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- 1. For the purposes of this Convention, the term ‘resident of a Contracting State’ means any person who, under the laws of that Contracting State, is liable to tax therein by reason of his domicile, residence, place of head or main office, place of management, place of incorporation or any other criterion of a similar nature, and also includes:
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- (a) the Government of that Contracting State and any political subdivision or local authority thereof;
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- (b) a pension fund or pension scheme established under the laws of that Contracting State; and
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- (c) an organisation established under the laws of that Contracting State and operated exclusively for a religious, charitable, educational, scientific, artistic, cultural or public purpose (or for more than one of those purposes), only if all or part of its income or gains may be exempt from tax under the domestic laws of that Contracting State.
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- This term, however, does not include any person who is liable to tax in that Contracting State in respect only of income, profits or gains from sources in that Contracting State.
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- 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:
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- (a) he shall be deemed to be a resident only of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident only of the Contracting State with which his personal and economic relations are closer (centre of vital interests);
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- (b) if the Contracting 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 Contracting State, he shall be deemed to be a resident only of the Contracting State in which he has an habitual abode;
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- (c) if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident only of the Contracting State of which he is a national;
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- (d) if he is a national of both Contracting States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.
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- 3.[REPLACED by paragraph 1 of Article 4 and subparagraph e) of paragraph 3 of Article 4 of the MLI] [Where by reason of the provisions of paragraph 1 of this Article a person other than an individual is a resident of both Contracting States, then the competent authorities of the Contracting States shall determine by mutual agreement the Contracting State of which that person shall be deemed to be a resident for the purposes of this Convention. In the absence of a mutual agreement by the competent authorities of the Contracting States, the person shall not be considered a resident of either Contracting State for the purposes of claiming any benefits provided by the Convention, except those provided by paragraph 1 of Article 23, Article 24 and Article 25 of the Convention.]
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The following paragraph 1 of Article 4 and subparagraph e) of paragraph 3 of Article 4 of the MLI replace paragraph 3 of Article 4 of this Convention:
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Article 4 of the MLI — dual resident entities
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Where by reason of the provisions of [this Convention] a person other than an individual is a resident of both [Contracting States], the competent authorities of the [Contracting States] shall endeavour to determine by mutual agreement the [Contracting State] of which such person shall be deemed to be a resident for the purposes of [this Convention], having regard to its place of effective management, the place where it is incorporated or otherwise constituted and any other relevant factors. In the absence of such agreement, such person shall not be entitled to any relief or exemption from tax provided by [this Convention].
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- 4. Where, pursuant to any provision of this Convention, a Contracting State reduces the rate of tax on, or exempts from tax, income, profits or gains of a resident of the other Contracting State and under the laws in force in that other Contracting State the resident is subject to tax by that other Contracting State only on that part of such income, profits or gains which is remitted to or received in that other Contracting State, then the reduction or exemption shall apply only to so much of such income, profits or gains as is remitted to or received in that other Contracting State.
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- 5. [REPLACED by paragraphs 1 and 3 of Article 3 of the MLI] [For the purposes of applying this Convention:
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- (a) an item of income, profit or gain:
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- (i) derived from a Contracting State through an entity that is organised in the other Contracting State; and
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- (ii) treated as an item of income, profit or gain of the beneficiaries, members or participants of that entity under the tax laws of that other Contracting State;
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- 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 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 an item of income, profit or gain is treated as an item of income, profit or gain of such beneficiaries, members or participants under the tax laws of the first-mentioned Contracting State.
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- (b) an item of income, profit or gain:
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- (i) derived from a Contracting State through an entity that is organised in the other Contracting State; and
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- (ii) treated as an item of income, profit or gain of that entity under the tax laws of that other Contracting State;
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- 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 an item of income, profit or gain is treated as an item of income, profit or gain of the entity under the tax laws of the first-mentioned Contracting State, if such entity is a resident of that other Contracting State and satisfies any other conditions specified in the Convention.
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- (c) an item of income, profit or gain:
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- (i) derived from a Contracting State through an entity that is organised in that Contracting State; and
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- (ii) treated as an item of income, profit or gain of that entity under the tax laws of the other Contracting State;
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- shall not be eligible for the benefits of the Convention.]