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in exchange for a cash payment not exceeding ten per cent
(10%) of the nominal value or, in the absence of a nominal
value, of the accounting par value of those shares;

(c) «transfer of assets» shall mean an operation whereby a
company transfers, without being dissolved, all or one or more
branches of its activity to another company in exchange for the
transfer of shares representing the capital of the company
receiving the transfer;

(d) «exchange of shares» shall mean an operation whereby a
company acquires a holding in the capital of another company
such that it obtains a majority of the voting rights in that
company, in exchange for the issue to the shareholders of the
latter company, in exchange for their shares, of shares
representing the capital of the former company, and, if



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applicable, in exchange for a cash payment not exceeding ten
per cent (10%) of the nominal value or, in the absence of a
nominal value, of the accounting par value of the shares issued
in exchange;

(e) «transferring company» shall mean the company transferring
its assets and liabilities or transferring all or one or more
branches of its activity;

(f) «receiving company» shall mean the company receiving the
assets and liabilities, or all or one or more branches of the
activity of the transferring company;

(g) «acquired company» shall mean the company in which a
holding is acquired by another company by means of an
exchange of shares;

(h) «acquiring company» shall mean the company which acquires
a holding by means of an exchange of shares;

(i) «branch of activity» shall mean all the assets and liabilities of a
division of a company which, from an organizational point of
view, constitute an independent business, that is to say an
entity capable of functioning by its own means.



PART VII
TRUSTEES, AGENTS, ETC.

Chargeability of 31. Trustees in bankruptcy or receivers, trustees, executors of a will
trustees. or administrators of an estate or guardians entrusted with the
management, control or administration of any property or business
on behalf of any person, shall be chargeable to tax in respect of
income derived from such property or business in like manner and
to the like amount as such person would be chargeable if he had
received such income personally, and every such trustee in
bankruptcy, receiver, trustee, executor of a will or administrator of
an estate, or guardian, shall be answerable for doing all matters and


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things required to be done under this Law for the purpose of
assessment and payment of tax:

Provided that nothing in this section contained shall preclude the
raising of an assessment in the name of any person represented by
any such trustee in bankruptcy, receiver, trustee, executor of a will
or administrator of an estate or guardian.

32. (1) Any person not resident in the Republic, shall be assessable
Chargeability of
agent of person in the name of his attorney, factor or agent, trustee in bankruptcy,
residing out of receiver, administrator or custodian, whether such attorney, agent,
the Republic. factor, trustee in bankruptcy, receiver, administrator or custodian
has the receipt of the income or not, in like manner and to the like
amount as such non-resident person would be assessed and charged
if he received personally such income.

(2) Any person who is not resident in the Republic shall be charged
to tax in respect of any income arising, directly or indirectly, from
any attorneyship, factorship, agency, partnership or from acts of his
trustee in bankruptcy or receiver, administrator or custodian, and
such assessment shall be made in the name of his attorney, factor,
agent, trustee in bankruptcy or receiver, administrator or custodian.

(3) Nothing in this section shall render a person who is not resident
in the Republic subject to assessment in the name of a broker or
general commission agent or other agent where such broker, general
commission agent or other agent is not an authorized person,
carrying on the general agency of the person who is not resident in
the Republic, or a person subject to assessment as if he were an
agent in pursuance of sub-section (1)and (2) of this section in respect
of profits or benefits arising from sales or transactions carried out
through such broker or agent.

Arms™ length 33. (1) Where -
principles.
a) a business in the Republic participates directly or indirectly in
the management, control or capital of a business of another
person; or




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b) the same persons participate directly or indirectly in the
management, control or capital of two or more businesses;

and in either case conditions are made or imposed between the two
businesses in their commercial or financial relations which differ
from those which would be made between independent businesses,
then any profits which would, but for those conditions, have accrued
to one of the businesses, but, by reason of those conditions, have not
so accrued, may be included in the profits of that business and taxed
accordingly.

(2) The provisions of sub-section (1) apply also in connection with
any transactions between connected persons.

(3) For the purposes of this section:

(a) An individual is connected with another individual if the first
individual is the spouse or relative of the second individual, or
the spouse of a relative of the second individual, or relative of
the husband or wife of the second individual;

(b) a person is connected with any person with whom he is in
partnership, and with the husband or wife or relative of any
individual with whom he is in partnership;

(c) a company is connected with another company -

(i) if the same person has control of both, or a person has
control of one and persons connected with him, or he and
persons connected with him, have control of the other; or

(ii) if a group of two or more persons has control of each
company, and the groups either consist of the same
persons or could be regarded as consisting of the same
persons by treating (in one or more cases) a member of
either group as replaced by a person with whom he is
connected;

(d) a company is connected with another person if that person has
control of it or if that person and persons connected with him



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together have control of it;

(e) any two or more persons acting together to secure or exercise
control of a company shall be treated in relation to that
company as connected with one another and with any person
acting on the directions of any of them to secure or exercise
control of the company.

(5) In this section -

(a) «control», in relation to a company, means the power of a
person to secure -

(i) by means of the holding of shares or the possession of
voting power in or with relation to that or any other
company, or

(ii) by virtue of any powers conferred by the articles of
association or other document regulating that or any other
company,

that the affairs of the first-mentioned company are conducted
in accordance with the wishes of that person, and,

(b) «control», in relation to a partnership, means the right to a
share of more than one-half of the assets, or of more than one-
half of the income of the partnership;

(c) «relative» means spouse and individual up to the third degree
of kindred whether unmarried or married.


PART VIII
RELIEF IN CASE OF DOUBLE TAXATION

Double taxation 34. (1) If the Council of Ministers by Order declares that a
conventions. convention specified in the Order has been made with the
Government of any country outside the Republic with a view to
affording relief from double taxation in relation to income tax and
any tax of a similar character, which is imposed by the laws of that
country, and that it is expedient that that convention should have
effect, such convention shall have effect in relation to income tax



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notwithstanding anything in any Law contained.

(2) Any Order made under this section may be revoked by a
subsequent Order.

Tax credits. 35. (1) The provisions of this section shall apply where, under a
convention having effect under section 34, tax payable in respect of
any income in the country with the Government of which the
convention is made, is to be allowed as a credit against tax payable
in the Republic in respect of that income, and in this section the
term "foreign tax" means any tax payable in the country with which
the convention was made, which under the convention shall be
allowed in the form of credit.

(2) The amount of the tax chargeable in respect of the income shall
be reduced by the amount of the credit.

(3) The amount of the credit shall not exceed the amount which
would be ascertained if the amount of the income were computed in
accordance with the provisions of this Law and charged to tax at a
rate ascertained by dividing the tax chargeable (before granting
allowances for credits in accordance with the convention made
pursuant to section 34 of this Law) on the total income of the person
entitled to the income by the amount of his total income.

(4) Without prejudice to the provisions of sub-section (3), the total
amount of credit to be allowed for any year of assessment in
respect of foreign tax pursuant to section 34 shall not exceed the
total tax payable by him for that year of assessment.

(5) In computing the amount of the income -

(a) no deduction shall be allowed in respect of foreign tax whether
in respect of the same or any other income;

(b) where the tax chargeable depends on the amount received in
the Republic, such amount shall be increased by the appropriate
amount of the foreign tax;

(c) where the income includes dividends of companies and under



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the convention foreign tax not chargeable directly or by
deduction on the dividends has to be taken into account in
considering whether any credit is to be given against tax in
respect of such dividends, the amount of the income shall be
increased by the amount of the foreign tax not so chargeable,
which has to be taken into account in computing the amount of
the credit:

Provided that notwithstanding anything in the preceding provisions
of this sub-section, there shall be deducted from the deemed amount
of the foreign income any amount by which the foreign tax exceeds
the respective credit.

(6) The provisions of paragraphs (a) and (b) of sub-section (5) shall
apply to the computation of the deemed total income for the
purposes of determining the rate mentioned in sub-section (3); and
shall in the same way apply to such computations in relation to
every income in the case of which credit falls to be given for foreign
tax pursuant to a convention for the time being in force under
section 34.

(7) Where -

(a) the convention provides, in relation to dividends of some
classes but not in relation to dividends of other classes, that
foreign tax not chargeable directly or by deduction in respect
of dividends, is to be taken into account in considering whether
any credit is to be given against tax in respect of such
dividends; and

(b) dividends are paid which are not of a class for which such
provision has been made in the convention ,

then, if the dividends are paid to a company which controls, directly
or indirectly, not less than fifty per cent of the shares with voting
rights of the company paying the dividends, credit shall be allowed
as if the dividends were of a class for which such provision has been
made in the convention .




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(8) The allowable credit under such convention against the tax
imposed on income of any person for any year of assessment shall
not be allowed if such person so elects for that year.

(9) Claims for an allowance by way of credit shall be made not later
than six years after the end of the year of assessment and in the event
of any dispute as to the amount allowable, the claim shall be subject
to objection and recourse in like manner as an assessment.

(10) Where the amount of any credit given under a convention is
rendered excessive or insufficient by reason of any adjustment of the
amount of any tax payable either in the Republic or elsewhere, the
provisions of this Law limiting the time for the making of
assessments or claims for relief, shall not apply to any assessments
or claims which are the result of the adjustment made, if such
assessments and claims are made before the lapse of six years from
the year in which they were made, in the Republic or elsewhere, all
the assessments, adjustments and other determinations which were
material in determining whether any credit falls to be given.

36. (1) Notwithstanding the provisions of section 34, where the
Unilateral relief
Commissioner is satisfied that income tax has been paid on income
derived by him from a foreign country with which a double taxation
convention has not been concluded, and such income is subject to
income tax under this Law, the Commissioner shall grant relief from
tax payable under this Law, in respect of such income, not exceeding
the amount of tax paid in the foreign country in respect of such
income.

(2) For the purposes of this section the procedure prescribed in
section 35 shall, so far as practicable, be followed.

(3) Notwithstanding any other provisions of this Law, profits of a
person which derive from a permanent establishment situated
outside the Republic are exempt from tax:

Provided that where deductions for losses have been allowed, in
previous year or years of assessment, under section 13 in respect of



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losses from a permanent establishment situated outside the Republic,
an amount of profits equal to the amount of losses so allowed shall
be included in the chargeable income.

(4) The provisions of sub-section (3) shall not apply-

(a) if the permanent establishment directly or indirectly engages
more than fifty per cent (50%) in activities which lead to
investment income, and

(b) the foreign tax burden on the income of the permanent
establishment is substantially lower than the tax burden of the
resident company or person controlling the permanent
establishment and resident in the Republic.

(5) The remuneration from the rendering outside the Republic of
salaried services for a total aggregate period in the year of
assessment of more than 90 days to an employer not resident in the
Republic or to a permanent establishment of an employer resident
in the Republic shall be exempt from tax.


PART IX
GENERAL POWERS OF COMMISSIONER
Power of 37. The Commissioner may, by notice in writing, require any
Commissioner to
person to furnish him with such particulars as he may require for the
require
purposes of this Law with respect to the income of such person, or
particulars to be
to attend before him and give evidence on oath or otherwise with
furnished.
respect to his income and to produce any accounts, books or other
documents in his custody or under his control relating to such
income.

38. Any accounts and any computations of chargeable income
Accounts
prepared and produced to the Commissioner or accompanying any return of
certified by
income submitted to the Commissioner may not be considered if
professional
they have not been prepared and certified by a person holding the
accountants.

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