Article 8 - Shipping and Air Transport - Portuguese Republic

ARTICLE 8 SHIPPING AND AIR TRANSPORT 1. Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State of which the enterprise is a resident. 2. The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency. 3. Whenever companies from different countries have agreed to carry on an air transportation business together in the form of a consortium; the provisions of paragraph 1 shall apply to such part of the profits of the consortium as corresponds to the participation held in that consortium by a company that is a resident of a Contracting State. 4. For the purposes of this article, profits from the operation of ships or aircraft in international traffic shall mean profits derived from the transportation by sea or air of passengers, mail, livestock or goods carried on by the owner or lessees or charterers of the ships or aircraft, including profits from: i) The sale of tickets for such transportation on behalf of other enterprises; ii) The incidental lease of ships or aircraft used in such transportation; and iii) The use, maintenance or rental of containers (including trailers and related equipment for the transport of containers) by the enterprise engaged in international traffic in connection with such transportation. 5. Interest on funds generated by the operation of ships or aircraft and arising directly to a permanent establishment of an enterprise of one Contracting State in the other Contracting State, shall be regarded as profits derived from the operation of ships or aircraft in international traffic. It is clarified that such interest shall not refer to interest on funds representing investments.