Agreement between the Government of the Russian Federation and Government of the Republic of Moldova on avoidance of double taxation of the income and property and prevention of tax avoidance

of April 12, 1996

Government of the Russian Federation and Government of the Republic of Moldova,

wishing to sign the Agreement on avoidance of double taxation of the income and property and prevention of tax avoidance,

agreed as follows:

Article 1 of Person to which the Agreement is applied

This agreement is applied to persons who are residents of one or both Contracting States.

Article 2 Taxes to which the Agreement extends

1. This agreement is applied to the taxes on the income and property levied in the Contracting State irrespective of method of their collection.

2. All taxes levied from total of income or property value or on their separate elements are considered as taxes on the income and property.

3. Taxes to which this agreement extends are:

a) in the Russian Federation:

- income tax (income) of the companies and organizations;

- the income tax from physical persons;

- property tax of the companies;

- property tax of physical persons;

b) in the Republic of Moldova:

- income tax (income) of the companies;

- the income tax from physical persons;

- property tax.

4. This agreement will be applied also to any identical or in essence to similar taxes which will be levied by any of Contracting States after signature date of this agreement in amendment or instead of the taxes specified in Item 3 of this Article. Competent authorities of Contracting States will notify each other on any essential changes in their tax legislation.

Article 3 General determinations

1. For the purposes of this agreement if other does not follow from context:

a) the terms "one Finishing speaking State" and "other Contracting State" mean, depending on context, the Russian Federation or the Republic of Moldova;

b) the term "person" includes physical person, the legal entity or any consolidation of persons;

c) the terms "company of one Contracting State" and "company of other Contracting State" mean respectively the company which is resident of one Contracting State and the company which is resident of other Contracting State;

d) the term "international delivery" means any transportation sea, river or the aircraft, the road vehicle operated by the company of one Contracting State except cases when sea, river or the aircraft, the road vehicle is operated only between the Items located in other Contracting State;

e) the term means "competent authority":

- in the Russian Federation - the Ministry of Finance of the Russian Federation or the representative authorized by it;

- in the Republic of Moldova - the Ministry of Finance of the Republic of Moldova or the representative authorized by it;

f) the term "national person" means:

(i) any physical person having nationality of the Contracting State;

(ii) any legal entity, partnership or association which received such status based on the current legislation of the Contracting State.

2. In case of application of this agreement by the Contracting State any term which is not determined in the Agreement has that significance which is attached to it by the legislation of this Contracting State concerning taxes to which the Agreement extends if other does not follow from context.

Article 4 Resident

1. For the purposes of this agreement the term "resident of one Contracting State" means person who by the legislation of this State is subject in it to the taxation based on the residence, the permanent residence, place of registration, the location of the actual governing body or any other criterion of similar nature.

This term, however, does not include face, taxable in this Contracting State, only owing to the fact that it gains income from sources in this State or concerning the property which is in it.

2. In case according to provisions of Item 1 of this Article the physical person is resident of both Contracting States, its provision is determined as follows:

a) it is considered resident of that Contracting State in which it has permanent housing; if it has permanent housing in both Contracting States, it is considered resident of that Contracting State in which it has more close personal and commercial relations (the center of vital interests);

b) if the Contracting State in which person has the center of vital interests cannot be determined or if such person has no permanent housing in one of Contracting States, it is considered resident of that Contracting State in which it usually lives;

c) if it usually lives in both Contracting States or if it usually does not live in one of them, it is considered resident of that Contracting State which citizen it is;

d) if each of Contracting States considers it as the citizen or any of Contracting States does not consider it that, competent authorities of Contracting States resolve the matter by mutual consent.

3. If according to provisions of Item 1 of this Article person which is not physical person is resident of both Contracting States, it is considered resident of that Contracting State in which its actual governing body is located.

Article 5 Permanent mission

1. For the purposes of this agreement the term "permanent mission" means the permanent place of activities through which the company of one Contracting State performs business activity in other Contracting State.

2. The term, in particular, includes "permanent mission":

a) management place;

b) department;

c) office;

d) factory;

e) workshop;

f) mine, oil or gas well, pit or any other place of production of natural resources.

3. The term "permanent mission" also includes the building site, construction, assembly or assembly object or activities for the related technical supervision but only in that case when such platform, object exist or activities are performed during the period exceeding 12 months.

4. Despite the previous provisions of this Article, the term "permanent mission" does not include:

a) use of constructions only for the purposes of storage, demonstrations or delivery of the goods or products belonging to this company;

b) content of inventories of the goods or products belonging to this company is exclusive for the purpose of storage, demonstration or delivery;

c) content of inventories of the goods or products belonging to this company only for the purposes of conversion by their other company;

d) content of the permanent place of activities only for the purposes of purchase of goods or products or for information collection for this company;

e) content of the permanent place of activities only for the purpose of implementation of any other activities of preparatory or auxiliary nature for the benefit of exclusively this company;

f) content of the permanent place of activities only for implementation of any combination of the types of activity mentioned in subitems from and) to f) provided that the cumulative activities of this permanent place of activities which resulted from such combination have preparatory or auxiliary character.

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