Portugal
CONVENTION BETWEEN THE PORTUGUESE REPUBLIC AND THE
REPUBLIC OF TURKEY FOR THE AVOIDANCE OF DOUBLE TAXATION
AND THE PREVENTION OF FISCAL EVASION WITH
RESPECT TO TAXES ON INCOME.
The Portuguese Republic and the Republic of Turkey,
desiring to conclude a Convention for the avoidance
of double taxation and the prevention of fiscal evasion
with respect to taxes on income, have agreed as follows:
CHAPTER i
Scope of the convention
Article ı
Persons covered
This Convention shall apply to persons who are residents
of one or both of the Contracting States.
Article 2
Taxes covered
ı- This Convention sh all apply to taxes on income
!mposed on behalf of a Contracting State or of its politı.
cal or administrative subdivisions or local authorities ,
ırrespectıve of the manner in which theyare levied.
2 – There sh all be regarded as taxes on Income taxes
imposed on total income, or on elements of income,
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 Convention sh all
apply are in particular:
a) In the cas e of Portugal:
i) The personal Income tax [imposto sobre
o rendimento das pessoas singulares
(IRS)];
ii) The corporate Income tax [imposto sobre
O rendimento das pessoas colectivas
(IRC)]; and
iii) The local surtax on corporate Income tax
(Derrama);
(hereinafter referred to as «Portuguese
tax»);
b) In the cas e of Turkey:
i) The Income tax (Gelir Vergisi);
ii) The corporation tax (Kurumlar Vergisi);
iii) The levy imposed on the Income tax and
the corporation tax (Gelir Ve Kurumlar
Vergisi üzerinden alinan fon payi);
(hereinafter referred to as «Turkish
tax»),
4 – The Convention shall apply alsa to any identical
or substantially similar taxes that are imposed after the
date of signature of the Convention 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 that have been made in their taxation
laws.
CHAPTER II
Definitions
Article 3
General definitions
ı- For the purposes of this Convention, unless the
context otherwise requires:
a) The term «Portugal» means the Portuguese territory,
territoria! sea as well as the maritime
areas over which the Portuguese Republic has
jurisdiction or sovereign rights for the purposes
of exploration, exploitation and conservation of
natural resources, pursuant to international law;
b) The term «Turkey» means the Turkish territory,
territorial sea as well as the maritime areas over
which Turkey has jurisdiction or sovereign rights
for the purposes of exploration, exploitation and
conservation of natural resources, pursuant to
internationallaw;
c) The terms «a Contracting State» and «the other
Contracting State» mean Portuga! or Turkey,
as the context requires;
d) The term «person» includes an individual, a
companyand any other body of persons;
e) The term «company» means any body corporate
or any entity which is treated as a body corporate
for tax purposes;
f) 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;
g) The term «international traffic» means any
transport by a ship, aircraft or road vehiele operated
by an enterprise of a Contracting State,
except when the ship, aircraft or road vehiele
is operated solely between places in the other
Contracting State;
h) The term «competent authority» means:
i) In Portugal, the Minister of Finance, the
Director Generalaf Taxation (Director-
Geral dos Impostos) or their authorised
representative;
ii) In Turkey: the Minister of Finance or his
authorised representative;
i) 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 İ n force İ n a Contracting State.
2 – As regards the application of the Convention at
any time by a Contracting State, any term not defined
therein shall, unless the context otherwise requires, have
the meaning that it has at that time under the law of
that State for the purposes of the taxes to which the
Convention applies, any meaning under the applicable
tax laws of that State prevailing over a meaning given
to the term under other laws of that State.
Article 4
Resident
ı- 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, legal head office,
place of management or any other criterion of asimilar
nature and alsa includes that State and any political
or administrative 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
from sources in that State.
2 – Where by reason of the provisions of paragraph ı
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 has not
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 ı
of this artiele, a person other than an individual is a
resident of both Contracting States, then it shall be
deemed to be a resi de nt only of the Contracting State
in which its place of effective management is situated.
However, if its place of effective management can not
be determined, then the competent authorities of the
Contracting States shall determine by mutual agreement
the State of which the person shall be deemed to be
a resident for the purpose of this Convention.
Article 5
Permaneni establishmen!
ı- For the purposes of this Convention, the term
«permanent establishment» means a fixed place of business
through which the business of an enterprise is
wholıyor 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; and
f) A mine, an oil or gas well, a quarry or any other
place of extraction of natural resources.
3 – A building site, construction, assembly or installation
project or supervisory activities in connection
therewith constitute a permanent establishment only if
they last more than 9 months.
4 – Notwithstanding the preceding provisions of this
artiele, the term «permanent establishment» shall be
deemed not to include:
a) The use of facilities solely for the purpose of
storage, display or delivery of goods or merch
and ise belonging to the enterprise;
b) The maintenance of a stock of goods or merchandise
belonging to the enterprise solely for
the purpose of storage, display or delivery;
c) The maintenance of a stock of goods or rnerch
and ise belonging to the enterprise solely for
the purpose of processing by anather 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 on, 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.
Notwithstanding the provisions of paragraphs ı
and 2, where a person other than an agent of an independent
status to who m paragraph 6 applies is acting
in a Contracting State on behalf of an enterprise of
the other Contracting State, that enterprise shall be
deemed to have a permanent establishment in the firstmentioned
State if:
a) He has and habitually exereises in a Contracting
State an authority to conclude contracts on
behalf of the enterprise, unless his activities are
limited wholly to the activities deseribed in paragraph
4, which, if exereised through a fixed place
of business would not make this fixed place of
business a permanent establishment under the
provisions of that paragraph; or
b) He has no such authority but habitually maintains
in the first-mentioned State a stock of
goods or merchandise from which he regularly
delivers goods or merchandise on behalf of the
enterprise and conducts any other activity that
contributes to the sal e of goods or merchandise.
6 – 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 commissian agent or any other agent
of an independent status, pravided that such persons
are acting in the ordinary course of their business.
7 – The fact that a company which is a resident of
a Contracting State contrals or is contralled 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.
CHAPTER III
Taxation of İ ncome
Article 6
Income from immovable property
ı- 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 «imrnovable 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 (including the breeding and cultivation of
fish) and forestry, 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; ships, aircraft and road vehicles sh all not be
regarded as immovable property.
3 – The provisions of paragraph ı shall apply to
İ ncome derived from the direct use, letting, or use in
any other form of immovable property.
4 – The provisions of paragraphs ıand 3 shall alsa
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
ı- The profits of an enterprise of a Contracting
State sh all 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 sh all be allawed as deductions expenses
which are incurred for the purposes of the permanent
establishment, including executive and general administrative
expenses so incurred, whether 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 me re 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 Convention,
then the provisions of those Articles shall not be affected
by the provisions of this Artiele.
Article 8
Shipping, air and land transport
ı- Profits of 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.
2 – The provisions of paragraph ı sh all alsa apply
to profits derived from the participation in apool, a
joint business or an international operating ageney.
Article 9
Associated enterprises
ı- 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 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 sh all make
an appropriate adjustment to the amount of the tax
charged therein on those profits, if the other Contracting
State considers the adjustment justified. In determining
such adjustment, due regard shall be had to the other
provisions of this Convention and the competent authorities
of the Contracting States shall if necessary consult
each other.
Article 10
Dividcnds
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 mayaıso 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 beneficial owner of the dividends
is a resident of the other Contracting State, the tax so
charged shall not exceed:
a) 5 per cent of the gross amount of the dividends
paid if the beneficial owner is a company (other
than a partnership) that, for an uninterrupted
period of two years prior to the payment of the
dividends, or if the company paying the dividends
has existed for less than two years during
the lifetime of the company, holds directiyat
least 25 per cent of the capital (capital social)
of the company paying the dividends; or
b) 15 per cent of the gross amount of the dividends,
in all other cases.
The competent authorities of the Contracting States
shall by mutual agreement settle the mo de of application
of these limitations. This paragraph shall not affect the
taxation of the company in respect of the profits out
of which the dividends are paid.
3 – The term «dividends» as used in this artiele
means Income from shares, «jouissance» sh ares 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 İ n 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 the provisions of domestic law of that State,
but the tax so charged shall not exceed 5 per cent of
that amount.
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 pa id is effectively connected with such
permanen! 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 provision of paragraph 4, 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 estab-
!ishment or a fixed base situated in that other State,
nar subject the company’s undistributed profits to a tax
on the company’s undistributed profits, even if the dividen
ds pa id or the undistributed profits consist wholly
or partly of profits or Income arising in such other State.
Article 11
lnterest
1 – Interest 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 interest mayaıso be taxed in the
Contracting State in which it arises and according to
the laws of that State, but if the beneficial owner of
the interest is a resident of the other Contracting State,
the tax so charged shall not exceed:
a) 10 per cent of the gross amount of the interest
if it is paid on a loan made for a period of
more than two years;
b) 15 per cent of the gross amount of the interest,
in all other cases.
3 – Notwithstanding the provisions of paragraph 2:
a) The Central Bank of Turkey shall be exempt
from Portuguese tax with respect to interest arising
in Portugal;
b) The Central Bank of Portugal shall be exempt
from Turkish tax with respect to interest arising
in Turkey;
c) The Government, the political or administrative
subdivisions or the local authorities of one of
the Contracting States shall be exempt from tax
in the other Contracting State with respect to
interest arising in that other State.
4 – The term «interest» as used in this Article means
Income from debt-clairns 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.
5 – The provisions of paragraphs ıand 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, or
performs in that other State independent personal services
from a fixed base situated therein, and the debtdaim
in respect of which the interest is paid is effectively
connected with such permanent establishment or fixed
base. In such case the provisions of Article 7 or artiele
ı4, as the case may be, sh all apply.
6 – Interest shall be deemed to arise in a Contracting
State when the payer is 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 or a fixed base
in connection with which the indebtedness on which
the interest is paid was incurred, and such interest is
borne by such permanent establishment or fixed base,
then such interest shaII be deemed to arise in the State
in which the permanent establishment or fixed base is
situated.
7 – Where, by reason of a special relationship
between the payer and the beneficial owner or between
both of them and same 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 shaII 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 ro the other provisions of this
Convention.
Article 12
Royalties
ı- 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 mayalsa be taxed in the
Contracting State in which theyarise and according to
the laws of that State, but if the beneficial owner of
the royalties is a resident of the other Contracting State,
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 films or recordings for radio or television broadcasting,
any patent, trade mark, design or model, plan,
seeret formula or process, or for the use of, or the right
to use, industrial, commercial or scientific equipment,
or for information concerning industrial, commercial or
scientific experience.
4 – The provisions of paragraphs ı and 2 shall not
apply if the beneficia! 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, or
performs in that other State independent personal services
from a fixed base situated therein, and the right
or property in respect of which the roya1ties are paid
is effectively conneeted with such permanent establishment
or fixed base. In such case the provisions of Article 7
or Article 14, as the ease may be, shall apply.
5 – Royalties shall be deemed to arise in a Contracting
State when the payer is a resident of that State.
Where, however, the person paying the royalties,
whether he is a resident of a Contraeting State or not,
has in a Contracting State a permanent establishment
or fixed base in connection with which the liability to
pay the royalties was incurred, and such royalties are
borne by that permanent establishment or fixed base,
then such royalties shaII be deemed to arise in the State
in which the permanent establishment or fixed base is
situated.
6 – Where, by reason of a special relationship
between the payer and the beneficial owner or between
both of them and same other person, the amount of
the royalties, having regard to the use, right or information
for which theyare 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 sh alI 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 Convention.
Article 13
Capital gains
ı- 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 fixed base, may be taxed in that
other State.
3 – Gains of an enterprise of a Contracting State
from the alienation of ships, aircraft or road vehieles
operated in international traffic or movable property
pertaining to the operation of such ships, aircraft or
road vehicles shall be taxable only in that State.
4 – Gains from the alienation of any property other
than that referred to in paragraphs ı, 2 and 3, shall
be taxable only in the Contracting State of which the
alienatar is a resident.
5 – The provisions of paragraph 4 shall not affect
the right of a Contracting State to levy according to
its own law a tax on gains derived by a resident of the
other State from the alienation of shares that represent
a participation of more than 25 percent of the capital
stock of a company which is resident of the first-mentioned
State if the alienation takes place to a resident
of the first-mentioned State, and if the period between
acquisition and alienatian does not exceed one year.
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. However, such Income mayaıso be taxed
in the other Contracting State if such services or activities
are performed in that other State and if:
a) He has a fixed base regularly available to him
in the other State for the purpose of performing
those services or activities; or
b) He is present in that other State for the purpose
of performing those services or activities for a
period or periods amounting in the aggregate
to lS3 days or more in any continuous period
of 12 months.
In such circumstances, only so much of the income
as is attributable to that fixed base or derived from the
services or activities performed during his presence in
that other State, as the case may be, may be taxed in
that other State.
2 – Ineerne derived by an enterprise of a Contracting
State in respect of professional service s or other activities
of asimilar character shall be taxable only in that State.
However, such Income mayaıso be taxed in the other
Contracting State if such services or activities are performed
in that other State and if:
a) The enterprise has a permanent establishment
in that other State through which the services
or activities are performed; or
b) The period or periods during which the services
are performed exceed in the aggregate 1S3 days
in any continuous period of 12 months.
In such circumstances, only so much of the income
as is attributable to that permanent establishment or
to the services or activities performed in that other State,
as the case may be, may be taxed in that other State.
In either case, the enterprise may c\cct to be taxed in
that other State in respect of such Income in accordance
with the provisions of Article 7 of this Convention as
if the Income were attributable to a permanent estab-
Iishment of the enterprise situated in that other State.
This election sh all not affect the right of that other State
to impose a withholding tax on such income.
3 – The term «professional services» ineludes especially
independent scientific, Iiterary, artistic, educationalar
teaching activities as well as the independent
activities of physicians, lawyers, engineers, architects,
dentists and accountants, and other activities requiring
specific professional skill,
Article 15
Dependent personal services
1 – Subject to the provisions of artieles 16, IS, 19,
20 and 21, salaries, wages and other similar remuneration
derived by a resident of a Contracting State in
respect of an employment sh all 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 sh all 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 calendar year concemed,
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
artiele, remuneration derived in respect of an employment
exereised aboard a ship, aireraft or road vehicle
operated in international traffic by an enterprise of a
Contracting State may be taxed in that State.
Article 16
Directors’ fees
Directors’ fees and other similar payments derived
by a resident of a Contracting State in his capaeity as
a member of the board of directors or supervisory board
of a company which is a resident of the other Contracting
State or as a member of any other organ which performs
the same functions in the company 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 theatre, motion picture,
radio or television artiste, or amusician, or as a sportsrnan,
from his personal activities as such exereised in
the other Contracting State, may be taxed in that other
State.
2 – Where Income in respect of personal activities
exereised by an entertainer or a sportsman in his capacity
as such accrues not to the entertainer or sportsman himself
but to anather person, that Income may, notwithstanding
the provisions of artieles 7, 14 and 15, be taxed
in the Contracting State in which the activities of the
entertainer or sportsman are exereised.
3 – Income derived by an entertainer or a sportsman
from activities exercised in a Contracting State sh all be
exempt from tax in that State, if the visit to that State
is supported wholly or mainly by public funds of the
other contracting state a politİ cal or adminİ strative subdivision
or local authority thereof.
Article IS
Pensions
Subject to the provisions of paragraph 2 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 alsa apply to life annuities paid to
a resident of a Contracting State.
Article 19
Government service
ı- a) Salaries, wages and other similar remuneration,
other than a pension, paid by a Contracting State
or a political or administrative subdivision or alocal
authority thereof to an individual in respect of services
rendered to that State or subdivision or authority shall
be taxable only in that State;
b) However, such salaries, wages and other similar
remuneration shall be taxable only in the other Contracting
State if the services are rendered in that State
and the individual is a resident of that State who:
i) Is a national of that State; or
ii) Did not become a resident of that State solely
for the purpose of rendering the services.
2 – a) Any pension paid by, or out of funds created
by, a Contracting State or a political or administrative
subdivision or alocal authority thereof to an individual
in respect of services rendered to that State or subdivision
or authority shall be taxable only in that State.
b) However, such pension shall be taxable only in
the other Contracting State if the individual is a resident
of, and a nationalof, that State.
3 – The provisions of Artieles IS, 16, 17 and 18 shall
apply to salaries, wages and other similar remuneration,
and to pensions, in respect of services rendered in connection
with a business carried on by a Contracting State
or a political or administrative subdivision or a local
authority thereof.
Article 20
Professors and researchers
An individual who is or was a resident of a Contracting
State immediately before visiting the other Contracting
State solely for the purpose of teaching or scientific
research at an university, college, school or other similar
educational or scientific research institution whieh is re cognised
as non-profitable by the Government of that
other State, or und er an official programme of cultural
exchange, for a period not exceeding two years from
the date of his first arrival in that other State, shall
be exempt from tax in that other State on his rernuneration
for such teaching or research.
Article 21
Students
1 – Payments which a student or business apprentice
who is or was immediately before visiting a Contracting
State a resident of the other Contracting State and who
is present in the first-rnentioned State solely for the
purpose of his educatian or training receives for the
purpose of his maintenance, education or training shall
not be taxed in the first-rnentioned State, provided that
such payments arise from sources outside that State.
2 – Remuneration which a student or a trainee who
is or was immediately before visiting a Contracting State
a resident of the other Contracting State derives from
an employment which he exereises in the first-mentioned
?tate for a period or periods not exceeding 183 days
ın a calendar year in order to obtain practical experience
related to his education or formatian shall not be taxed
in that State.
Article 22
Other income
ı- Items of Income of a resident of a Contracting
State, wherever arising, not dealt with in the foregoing
artieles of this Convention sh all be taxable only in that
State.
2 – The provisions of paragraph 1 shall not apply
to income, other than Income from immovable property
as defined in paragraph 2 of Article 6, if the recipient
of such income, being a resident of a Contracting State,
carries on business in the other Contracting State
through a permanent establishment situated therein, or
performs in that other State independent personal services
from a fixed base situated therein, and the right
or property in respect of which the Income is pa id is
effectively connected with such permanent establishment
or fixed base. In such cas e the provisions of Article 7
or Article 14, as the case may be, sh all apply.
CHAPTER IV
Elimination of double taxation
Article 23
Elimination of double taxation
1 – In the case of Portugal, double taxation sh all be
avoided as follows:
a) Where a resident of Portugal derives income
which, in accordance with the provisions of this
Convention, may be taxed in Turkey, Portugal
shall allow as a deduction from the tax on the
Income of that resident an amount equal to the
tax paid in Turkey. Such deduction shall not,
however, exceed that part of the Income tax as
computed before the deduction is given, which
is attributable to the Income which may be taxed
in Portugal;
b) Where in accordance with any provisions of this
Convention Income derived bya resident of Portugal
is exempt from tax in this State, Portugal
may nevertheless, in calculating the amount of
tax on the retnaining Income of such resident
take into account the exempted income;
c) Notwithstanding the provision of sub-paragraph
a), where a company (other than a partnership)
which is resident of Portugal receives
dividends from a company which is resident of
Turkey and which is not exempt from corporation
tax in Turkey, Portugal shall allow a
deduction for 95 per cent of such dividends
ineluded in the tax base of the company receiving
dividends, provided that the company which
is resident of Portugal is a company that, for
an uninterrupted period of two years prior to
the paymen t of the dividends, or if the company
paying the dividends has existed for less than
two years during the lifetime of the company,
holds directiyat least 2S per cent of the capital
(capital social) of the company paying the
dividends.
2 – In the case of Turkey, double taxation shall be
avoided as follows:
a) Subject to the provisions of the laws of Turkey
regarding the allowance as a credit against Turkish
tax of tax payable in a territory outside Turkey,
Portuguese tax payable under the laws of
Portugal and in accordance with this Convention,
in respect of Income (including profits and
chargeable gains) derived by a resident of Turkey
from sources within Portugal shall be
allawed as a deduction from the Turkish tax
on such income. Such deduction, however, shall
not exceed the amount of Turkish tax, as computed
before the deduction is given, attributable
to such income;
b) Where in accordance with any provisions of this
Convention Income derived by a resident of Turkey
is exempt from tax in Turkey, Turkey may
nevertheless, in calculating the amount of tax
on the remaining Income of such resident take
into account the exempted income.
CHAPTER V
Special provisions
Article 24
Non-discrimination
ı- Natianals 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, in particular with respect to
residence, are or may be subjected. This provision shall,
notwithstanding the provisions of Article 1, alsa apply
to persons who are not residents of one or both of the
Contracting States.
2 – Subject to the provisions of paragraph 4 of artiele
10, the taxation on a permanent establishment which
an enterprise of a Contracting State has in the other
Contracting State shall not be less favourably levied in
that other State than the taxation levied on enterprises
of that other State carrying on the same activities.
3 – Except where the provisions of paragraph ı of
article 9, paragraph 7 of article 11, or paragraph 6 of
Article 12, apply, interest, royalties and other disbursements
paid by an enterprise of a Contracting State to
a resident of the other Contracting State sh all, for the
purpose of determining the taxable profits of such enterprise,
be deductible under the same conditions as if they
had been paid to a resident of the first-mentioned State.
4 – Enterprises of a Contracting State, the capital
of which is wholıyor 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 ar any requirement connected
therewith 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.
5 – 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.
6 – The provisions of this Article shall apply to the
taxes covered by this Convention.
Article 25
Mutual agreement procedure
1 – Where a person considers that the actions of one
or both of the Contracting States result or will result
for him in taxation not in accordance with the provisions
of this Convention, he may, irrespective of the remedies
provided by the domestic law 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 ıof article 24, to that of the Contracting
State of which he is a nationaL. The case must
be presented within three years from the first notification
of the action resulting in taxation not in accordance
with the provisions of the Convention.
2 – The competent authority shall endeavour, if the
objection appears to it to be justified and if it İ s 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 Convention. Any agreement reached sh all be
implemented notwithstanding any time limits in the
domestic law of the Contracting States.
3 – The competent authorities of the Contracting
States shall endeavour to resolve by mutual agreement
any difficulties or doubts arising as to the interpretation
or application of the Convention.
4 – The competent authorities of the Contracting
States may communicate with each other directly, including
through a joint commission consisting of themselves
or their representatives, for the purpose of reaching an
agreement in the sense of the preceding paragraphs.
Article 26
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 Convention or
of the domestic laws of the Contracting States concerning
taxes covered by the Convention insofar as the taxation
thereunder is not contrary to the Convention. Any
information received by a Contracting State shall be
treated as seeret in the same manner as information
obtained under the domestic laws of that State and shall
be diselosed only to persons or authorities (ineluding
courts and adminİ strative 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 Convention. 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 ı
be construed so as to impose on a Contracting State
the obligation:
a) To carry out administrative measures at variance
with the laws and 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
seeret or trade process, or information,
the diselosure of which would be contrary to
public policy (ordre public).
Article 27
Members of diplomatic missions and consular posts
Nothing in this Convention 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.
CHAPTER VI
Final provisions
Article 28
Entry into foree
1 – Each Contracting State shall notify to the other
Cont,racting ,State the completion of the procedures
requıred by ıts law for the bringing into force of this
Convention. This Convention shall enter into foree on
the date of the later of these notifications.
2 – The provisions of this Conventian sh all have
effect:
a) In Portugal:
i) In respeet of taxes withheld at source,
the fact giving rise to them appearing on
or after the first day of J anuary of the
year next following the year in which this
Convention enters into force;
ii) In respect of other taxes as to income
arising in any fiscal year beginning on or
after the first day of January of the year
next following the year in which this Convention
enters into force;
b) In Turkey – in respect of taxes for the taxable
period beginning on or af ter first day of January
next followmg the date upon which this Convention
enters into force and subsequent taxable
periods.
Article 29
Termination
1 – This Convention sh all remain in force until terminated
b~ a Contracting State. Either Contracting State
may termmate the Convention, through diplomatic
channels, by giving notice of termination at least six
moı:ıth~ befor~ the end of any calendar year after the
expıratıon of fıve years from the date of entry into force
of the Convention.
2 – In such event, the Conventian shall cease to have
effect:
a) In Portugal:
i) In respect of taxes withheld at source,
the fact giving rise to them appearing on
or after the first day of January of the
year next following that specified in the
said notice of termination;
ii) In respect of other taxes, as to income
arising in the fiscal year beginning on or
after the first day of January of the year
next following that specified in the said
notice of termination;
b) In Turkey – for, ta~es with respect to every taxable
penod begmnmg on or af ter the first day
?f January of the year next following that specıfıed
m the saıd notice of termination.
In witness whereof the undersigned, duly authorised
thereto, have signed this Convention.
DO,ne in duplieate at Lisbon this eleven day of May,
2005 ın the Portuguese, Turkish and English languages,
all texts being equally authentic. In case of any divergence
of interpretation or application of this Convention,
the English text sh all prevail.
For the Portuguese Republic:
Luis Campas e Cunha. Minister of State and
Finance,
For the Republic of Turkey:
Ali Tuygan, Undersecretary of the Ministry of
Foreign Affairs.
PROTOCOL
At the moment of signature of the Convention for
the Avoidance of Double Taxation and the Prevention
of Fiscal Evasion with respect to Taxes on Income concluded
this day between the Portuguese RepubIic and
the Republic of Turkey, the undersigned have agreed
upon the following additional provisions, which form
an integral part of the Convention.
Ad Article 6
With referenee to Article 6, it is understood that the
provisions deseribed therein sh all alsa apply to income
from associated movable (personal) property and from
the provision of services for the maintenance or operation
of immovable property (real property).
Ad Article 8
For the purposes of paragraph 2 of Article 8, it is
und~rstood that the provisions of that paragraph inelude
profits of a consonium or a similar form of association
as corresponds to the partieipation held in the consortium
or association by a company that is resident of
a Contracting State.
Ad Article 10
With reference to paragraph 3 of Article 10, it is understood
that the term «dividends» alsa ineludes: in the
case of Portugal, profits attributed under an arrange-
~~nt ~or p.articipation in profits (associaçao em partıcıpaçao);
m the case of Turkey, Income derived from
an investment fund and investment trust.
Ad Article 12
For the purposes of paragraph 3 of Article 12, it is
un~erstood that the term «royalties» ineludes gains
denved from the use of such right or property in the
case of an alienation of such right or property to the
extent that such gains are contingent on the productivity
use, or dispositian thereof. ‘
Ad Article 14
With reference to paragraph 2 of Article 14, it is understood
that if the enterprise of a Contracting State elects
to be taxed in the other Contracting State in accordance
with the provisions of article 7 of this Convention the
tax withheld in that other State on the Income of’ that
enterprise may be deducted from the tax ca\culated on
i~c,ome whic~ is determined in accordance with the provısıons
of Article 7 of this Conventİ on.
Article 25
With respect to paragraph 2 of Article 25, it is understood
that the taxpayer must elaim the refund resulting
from such mutual agreement within a time period provided
by the domestic law after the tax administration
has notified the taxpayer of the result of the mutual
agreement.
In witness whereof the undersigned, duly authorised
thereto, have signed this Protocol.
Done in duplicate at Lisbon this eleven day of May,
2005 in the Portuguese, Turkish and English languages,
all texts being equally authentic. In case of any divergence
of interpretation or application of this Protocol,
the English text sh all prevail.
For the Portuguese Republic:
Luis Campas e Cunha, Minister of State and
Finance.
For the Republic of Turkey:
Ali Tuygan, Undersecretary of the Ministry of
Foreign Affairs.
/