- 1. For the purposes of this Convention, 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, place of incorporation 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 or capital gains from sources in that State or capital situated therein. The term ‘resident of a Contracting State’ includes a pension scheme established 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 does not have 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 he is a national of both States or of neither of them, 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.
- 4. For the purposes of applying this Convention:
- a) an item of income, profit or gain:
- (i) derived from a Contracting State through a partnership, a trust, group of persons or other similar entity that is established in the other Contracting State; and
- (ii) treated as the income of beneficiaries, members or participants of that partnership, trust, group of persons or other similar entity under the tax laws of that other Contracting State;
- shall be eligible for the benefits of the Convention that would be granted if it were directly derived by a beneficiary, member or participant of that partnership, trust, group of persons or other similar entity who is a resident of that other Contracting State, to the extent that such beneficiaries, members or participants are residents of that other Contracting State and satisfy any other conditions specified in the Convention, without regard to whether the income is treated as the income of such beneficiaries, members or participants under the tax laws of the first-mentioned State;
- b) an item of income, profit or gain:
- (i) derived from a Contracting State through a partnership, a trust, group of persons or other similar entity that is established in the other Contracting State; and
- (ii) treated as the income of that partnership, trust, group of persons or other similar entity under the tax laws of that other Contracting State;
- shall be eligible for the benefits of the Convention that would be granted to a resident of that other Contracting State, without regard to whether the income is treated as the income of that partnership, trust, group of persons or other similar entity under the tax laws of the first-mentioned State, if such partnership, trust, group of persons or other similar entity is a resident of that other Contracting State and satisfies any other conditions specified in the Convention;
- c) an item of income, profit or gain:
- (i) derived from a Contracting State through a partnership, trust, group of persons or any other similar entity that is established in that Contracting State;
- (ii) treated as the income of beneficiaries, members or participants of that partnership, trust, group of persons or other similar entity under the tax laws of the other Contracting State; and
- (iii) treated as the income of that partnership, trust, group of persons or other similar entity under the tax laws of the first-mentioned State;
- can be taxed under the tax laws of the first-mentioned State without any restriction;
- d) an item of income, profit or gain:
- (i) derived from a Contracting State through a partnership, trust, group of persons or other similar entity that is established in that Contracting State; and
- (ii) treated as the income of that partnership, trust, group of persons or other similar entity under the tax laws of the other Contracting State;
- shall not be eligible for the benefits of the Convention;
- e) an item of income, profit or gain:
- (i) derived from a Contracting State through a partnership, group of persons or any other similar entity that is established in a State other than the Contracting States; and
- (ii) treated as the income of the beneficiaries, members or participants of that partnership, group of persons or other similar entity under the tax laws of the other Contracting State and under the tax laws of the State where the entity is established;
- shall be eligible for the benefits of the Convention that would be granted if it were directly derived by a beneficiary, member or participant of that partnership, group of persons or other similar entity who is a resident of that other Contracting State, to the extent that such beneficiaries, members or participants are residents of that other Contracting State and satisfy any other conditions specified in the Convention, without regard to whether the income is treated as the income of such beneficiaries, members or participants under the tax laws of the first-mentioned State provided that the State where the partnership, group of persons or other similar entity is established has concluded with the first-mentioned State an agreement containing a provision for the exchange of information with a view to the prevention of fiscal evasion;
- f) an item of income, profit or gain:
- (i) derived from a Contracting State through a partnership, group of persons or any other similar entity that is established in a State other than the Contracting States; and
- (ii) treated as the income of that partnership, group of persons or other similar entity under the tax laws of the other Contracting State;
- shall not be eligible for the benefits of the Convention.