CONVENTION
The Government of the Hellenic and the Government of Republic of Turkey,
Desiring to conclude a Convention for the avoidance of double taxation with respect
to taxes on income,
Have agreed as follows:
CHAPTER I
Scope of the Convention
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 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 all taxes imposed on total income,
or on elements of income, including taxes on gains from the alienation of movable or
immovable property, as well as taxes on capital appreciation.
3. The existing taxes to which the Agreement shall apply are in particular:
a) in the Hellenic Republic:
i) the income tax on natural persons;
ii) the income tax on legal persons;
(hereinafter referred to as “Hellenic tax”).
b) in the Republic of Turkey:
i) the income tax;
ii) the corporation tax; and
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 substantial changes which have been made in their respective
taxation laws.
CHAPTER II
Definitions
Article 3
General definitions
1. For the purposes of this Agreement, unless the context otherwise requires:
a) the term “Hellenic Republic” means the Hellenic territory, territorial sea, as
well as the maritime areas over which the Hellenic 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
international law.
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 which is treated
as a body corporate for tax purposes;
f) the term “registered office” means the legal head office registered under the
laws of each 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 terms “a Contracting State” and “the other Contracting State” mean the
Hellenic Republic or the Republic of Turkey as the context requires;
k) the term “competent authority” means:
i) in the Hellenic Republic, the Minister of Economy & Finance or his
authorized representative;
ii) in the Republic of Turkey, the Minister of Finance or his authorised
representative;
j) the term “international traffic” means , any transport by an aircraft or a road
vehicle operated by an enterprise of a Contracting State or by a ship registered in a
Contracting State, except when the ship, aircraft or road vehicle is operated solely
between places in the other Contracting State.
2. As regards the application of the Agreement 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 Agreement 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
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, legal head office, place of management or any other
criterion of a similar nature, and also includes that State and any political 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 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 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 of the State in which he has a habitual abode;
c) if he has a 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; and
f) a mine, an oil or gas well, a quarry or any other place of extraction of natural
resources.
3. The term “permanent establishment” likewise encompasses;
a) a building site, a construction, assembly or installation project or supervisory
activities in connection therewith, but only where such site, project or activities
continue for a period of more than ten (10) months.
b) the furnishing of professional services, including consultancy services, by an
enterprise through employees or other personnel engaged by the enterprise for such
purpose, but only where activities of that nature continue (for the same or a
connected project) within the country for a period or periods aggregating more than
six (6) months within any twelve month period.
4. 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
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.
5. Notwithstanding the provisions of paragraphs 1 and 2, where a person – other
than an agent of an independent status to whom 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 first-mentioned
Contracting State in respect of any activities which that person undertakes for the
enterprise, if such a person:
a) has and habitually exercises in that State an authority to conclude contracts in
the name of the enterprise, unless the activities of such person are limited to those
mentioned in paragraph 4 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; or
b) 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.
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 commission agent or any other agent of an independent status, provided that
such persons are acting in the ordinary course of their business.
7. Notwithstanding the preceding provisions of this Article and the provisions of
Article 14, a person who is a resident of a Contracting State and carries on activities
in connection with preliminary surveys, exploration, extraction or exploitation of
natural resources situated in the other Contracting State shall be deemed to be
carrying on in respect of those activities a business in that other Contracting State
through a permanent establishment or a fixed base situated therein, unless such
activities are carried on for a period or periods not exceeding 30 days in the aggregate
in any twelve-month period. However, for the purposes of this paragraph:
a) where an enterprise carrying on activities in the other State is related to
another enterprise and that other enterprise continues as part of the same project the
same activities that are or were being carried on by the first-mentioned enterprise, and
the activities carried on by both enterprises exceed – when added together – a period of
30 days, then each enterprise shall be deemed to be carrying on its activities for a
period exceeding 30 days in a twelve-month period.
b) two enterprises shall be deemed to be related if one is controlled directly or
indirectly by the other, or both are controlled directly or indirectly by a third person.
8. An insurance enterprise of a Contracting State shall be deemed to have a
permanent establishment in the other Contracting State if it collects premiums in that
other State through an agent – other than an agent to whom paragraph 6 applies – or
insures risks situated in that other State through such an agent.
9. 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.
CHAPTER III
Taxation of income
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 (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, 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 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.
However, no such deduction will be allowed in respect of participations to the
expenses and losses of the head office or other permanent establishments situated
abroad and likewise, the amounts paid by the permanent establishment to the head
office of the enterprise or any of its other permanent establishment, by way of
royalties, interests, commissions or other similar payments.
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. For the purposes of the preceding paragraphs, the profits to be attributed to the
permanent establishment shall be determined by the same method year by year unless
there is good and sufficient reason to the contrary.
6. 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
1. Profits derived from the operation of ships engaged in international traffic
shall be taxable only in the Contracting State in which the ships are registered.
2. Profits of an enterprise of a Contracting State derived from the operation of
aircraft or road vehicles in international traffic shall be taxable only in that State.
3. The provisions of paragraphs 1 and 2 of this Article shall also apply to profits
from the participation in a pool, a joint business or an international operating agency.
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 firstmentioned
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 beneficial owner of the dividend is a resident of the other Contracting State,
the tax so charged shall not exceed 15% of the gross amount of the dividends.
The competent authorities of the Contracting States shall by mutual agreement settle
the mode 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 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, and income
derived from an investment fund and investment corporation.
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 paragraph 2 of this Article.
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.
Article 11
Interest
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 may also 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 Stale, the tax so charged shall not
exceed 12% of the gross amount of the interest. The competent authorities of the
Contracting States shall by mutual agreement settle the mode of application of this
limitation,
3. Notwithstanding the provisions of paragraph 2, interest arising in:
a) The Hellenic Republic and paid to the Republic of Turkey or to the
Central
Dank of the Republic of Turkey (Turkiye Cumhuriyet Merkez Bankasi) shall
be
exempt from the Hellenic fax;
b) The Republic of Turkey and paid to the Hellenic Republic or to the
Central
Bank of the Hellenic Republic shall be exempt from Turkish tax.
4. The term “interest” as used in this Article means income from debtclaims
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, as well as all
other income assimilated to income from money lent by the taxation law of the
State in which the income arises.
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, or performs in-that other state
independent personal services from a fixed base situated there in, and the debtclaim
in respect of which the interest is paid is effectively connected with such
permanent establishment or fixed base. In such a case the provisions of
Article 7 or Article 14, as the case may be, 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
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 shall be deemed to arise in the Contracting 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 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, hi 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.
Article12
Royalties
1. Royalties arising in a Contracting State and paid lo a resident of the
other Contracting State may be taxed in that other State.
2. However, such royalties may also be taxed in the Contracting State in
which they arise 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. The
competent authorities of the Contracting States shall by mutual agreement settle
the mode of application of this limitation.
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 far radio and television, any patent, trade mark, design or mode!, 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 (lie 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, or performs in that other Slate
independent personal services from a fixed base situated therein, and the right
or property in respect of which the royalties 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.
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 Stale a permanent establishment
or
fixed base 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 or fixed base, then such royalties shall be deemed to
arise in the Contracting 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 some other person, the amount
of the royalties, 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 Stale 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 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 profits from the operations of such ships, road vehicles or aircraft are
taxable according to the provisions of Article 8.
4. Gains from the alienation of any property other than that referred to in
paragraphs 1, 2 and 3 shall be taxable only 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, may be taxed in the
other Contracting State if the time period does not exceed one year between
acquisition and alienation.
5. Any payments received as a consideration for /he sale of the royalty
(except industrial, commercial or scientific equipment) as defined in paragraph 3
of Article 12 the provisions of Article 12 shall apply, unless it is proved that the
payment in question is a payment for a genuine alienation of the said property. In
such case the provisions of Article 13 shall apply.
Article 14
Independent personal services
1. Income derived by an individual who is a resident of a Contracting
State in respect of professional services or other activities of an independent
character shall be taxable only in that Contracting State. However, such income
may also be taxed in the other Contracting State if such services or activities are
performed in that other Contracting State and if:
a) he has a fixed base regularly available to him in the other Contracting
State for the purpose of performing his activities; or
b) his stay in the other Contracting State for the purpose of performing his
services or activities is for a period or periods exceeding in the aggregate 183
days in any twelve month period commencing or ending in the fiscal year
concerned.
In such circumstances only so much of the income as is attributable to that
fixed base or is derived from the services or activities performed during his
presence in that other Contracting State, as the case may be, may be taxed in
that other Contracting State.
2. The term “professional services” includes especially independent
scientific, literary, artistic, educational or teaching activities as well us the
independent activities of physicians, lawyers, engineers, architects, dentists and
accountants.
Article 15
Dependent personal services
1. Subject to the provisions of Articles 16, I8, 19 and 20, salaries, wages
and other similar remuneration derived by a resident of a Contracting Slate 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 profits from the operation of the ship, aircraft or road vehicle are
taxable according to the provisions of Article 8.
Article 16
Directors’ fees
Directors’ fees and other 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 theatre, motion
picture, radio or television artiste, 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. Notwithstanding the provisions of paragraphs 1 and 2, income derived
from activities referred to in paragraph 1 performed under a cultural agreement or
arrangement between the Contracting States shall be exempt from tax in the
Contracting State in which the activities are exercised if the visit to that State is
wholly or substantially supported by public funds of the other contracting State or
of a political subdivision or local authority thereof
Article 18
Pensions
1. 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 also apply to life annuities paid to a resident of a Contracting State.
2. The term “life annuities ” means a staled sum payable periodically at
stated times during life or during a ‘specified or ascertainable period of time,
under an obligation to make the payments in return for adequate and full
consideration in money or money’s worth.
Article 19
Government service
1.a) Salaries, wages and other similar remuneration, other than a pension, paid
by a Contracting State or a political subdivision or a local 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 oilier similar remuneration shall be taxable
only in the other Contracting State if the services are rendered in that other
Slate 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 Stale or a
political subdivision or a local 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 national of, that State.
3. The provisions of Articles 15, 16,17 and 18 shall apply to salaries, wages
and other similar remuneration and 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 resident of a
Contracting State and who is present in the other Contracting Slate 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. Where a teacher who is a resident of a Contracting State and who at the
invitation of any university, college or other similar educational institution,
which is recognized as such by the competent authority in that other
Contracting State visits that other Contracting State for a period not exceeding
two years solely for the purpose of teaching or research or both at such
educational institution, any remuneration the person receives for such
teaching or research shall be exempt from tax in that other Contracting State to
the extent to which that remuneration, upon the application of this Article, is
subject to tax in the first mentioned State.
3. Remuneration which a student or a trainee who is a resident of a
Contracting State derives from an employment which he exercises in the other
Contracting State for a period or periods not exceeding 183 days in a calendar
year, in order to obtain practical experience related to his education or formation
shall not be taxed in that other State.
Article 21.
Other income
1. Items of income arising in a Contracting State, which are not
expressly mentioned in the foregoing Articles of this Agreement may be taxed in
that State.
2. The provisions of the preceding paragraph of this Article 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 oilier Contracting State through a permanent
establishment situated therein, or performs in that other Slate independent
personal services from a fixed base situated therein, and the right or properly in
respect of which the income is 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.
CHAPTER IV
Methods for elimination of double taxation
Article 22
Elimination of double taxation
1. Where a resident of a Contracting Stale derives income which, in
accordance with the provisions of this Agreement, may be taxed in the other
Contracting State, the first mentioned State shall allow as a deduction from the tax
on the income of that resident, an amount equal to the income tax paid in that
other State. 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 that other State.
2. Notwithstanding (he provisions of paragraph 1, when interest,
mentioned in Article 11 is taxed, under special incentive measures designed to
promote economic development in a Contracting State, at a rate of tax which is
lower than 12%, then, tax shall be allowed by the Contracting State of residence
as credit for the tax. payable in the other Contracting State on such income an
amount equal to 12% of the gross amount of such income. However, in no event
shall the credit provided for in this paragraph exceed the maximum rate of tax
which could have been imposed in accordance with Article 11 of the this
Agreement in the absence of the special incentive measures.
The provisions of this paragraph shall apply only for the first five years for
which this Agreement is effective and only to the interest arising from the
financial transactions related to corporate loans and bonds of the business
activities carried on within the Contracting States in the following sectors:
a) construction of infrastructure facilities including communications,
power production and supply,
b) mining and quarry,
c) heavy industry projects including metallurgy, mechanical
engineering production, base chemical production, cement
production, electrical and electronic materials manufacturing,
fertiliser manufacturing,
d) food processing industry.
However the provisions of this paragraph shall not apply:
(a) whether any benefit accrues or may accrue to a person who is neither a
Greek resident nor a resident of Turkey,
(b) whether any arrangements have been entered into by any person with
the main purpose of taking advantage of this provision for the benefit
of that person or any other person,
(c) whether residents of both Contracting States entered into agreement
with the main purpose to evade or avoid taxes covered by this
Agreement.
CHAPTER V
Special provisions
Article 23
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 Stale 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. 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 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.
4. The provisions of this Article shall not be construed as obliging a
Contracting State to grant to residents of the other Contracting Slate any personal
allowances, reliefs and reductions for taxation purposes on account of civil status
or family responsibilities which it grants to its own residents.
5. Except where the provisions of paragraph 1 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 Slate to a resident of the
other Contracting State shall, 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.
Article 24
MUTUAL AGREEMENT PROCEDURE
1. Where a resident of a Contracting State considers that the actions of
one or both of the Contracting Stales result or will result for him in taxation not in
accordance with the provisions of 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 23, 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 Agreement.
2. The competent authority shall endeavour, 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 time period prescribed in the domestic laws of the Contracting Stales.
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 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 competed authorities of the
Contracting States.
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.
The exchange of information is not restricted by Article 1. 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 involved
in 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 I 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 secret or trade process, or information,
the disclosure of which would be contrary to public policy (ordre public).
Article 26
Members of diploma tic 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.
CHAPTER VI
Final provisions
Article 27
Entry into force
1. Each Contracting State shall notify the other for the completion of the
procedures required by its law for the bringing into force of this Agreement.
The Agreement shall enter into force on the dale of the later of these
notifications.
2. The provisions of this Agreement shall have effect:
a) with regard to taxes withheld at source, in respect of amounts paid or
credited on or after the first day of January next following the date upon which
this Agreement enters into force; and
b) with regard to other taxes, in respect of taxable years beginning on or
after the first day of January next following the date upon which this
Agreement enters
into force.
Article 28
Termination
1. This Agreement shall remain in force until terminated by a Contracting
State. Either Contracting States may terminate the Agreement, through
diplomatic channels, by giving notice of termination at least six months before
the end of any calendar year beginning after the expiration of five years from
the date of entry into force of the Agreement.
2. In such event, the Agreement shall cease to have effect:
a) with regard to taxes withheld at source, in respect of amounts paid or
credited after the end of calendar year in which such notice is given; and
b) with regard to other taxes, in respect of taxable years beginning after
the end of calendar year in which such notice is given.
IN WITNESS WHEREOF, the undersigned plenipotentiaries have signed
the present Agreement.
“Done in duplicate at Ankara this 2nd day of December 2003 in the Hellenic,
Turkish and English Languages, all three texts being equally authentic. In case of
divergence between the texts, the English text shall be the operative one. “

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