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- 1. In this Article:
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- (a) the term ‘Treaty’ means the Treaty between the United Kingdom of Great Britain and Northern Ireland and the French Republic concerning the Construction and Operation by Private Concessionaires of a Channel Fixed Link signed at Canterbury on 12th February 1986;
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- (b) the term ‘Fixed Link’ has the meaning given by paragraph 2 of Article 1 of the Treaty;
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- (c) the term ‘Concession’ means the Concession Agreement concerning the development, financing, construction and operation of a fixed link across the English Channel signed at Paris on 14th March 1986 between the Secretary of State for Transport of the Government of the United Kingdom of Great Britain and Northern Ireland and Le Ministre de l’Urbanisme, du Logement et des Transports representing the French State of the one part, and The Channel Tunnel Group Limited and France-Manche SA of the other part;
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- (d) the term ‘Concessionaire(s)’ means The Channel Tunnel Group Limited and France-Manche SA or any transferee or successor permitted in accordance with the Concession;
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- (e) the term ‘holding companies’ means:
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- (i) the company which is a resident of the United Kingdom and beneficially owns all the issued share capital of the Concessionaire which is an enterprise of the United Kingdom; and
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- (ii) the company which is a resident of France and holds all the issued share capital of the Concessionaire which is an enterprise of France, with the exception of shares held compulsorily by other shareholders in accordance with French commercial law;
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- (f) the term ‘associated company’ means:
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- (i) either of the holding companies; or
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- (ii) a company in which one of the Concessionaires owns directly or indirectly more than 50 per cent either of the voting power or of the ordinary share capital; or
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- (iii) a company in which one of the holding companies owns directly or indirectly more than 50 per cent either of the voting power or of the ordinary share capital;
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- (g) the term ‘ordinary share capital’ as used in sub-paragraph (f) of this paragraph means:
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- (i) in the United Kingdom, all the issued share capital in the company, other than share capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the company;
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- (ii) in France, all the issued share capital in the company the holders of which have no special right to a dividend nor a special voting right.
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- 2. The provisions of this Article shall apply for the purposes of the taxation by the Contracting States of income derived from immovable property forming a part of the Fixed Link and of profits derived from the construction and operation of the Fixed Link, notwithstanding anything to the contrary in Article 6, 7 or 8 of this Convention, so long as:
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- (a) one of the Concessionaires is an enterprise of one Contracting State and the other Concessionaire is an enterprise of the other Contracting State; and
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- (b) the Concession provides for the equal sharing of costs and revenues between the two Concessionaires; and
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- (c) the Concessionaires effectively share such costs and revenues equally during the construction and operation of the Fixed Link.
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- 3. The Contracting States shall for the purposes of their taxation laws compute the income or profits of each of the Concessionaires separately (whether or not any partnership exists between them) on the basis that the costs and revenues which are shared between them in accordance with subparagraph (c) of paragraph 2 have been respectively incurred and received by each of them in equal shares.
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- 4. If and so long as the holders of shares in one of the Concessionaires, or in one of the holding companies, are required simultaneously to hold an equivalent number of shares of the same description in the other Concessionaire or, as the case may be, the other holding company, the income or profits of each of the Concessionaires computed in accordance with paragraph 3 shall be taxable only in the Contracting State of which it is an enterprise.
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- 5. If the requirements of paragraph 4 are not satisfied, the income or profits of each of the Concessionaires computed in accordance with paragraph 3 shall be attributable as to one half thereof to a permanent establishment which the Concessionaire has in the Contracting State of which it is not an enterprise and shall be taxable in that Contracting State accordingly.
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- 6.
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- (a) Notwithstanding the provisions of Article 15 of this Convention, salaries, wages and other similar remuneration received by an employee of one of the Concessionaires or an associated company in respect of an employment which is exercised wholly or mainly within the Fixed Link in both Contracting States may be taxed in the Contracting State in which the place of effective management of that Concessionaire or associated company is situated.
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- (b) For the purposes of paragraph 2 of Article 15 of this Convention, remuneration shall not be regarded as borne by a permanent establishment which a Concessionaire has in the Contracting State of which it is not an enterprise by reason only that a partnership exists between the two Concessionaires.