Article 8 - Shipping and air transport - Sri Lanka

ARTICLE 8 SHIPPING AND AIR TRANSPORT 1. Profits derived by an enterprise of a Contracting State from the operation of aircraft in international traffic shall be taxable only in that State. 2. Profits derived in a Contracting State by an enterprise of the other Contracting State from the operation of ships in international traffic may be taxed in the first mentioned State, but the tax so charged shall be reduced by an amount equal to 50 per cent thereof. 3. If the place of effective management of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship is a resident. 4. Profits derived by a transportation enterprise which is a resident of a Contracting State from the use, maintenance, or rental of containers (including trailers and other equipment for the transport of containers) used for the transport of goods or merchandise in international traffic which is incidental to its international operations of aircrafts or ships shall be regarded as profits derived from the operation of such aircrafts or ships in international traffic and would be taxed subject to the provisions of paragraph 1 and 2 respectively, unless the containers are used solely within the other contracting State. 5. For the purposes of this Article interest on investments directly connected with the operation of ships or aircraft in international traffic shall be regarded as profits derived from the operation of such ships or aircraft if they are integral to the carrying on of such business, and the provisions of Article 11 shall not apply in relation to such interest. 6. The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.