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HMRC internal manual

Double Taxation Relief Manual

From
HM Revenue & Customs
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DT: Ivory Coast: double taxation agreement, Article 13: Management fees

  1. Management fees arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

  2. However, such management fees may also be taxed in the Contracting State in which they arise, and according to the law of that State, but if the recipient is the beneficial owner of the management fees the tax so charged shall not exceed 10 per cent of the gross amount of the management fees.

  3. The term `management fees` as used in this Article means payments of any kind to any person, other than to an employee of the person making the payments, in consideration for any services of a managerial, technical or consultancy nature.

  4. The provisions of paragraphs (1) and (2) of this Article shall not apply if the beneficial owner of the management fees, being a resident of a Contracting State, carries on business in the other Contracting State in which the management fees arise through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the obligation in respect of which the management fees are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 15, as the case may be, shall apply.

  5. A resident of one of the Contracting States who derives and beneficially owns management fees which arise in the other Contracting State may elect, for any year of assessment or financial year, that the tax chargeable in respect of those management fees in the Contracting State in which they arise shall be calculated as if he had a permanent establishment or fixed base in the lastmentioned Contracting State and as if those management fees were taxable in accordance with Article 7 or Article 15, as the case may be, as profits attributable to that permanent establishment or fixed base.

  6. Management fees shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the management fees, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the obligation to pay the management fees was incurred, and where such management fees are borne by such permanent establishment or fixed base, then such management fees shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated.

  7. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the management fees paid exceeds, for whatever reason, the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last- mentioned amount. In such case, the excess part of the payments shall remain taxable according to the law of each Contracting State, due regard being had to the other provisions of this Convention.