Article 8 - Shipping and air transport - Sri Lanka (Old - Effective upto 31-3-2013)

Article 8 : Shipping and air transport 1. Profits derived by an enterprise of a ContractingState from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. 2. Notwithstanding the provisions of paragraph (1), profits derived from the operation of ships in international traffic may be taxed in the ContractingState in which such operation is carried on; but the tax so charged shall not exceed 50 per cent of the tax otherwise imposed by the internal law of that State. PROVIDED that for the purpose of the calculation of the tax, such profits shall be deemed to be an amount not exceeding the rates presently provided in the taxation laws of the respective States for the computation of such profits. 3. The provisions of paragraphs (1) and (2) of this Article shall likewise apply in respect of profits from the participation in a pool, a joint business or an international operating agency of any kind by enterprises engaged in the operation of ships or aircraft in international traffic. 4. For the purpose of paragraph 1, interest on funds connected with the operation of ships or aircraft in international traffic shall be regarded as income from the operation of such aircraft, and the provisions of Article XI shall not apply in relation to such interest. 5. 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 State of which the operator of the ship is a resident.