AGREEMENT

BETWEEN

THE ARAB REPUBLIC OF EGYPT

AND

THE KINGDOM OF SPAIN

FOR

THE AVOIDANCE OF DOUBLE TAXATION

AND PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL

The Government of the Arab Republic of Egypt, and the Governmentof the Kingdom of Spain desiring to conclude an Agreement for theAvoidance of Double Taxation and the Prevention of Fiscal Evasion withrespect to taxes on Income and on Capital, have agreed as follows:

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CHAPTER I

SCOPE OF THE AGREEMENT

ARTICLE 1

PERSONS COVERED

This Agreement shall apply to persons who are residents of one orboth of the Contracting States.

ARTICLE 2

TAXES COVERED

1. This Agreement shall apply to taxes on income and on capital imposedon behalf of a Contracting State or of its political subdivisions or localauthorities, irrespective of the manner in which they are levied.

2. There shall be regarded as taxes on income and on capital all taxesimposed on total income, on total capital, or on elements of income or ofcapital, including taxes on gains from the alienation of movable or immovableproperty, taxes on the total amounts of wages or salaries paid by enterprises,as well as taxes on capital appreciation.

3. The existing taxes to which the Agreement shall apply are in particular:

a) in Egypt:

i) the tax on income derived from immovable property(including the land tax, and the building tax);

ii) the unified tax on income of individuals;iii) the tax on corporation profits; andiv) the duty for the development of the financial resources of

the state;

(hereinafter referred to as “ Egyptian tax”);

b) in Spain:

i ) the income tax on individuals;ii) the corporation tax;iii) the income tax on non residents;iv) the capital tax; andv) local taxes on income and on capital;

(hereinafter referred to as “Spanish tax”);

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4. The Agreement shall apply also to any identical or substantially similartaxes which are imposed after the date of signature of this Agreement inaddition to, or in place of, the existing taxes. The competent authorities of theContracting States shall notify each other of significant changes which havebeen made in their respective taxation laws.

CHAPTER II

DEFINITION

ARTICLE 3

GENERAL DEFINITIONS

1. For the purposes of this Agreement, unless the context otherwiserequires:

a) the terms “Spain” and “Egypt” mean, respectively, the Kingdomof Spain and the Arab Republic of Egypt; and, when used in ageographical sense include each Party’s territory and territorialwaters as well as any area outside the territorial sea where, inaccordance with the domestic law of each Party andinternational law, either Party exercises or may in the futureexercise jurisdiction or sovereign rights with respect to theseabed, subsoil and superjacent waters and their naturalresources;

b) the terms “a Contracting State” and “the other Contracting State”mean Egypt or Spain as the context requires;

c) the term “person” includes an individual, a company and anyother body of persons;

d) the term “company” means any body corporate or any entity thatis treated as a body corporate for tax purposes;

e) the terms “enterprise of a Contracting State” and “enterprise ofthe other Contracting State” mean, respectively, an enterprisecarried on by a resident of a Contracting State and an enterprisecarried on by a resident of the other State;

f) the term “international traffic” means any transport by a ship oraircraft operated by an enterprise that has its place of effectivemanagement in a Contracting State except when the ship oraircraft is operated solely between places in the otherContracting State;

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g) the term “competent authority” means:

(i) in Egypt: the Minister of Finance or his authorisedrepresentative;

(ii) in Spain: the Minister of Finance or his authorisedrepresentative.

h) the term “national” means:

(i) any individual possessing the nationality of a ContractingState;

(ii) any legal person, partnership or association deriving itsstatus as such from the laws in force in a ContractingState.

2. As regards the application of the Agreement at any time by aContracting State, any term not defined therein shall, unless the contextotherwise requires, have the meaning that it has at that time under the law ofthat State for the purposes of the taxes to which the Agreement applies, anymeaning under the applicable tax laws of that State prevailing over a meaninggiven to the term under other laws of the State.

ARTICLE 4

RESIDENT

1. For the purposes of this Agreement, the term “resident of a ContractingState” means any person who, under the laws of that State, is liable to taxtherein by reason of his domicile, residence, place of management or anyother criterion of a similar nature, and also includes that State and anypolitical subdivision or local authority thereof. This term, however, does notinclude any person who is liable to tax in that State in respect only of incomefrom sources in that State or capital situated therein.

2. Where by reason of the provisions of paragraph 1 an individual is aresident of both Contracting States, then his status shall be determined asfollows:

a) he shall be deemed to be a resident of the State in which he hasa permanent home available to him; if he has a permanenthome available to him in both States, he shall be deemed to bea resident of the State with which his personal and economicrelations are closer (center of vital interests);

b) if the State in which he has his center of vital interests cannot bedetermined, or if he has not a permanent home available to himin either State, he shall be deemed to be a resident of the Statein which he has an habitual abode;

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c) if he has an 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 anational;

d) if he is a national of both States or of neither of them, thecompetent authorities of the Contracting States shall settle thequestion by mutual agreement.

3. Where by reason of the provisions of paragraph 1 a person other thanan individual is a resident of both Contracting States, then it shall be deemedto be a resident of the State in which its place of effective management issituated.

ARTICLE 5

PERMANENT ESTABLISHMENT

1. For the purposes of this Agreement, the term "permanentestablishment" means a fixed place of business through which the businessof 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, andf) 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 orsupervisory activities in connection therewith, but only wheresuch site, project or activities continue for a period of more thannine months, within any twelve month period;

b) the furnishing of services in a Contracting State, includingconsultancy services, by an enterprise through employees orother personnel engaged by the enterprise, but only wherethese employees or personnel are present in that ContractingState for the performance of the same or connected project,during a period or periods aggregating more than 183 days inany twelve month period.

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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, display ordelivery of goods or merchandise belonging to the enterprise,provided that these facilities are not used as sales-outlets in theContracting State where these facilities are situated;

b) the maintenance of a stock of goods or merchandise belongingto the enterprise solely for the purpose of storage, display ordelivery, provided that these goods or merchandise are not soldin the Contracting State where the stock is situated;

c) the maintenance of a stock of goods or merchandise belongingto the enterprise solely for the purpose of processing by anotherenterprise;

d) the maintenance of a fixed place of business solely for thepurpose of purchasing goods or merchandise or of collectinginformation, for the enterprise;

e) the maintenance of a fixed place of business solely for thepurpose of carrying on, for the enterprise, any other activity of apreparatory or auxiliary character;

f) the maintenance of a fixed place of business solely for anycombination of activities mentioned in subparagraphs (a) to (e),provided that the overall activity of the fixed place of businessresulting from this combination is of a preparatory or auxiliarycharacter.

5. Notwithstanding the provisions of paragraphs 1 and 2, where a person-other than an agent of an independent status to whom paragraph 7 applies–is acting in a Contracting State on behalf of an enterprise of the otherContracting State, that enterprise shall be deemed to have a permanentestablishment in the first-mentioned Contracting State in respect of anyactivities which that person undertakes for the enterprise, if such a person:

a) has and habitually exercises in that Contracting State anauthority to conclude contracts in the name of the enterprise,unless the activities of such person are limited to thosementioned in paragraph 4 which, if exercised through a fixedplace of business, would not make this fixed place of business apermanent establishment under the provisions of thatparagraph; or

b) has no such authority, but habitually maintains in the firstmentioned State a stock of goods or merchandise from which heregularly delivers goods or merchandises on behalf of the

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enterprise, provided that these goods or merchandise are sold inthe Contracting State where the stock is situated.

6. An enterprise shall not be deemed to have a permanent establishmentin a Contracting State merely because it carries on business in that Statethrough a broker, general commission agent or any other agent of anindependent status, provided that such persons are acting in the ordinarycourse of their business. However, when the activities of such an agent aredevoted wholly or almost wholly on behalf of that enterprise, he will not beconsidered an agent of an independent status within the meaning of thisparagraph.

7. The fact that a company which is a resident of a Contracting Statecontrols or is controlled by a company which is a resident of the otherContracting State or which carries on business in that other State (whetherthrough a permanent establishment or otherwise), shall not of itself constituteeither company a permanent establishment of the other.

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CHAPTER III

TAXATION OF INCOME

ARTICLE 6

INCOME FROM IMMOVABLE PROPERTY

1. Income derived by a resident of a Contracting State from immovableproperty (including income from agriculture or forestry) situated in the otherContracting State may be taxed in that other State.

2. The term “immovable property” shall have the meaning which it hasunder the law of the Contracting State in which the property in question issituated. The term shall in any case include property accessory to immovableproperty, livestock and equipment used in agriculture and forestry, rights towhich the provisions of general law respecting landed property apply, usufructof immovable property and rights to variable or fixed payments asconsideration for the working of, or the right to work, mineral deposits,sources and other natural resources; ships, boats and aircraft shall not beregarded as immovable property.

3. The provisions of paragraph 1 shall apply to income derived from thedirect use, letting or use in any other form of immovable property.

4. Where the ownership of shares or other rights directly or indirectlyentitles the owner of such shares or rights to the enjoyment of immovableproperty, the income from the direct use, letting or use in any other form ofsuch right to the enjoyment may be taxed in the Contracting State in whichthe immovable property is situated.

5. The provisions of paragraphs 1, 3 and 4 shall also apply to the incomefrom immovable property of an enterprise and to income from immovableproperty 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 onlyin that State unless the enterprise carries on business in the otherContracting State through a permanent establishment situated therein. If theenterprise carries on business as aforesaid, the profits of the enterprise maybe taxed in the other State, but only so much of them as is attributable to thatpermanent establishment.

2. Subject to the provisions of paragraph 3, where an enterprise of aContracting State carries on business in the other Contracting State through a

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permanent establishment situated therein, there shall in each ContractingState be attributed to that permanent establishment the profits which it mightbe expected to make if it were a distinct and separate enterprise engaged inthe same or similar activities under the same or similar conditions and dealingwholly independently with the enterprise of which it is a permanentestablishment.

3. In determining the profits of a permanent establishment, there shall beallowed as deductions expenses which are incurred for the purposes of thepermanent establishment, including executive and general administrativeexpenses so incurred, whether in the State in which the permanentestablishment is situated or elsewhere.

4. No profits shall be attributed to a permanent establishment by reasonof the mere purchase by that permanent establishment of goods ormerchandise for the enterprise.

5. For the purposes of the preceding paragraphs, the profits to beattributed to the permanent establishment shall be determined by the samemethod year by year unless there is good and sufficient reason to thecontrary.

6. Where profits include items of income which are dealt with separatelyin other Articles of this Agreement, then the provisions of those Articles shallnot be affected by the provisions of this Article.

ARTICLE 8

SHIPPING AND AIR TRANSPORT

1. Profits from the operation of ships or aircraft in international traffic shallbe taxable only in the Contracting State in which the place of effectivemanagement of the enterprise is situated.

2. If the place of effective management of a shipping enterprise is aboarda ship, then it shall be deemed to be situated in the Contracting State inwhich the home harbour of the ship is situated, or, if there is no such homeharbour, in the Contracting State of which the operator of the ship is aresident.

3. The provisions of paragraph 1 shall also apply to profits from theparticipation in a pool, a joint business or an international operating agency.

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ARTICLE 9

ASSOCIATED ENTERPRISES

1. Where

a) an enterprise of a Contracting State participates directlyor indirectly in the management, control or capital of anenterprise of the other Contracting State, or

b) the same persons participate directly or indirectly in themanagement, control or capital of an enterprise of aContracting State and an enterprise of the otherContracting State,

and in either case conditions are made or imposed between the twoenterprises in their commercial or financial relations which differ from thosewhich would be made between independent enterprises, then any profitswhich 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 inthe profits of that enterprise and taxed accordingly.

2. Where a Contracting State includes in the profits of an enterprise ofthat State -and taxes accordingly- profits on which an enterprise of the otherContracting State has been charged to tax in that other Contracting State andthat other State agrees that the profits so included are profits which wouldhave accrued to the enterprise of the first-mentioned State if the conditionsmade between the two enterprises had been those which would have beenmade between independent enterprises, then that other State may make anappropriate adjustment to the amount of the tax charged therein on thoseprofits. In determining such adjustment, due regard shall be had to the otherprovisions of this Agreement and the competent authorities of the ContractingStates shall if necessary consult each other.

ARTICLE 10

DIVIDENDS

1. Dividends paid by a company which is a resident of a ContractingState to a resident of the other Contracting State may be taxed in that otherState.

2. However, such dividends may also be taxed in the Contracting State ofwhich the company paying the dividends is a resident, and according to thelaws of that State, but if the beneficial owner of the dividends is a resident ofthe other contracting State, the tax so charged shall not exceed:

a) 9 per cent of the gross amount of the dividends if the beneficialowner is a company (other than a partnership) which holds

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directly at least 25 per cent of the capital of the company payingthe dividends;

b) 12 per cent of the gross amount of the dividends in all othercases.

This paragraph shall not affect the taxation of the company in respectof the profits out of which the dividends are paid.

3. The term “dividends” as used in this Article means income fromshares, ”jouissance” shares or “jouissance” rights, mining shares, founders’shares or other rights, not being debt-claims, participating in profits, as wellas income from other corporate rights which is subjected to the same taxationtreatment as income from shares by the laws of the State of which thecompany making the distribution is a resident.

4. The provisions of paragraphs 1 and 2 shall not apply if the beneficialowner of the dividends, being a resident of a Contracting State, carries onbusiness in the other Contracting State of which the company paying thedividends is a resident, through a permanent establishment situated therein,or performs in that other State independent personal services from a fixedbase situated therein, and the holding in respect of which the dividends arepaid is effectively connected with such permanent establishment or fixedbase. In such case the provisions of Article 7 or Article 14, as the case maybe, shall apply.

5. Where a company which is a resident of a Contracting State derivesprofits or income from the other Contracting State, that other State may notimpose any tax on the dividends paid by the company, except insofar as suchdividends are paid to a resident of that other State or insofar as the holding inrespect of which the dividends are paid is effectively connected with apermanent establishment or a fixed base situated in that other State, norsubject the company's undistributed profits to a tax on the company’sundistributed profits, even if the dividends paid or the undistributed profitsconsist wholly or partly of profits or income arising in such other State.

ARTICLE 11

INTEREST

1. Interest arising in a Contracting State and paid to a resident of theother Contracting State may be taxed in that other State.

2. However, such interest may also be taxed in the Contracting State inwhich it arises, and according to the laws of that State, but if the beneficialowner of the interest is a resident of the other Contracting State, the tax socharged shall not exceed 10 per cent of the gross amount of the interest.

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3. Notwithstanding the provisions of paragraph 2, interest arising in aContracting State and paid to a resident of the other Contracting State shallbe taxable only in that other State if the recipient is the beneficial owner of theinterest and

h) the interest is beneficially owned by a Contracting State, apolitical subdivision, public statutory body or a local authority thereof;or

ii) the interest is paid to the Central Bank of the other ContractingState.

4. The term “interest” as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage and whether or notcarrying a right to participate in the debtor’s profits, and in particular, incomefrom government securities and income from bonds or debentures, includingpremiums and prizes attaching to such securities, bonds or debentures, aswell as all other income assimilated to income from money lent by thetaxation laws of the State in which the income arises. Penalty charges for latepayment shall not be regarded as interest for the purpose of this Article.

5. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficialowner of the interest, being a resident of a Contracting State, carries onbusiness in the other Contracting State in which the interest arises, through apermanent establishment situated therein, or performs in that other Stateindependent personal services from a fixed base situated therein, and thedebt-claim in respect of which the interest is paid is effectively connectedwith such permanent establishment or fixed base. In such case the provisionsof Article 7 or Article 14, as the case may be, shall apply.

6. Interest shall be deemed to arise in a Contracting State when thepayer is a resident of that State. Where, however, the person paying theinterest, whether he is a resident of a Contracting State or not, has in aContracting State a permanent establishment or a fixed base in connectionwith which the indebtedness on which the interest is paid was incurred, andsuch interest is borne by such permanent establishment or fixed base, thensuch interest shall be deemed to arise in the State in which the permanentestablishment or fixed base is situated.

7. Where, by reason of a special relationship between the payer and thebeneficial owner or between both of them and some other person, the amountof the interest, having regard to the debt-claim for which it is paid, exceedsthe amount which would have been agreed upon by the payer and thebeneficial owner in the absence of such relationship, the provisions of thisArticle shall apply only to the last-mentioned amount. In such case, theexcess part of the payments shall remain taxable according to the laws ofeach Contracting State, due regard being had to the other provisions of thisAgreement.

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ARTICLE 12

ROYALTIES

1. Royalties arising in a Contracting State and paid to a resident of theother Contracting State may be taxed in that other State.

2. However, such royalties may also be taxed in the Contracting State inwhich they arise and according to the laws of that State, but if the beneficialowner of the royalties is a resident of the other Contracting State, the tax socharged shall not exceed 12 per cent of the gross amount of the royalties.

3. The term “royalties” as used in this Article means payments of any kindreceived as a consideration for the use of, or the right to use, any copyright ofliterary, artistic or scientific work including cinematograph films, or films ortapes and other means of image or sound reproduction, any patent, trademark, design or model, computer software, plan, secret formula or process, orfor the use of, or the right to use, industrial, commercial, or scientificequipment or for information concerning industrial commercial or scientificexperience. It also includes payments for technical assistance performed in aContracting State by a resident of the other Contracting State where it isconnected only to the application of the above mentioned rights, properties orinformation.

4. The provisions of paragraphs 1 and 2 shall not apply if the beneficialowner of the royalties, being a resident of a Contracting State, carries onbusiness in the other Contracting State in which the royalties arise, through apermanent establishment situated therein, or performs in that other Stateindependent personal services from a fixed base situated therein, and theright or property in respect of which the royalties are paid is effectivelyconnected with such permanent establishment or fixed base. In such case theprovisions 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 thepayer is a resident of that State. Where, however, the person paying theroyalties, whether he is a resident of a Contracting State or not, has in aContracting State a permanent establishment or a fixed base in connectionwith which the liability to pay the royalties was incurred, and such royaltiesare borne by the permanent establishment or fixed base, then such royaltiesshall be deemed to arise in the Contracting State in which the permanentestablishment or fixed base is situated.

6. Where, by reason of a special relationship between the payer and thebeneficial owner or between both of them and some other person, the amountof the royalties, having regard to the use, right or information for which theyare paid, exceeds the amount which would have been agreed upon by thepayer and the beneficial owner in the absence of such relationship, theprovisions of this Article shall apply only to the last-mentioned amount. In

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such case, the excess part of the payments shall remain taxable according tothe laws of each Contracting State, due regard being had to the otherprovisions of this Agreement.

ARTICLE 13

CAPITAL GAINS

1. Gains derived by a resident of a Contracting State from the alienationof immovable property referred to in Article 6 and situated in the otherContracting State may be taxed in that other State.

2. Gains from the alienation of movable property forming part of thebusiness property of a permanent establishment which an enterprise of aContracting State has in the other Contracting State or of movable propertypertaining to a fixed base available to a resident of a Contracting State in theother Contracting State for the purpose of performing independent personalservices, including such gains from the alienation of such a permanentestablishment (alone or with the whole enterprise) or of such fixed base, maybe taxed in that other Contacting State.

3. Gains from the alienation of ships or aircraft operated in internationaltraffic or movable property pertaining to the operation of such ships or aircraftshall be taxable only in the Contracting State in which the place of effectivemanagement of the enterprise is situated.

4. Gains from the alienation of company shares (other than shares listedon an approved stock exchange) or other participation rights in a company,the property of which consists, directly or indirectly, mainly of immovableproperty situated in a Contracting State may be taxed in that State.

Gains from the alienation of shares or other rights, which directly orindirectly entitle the owner of such shares or rights to the enjoyment ofimmovable property situated in a Contracting State, may be taxed in thatState.

5. Gains from the alienation of shares or other rights forming part of asubstantial participation in a company which is a resident of a ContractingState may be taxed in that State.

6. Gains from the alienation of any property other than that referred to inparagraphs 1, 2, 3, 4 and 5 shall be taxable only in the Contracting State ofwhich the alienator is a resident.

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ARTICLE 14

INDEPENDENT PERSONAL SERVICES

1. Income derived by an individual who is a resident of a ContractingState in respect of professional services or other activities of an independentcharacter shall be taxable only in that State unless he has a fixed baseregularly available to him in the other Contracting State for the purpose ofperforming his activities; in that case, only so much of the income as isattributable to that fixed base may be taxed in that other Contracting State.

2. The term “professional services” includes especially independentscientific, literary, artistic, educational or teaching activities as well as theindependent activities of physicians, lawyers, engineers, architects, dentistsand accountants.

ARTICLE 15

DEPENDENT PERSONAL SERVICES

1. Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wagesand other similar remuneration derived by a resident of a Contracting State inrespect of an employment shall be taxable only in that State unless theemployment is exercised in the other Contracting State. If the employment isso exercised, such remuneration as is derived therefrom may be taxed in thatother State.

2. Notwithstanding the provisions of paragraph 1, remuneration derivedby a resident of a Contracting State in respect of an employment exercised inthe other Contracting State shall be taxable only in the first-mentioned Stateif:

a) the recipient is present in the other State for a period or periodsnot exceeding in the aggregate 183 days in any twelve monthperiod commencing or ending in the fiscal year concerned, and

b) the remuneration is paid by, or on behalf of, an employer who isnot a resident of the other State, and

c) the remuneration is not borne by a permanent establishment ora fixed base which the employer has in the other State.

3. Notwithstanding the preceding provisions of this Article, remunerationderived in respect of an employment exercised aboard a ship or aircraftoperated in international traffic may be taxed in the Contracting State in whichthe place of effective management of the enterprise is situated.

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ARTICLE 16

DIRECTORS’ FEES

Directors' fees and other similar remuneration derived by a resident ofa Contracting State in his capacity as a member of the board of directors of acompany which is a resident of the other Contracting State may be taxed inthat other State.

ARTICLE 17

ARTISTES AND SPORTSMEN

1. Notwithstanding the provisions of Articles 14 and 15, income derivedby 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 anentertainer or a sportsman in his capacity as such accrues not to theentertainer or sportsman himself but to another person, that income may,notwithstanding the provisions of Articles 7, 14 and 15, be taxed in theContracting State in which the activities of the entertainer or sportsman areexercised.

3. Notwithstanding the provisions of paragraphs 1 and 2, income derivedfrom activities referred to in paragraph 1 performed under a cultural or sportsagreement or arrangement between the Contracting States shall be exemptfrom tax in the Contracting State in which the activities are exercised if thevisit to that State is wholly or substantially supported by public funds of theother Contracting State or of a political subdivision or of a local authoritythereof.

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ARTICLE 18

PENSIONS AND ANNUITIES

1. Subject to the provisions of paragraph 2 of Article 19, pensions,annuities and other similar remuneration paid to a resident of a ContractingState in consideration of past employment shall be taxable only in that State.

2. The term “annuities” means a stated sum payable periodically at statedtimes, during life or during a specified or ascertainable period of time, underan obligation to make the payments in return for adequate and fullconsideration in money or money’s worth.

ARTICLE 19

GOVERNMENT SERVICE1.

a) Salaries, wages and other similar remuneration, other than apension, paid by a Contracting State or a political subdivision ora local authority thereof to an individual in respect of servicesrendered to that State or subdivision or authority shall betaxable only in that State.

b) However, such salaries, wages and other similar remunerationshall be taxable only in the other Contracting State if theservices are rendered in that State and the individual is aresident of that State who:

i) is a national of that State; orii) did not become a resident of that State solely for the

purpose of rendering the services.2.

a) Any pension or annuity paid by, or out of funds created by, aContracting State or a political subdivision or a local authoritythereof to an individual in respect of services rendered to thatState or subdivision or authority shall be taxable only in thatState.

b) However, such pension shall be taxable only in the otherContracting State if the individual is a resident of, and a nationalof, that State.

3. The provisions of Articles 15, 16, 17 and 18 shall apply to salaries,wages and other similar remuneration and to pensions in respect of servicesrendered in connection with a business carried on by a Contracting State or apolitical subdivision or a local authority thereof.

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ARTICLE 20

PAYMENTS RECEIVED BY STUDENTS AND APPRENTICES

Payments which a student or business apprentice who is or wasimmediately before visiting a Contracting State a resident of the otherContracting State and who is present in the first-mentioned State solely forthe purpose of his education or training receives for the purpose of hismaintenance, education or training shall not be taxed in that State, providedthat such payments arise from sources outside that State.

ARTICLE 21

OTHER INCOME

1. Items of income of a resident of a Contracting State, wherever arising,not dealt with in the foregoing Articles of this Agreement shall be taxable onlyin that State.

2. The provisions of paragraph 1 shall not apply to income, other thanincome from immovable property as defined in paragraph 2 of Article 6, if therecipient of such income, being a resident of a Contracting State, carries onbusiness in the other Contracting State through a permanent establishmentsituated therein, or performs in that other State independent personalservices from a fixed base situated therein, and the right or property inrespect of which the income is paid is effectively connected with suchpermanent establishment or fixed base. In such case the provisions of Article7 or Article 14, as the case may be, shall apply.

CHAPTER IV

TAXATION OF CAPITAL

ARTICLE 22

CAPITAL

1. Capital represented by immovable property referred to in Article 6,owned by a resident of a Contracting State and situated in the otherContracting State, may be taxed in that other State.

2. Capital represented by movable property forming part of the businessproperty of a permanent establishment which an enterprise of a ContractingState has in the other Contracting State or by movable property pertaining toa fixed base available to a resident of a Contracting State in the other

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Contracting State for the purpose of performing independent personalservices, may be taxed in that other Contracting State.

3. Capital represented by ships and aircraft operated in internationaltraffic and by movable property pertaining to the operation of such ships andaircraft shall be taxable only in the Contracting State in which the place ofeffective management of the enterprise is situated.

4. Capital constituted by shares, rights or comparable interest in acompany, in any other legal person or in a partnership, the assets of whichconsist principally of, or of rights in, immovable property situated in aContracting State or by shares or other rights which entitle its owner to a rightof enjoyment of immovable property situated in a Contracting State, may betaxed in the Contracting State in which the immovable property is situated.

5. Capital represented by shares or other rights constituting a substantialparticipation in a company that is a resident of a Contracting State, may betaxed in that State.

6. All other elements of capital of a resident of a Contracting State shallbe taxable only in that State.

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CHAPTER V

METHODS FOR ELIMINATION OF DOUBLE TAXATION

ARTICLE 23

ELIMINATION OF DOUBLE TAXATION

1. Where a resident of a Contracting State derives income or ownselements of capital which in accordance with the provisions of this Agreementmay be taxed in the other Contracting State, the first-mentioned State shallallow as a deduction from the tax on the income or the capital of that residentan amount equal to the tax paid in that other State. Such deduction, in eithercase, shall not, however, exceed that part of the tax as computed before thededuction is given, which is attributable, as the case may be, to the income orthe capital which may be taxed in that other State.

2. Where in accordance with any provision of this Agreement incomederived or capital owned by a resident of a Contracting State, is exemptedfrom tax in that State, such State may nevertheless, in calculating the amountof tax on the remaining income or capital of such resident, take into accountthe exempted income or capital.

CHAPTER VI

SPECIAL PROVISIONS

ARTICLE 24

NON-DISCRIMINATION

1. Nationals of a Contracting State shall not be subjected in the otherContracting State to any taxation or any requirement connected therewith,which is other or more burdensome than the taxation and connectedrequirements to which nationals of that other State in the samecircumstances, in particular with respect to residence, are or may besubjected. This provision shall, notwithstanding the provisions of Article 1,also apply to persons who are not residents of one or both of the ContractingStates.

2. The taxation on a permanent establishment which an enterprise of aContracting State has in the other Contracting State shall not be lessfavourably levied in that other State than the taxation levied on enterprisesof that other State carrying on the same activities.

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3. Except where the provisions of paragraph 1 of Article 9, paragraph 7 ofArticle 11, or paragraph 6 of Article 12, apply, interest, royalties and otherdisbursements paid by an enterprise of a Contracting State to a resident ofthe other Contracting State shall, for the purpose of determining the taxableprofits of such enterprise, be deductible under the same conditions as if theyhad been paid to a resident of the first-mentioned State. Similarly, any debtsof an enterprise of a Contracting State to a resident of the other contractingState shall, for the purpose of determining the taxable capital of suchenterprise, be deductible under the same conditions as if they had beencontracted to a resident of the first-mentioned State.

4. Enterprises of a Contracting State, the capital of which is wholly orpartly owned or controlled, directly or indirectly, by one or more residents ofthe other Contracting state, shall not be subjected in the first-mentioned Stateto any taxation or any requirement connected therewith which is other ormore burdensome than the taxation and connected requirements to whichother similar enterprises of the first-mentioned State are or may be subjected.

5. The provisions of this Article shall, notwithstanding the provision ofArticle 2, apply to taxes of every kind and description.

6. Nothing in this Article shall be construed as obliging a ContractingState to grant to residents of the other Contracting State any personalallowances, reliefs and reductions for taxation purposes on account of civilstatus or family responsibilities which it grants to its own residents.

ARTICLE 25

MUTUAL AGREEMENT PROCEDURE

1. Where a person considers that the actions of one or both of theContracting States result or will result for him in taxation not in accordancewith the provisions of this Agreement, he may, irrespective of the remediesprovided by the domestic law of those States, present his case to thecompetent authority of the Contracting State of which he is a resident or, if hiscase comes under paragraph 1 of Article 24, to that of the Contracting Stateof which he is a national. The case must be presented within three years fromthe first notification of the action resulting in taxation not in accordance withthe provisions of the Agreement.

2. The competent authority shall endeavour, if the objection appears to itto be justified and if it is not itself able to arrive at a satisfactory solution, toresolve the case by mutual agreement with the competent authority of theother Contracting State, with a view to the avoidance of taxation which is notin accordance with the Agreement. Any agreement reached shall beimplemented notwithstanding any time limits in the domestic law of theContracting States.

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3. The competent authorities of the Contracting States shall endeavour toresolve by mutual agreement any difficulties or doubts arising as to theinterpretation or application of the Agreement. They may also consulttogether for the elimination of double taxation in cases not provided for in theAgreement.

4. The competent authorities of the Contracting States may communicatewith each other directly for the purpose of reaching an agreement in thesense of the preceding paragraphs. When it seems advisable in order toreach agreement to have an oral exchange of opinions, such exchange maytake place through a commission consisting of representatives of thecompetent authorities of the Contracting States.

ARTICLE 26

EXCHANGE OF INFORMATION

1. The competent authorities of the Contracting States shall exchangesuch information as is necessary for carrying out the provisions of thisAgreement or of the domestic laws of the Contracting States concerningtaxes covered by the Agreement insofar as the taxation thereunder is notcontrary to the Agreement. The exchange of information is not restricted byArticle 1. Any information received by a Contracting State shall be treated assecret in the same manner as information obtained under the domestic lawsof that State and shall be disclosed only to persons or authorities (includingcourts and administrative bodies) involved in the assessment or collection of,the enforcement or prosecution in respect of, or the determination of appealsin relation to the taxes covered by the Agreement. Such persons orauthorities shall use the information only for such purposes. They maydisclose the information in public court proceedings or in judicial decisions.

2. In no case shall the provisions of paragraph 1 be construed so as toimpose on a Contracting State the obligation:

a) to carry out administrative measures at variance with the lawsand administrative practice of that or of the other ContractingState;

b) to supply information which is not obtainable under the laws orin the normal course of the administration of that or of the otherContracting State;

c) to supply information which would disclose any trade, business,industrial, commercial or professional secret or trade process, orinformation, the disclosure of which would be contrary to publicpolicy (ordre public).

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ARTICLE 27

MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

Nothing in this Agreement shall affect the fiscal privileges of diplomaticmissions agents or consular posts under the general rules of international lawor under the provisions of special agreements.

CHAPTER Vll

FINAL PROVISIONS

ARTICLE 28

ENTRY INTO FORCE

1. This Agreement shall enter into force on the date of the exchange ofthe last notification confirming the completion of the legal proceduresnecessary to its entry into force in the two Contracting States.

2. After the entry into force of this Agreement its provisions shall haveeffect for the first time:

a) in respect of taxes withheld at source, on amounts paid orcredited on or after the first day of January in the calendar yearfollowing its entry into force; and

b) in respect of other taxes, for taxation years or periods beginningon or after the first day of January in the calendar year followingits entry into force.

ARTICLE 29

TERMINATION

This Agreement shall continue in effect indefinitely, but eitherContracting State may, on or before 30 of June in any calendar year after theexpiration of a period of five years from date of entry into force, give to theother Contracting State a notice of termination in writing through diplomaticchannels.

In such event, the Agreement shall cease to have effect:

a) in respect of taxes withheld at source, on amounts paid orcredited on or after the first day of January in the calendar yearfollowing that in which the notice has been given; and

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b) in respect of other taxes, for taxation years beginning on or afterthe first day of January in the calendar year following that in whichthe notice is given.

In witness whereof the undersigned, duly authorised thereto, havesigned this Agreement.

Done in duplicate in _______ on the _____ day of _______2001, in theSpanish, Arabic and English languages, all the texts being equally authentic.In case of divergence between any of the texts, the English text shall prevail.

For the Kingdom of Spain For the Arab Republic of Egypt

PROTOCOL

At the moment of signing the Agreement between the Kingdom ofSpain and the Arab Republic of Egypt for the Avoidance of Double Taxationand the Prevention of Fiscal Evasion with respect to Taxes on Income and onCapital, the undersigned have agreed upon the following provisions whichshall be an integral part of the Agreement.

I. Ad Article 10, paragraph 3

In the case of the winding up of a company, the profits will be taxedunder the Corporation Tax of this company, and the amount distributed to theshareholders will be considered as dividends.

II. Ad Article 13 and 22

It is understood that the term “substantial” contained in Article 13,paragraph 5, and Article 22, paragraph 5, means 25% per cent ofparticipation in the company.

III. Ad Article 17, paragraph 3

It is understood that the visit of artistes and sportsmen is “substantially”supported by public funds when 75 per cent or more of the total expenses ontransport, accommodation and daily allowance are financed by funds of suchnature.

IV. Ad Article 22

It is understood that this Article shall enter into force from the momentin which Egypt shall establish a tax on capital.

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In witness whereof the undersigned, duly authorised thereto, havesigned this Protocol.

Done in duplicate in _______ on the _____ day of _______2001, in theSpanish, Arabic and English languages, all the texts being equally authentic.In case of divergence between any of the texts, the English text shall prevail.

For the Kingdom of Spain For the Arab Republic of Egypt