The Government of the State of Qatar,

And the Government of the Republic of Yemen,

Desiring to promote and strengthen their economic relations between their states by concluding an Agreement for the Avoidance of Double Taxation with respect to Taxes on Income,

Have agreed as follows:

Article1

Scope of Application of the Agreement

The provisions of this Agreement shall apply to persons who are residents of one or both of the Contracting States.

Article2

Taxes covered by the Agreement

(1) The provisions of this Agreement shall apply to the following taxes:

(a)  in the case of Qatar:

the taxes on income, hereinafter referred to as "Qatari tax";

(b)  in the case of the Republic of  Yemen:

- Property tax including tax on real estate revenue and tax on property sales;

-        Tax on commercial and industrial profits levied from natural persons;

-        Tax on commercial and industrial profits levied from legal persons (companies with their various legal entities);

-        Tax on free professions and other non-commercial professions; and

-        Tax on salaries, wages and the like; hereinafter referred to as "Yemeni Tax ";

(2) The provisions of this Agreement shall also apply to any identical or substantially similar taxes which are imposed after the date of signature of this Agreement in addition to, or in place of, the existing taxes.

(3)  The competent authorities of the Contracting States shall notify each other of any substantial changes which have been made in their respective taxation laws.

Article3

General Definitions

(1)  In the application of the provisions of this Agreement, the following words and expressions shall have the meanings assigned to each, unless the context requires otherwise:

(a)     "a Contracting State" and "the other Contracting State" mean the “State of Qatar” or the “Republic of Yemen ”,as the case may be;

(b)     "Qatar” means the State of Qatar’s territory and maritime area including its territorial waters, the air space over them and the continental shelf over which the State of Qatar exercises sovereign rights and jurisdiction in accordance with Qatar’s domestic laws in force and common international law;

(c)      the term "Republic of Yemen " means the territory of the Republic of Yemen , including its maritime economic zone and continental shelf over which Yemen possesses sovereign rights in accordance with its domestic law and international laws and charters concerning exploration and investment of the natural, biological and mineral resources of the waters adjacent to the seabed and of the sea ed and its sub-soil;

(d)     "tax" means Qatari tax or Yemeni Tax  as the case may be;

(e)      "person" includes any natural person, company and any other body of legally incorporated persons in one of the two Contracting States;

(f)      "company" means any legal person or any independent unit that is treated as a legal person for tax purposes;

(g)     "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;

(h)     "national" means:

-in relation to the State of Qatar: any individual possessing the nationality of the State of Qatar pursuant to its laws and regulations; and any legal person, companies, associations and any other independent unit established in Qatar in accordance with the legislation in force therein; and

- in relation to the Republic of Yemen: any natural person possessing the nationality of Yemen  and any legal person, body of legal persons or any other independent unit established in the Republic of Yemen in accordance with the legislation in force therein.

(i)      "international traffic" means any transport by a ship, aircraft or railway utilised by an enterprise whose management is located in a Contracting State, except when the transport  is operated solely between two places in one Contracting State;

(j)   "competent authority" means:

-in the case of the State of Qatar: the Minister of Finance, Economy and Commerce or his authorised representative; and

-        in the case of the Republic of Yemen :the Minister of Finance or his authorised representative.

(2)  Upon the application of this Agreement by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has under the laws of that State for the purposes of the taxes to which this Agreement applies.

Article 4

Resident

(1)  For the purposes of this Agreement, "resident of a Contracting State" means any person who is deemed to be a resident under the laws of that State for the purposes of taxation by reason of his domicile, residence, place of management or any other criterion of a similar nature. But this term does not include any person who is liable to tax in that State in respect only of income from sources in that State or capital situated therein.

(2)  Whereby reason of the provisions of the preceding paragraph an individual is a resident of both Contracting States, then this case shall be dealt with in accordance with the following rules:

(a)     he shall be deemed to be a resident only of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his centre of vital interests is situated;

(b)     if he does not have a permanent home available to him in either State or if the Contracting State in which he has his centre of vital interests cannot be determined, he shall be deemed to be a resident only of the State in which he has a habitual abode;

(c)      if he has a habitual abode in both Contracting 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 Contracting States or of neither of them, the competent authorities of the Contracting States shall determine his habitual abode by mutual agreement.

(3)  Whereby reason of the provisions of paragraph (1) of this Article a person other than a natural person is a resident of both Contracting States, then it shall be deemed to be a resident only of the State in which his place of effective management is situated.

Article 5

Permanent establishment

(1) For the purposes of application 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) "permanent establishment" includes especially:

(a)     a place of management;

(b)  a branch;

(c)  an office;

(d)  a factory;

(e)    a sales area;

(f)  a workshop;

(g)    a farm or field;

(h)     a mine, a quarry, an oil or gas well or any other place of extraction of natural resources; and

(i)  A building or construction site, an assembly project or advisory activities in connection therewith that is used for more than six months in any Gregorian calendar year.

(3)  "permanent establishment" shall be deemed not to include:

(a)     the use of special facilities solely for the purpose of storage, display, delivery or sale of goods or belonging to the enterprise under a sales contract;

(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 merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

(d)     the sale of goods or merchandise belonging to the enterprise, in the context of a temporary seasonal market or exhibition, within a period not exceeding one month after closure of the said market or exhibition;

(e)      the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or of collecting information, for the enterprise;

 

(f)      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;

 

(g)     the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (f), provided that the resulting overall activity is of a preparatory or auxiliary character.

(4)  Where a person is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to conclude contracts on behalf of the enterprise, that person shall be deemed to have a permanent establishment in the Contracting State

 

(5) Notwithstanding   the   preceding   provisions   of   this  Article,   an insurance company of a Contracting State shall be deemed to have a permanent establishment in the other Contracting  State  if  it  concludes insurance contracts in  that  other Contracting State through a person, other than an agent of an independent status to whom paragraph (6) of this Article applies.

(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.

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) may be taxed in the Contracting State in which the property is situated.

(2)  The term "immovable property" (landed 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, cattle, livestock and equipment used in agriculture and forestry, 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 use of warehouses, working of, or the  right  to  work,  mineral  deposits, sources and other natural resources. However, ships, aircrafts, railways and road vehicles shall not be regarded as immovable property.

(3)  The provisions of paragraph (1) of this Article 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) of this Article 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.

Article7

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) of this Article, 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  Contracting  State  in  which  the permanent establishment is situated or elsewhere. This text shall apply notwithstanding the restrictions imposed by the domestic law of the Contracting State.

(4)   Insofar as it has been customary in a Contracting State to determine

the profits to be attributed to a permanent establishment on the basis of an

apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 of this Article shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles indicated in this Article.

(5)   For the purpose 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 a 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

International Traffic

(1)  Profits from the operation of ships, aircrafts, railways or road vehicles (terrestrial conveyance vehicles) in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

(2)  If the place of effective management of a shipping enterprise is aboard a ship then it shall be deemed to be the home harbour of the ship registration, or, if there is no such home harbour, the enterprise shall be deemed to be located in the contracting State of which the ship captain is a national.

(3)  The provisions of paragraph (1) of this article shall also apply to profits from the participation in a pool, a joint business or an international operating agency, as well as profits from interest arising from assets pertaining to the operation of ships, aircrafts, railways or road vehicles (terrestrial conveyance vehicles).

(4) The provisions of paragraph (1) shall also apply to the Gulf Air Company and the United Arab Shipping Company as long as Qatar retains a share in those two companies, and shall apply to any marine or air transport enterprise determined by the governments of the two Contracting States.

Article 9

Associated enterprises of Special Conditions

Any of the two Contracting States may choose not to adopt the special conditions pertaining to commercial and financial relations between two or more enterprises if these conditions tend to reduce the taxable profits in that State, and such in the following two cases:

(1)     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

(2)     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.

Article10

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 only.

(2)   “dividends” as used in this Article means income from any shares, usufruct cards, lots or any portion resulting from shares of any type including preference shares, founders’ shares or other rights, not being debt claims, participating in profits under the tax legislation of the State of which the company making the distribution is a resident.

Article11

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 only.

(2)     “interest” as used in this Article means income from debt claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor’s profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article.

Article12

Royalties

(1)  Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in the State in which such royalties arise.

(2)  The term "royalties" 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, any patent, trade mark, design or model, plan, secret formula or production process, or for the use of or right to use any of the industrial, commercial or scientific equipment,  or for information concerning industrial, commercial or scientific experience.

Article13

Capital  gains

(1)Gains  derived  by  a  resident  of a  Contracting  State  from  the alienation of immovable property referred to in Article 6 of this Agreement and situated in the other Contracting State, may be taxed in the Contracting State in which such property is situated.

(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, including such gains from the alienation of such a permanent establishment or of such a fixed base, may be taxed in the State in which such gains arise.

(3)  Gains from the alienation of the property referred to in Article 8 of this Agreement, shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

(4)  Gains from the alienation of any property other than that referred to in this Article shall be taxable only in the Contracting State of which the alienator is a resident.

Article14

Independent Professions

(1)     Income derived by a resident of a Contracting State in respect of professional services or other activities of a similar independent character shall be taxable only in that State. However such income shall be taxable in the other Contracting State in the following two cases:

(a)     If the said person has a fixed base  regularly available to him in the other Contracting State for the purpose of performing his activities;  and

(b)     If the person’s residence in the other State extends for a period or periods reaching or exceeding 183 days during a twelve (12) months period commencing or ending at the tax year concerned.

For the two cases referred to in subparagraphs (a) and (b), such income is taxable in the other Contracting State but only so much of it as attributable to that fixed base or arises from business within the period during which the resident was present in that other Contracting State.

(2)     The term `independent professions` includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.

Article15

Dependent Professions

(1) Subject to the provisions of Articles 16, 18 and 19of this Agreement, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is exercised in the other Contracting State, such remuneration as is derived therefrom may be taxed in that other State.

(2)As an exception of 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 183 days in any period of twelve months commencing or ending in the tax 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 fixed base which the employer has in the other Contracting State.

(3)As an exception to the provisions of the preceding paragraphs of this Article, remuneration derived by a resident of a Contracting State in respect of an employment exercised aboard a ship, aircraft, railway or road vehicle (terrestrial conveyance vehicle) operated in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

Article16

Board Members Fees

Board Members’ 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.

Article17

Artistes and sportspersons (Entertainers and athletes)

As an exception to the  provisions  of  Articles 14and  15of  this Agreement, income derived by public entertainment artistes in the field of theatre, motion picture, radio or television, or musicians, or sportspersons, from personal activities in those fields may be taxed in the Contracting State in which they exercise such activities.

Article18

Pensions

Retirement pensions and other similar remuneration in the public and private sectors paid to a resident of a Contracting State in consideration of past employment in a Contracting State shall be taxable only in that State, irrespective of the place of residence of the beneficiary.

Article19

Government Services

Salaries, wages and similar remuneration, paid by the government of a Contracting State or bodies of a public character shall be taxable only in that State in which such remuneration is paid.

Article20

Students and trainees

Payments received by a student or business trainee in a Contracting State for the purpose of maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State.

Article21

Other Income

Items of income of a resident of a Contracting State not dealt with in the foregoing Articles of this Agreement shall be taxable only in that State.

Article22

Avoiding Double Taxation

(1)     Where a resident of a Contracting State derives from the other Contracting State income which, in accordance with the provisions of this Agreement, may be taxed in the other Contracting State, the first-mentioned State shall, notwithstanding the provisions of paragraph (2) of this Article, exempt such income from tax;

(2)     Where a resident of a Contracting State derives from the other Contracting State income which 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 person an amount equal to the tax that person pays in the other Contracting State; and

(3)     Where a tax is exempted or reduced during a certain period in a Contracting State under its domestic legislation, such tax shall be deemed to have been effectively paid and it shall become deductible from the said income tax of the other Contracting State.

Article23

Non-discrimination

(1)     Notwithstanding the legislations of the two Contracting States, 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.

(2)     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)     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 the nationals 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 nationals.

Article 24

Agreement Interpretation Procedure

(1)     Each of the Contracting States shall have the right to demand interpretation of the provisions of this Agreement if it finds that the resolution or action that is applied or has been applied in one or both of the contracting States, upon the imposition of tax,  is contrary to the provisions of this Agreement;

(2)     The request for interpretation shall be submitted to the other ContractingState. The time and meeting place of the commission stipulated in paragraph (3) of this  Article shall be determined through diplomatic channels; and

(3)     The interpretation shall be carried out by a commission composed of two or more representatives for each Contracting State, provided that each one of them shall be an expert of finance and taxation in his respective State. The interpretation so agreed shall be deemed as part of this Agreement.

Article25

Exchange of information

(1)     The competent authorities of the Contracting States shall exchange such information as may be relevant for carrying out the provisions of this Agreement or to the enforcement of the domestic laws of the Contracting States concerning the taxes stipulated in this Agreement. The information so exchanged shall be treated as secret and shall not be disclosed except to courts and administrative bodies and entities in charge of the assessment or collection of the taxes covered by this Agreement including the determination of taxes through judicial procedure, provided that such entities shall use such information for such purposes only.

(2)     In no case shall the provisions of paragraph (1) of this Article 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 production process, or information, the disclosure of which would be contrary to public policy.

Article26

Diplomatic and Consular Privileges

Nothing in this Agreement shall affectthe fiscal privileges of members of diplomatic or consular missions under the general rules of international law or under the provisions of special agreements.

Article27

Procedures for Entry into force of the Agreement

 

(1) This Agreement shall be ratified by each of the Contracting States in accordance with their respective constitutional procedures, as soon as possible.

(2) The Contracting States shall notify each other, through diplomatic channels, of the completion of the constitutional and legal procedures for the bringing into force of this Agreement.

(3) This Agreement shall be deemed to enter into force on the first day of January of the Gregorian calendar year following the year of exchange of notifications in the manner stipulated in paragraph (2) of this Article.

 

Article28

Termination of the Agreement

(1) This Agreement shall remain in force in both Contracting States until termination.

(2) However, either Contracting State may request the termination of this Agreement, through diplomatic channels, by giving a written notice of termination at least six months before the end of any Gregorian calendar year. In such event, this agreement shall be deemed annulled beginning on the first day of January of the year following that in which the notice of termination expires.

In witness whereof the undersigned, being duly authorised thereto by the irrespective Governments, have signed this Agreement.

Done and signed in duplicate in Sanaa city on 6th Jumada Al-Awwal1420 H, corresponding to 7August 2000 in the Arabic language. Each one being an original and equally authoritative copy.

 

 

 

 

 

For the Government of the State of Qatar

 

Yousef Hussain Kamal

Minister of Finance, Economy and Commerce

 

For the Government of the

Republic of Yemen

 

Alawi Saleh Al-Salami

   Minister of Finance