dtc agreement between zimbabwe and netherlands

8/2/2019 DTC agreement between Zimbabwe and Netherlands

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19 (1989) N r . 1

TRACTATENBLADVAN HET

KONI NKRI JK DER NE DE RL AN DE NJAARGANG 1989 Nr. 95

A. TITELOvereenkomst tussen het Koninkrijk der Nederlanden en de RepubliekZimbabwe tot het vermijden van dubbele belasting en hetvoorkomen vanhet ontgaan van belasting metbetrekking tot belastingen naar hetinkomen ennaar vermogenswinsten, met Protocol;Harare, 18 mei 1989

B. TEKSTConvention between the K ingdom of the Netherland s and the Repub licofZimbabwe forthe Avoidance ofDou ble Taxation and thePrevention ofFiscal Evasion with respect to Taxes on Income andCapital Gains

The Government of the Kingdom of the Netherlandsandthe Government of the Republic of Zimbabwe,Desiring to conclude a convention for the avoidance of doubletaxation and theprevention of fiscal evasion with respect to taxes onincome and capital gains,Have agreed as follows:


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CHAPTER ISCOPE OF THE CONVENTION

Article 1Personal Scope

This Con vention shall apply to persons who a re residents of one orboth of the States.Article 2

Taxes covered1. This Co nve ntion shall apply to taxes on income and cap ital gainsimpo sed on behalf of one of the States or of its political subdivisionsor local authorities, irrespective of the manner in which they arelevied.2. There shall be regarded as taxes on income and capital gains alltaxes imposed on total incom e, on total capital gains or on elements ofincome or of capital gains, as well as taxes on capital appreciation.3 . The existing taxes to which this Convention shall apply are inparticular:a) in the Netherlands:(i) de inkom stenbelasting (income tax);(ii) deloonbelasting(wagestax);(Hi) de vennootschapsbelasting (company tax) including the Gov-ernment share in the net profits of the exploitation of naturalresources levied p ursu an t to the M ijnwet 1810 (the Mining Actof 1810) with respect to concessions issued from 1967, orpursuant to the Mijnwet Continentaal Plat 1965 (the Nether-lands C on tinen tal Shelf Mining Act of 1965); and(iv) de dividendb elasting (dividend tax );(hereinafter referred to as "Netherlands tax");b) in Zimbabwe:(i) the income ta x;(ii) the branch profits tax;(iii) the non-resident shareho lders' tax;(iv) the non-residents' tax on interest;(v) the no n-resid ents'tax on fees;(vi) the non-residents' tax on roy alties; and(vii) the capital gains tax ;(hereinafter referred to as "Zimbabwean tax").4. This Convention shall apply also to any identical or substantially


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similar taxes which are imposed after the date of signature of thisConvention in addition to, or in place of, the existing taxes. Thecompetent authorities of the States shall, if necessary, notify eachother of any substantial changes which have been made in theirrespective taxation laws.

CHAPTER IIDEFINITIONS

Article 3General Definitions

1. For the purposes of this Convention, unless the context other-wise requires:a) the term "State" means the Netherlands or Zimbabwe, as thecontext requires; the term "States" means the Netherlands andZimbabwe;b) the term " the N ether land s" means the part of the Kingdom ofthe N etherland s tha t is situated in Europ e including the part of the seabed and its sub-soil un de r the North Sea, to the extent that that a rea inaccordance with international law has been or may hereafter bedesignated under Netherlands laws as an area within which theNetherlands may exercise certain rights with respect to the explora-tion and exploitation of the natural resources of the sea bed or itssub-soil;c) the term "Zimbabwe" means the Republic of Zimbabwe;d) the term " pe rso n" includes an individual, a com pany, an estate,a trust and any other body of persons;e) the term "company" means any body corporate or any entitywhich is treated as a body corporate for tax purposes;f) the terms "enterprise of one of the State s" and "en terprise of theother S tate " mean respectively an enterprise carried o n by a residentof one of the States and an enterprise carried on by a resident of theother State;g) the term "intern ationa l traffic" means any transp ort by a ship oraircraft, including transport by container, operated by an enterprisewhich has its place of effective management in one of the States,except when the ship or aircraft is operated solely between places inthe other State;

h) the term "national" means:(i) in relation to the Netherlands, any individual possessing thenationality of the Netherlands and any legal person, partner-ship or association deriving its status as such from the law inforce in the N ethe rlan ds;


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(ii) in relation to Zimbabwe , any citizen of Zimbabw e and any legalperson, partnership, association or other entity deriving itsstatus as such from the law in force in Z im ba bw e;i) the term "com peten t au thority " m eans in the case of theN etherland s the M inistry of Finance or his autho rised representativeand in the case of Zimbabwe the Commissioner of Taxes or hisauthorised representative.

2. As regards the application of this Convention by one of theStates any term not defined therein shall, unless the context otherwiserequires, have the meaning which it has under the law of that Stateconcerning the taxes to which this Convention applies.Article 4

Fiscal Do micile1. For the purposes of this Co nven tion, the term "residen t of one ofthe States" means any person who, under the laws of that State, isliable to tax therein by reason of his domicile, residence, place ofmanagement or any other criterion of a similar nature.2. W here by reason of the provisions of pa ragraph 1 of this Article,an individual is a resident of both States, then his status shall bedetermined as follows:a) he shall be deem ed to be a resident of the State in which he has apermanent home available to him; if he has a permanent homeavailable to him in both States, he shall be deem ed to be a resident ofthe 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 can no t bedetermined, or if he has not a permanent home available to him ineither S tate, he shall be deemed to be a resident of the S tate in which he

has an habitual abode;c) if he has an habitua l abo de in both States or in neither of them , heshall be deemed to be a resident of the S tate of which he is a n atio na l;d) if he is a national of both States or of neither of them, thecom peten t autho rities of the States shall settle the que stion by m utualagreement.3. W here by reason of the provisions of pa ragrap h 1 of this Article aperson other than an individual is a resident of both States, then itshall be deemed to be a resident of the State in which its place of

effective management is situated.


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Article 5Permanent Establishment

1. For the purposes of this Convention, the term "permanentestablishment" means a fixed place of business through which thebusiness 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; and0 a mine, an oil or gas well, a quarry or any othe r place of ex tractionof natural resources.3. A build ing site or cons truction or installation project constitutesa permanent establishment only if it lasts more than six months.4. Notwithstanding the preceding provisions of this Article, theterm "permanent establishment" shall be deemed not to include:a) the use of facilities solely for the pur po se of storage, display ordelivery of goods or merchandise belonging to the enterprise;b) the main tenance of a stock of goods or m erchand ise belongingto the enterprise solely for the purpo se of storage, display or delivery ;c) the maintena nce of a stock of goods or m erchand ise belonging tothe enterprise solely for the purpose of processing by anotherenterprise;d) the maintenance of a fixed place of business solely for thepurp ose of purchasin g goods or merc handise or of collecting informa-tion, 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 apreparatory or auxiliary character;f) the maintenance of a fixed place of business solely for anycom bination of activities mention ed in sub-parag raphs a) to e) of thisparagraph, provided that the overall activity of the fixed place ofbusiness resulting from this combination is of a preparatory orauxiliary character.5. No twithstand ing the provisions of parag raph s 1 and 2 of thisArticle, where a person , other tha n an agent of an indepe nde nt status

to whom para grap h 6 of this Article applies, is acting on behalf of anenterprise and has, and habitually exercises, in one of the States anauthority to conclude contracts in the name of the enterprise, thatenterprise shall be deem ed to have a perm anen t establishmen t in thatState in respect of any activities which that person undertakes for the


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enterprise, unless the activities of such person are limited to thosem entioned in para graph 4 of this Article which, if exercised throug h afixed place of business, would not make this fixed place of business apermanent establishment under the provisions of that paragraph.6. An enterprise shall not be deemed to have a permanent estab-lishment in one of the States merely because it carries on business inthat State through a broker, general commission agent or any otheragent of an independent status, provided that such persons are actingin the ordinary course of their business.

7. The fact that a company w hich is a resident of one of the Statescon trols or is con trolled by a com pany w hich is a resident of the othe rState, or which carries on business in that other State, (whetherthrough a permanent establishment or otherwise), shall not of itselfconstitute either company a permanent establishment of the other.

CHAPTER IIITAXATION OF INCOME

Article 6Income from immo vable Property

1. Income derived by a resident of one of the States from immov-able property (including incom e from agriculture or forestry) situatedin the other State may be taxed in that other State.2. The term "im mo vable p rop erty" shall have the mea ning which ithas under the law of the State in which the property in question issituated. The term shall in any case include property accessory toimm ovable property, livestock and equipm ent used in agriculture and

forestry, rights to which the provisions of general law respectinglanded property apply, usufruct of immovable property and rights tovariable o r fixed paym ents as consideration for the working of, or theright to work, mineral deposits, sources and other natural resources;ships and aircraft shall not be regarded as immovable property.3. The p rovisions of para graph 1 of this Article shall apply toincome derived from the direct use , letting, or use in any o ther form ofimmovable property.4. Th e provisions of parag rap hs 1 and 3 of this Article shall alsoapply to the income from imm ovable prop erty of an enterprise and toincome from immovable property used for the performance ofindependent personal services.


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Article 8International Traffic

1. Profits from international traffic shall be taxable only in theState in which the place of effective management of the enterprise issituated.2. If the place of effective management of a shipping enterprise isaboard a ship, then it shall be deemed to be situated in the State inwhich the hom e ha rbo ur of the ship is situated, or, if there is no suchhome harbour, in the State of which the operator of the ship is aresident.3. For the purposes of this Article, profits derived from theoperation in international traffic of ships and aircraft include profitsderived from the rental on a full o r bare boat basis of ships and aircraftif operated in interna tional traffic if such rental profits are inciden talto the profits described in para grap h 1 of this Article.4. The provisions of parag raph 1 of this Article shall apply also toprofits from the particip ation in a po ol, a join t business or aninternational operating agency.

Article 9Associated Enterprises

1. Where:a) an enterprise of one of the States participates directly orindirectly in the m anagem ent, control or capital of an en terprise of theother State; orb) the same persons pa rticipate directly or indirectly in the m ana-gem ent, control or capital of an enterprise of on e of the States and anenterprise of the other State;and in either case conditions a re made o r imp osed betw een the twoenterprises in their commercial or financial relations which differfrom those which would be made between independent enterprises,then an y profits w hich would, bu t for those cond itions, have accruedto one of the enterprises, but, by reason of those con ditions, have n otso accrued, m ay be included in the profits of tha t enterprise and taxedaccordingly. It is understood, however, that the fact that associatedenterprises have concluded arrangements, such as costsharing ar-rangem ents or general services agreem ents, for or based on the alloca-tion of executive, general administrative, technical and commercialexpenses, research and development expenses and other similarexpenses, is not in itself a condition as meant in the precedingsentence.


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2. W here one of the S tates includes in the profits of an en terprise oftha t State, and taxes accordingly, profits on w hich an enterprise of theother State has been charged to tax in that other State and the profitsso included are profits which would have accrued to the enterprise ofthe first-mentioned State if the conditions made between the twoenterprises had been those which would have been made betweenindependent enterprises, then that other State shall make an appro-priate adjustment to the amount of the tax charged therein on thoseprofits. In determining such ad justmen t, due regard shall be had to theother provisions of this Convention and the com petent au thorities ofthe States shall if necessary consult each other.Article 10Dividends

1. Dividends derived from a com pany which is a resident of one ofthe States by a resident of the other State may be taxed in that otherState.2. How ever, such dividend s may also be taxed in the State of whichthe com pany from which the dividends are derived is a resident andacco rding to the law of that State, but if the recip ient is the beneficial

owner of the dividends the tax so charged shall not exceed:a) 10 per cent of the gross am ount of the dividends if the beneficialowner is a com pany (other than a partnership) w hich holds directly atleast 25 per cent of the capital of the com pany paying the divid end s;b) 20 per cent of the gross amount of the dividends in all othercases.This paragraph shall not affect the taxation of the company inrespect of the profits out of which the dividends are paid.3 . The competent authorities of the States shall by mutual agree-

m ent settle the m ode of application of para grap h 2 of this Article.4. The term "d iv ide nd s" as used in this Article m eans incom e fromshares or other rights, not being debt-claims, participating in profits,as well as income from other corporate rights assimilated to incomefrom shares by the taxation law of the State of which the companymaking the distribution is a resident and also includes any other itemwhich, under the law of the State of which the company paying thedividend is a resident, is treated as a dividend or distribution of acompany.5. The provisions of pa rag raphs 1 and 2 of this Article shall notapp ly if the beneficial owner of the dividen ds, being a residen t of oneof the States, carries on business in the other State of which thecompany paying the dividends is a resident, through a permanentestablishment situated therein, or performs in that other State inde-


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pendent personal services from a fixed base situated therein, and theholding in respect of which the dividends are paid is effectivelyconnec ted w ith such perm ane nt establishm ent o r fixed base. In suchcase the provision s of Article 7 or Article 14, as the case may be, shallapply.6. W here a com pany which is a resident of one of the States derivesprofits o r income from the other S tate, that othe r State may not im poseany tax on the dividends paid by the com pan y, except insofar as suchdividends are paid to a resident of that other State or insofar as theholding in respect of which the dividends are paid is effectivelyconnected with a perm ane nt establishment or a fixed base situated inthat other State, nor subject the company's undistributed profits to atax on the company's undistributed profits, even if the dividends paidor the undistributed profits consist wholly or partly of profits orincome arising in that other State.

Article 11Interest

1. Interest arising in one of the S tates and paid to a residen t of theother State may be taxed in that other State.2. How ever, such interest may also be taxed in the S tate in which itarises and acco rding to the law of that S tate, but if the recip ient is thebeneficial owner of the interest the tax so charged shall not exceed 10per cent of the gross amount of the interest.3 . Notwithstanding the provisions of paragraph 2 of this Article,interest arising in one of the States shall be exempt from tax in thatState if it is derived by the G overnm ent of the other State, a politicalsubdivision o r a local authority thereof or any agency or instrum ental-ity of that Government, political subdivision or local authoritythereof.4. No twithstanding the provisions of parag raph 2 of this Article ,interest arising in Zimbabwe and paid to the Nederlandse Fiancie-ringsmaatscha ppij voor Ontwikkelingslanden N.V. (Ne therland s Fi-nance Company for Developing Countries), and the NederlandseInvesteringsbank voor Ontwikkelingslanden N.V. (Netherlands In-vestment Bank for Developing Countries) shall be exempt fromZimbabwean tax.5. The competent authorities of the States shall by mutual agree-ment settle the mode of application of paragraphs 2, 3 and 4 of thisArticle.6. The term "interest" as used in this Article means income fromdebt-claims of every kind, whether or not secured by mortgage and


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3 . The competent authorities of the States shall by mutual agree-ment settle the m ode of app lication of pa rag rap h 2 of this Article.4. The term "ro ya lties" as used in this Article m eans paym ents 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 cinema-tograp h films, and films or tapes for radio or television broadc asting),any patent, trade mark, design or model, plan, secret formula orprocess, or for the use of, or the right to use, industrial, com mercial orscientific equipment, or for information concerning industrial, com-mercial or scientific experien ce, as well as paym ents of any kind to anyperson, other than to an employee of the person m aking the paym ents,in consideration for any services of a technical, managerial orconsultancy nature.5. The prov isions of para grap h 1 and 2 of this Article, shall notapp ly if the beneficial owner of the royalties, being a resident of one ofthe S tates, carries on bu siness in the other S tate in which the royaltiesarise, through a permanent establishment situated therein, or per-forms in that other State independent personal services from a fixedbase situated therein, and the right or property in respect of which theroyalties are paid, are effectively connected with such permanentestablishm ent or fixed base . In such case the provisions of Article 7 orArticle 14, as the case may be, shall apply.6. Royalties shall be deem ed to arise in one of the States when thepayer is that S tate itself, a political subdivision, a local autho rity or aresident of that State. Where, however, the person paying the royal-ties, whether he is a resident of one of the States or no t, has in one ofthe States a permanent establishment or a fixed base in connectionwith which the contract under which the royalties are paid wasconcluded, and such royalties are borne by such permanent estab-lishment or fixed base, then such royalties shall be deemed to arise in

the State in which the permanent establishment or fixed base issituated.7. W here, by reason of a special relationship betw een the payer andthe beneficial owner or between both of them a nd som e other person ,the amount of the royalties, having regard to the use, right orinform ation for which they are paid, exceeds the am oun t which wou ldhave been agreed upon by the payer and the beneficial owner in theabsen ce of such relationship , the provisions of this Article shall app lyonly to the last-men tioned am oun t. In such case, the excess par t of the

paym ents shall remain taxable acco rding to the laws of each State, dueregard being had to the other provisions of this Convention.


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Article 15Dependent personal Services

1. Subject to the provisions of Articles 16, 18, 19 and 20, salaries,wages and other similar rem uneration derived by a resident of one ofthe States in respect of an employment shall be taxable only in thatState unless the employment is exercised in the other State. If theemployment is so exercised, such remuneration as is derived there-from may be taxed in that other State.2. No twithstanding the provisions of parag raph 1 of this Article,rem unera tion derived by a resident of one of the States in respect of anemployment exercised in the other State shall be taxable only in thefirst-mentioned State if:a) the recipient is present in the other State for a period or periodsnot exceed ing in the aggregate 183 days in the fiscal year of that Sta te;andb) the rem une ration is paid by , or on behalf of, an em ployer who isnot a resident of the other State; andc) the remu neration is not borne by a perman ent establishment or afixed base which the employer has in the other State.3. Notwithstanding the preceding provisions of this Article, remu-neration derived in respect of an employm ent exercised aboard a shipor aircraft o perated in internationa l traffic, may be taxed in the S tatein which the place of effective management of the enterprise issituated.

Article 16Director's Fees

Dire ctor's fees or other rem une ration derived by a resident of one ofthe States in his capacity as a member of the board of directors, a"b est uu rde r" or a "com m issaris" of a com pany w hich is a resident ofthe other State may be taxed in that other State.Article 17

Artistes and Athletes1. No twithstanding the provisions of Articles 14 and 15, incomederived by a resident of one of the States as an entertainer, such as athea tre, motion pictu re, radio or television artiste, or a musician, or asan athlete, from his personal activities as such exercised in the otherState, may be taxed in that other State.


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2. Where income in respect of personal activities exercised by anentertainer or an athlete in his capacity as such accrues not to theentertain er or athlete himself but to anothe r person, that income m ay,notw ithstand ing the provisions of Articles 7 ,1 4 an d 15, be taxed in theState in which the activities of the entertainer or athlete are exercised.Article 18Pensions

1. Subject to the provisions of parag rap h 2 of Article 19, pens ionsand other similar rem une ration, wh ether or not of a periodical natu re,arising in one of the S tates and paid to a resident of the other State inconsideration of past employment or services may be taxed in thefirst-mentioned State, and any an nuity arising in that State and paid toa resident of the oth er State may be taxed in the first-mentioned State.

2. Any pension paid out under the provisions of a social securitysystem of on e of the States to a resident of the othe r State may be taxedin the first-mentioned State.3 . Th e term "an nu ity" means a stated sum payable periodically atstated times during life or durin g a specified or asce rtainable p eriod oftime un de r an obligation to make the paym ents in return for ad equ ateand full consideration in money or money's worth.

Article 19Government Service

1. a) Re m unera tion, other than a pen sion, paid by one of the Statesor a political subdivision or a local authority thereof to an in dividu alin respect of services rendered to that S tate or subdivision or autho ritymay be taxed in that State.b) How ever, such remun eration shall be taxable only in the otherState if the services are rendered in that State and the individual is aresident of that State who:(i) is a natio nal of tha t State ; or(ii) did not becom e a resident of tha t State solely for the purp ose ofrendering the services.

2. a) Any pension paid by, or out of funds created by, one of theStates or a political subdivision or a local authority thereof to anindividual in respect of services rendered to that State or subdivisionor authority may be taxed in that State.b) How ever, such pension shall be taxable only in the other State ifthe individual is a resident of, and a national of, that State and ifimm ediately p rior to the cessation of the services to which the pens ion


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relates the remuneration therefor was subject to tax in that Statew hether un der pa ragraph 1 of this Article or otherwise.c) For the purposes of this paragraph any pension paid out of theCentral African Pension Fund and subject to tax under the law ofZimbabwe shall be treated as if it were a pension paid by, or out offunds created by, Zimbabwe.3. The provisions of Articles 15 ,16 and 18 shall apply to rem unera-tion and pensions in respect of services rende red in connection with abusiness carried on by one of the States or a political subdivision or alocal authority thereof.

Article 20Professors and Teachers

1. Re m unera tion, which a professor or teacher who is a resident ofone of the States, and who is prese nt in the oth er State for the p urp oseof teach ing or scientific research for a maxim um perio d of two years ina university, college or other establishment for teaching or scientificresearch in that other State, receives for such teaching or research,shall be taxable only in the first-men tioned State, provided that suchremuneration arises from sources outside that other State.2. This Article shall not apply to income from research if suchresearch is undertaken not in the public interest but primarily for theprivate benefit of a specific person or persons.

Article 21Students

Payments which a student or business apprentice who is or wasimmediately before visiting one of the States a resident of the otherState and who is present in the first-mentioned State solely for thepurpose of his education or training receives for the purpose of hismaintenance, education or training shall not be taxed in that State,provided that such payments arise from sources outside that State.

Article 22Income not expressly mentioned

1. Items of income of a resident of one of the States, whereverarising, which are not dealt with in the foregoing Articles of thisConvention shall be taxable only in that State.


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2. The provisions of paragra ph 1 of this Article shall not app ly toincome, other than income from immovable property as defined inparagraph 2 of Article 6, if the recipient of such income, being aresident of one of the States, carries on business in the other Statethrough a permanent establishment situated therein, or performs inthat other State independent personal services from a fixed basesituated therein, and the right or property in respect of which theincome is paid is effectively connected with such permanent estab-lishment or fixed base. In such case the provisions of Article 7 orArticle 14, as the case may be, shall apply.CHAPTER IV

ELIMINATION OF DOUBLE TAXATIONArticle 23

Elimination of double Ta xation1. The Netherlands, when imposing tax on its residents, mayinclude in the basis upo n which such taxes are imp osed the items ofincome w hich, according to the provisions of this Conv ention, may be

taxed in Zimbabwe.2. However, where a resident of the Netherlands derives items ofincome according tq Article 6, Article 7, paragraph 5 of Article 10,para grap h 7 of Article 11, para grap h 5 of Article 12, parag raph s 1 and2 of Article 13, Article 14, pa rag rap hs 1 and 3 of A rticle 15, Article 16,pa rag rap h 2 of Article 18, Article 19 and pa rag rap h 2 of Article 22 ofthis Convention may be taxed in Zimbabwe and are included in thebasis referred to in paragra ph 1 of this Article, the N etherlan ds shallexempt such items of income by allowing a reduction of its tax. Thisreduction shall be computed in conformity with the provisions ofNetherlands law for the avoidance of double taxation. For thatpu rpose the said items of income shall be deemed to be included in thetotal amo unt of the items of income which are exem pt from N ether-lands tax under those provisions.

3 . Further, the Netherlands shall allow a deduction from theNe therland s tax so com puted for the items of income w hich accordingto parag raph 2 of Article 10, para grap h 2 of Article 11, para grap h 2 ofArticle 12, pa rag rap h 4 of Article 13, Article 17 an d p aragra ph 1 ofArticle 18 of this Co nvention may be taxed in Zim babwe to the extentthat these items are include d in the basis referred to in para gra ph 1 ofthis Article. The amount of this deduction shall be equal to the taxpaid in.Zimbabw e on these items of incom e, but shall not exceed theamount of the reduction which would be allowed if the items of


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2. The competent authority shall endeavour, if the objectionappears to it to be justified and if it is not itself able to arrive at asatisfactory solution, to resolve the case by mutua l agreement with thecom peten t au thority of the o ther State, with a view to the avoidan ce oftaxation which is not in accordance with this Convention. Anyagreement reached shall be implemented notwithstanding any timelimits in the domestic law of the States.3 . The competent authorities of the States shall endeavour toresolve by mutual ag reement any difficulties or dou bts arising as to theinterpretation or application of this Convention. They may alsoconsult together for the elimination of double taxation in cases notprovided for in this Convention.4. The competent authorities of the States may communicate witheach other directly for the purpose of reaching an agreement in thesense of the preceding paragraphs.

Article 26Exchange of Information

1. The competent authorities of the States shall exchange suchinformation as is necessary for carrying out the provisions of thisConvention or of the domestic laws of the States concerning taxescovered by this Convention insofar as the taxation thereunder is notcontrary to this Convention. The exchange of information is notrestricted by Article 1. Any inform ation received by one of the Statesshall be treated as secret in the same ma nn er as information ob tainedunder the domestic laws of that State and shall be disclosed only topersons or authorities (including courts and administrative bodies)involved in the assessment or collection of, the enforcement orprosecution in respect of, or the determination of appeals in relationto, the taxes covered by this Convention. Such persons or authoritiesshall use the information only for such purposes.

2. In no case shall the provisions of para gra ph 1 of this Article beconstrued so as to impose on one of the States the obligation:a) to carry out administrative measures at variance with the lawsand administrative practice of that or of the other State;b) to supply information which is not obtain able un de r the laws orin the normal course of the adm inistration of that o r of the other S tate;c) to supply information which would disclose any trad e, business,industrial, commercial, or professional secret or trade process, orinformation, the disclosure of which would be contrary to publicpolicy.


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Article 27Diplomatic Agents and consular Officers

1. Nothing in this Convention shall affect the fiscal privileges ofdiplomatic agents or consular officers under the general rules ofinternational law or under the provisions of special agreements.2. For the purposes of this Convention an individual, who is am emb er of a diplom atic or consular m ission of one of the States in theother State or in a third State and who is a national of the sendingState, shall be deemed to be a resident of the sending State if he issubjected therein to the sam e obligations in respect of taxes on inc om eas are residents of that State.3. This Convention shall not apply to international organisations,organs and officials thereof and members of a diplomatic or consularmission of a third State, being pre sen t in one of the States, if they arenot subjected therein to the same obligations in respect of taxes onincome as are residents of that State.

Article 28Territorial Extension

1. This Convention may be extended, either in its entirety or withany necessary modifications, to the Netherlands Antilles and/orAru ba, if those coun tries imp ose taxes substan tially similar in chara c-ter to those to which this Con vention applies. Any such extension shalltake effect from such date and subject to such modifications andconditions, including conditions as to termination, as may be speci-fied and agreed in notes to be exchanged through diplomatic chan-nels.2. Unless otherwise agreed the termination of this Conventionshall not also terminate any extension of this Convention to theNetherlands Antilles and/or Aruba.

CHAPTER VIFINAL PROVISIONS

Article 29Entry into Force

This Convention shall enter into force on the thirtieth day after thelatter of the dates on which the respective Gov ernm ents have notified


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each other in writing that the formalities constitutionally required intheir respective States have been complied with, and its provisionsshall have effect:a) in the Netherlands:(i) in respect of dividend tax, on dividends paya ble on or after th edate of entry into force of this C onv ention ;(ii) in respect of any other taxes for taxable years and periodsbeginn ing on or after 1 st Janu ary, in the c alend ar year followingtha t in which the latter of the no tifications has been receiv ed;b) in Zimbabwe:(i) in respect of income tax, branch profits tax and capital gainstax, for an y year of assessment beg inning on or after 1st Ap ril inthe calendar year following that in which the latter of thenotifications has been received;(ii) in respect of non-resident shareholders' tax, for dividendsdistributed on or after the date of entry into force of thisConvention;(iii) in respect of non-r esiden ts' tax on interest, for interest pa id onor after the date of entry into force of this Con ve ntion;(iv) in respect of non-residen ts' tax on fees, for fees pa id on or afterthe da te of entry into force of this C on ve ntion ;(v) in respect of non-residents' tax on royalties, for royalties paidon or after the da te of entry into force of this C onven tion.Article 30

TerminationThis Co nvention shall rem ain in force un til term inated by one of theContracting Parties. Either Party may terminate this Convention,through diplom atic chann els, by giving notice of termination at leastsix m on ths before the end of any calend ar year after the expiration of a

pe riod of five years from the da te of its entry into force. In such eventthis Convention shall cease to have effect:a) in the Netherlands:(i) in respect of dividend tax, on dividends payable on or after1 st Jan uary in the calen dar yea r next following th at in which thenotice is given ;(ii) in respect of any other taxes, for any taxable year or periodbeginning after th e end of the ca lendar year in which the noticeis given;

b) in Zimbabwe:(i) in respect of income tax, branch profits tax and capital gainstax , for any year of assessm ent beg inning o n or after 1st April inthe calendar year next following that in which the notice isgiven;


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(ii) in respect of non-resident shareh olde rs' tax, non -residen ts' taxon interest, non -residents' tax on fees and n on-re siden ts' tax onroyalties from the 1st April in the ca lend ar yea r next followingtha t in which the notice is given.IN W ITNESS whereof the undersigned, duly authorised thereto bytheir respective Governments, have signed this Convention.D O N E at Ha rare this eighteenth day of M ay, 1989 in duplicate, inthe English language.

For the Go vernment of the Kingdom of the Netherlands(sd.) J. G. W. FABER

For the Government of the Republic of Zimbabw e(sd.) B. T. C H ID ZE RO

ProtocolAt the moment of signing the Convention for the avoidance ofdouble taxation and the prevention of fiscal evasion with respect totaxes on income and capital gains, this day concluded between theKingdom of the Netherlands and the Republic of Zimbabwe, theundersigned have agreed that the following provisions shall form anintegral part of this Convention.

(1) Ad Article 7a) In respect of pa rag rap hs 1 and 2 of Article 7, where an enterp riseof one of the States sells goods or me rcha nd ise o r carries on bu sinessin the other State throug h a perm ane nt establishmen t situated therein,the profits of that perm ane nt establishment shall not be determined onthe basis of the total amount received by the enterprise, but shall bedetermined only on the basis of the remu neration which is attributableto the actual activity of the perm anen t establishm ent for such sales orbusiness.b) In the case of contracts for the survey, supply, installation or

construction of industrial, commercial or scientific equipment orpremises, or of public works, when the enterprise has a permanent' establishme nt, the profits of such pe rm ane nt establishmen t shall no tbe determined on the basis of the total amount of the contract, butshall be determ ined only on the basis of tha t pa rt of the co ntract w hichis effectively carried ou t by the perm anen t establishm ent in the State


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where the permanent establishment is situated. The profits related tothat part of the co ntract which is carried out by the hea d office of theenterprise shall be taxab le only in the State of which the en terprise is aresident.(2) Ad Articles 10, 11 and 12

Where tax has been levied at source in excess of the amount of taxchargeable under the provisions of Articles 10,11 or 12, applicationsfor the refund of the excess am ou nt of tax have to be lodged with thecom peten t authority of the S tate having levied the tax, within a pe riodof three years after the tax has been levied.(3) Ad Article 13

When applying the provisions of Article 13 of this Convention inZimbabwe, the following shall be taken into account. Where theow nersh ip of any specified asset is transferred from a com pany, in thecourse of or in furtherance of a scheme of reconstruction of a grou p ofcompanies or a merger or other business operation which, in theopinion of the Commissioner of Taxes, is of a similar nature, toanother company under the same control, the transferor and thetransferee m ay elect that, notwithstanding the terms of any agreementof sale, the selling price of the asset shall in relation to the transferor bedeem ed for the purposes of this Conv ention to be an amo unt equ al tothe sum of the deductions allowable to such transferor in respect ofsuch asset in terms of parag rap hs a), b), c) and d) of subsection (2) ofsection eleven of the C apital Gains Tax A ct, 1981, of Zim babwe , as inforce at the date of signature of this Conv ention at the date of transfe r:Provided that if after the transfer such asset is sold, othe r than to acom pany und er the same control, the capital gain in the h and s of theseller shall be calculated as if the asset had at all times rem ained in theownership of the first transferor in respect of whom an election wasmade in terms of this section.

IN W ITN ES S whereof the undersigned, duly autho rised thereto bytheir respective Governments, have signed this Protocol.D O N E at Harare this eighteenth day of May, 1989 in dup licate, inthe English language.

For the G overnment of the Kingdom of the Netherlands(sd.) J. G. W. FABER


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For the G overnmen t of the Republic of Zimbabwe(sd.) B. T. C H IDZ ER O

D . PARLEMENTDe Overeenkom st, met P rotocol, behoeft ingevolge artikel 91 vande Grondwet de goedkeuring van de Staten-Generaal, alvorens hetKoninkrijk aan Overeenkomst en Protocol kan worden gebonden.

G . IN WER K IN G TR ED IN GDe bepalingen van Overeenkomst en Protocol zullen ingevolgeartikel 29 van de Overeenkom st, junc to de pream bule tot het Protocol,in werking treden op de dertigste dag na de laatste der beide datawaarop de onderscheiden Regeringen elkaar schriftelijk hebbenmedegedeeld dat de in hun onderscheiden Staten grondwettelijkvereiste formaliteiten zijn vervuld.Wat het Koninkrijk der Nederlanden betreft, zullen Overeenkomsten Protocol ingevolge artikel 3, eerste lid, onderdeel b, van de

Overeenkomst alleen voor Nederland gelden.Ingevolge artikel 28 van de Overeenkomst is uitbreiding tot deNederlandse Antillen en Aruba mogelijk.Uitgegeven de tiende juli 1989.

De Minister van Buitenlandse Zaken,H. VAN DE N BROEK

dtc agreement between zimbabwe and netherlands

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