IN THE NAME OF ALLAH
AGREEMENT
BETWEEN THE GOVERNMENT OF THE ISLAMIC REPUBLIC OF IRAN
AND
THE GOVERNMENT OF THE
. REPUBLIC OF TURKEY
FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL
EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL
THE GOVERNMENT OF THE ISLAMIC REPUBLIC OF IRAN
AND
THE GOVERNMENT OF THE REPUBLIC OF TURKEY
Desiring to conclude an Agreement for the avoidance of double taxation and the
prevention or fiscal evasion with respect to taxes on income and on capital
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 and on capital imposed on
behalf of a Contracting State or of its political subdivisions or local authorities,
irrespective of the manner in which they are levied.
2. There shall be regarded as taxes on income and on capital all taxes imposed
on total income, on total capital, or on elements of income or of capital, including
taxes on gains 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 in particular:
a) in the case of the Islamic Republic of Iran :
Income tax subject to Iranian direct taxes law; (hereinafter referred to as “the
tax of the Islamic Republic of Iran”);
b) in the case of the Republic of Turkey (hereinafter referred to as “Turkey”):
(i) the income tax;
(ii) the corporation tax;
(iii) the levy imposed on the income tax and the corporation tax;
(hereinafter referred to as “Turkish 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 of any significant 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:
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 “Turkey” means the territory under the sovereignty of the Republic
of Turkey.
b) the terms “a Contracting State” and “the other Contracting State” mean the
Islamic Republic of Iran or Turkey as the context requires;
c) the term “tax” means any tax covered by Article 2 of this Agreement;
d) the term “person” includes an individual, a company and any other body of
persons;
e) the term “company” means any body corporate or any entity that is treated
as a body corporate for tax purposes;
f) the term “registered office” means head office registered under the relevant
laws of either Contracting State;
g) the term “national” means:
i) any individual possessing the nationality of a Contracting State;
(ii) any legal person, partnership or association deriving its status as such from
the laws in force in a Contracting State;
h) 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;
i) the term “competent authority” means:
(i) in the Islamic Republic of Iran, the Minister of Economic Affairs and Finance
or his authorized representative;
j) the term “international traffic” means any transport by a ship, an aircraft or a
road vehicle operated by an Iranian or a Turkish enterprise, except when the
ship, aircraft or road vehicle is operated solely between places situated in the
territory of the Islamic Republic of Iran or Turkey.
2. As regards the application of this 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 that State, is liable to tax therein by
reason of his domicile, residence, registered office, place of management or any
other criterion of a similar nature.
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 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 hispersonal
and economic relations are closer (center of vital interests);
b) if the State in which he has his center 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 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 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 of the Contracting State in which its registered office 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 the business of an enterprise is
wholly or partly carried on.
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 extraction of natural
resources, and
g) a building site, a construction or installation project but only if such site,
project or activities continue for a period of more than six months
3. Notwithstanding the preceding provisions of this Article, the term “permanent
establishment” shall be deemed not to include:
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
carrying, for the enterprise, 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 sub-paragraphs 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.
4. Notwithstanding the provisions of paragraphs 1 and 2, where a person -other
than an agent of an independent status to whom paragraph 5 applies- is acting
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 person are limited to those mentioned in paragraph 3
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.
5. An enterprise shall not be deemed to have a permanent establishment in a
Contracting State merely because it carries on business in that State through a
broker, general commission agent or any other agent of an independent status,
provided that 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 will not be considered as agent of an
independent status within the meaning of this paragraph.
6. 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 may be taxed in that other State.
2. The term “immovable property” shall have the meaning which it has under the
law 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, fishing places of every
kind, 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; shall also be considered as immovable
property”. Ships, boats and aircraft shall not be regarded as immovable
property.
3. The provisions of paragraph 1 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 shall also apply to the income from
immovable property of an enterprise and to 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 that permanent
establishment.
2. Subject to the provisions of paragraph 3, 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, which would be deductible if the permanent establishment were an
independent enterprise, in so far 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. 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.
5. 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
SHIPPING, AIR AND LAND TRANSPORT
Profits derived by an enterprise of a Contracting State from the operation of
ships, aircraft or road vehicles in international traffic shall be taxable only in that
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, but for
those conditions, 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 State and the profits so included are
by the first mentioned State claimed to be 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 State shall make an appropriate
adjustment to the amount of the tax charged therein on those profits, where that
other State considers the adjustment justified. 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 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 beneficial owner of the dividends the tax so
charged shall not exceed:
a) (15) per cent of the gross amount of the dividends if the recipient is a
company (excluding partnership) which holds directly at least (25) per cent of
the capital of the company paying the dividends;
b) (20) per cent of the gross amount of the dividends in all other cases.
3. The term “dividends” as used 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. Profits of a company of a Contracting State carrying on business in the other
Contracting State through a permanent establishment situated therein may, after
having been taxed under Article 7, be taxed on the remaining amount in the
Contracting State in which the permanent establishment is situated and in
accordance with sub-paragraph a) of paragraph 2.
5. 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
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.
6. Subject to the paragraph 4 of Article 10, 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 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
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 State.
Article 11
INTEREST
1. Interest arising in a Contracting State and paid to a resident of the other
Contracting State may be taxed according to the laws of that 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 beneficial
owner of the interest the tax so charged shall not exceed (10) per cent of the
gross amount of the interest.
3. Notwithstanding the provisions of paragraph 2, interest arising in:
a) the Islamic Republic of Iran and paid to the Government of Turkey or to the
Central Bank of Turkey or to the Turkish Eximbank shall be exempt from the tax
of the Islamic Republic of Iran.
b) Turkey and paid to the Government of the Islamic Republic of Iran or to the
Central Bank of the Islamic Republic of Iran or to the Export Expansion Bank
(Bank Tousee Saderat) shall be exempt from Turkish tax.
4. 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.
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, and the debt-claim in respect of which the
interest is paid is effectively connected with such permanent establishment. In
such case the provisions of Article 7 shall apply.
6. Interest shall be deemed to arise in a Contracting State when the payer is that
State itself a political subdivision, 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
in connection with which the indebtedness on which the interest is paid was
incurred, and such interest is borne by such permanent establishment, then such
interest shall be deemed to arise in the Contracting State in which the permanent
establishment 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 State.
2. However, such royalties may 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) per cent 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 cinematograph 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, and the right or property in respect of which the
royalties are paid is effectively connected with such permanent establishment. In
such case, the provisions of Article 7 shall apply.
5. Royalties shall be deemed to arise in a Contracting State when the payer is
that State itself, a political subdivision, 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 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, then such royalties shall be deemed to arise in the
Contracting State in which the permanent establishment 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 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 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 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 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 a fixed base, may be taxed in that other State.
3. Gains from the alienation of ships, aircraft or road vehicles operated in
international traffic, or movable property pertaining to the operation of such
ships, aircraft or road vehicles, shall be taxable only in the Contracting State in
which the registered office of the enterprise is situated.
4. Gains from the alienation of any property other than that referred to in
paragraphs 1, 2 and 3, shall be taxable in the Contracting State of which the
alienator is a resident. However, the capital gains mentioned in the foregoing
sentence and derived from the other Contracting State, shall be taxable in the
other Contracting State if the time period does not exceed one year between
acquisition and alienation.
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. If he has such a
fixed base, the income may be taxed in the other State but only so much of it as
is attributable to that fixed base.
2. The term “professional services” includes especially independent scientific,
literary, artistic, educational or teaching activities as well as the independent
activities of physicians, lawyers, engineers, architects, dentists and accountants.
Article 15
DEPENDENT PERSONAL SERVICES
1. Subject to the provisions of Articles 16, 18, 19 and 20, 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
exercised in the other Contracting State. If the employment is so exercised, such
remuneration as is derived therefrom may be taxed in that other 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 the other 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 the other 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 derived
in respect of an employment exercised aboard a ship, aircraft or road vehicle
operated in international traffic, may be taxed in the Contracting State in which
the registered office of the enterprise is situated.
Article 16
DIRECTORS’ FEES
Directors’ fees and 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 State.
Article 17
ARTISTES AND SPORTSMEN
1. Notwithstanding the provisions of Articles 14 and 15, income derived by a
resident of a Contracting State as an entertainer, such as a theater, motion
picture, radio or television artist, or a musician, or as a sportsman, from his
personal activities as such exercised in the other Contracting State, may be taxed
in that other State.
2. Where income in respect of personal activities exercised by an entertainer or a
sportsman in his capacity as such accrues not to the entertainer or sportsman
himself but to another person, that income may, notwithstanding the provisions
of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities
of the entertainer or sportsman are exercised.
3. The provisions of paragraphs 1 and 2 shall not apply to the income derived
from activities performed in a Contracting State by artistes or sportsmen if the
visit to that State is wholly or mainly supported by public funds of the other
Contracting State or a political subdivision or a local authority thereof.
Article 18
PENSIONS
1. Subject to the provisions of paragraph 1 of Article 19, pensions and other
similar remuneration paid to a resident of a Contracting State in consideration of
past employment shall be taxable only in that State. This provision shall also
apply to life annuities paid to a resident of a Contracting State.
2. Pensions and life annuities paid, and other periodical or occasional payments
made by a Contracting State, or one of its political subdivisions in respect of
insuring personal accidents, may be taxed only in this State.
Article 19
GOVERNMENT SERVICE
1. Remuneration, including pensions, paid by, or out of funds created by, a
Contracting State or a political subdivision or a local authority thereof to any
individual in respect of services rendered to that State or subdivision or authority
thereof in the discharge of functions of a governmental nature shall be taxable in
that State.
2. The provisions of Articles 15, 16 and 18 shall apply to remuneration and to
pensions, in respect of services rendered in connection with a business carried
on by a Contracting State or a political subdivision or a local authority thereof.
Article 20
TEACHERS AND STUDENTS
1. Payments which a student or business apprentice who is a national of a
Contracting State and who is present in the other Contracting State solely for the
purpose of his education or training receives for the purpose of his maintenance,
education or training shall not be taxed in that other State, provided that such
payments arise from sources outside that other State.
2. Likewise, remuneration received by a teacher or by an instructor who is a
national of a Contracting State and who is present in the other Contracting State
for the primary purpose of teaching or engaging in scientific research for a
period or periods not exceeding two years shall be exempt from tax in that other
State on his remuneration from personal services for teaching or research,
provided that such payments arise from sources outside that other State.
This paragraph shall not apply to income from research if such research is
undertaken primarily for the private benefit of a specific person or persons.
Article 21
OTHER INCOME
Items of income of a resident of a Contracting State, wherever arising, not dealt
with in the foregoing Articles of this Agreement shall be taxable only in that
State.
Article 22
CAPITAL
1. Capital represented by immovable property referred to in Article 6, owned by
a resident of a Contracting State and situated in the other Contracting State,
may be taxed in that other State.
2. Capital represented by 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 by 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, may be taxed in that
other State.
3. Capital represented by ships, aircraft and road vehicles operated in
international traffic and by movable property pertaining to the operation of such
ships, aircraft and road vehicles shall be taxable only in the Contracting State, in
which the registered office of the enterprise is situated.
4. All other elements of capital of a resident of a Contracting State shall be
taxable only in that State.
Article 23
METHOD FOR THE ELIMINATION OF DOUBLE TAXATION
1. Where a resident of a Contracting State derives income or owns capital which,
in accordance with the provisions of this Agreement, may be taxed in the other
Contracting State, the first-mentioned State shall allow:
a) as a deduction from the tax on the income of that resident, an amount equal
to the income tax paid in that other State;
b) as a deduction from the tax on the capital of that resident, an amount equal
to the capital tax paid in that other State.
Such deduction in either case shall not, however, exceed that part of the income
tax or capital tax, as computed before the deduction is given, which is
attributable, as the case may be, to the income or the capital which may be
taxed in that other State.
2. Where in accordance with any provision of the Agreement income derived or
capital owned by a resident of a Contracting State is exempt from tax in that
State, such State may nevertheless, in calculating the amount of tax on the
remaining income or capital of such resident, take into account the exempted
income or capital.
Article 24
NON-DISCRIMINATION
1. Nationals of a Contracting State shall not be subjected in the other
Contracting State to any taxation or any requirement connected therewith, which
is other or more burdensome than the taxation and connected requirements to
which nationals of that other State in the same circumstances are or may be
subjected. This provision shall, notwithstanding the provisions of Article 1, also
apply to persons who are not residents of one or both of the Contracting States.
2. Subject to the provisions of paragraph 4 of Article 10, the taxation on a
permanent establishment which an enterprise of a Contracting State has in the
other Contracting State shall not be less favorably levied in that other State than
the taxation levied on enterprises of that other State carrying on the same
activities.
3. Enterprises of a Contracting State, the capital of which is wholly or partly
owned or controlled, directly or indirectly, by one or more residents of the other
Contracting State, shall not be subjected in the first-mentioned State to any
taxation or any requirement connected there with which is other or more
burdensome than the taxation and connected requirements to which other
similar enterprises of the first-mentioned State are or may be subjected.
4. These provisions shall not be construed as obliging a Contracting State to
grant to residents of the other Contracting State any personal allowances, reliefs
and reductions for taxation purposes on account of civil status or family
responsibilities which it grants to its own residents.
Article 25
EXCHANGE OF INFORMATION
1. The competent authorities of the Contracting States shall exchange such
information as is necessary for carrying out the provisions of this Agreement or
of the domestic laws of the Contracting States concerning taxes covered by the
Agreement insofar as the taxation thereunder is not contrary to the Agreement.
Any information received by a Contracting State shall be treated as secret in the
same manner as information obtained under the domestic laws of that State and
shall be disclosed only to persons or authorities (including courts and
administrative bodies) concerned with the assessment or collection of, the
enforcement or prosecution in respect of, or the determination of appeals in
relation to, the taxes covered by the Agreement. Such persons or authorities
shall use the information only for such purposes. They may disclose the
information in public court proceedings or in judicial decisions.
2. In no case shall the provisions of paragraph 1 be construed so as to impose
on a Contracting State the obligation:
a) to carry out administrative measures at variance with the laws and the
administrative practice of that or of the other Contracting State;
b) to supply information which is not obtainable under the laws or in the normal
course of the administration of that or of the other Contracting State;
c) to supply information which would disclose any trade, business, industrial,
commercial or professional secret or trade process, or information, the disclosure
of which would be contrary to public policy (order public).
Article 26
MUTUAL AGREEMENT PROCEDURE
1. Where a resident of a Contracting State considers that the actions of one or
both of the Contracting States result or will result for him in taxation not in
accordance with this Agreement, he may, irrespective of the remedies provided
by the national laws of those States, present his case to the competent authority
of the Contracting State of which he is a resident or, if his case comes under
paragraph 1 of Article 24, to that of the Contracting State of which he is a
national. The case must be presented within the period prescribed by the
domestic laws of the Contracting States.
2. The competent authority shall endeavor, if the objection appears to it to be
justified and if it is not itself able to arrive at a satisfactory solution, to resolve
the case by mutual agreement with the competent authority of the other
Contracting State, with a view to the avoidance of taxation which is not in
accordance with the Agreement. Any agreement reached shall be implemented
within the period prescribed in the domestic laws of the Contracting States.
3. The competent authorities of the Contracting States shall endeavor to resolve
by mutual agreement any difficulties or doubts arising as to the interpretation or
application of the Agreement. They may also consult together for the elimination
of double taxation in cases not provided for in the Agreement.
4. The competent authorities of the Contracting States may communicate with
each other directly for the purpose of reaching an agreement in the sense of the
preceding paragraphs. When it seems advisable in order to reach agreement to
have an oral exchange of opinions, such exchange may take place through a
commission consisting of representatives of the competent authorities of the
Contracting States.
Article 27
MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS
Nothing in this Agreement shall affect the fiscal privileges of members of
diplomatic missions or consular posts under the general rules of international law
or under the provisions of special agreements.
Article 28
ENTRY INTO FORCE
1. This Agreement shall be ratified and the instruments of ratification shall be
exchanged as soon as possible.
2. The Agreement shall enter into force upon the exchange of instruments of
ratification and its provisions shall have effect:
a) in respect of taxes withheld at the source, to amounts of income derived on or
after 1st January in the calendar year next following the year in which the
Agreement enters into force;
b) in respect of other taxes on income and on capital to such taxes chargeable
for any taxable year beginning on or after 1st January in the calendar year next
following the year in which the Agreement enters into force.
Article 29
TERMINATION
This Agreement shall remain in force until terminated by a Contracting State.
Either Contracting State may terminate the Agreement, through diplomatic
channels, by giving notice of termination at least six months before the end of
any calendar year following after the period of five years from the date on which
the Agreement enters into force. In such event, the Agreement shall cease to
have effect:
a) in respect of taxes withheld at source, to amounts of income derived on or
after 1st January in the calendar year next following the year in which such
notice has been given;
b) in respect of other taxes on income and on capital to such taxes chargeable
for any taxable year beginning on or after 1st January in the calendar year next
following the year in which such notice has been given.
In witness whereof, the undersigned, duly authorized thereto, have signed this
Agreement.
Done in duplicate in Tehran, on 27/3/1381 Solar Hijra (17/June/2002) in the
Persian, Turkish and English languages, all texts being equally authentic. In the
case of any divergence of interpretation, the English text shall prevail.
For the Government For the Government
of the Islamic Republic of the Republic
of Iran of Turkey