment or a fixed base,
which the employer has in the other
State.
3.
Notwithstanding the preceding provisions
of this Article, remuneration paid by an
enterprise of a Contracting State in
respect of an employment exercised
aboard a ship, boat, aircraft or road
vehicle and railway operated in
international traffic, shall be taxed
only in that Contracting 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 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 |