The Double Taxation Relief (Taxes on Income) (Kazakhstan) Order 1998

ARTICLE II

The following new paragraphs shall be inserted immediately after paragraph (7) of Article 25 of the Convention:

“(8) Subject to paragraph (10) of this Article, nothing in this Convention shall be construed as preventing a Contracting State from imposing in any taxation year a tax on the profits attributable to a permanent establishment in that Contracting State of a company which is a resident of the other Contracting State, in addition to the tax chargeable on those profits in accordance with Article 7 of this Convention, where—

(a) the amount of that additional tax does not exceed 5 per cent. of the amount of the earnings of the company which have not been taken into account in calculating that additional tax in previous taxation years, and

(b) the amount of the profits attributable to the permanent establishment in the taxation year in question exceeds 70,000 pounds sterling.

(9) In paragraph (8) of this Article, the term “earnings” means the profits attributable to the permanent establishment in accordance with Article 7 of the Convention (including any gains from the alienation of movable property forming part of the business property of that permanent establishment in accordance with Article 13(3) of the Convention) in any taxation year for which paragraph (8) of this Article has effect in the case of that permanent establishment, after deducting therefrom all taxes chargeable in the first-mentioned Contracting State on those profits in accordance with Articles 7 and 13 of the Convention.

(10) If, and so long as, there is a Convention for the avoidance of double taxation which has effect between Kazakhstan and a member state of the Organisation for Economic Co-operation and Development for any taxation year for which paragraph (8) of this Article has effect and does not permit the levying of an additional tax of the kind described in that paragraph in the case of a permanent establishment of a company which is a resident of that member state, that paragraph shall not have effect in the case of a permanent establishment of a company which is a resident of the United Kingdom.”