Article 22 ·

- 1. Except as otherwise provided in this Article, a resident of a Contracting State that derives income, profits or gains described in paragraph 3 of Article 10 or paragraph 1 of Article 11; or in Articles 12, 13 or 21 of this Convention from the other Contracting State shall be entitled to the benefits granted for a taxable year or chargeable period by the provisions of those paragraphs or Articles only if such resident is a qualified person as defined in paragraph 2 of this Article and satisfies any other specified conditions in those paragraphs or Articles for the obtaining of such benefits.

- 2. A resident of a Contracting State is a qualified person for a taxable year or chargeable period only if such resident is either:

- (a) an individual;

- (b) a qualified governmental entity;

- (c) a company if the principal class of its shares is listed, registered or admitted to dealings on a recognised stock exchange specified in clause (i) or (ii) of subparagraph of paragraph 7 of this Article and is regularly traded on one or more recognised stock exchanges;

- (d) a person other than an individual or a company if the principal class of units in that person is listed, registered or admitted to dealings on a recognised stock exchange specified in clause (i) or (ii) of subparagraph (c) of paragraph 7 of this Article and is regularly traded on one or more recognised stock exchanges;

- (e) a person described in subparagraph (b) or (c) of paragraph 1 of Article 4 of this Convention, provided that in the case of a person described in subparagraph (b) of that paragraph as of the end of the prior taxable year or chargeable period more than 50 per cent of the person’s beneficiaries, members or participants are individuals who are residents of either Contracting State;

- (f) a person other than an individual if residents of either Contracting State that are qualified persons by reason of subparagraphs (a), (b), (c), (d) or (e) of this paragraph own, directly or indirectly, shares or other beneficial interests representing at least 50 per cent of the voting power of the person; or

- (g) a trust or trustee of a trust in their capacity as such if at least 50 per cent of the beneficial interests in the trust is held, directly or indirectly, by persons who are either:

- (i) qualified persons by reason of subparagraps (a), (b), (c), (d) or (e) of this paragraph; or

- (ii) equivalent beneficiaries as defined in clause (i) of subparagraph (e) of paragraph 7 of this Article.

- 3. Notwithstanding that a company that is a resident of a Contracting State may not be a qualified person, it shall be entitled to the benefits otherwise accorded to residents of a Contracting State by the provisions of paragraph 3 of Article 10 or paragraph 1 of Article 11; or of Articles 12, 13 or 21 of the Convention with respect to an item of income, profit or gain described in those paragraphs or Articles derived from the other Contracting State if it satisfies any other specified conditions in those paragraphs or Articles for the obtaining of such benefits and shares representing at least 75 per cent of the voting power of the company are owned, directly or indirectly, by seven or fewer persons who are equivalent beneficiaries.

- 4. Where the provisions of subparagraphs (f) or (g) of paragraph 2 or the provisions of paragraph 3 of this Article apply:

- (a) in respect of taxation by withholding at source, a resident of a Contracting State shall be considered to satisfy the conditions described in the relevant subparagraph or paragraph for the taxable year or chargeable period in which the payment is made if such resident satisfies those conditions during the twelve month period preceding the date of payment of an item of income, profit or gain (or, in the case of dividends, the date on which entitlement to the dividends is determined);

- (b) for all other cases, a resident of a Contracting State shall be considered to satisfy the conditions described in subparagraphs (f) or (g) of paragraph 2 or in paragraph 3 of this Article for the taxable year or chargeable period in which the payment is made if such resident satisfies those conditions on at least half the days of the taxable year or chargeable period.

- 5. (a) Notwithstanding that a resident of a Contracting State may not be a qualified person, that resident shall be entitled to the benefits granted by the provisions of paragraph 3 of Article 10 or paragraph 1 of Article 11; or of Articles 12, 13 or 21 of this Convention with respect to an item of income, profit or gain described in those paragraphs or Articles derived from the other Contracting State if the resident is carrying on business in the first-mentioned Contracting State (other than the business of making or managing investments for the resident’s own account, unless the business is banking, insurance or securities business carried on by a bank, insurance company or securities dealer), the income, profits or gains derived from the other Contracting State is derived in connection with, or is incidental to, that business and that resident satisfies any other specified conditions in those paragraphs or Articles for the obtaining of such benefits.

- (b) If a resident of a Contracting State derives an item of income, profit or gain from a business carried on by that resident in the other Contracting State or derives an item of income, profit or gain arising in the other Contracting State from a person that has with the resident a relationship described in subparagraph (a) or (b) of paragraph 1 of Article 9 of this Convention, the conditions described in subparagraph (a) of this paragraph shall be considered to be satisfied with respect to such item of income, profit or gain only if the business carried on in the first-mentioned Contracting State is substantial in relation to the business carried on in the other Contracting State. Whether such business is substantial for the purpose of this paragraph will be determined on the basis of all the facts and circumstances.

- (c) In determining whether a person is carrying on business in a Contracting State under subparagraph (a) of this paragraph, the business conducted by a partnership in which that person is a partner and the business conducted by persons connected to such person shall be deemed to be conducted by such person. A person shall be connected to another if one possesses at least 50 per cent of the beneficial interest in the other (or, in the case of a company, shares representing at least 50 per cent of the voting power of the company) or another person possesses, directly or indirectly, at least 50 per cent of the beneficial interest (or, in the case of a company, shares representing at least 50 per cent of the voting power of the company) in each person. In any case, a person shall be considered to be connected to another if, on the basis of all the facts and circumstances, one has control of the other or both are under the control of the same person or persons.

- 6. A resident of a Contracting State that is neither a qualified person nor entitled under paragraph 3 or 5 of this Article to the benefits granted by the provisions of paragraph 3 of Article 10 or paragraph 1 of Article 11; or of Articles 12, 13 or 21 of this Convention with respect to an item of income, profit or gain described in those paragraphs or Articles shall, nevertheless, be granted such benefits if the competent authority of the other Contracting State determines, in accordance with its domestic law or administrative practice, that the establishment, acquisition or maintenance of such resident and the conduct of its operations did not have as one of the principal purposes the obtaining of such benefits.

- 7. For the purposes of this Article:

- (a) the term ‘qualified governmental entity’ means the Government of a Contracting State, any political subdivision or local authority thereof, the Bank of Japan, the Bank of England or a person that is wholly owned, directly or indirectly, by the Government of a Contracting State or a political subdivision or local authority thereof;

- (b) the term ‘principal class of shares’ means the ordinary or common shares of the company, provided that such class of shares represents the majority of the voting power of the company. If no single class of ordinary or common shares represents the majority of the voting power of the company, the ‘principal class of shares’ is that class or those classes that in the aggregate represent a majority of the voting power of the company;

- (c) the term ‘recognised stock exchange’ means:

- (i) the London Stock Exchange and any other recognised investment exchange within the meaning of the Financial Services Act 1986 or, as the case may be, the Financial Services and Markets Act 2000;

- (ii) any stock exchange established under the terms of the Financial Instruments and Exchange Law (Law No. 25 of 1948) of Japan;

- (iii) the Swiss Stock Exchange, the Irish Stock Exchange and the stock exchanges of Amsterdam, Brussels, Düsseldorf, Frankfurt, Hamburg, Johannesburg, Luxembourg, Madrid, Milan, New York, Paris, Singapore, Stockholm, Sydney, Toronto and Vienna and the NASDAQ System; and

- (iv) any other stock exchange which the competent authorities agree to recognise for the purposes of this Article;

- (d) the term ‘units’ includes shares and any other instrument, not being a debt-claim, granting an entitlement to share in the assets or income of, or receive a distribution from, the person. The term ‘principal class of units’ means the class of units which represents the majority of the value of the person. If no single class of units represents the majority of the value of the person, the ‘principal class of units’ is that class or those classes that in the aggregate represent the majority of the value of the person; and

- (e) an equivalent beneficiary is:

- (i) a resident of a state that has a convention for the avoidance of double taxation between that state and the Contracting State from which the benefits of this Convention are claimed such that:

- (aa) that convention contains provisions for effective exchange of information;

- (bb) that resident is a qualified person under limitation on benefits provisions (Tokuten Joko) in that convention or, where there are no such provisions in that convention, would be a qualified person when that convention is read as including provisions corresponding to paragraph 2 of this Article (or for the purposes of subparagraph (g) of paragraph 2 of this Article, a provision corresponding to clause (i) of that subparagraph); and

- (cc) with respect to an item of income, profit or gain referred to in paragraph 3 of Article 10 or paragraph 1 of Article 11; or in Articles 12, 13 or 21 of this Convention that resident would be entitled under that convention to a rate of tax with respect to the particular class of income, profit or gain for which the benefits are being claimed under this Convention that is at least as low as the rate applicable under this Convention; or

- (ii) a qualified person by reason of subparagraphs (a), (b), (c), (d) or (e) of paragraph 2 of this Article.