CONVENTIONBETWEEN THEREPUBLICOFLATVIAANDGEORGIA FORTHEAVOIDANCEOFDOUBLETAXATIONAND THEPREVENTIONOFFISCALEVASION WITHRESPECTTOTAXESONINCOMEANDONCAPITAL Article1 Personscovered ThisConventionshallapplytopersonswhoareresidentsofoneorbothoftheContractingStates. Article2 Taxescovered 1.ThisConventionshallapplytotaxesonincomeandoncapitalimposedonbehalfofaContracting Stateorofitspoliticalsubdivisionsorlocalauthorities,irrespectiveofthemannerinwhichtheyare levied. 2.

.Thereshallberegardedastaxesonincomeandoncapitalalltaxesimposedontotalincome,ontotal capital,oronelementsofincomeorofcapital,includingtaxesongainsfromthealienationofmovable orimmovableproperty,aswellastaxesoncapitalappreciation. 3.TheexistingtaxestowhichtheConventionshallapplyareinparticular: (a) (i) (ii) (iii) (hereinafterreferredtoas"Latviantax"); (b) (i) inGeorgia: inLatvia:

theenterpriseincometax(uznemumuienakumanodoklis); thepersonalincometax(iedzivotajuienakumanodoklis); theimmovablepropertytax(nekustamaipasumanodoklis);

thetaxonprofitofenterprises;

(ii) (iii) (iv)

thetaxonpropertyofenterprises; thetaxonincomeofindividuals;and thetaxonpropertyofindividuals;

(hereinafterreferredtoas"Georgiantax"). 4.TheConventionshallapplyalsotoanyidenticalorsubstantiallysimilartaxeswhichareimposedafter thedateofsignatureoftheConventioninadditionto,orinplaceof,theexistingtaxes.Thecompetent authoritiesoftheContractingStatesshallnotifyeachotherofanysignificantchangeswhichhavebeen madeintheirrespectivetaxationlaws. Article3 Generaldefinitions 1.ForthepurposesofthisConvention,unlessthecontextotherwiserequires:

(a) theterm"Latvia"meanstheRepublicofLatviaand,whenusedinthegeographicalsense,means theterritoryoftheRepublicofLatviaandanyotherareaadjacenttotheterritorialwatersofthe RepublicofLatviawithinwhichunderthelawsofLatviaandinaccordancewithinternationallaw,the rightsofLatviamaybeexercisedwithrespecttotheseabedanditssubsoilandtheirnaturalresources; (b) theterm"Georgia"meanstheterritoryrecognisedbytheinternationalcommunitywithinthe statebordersofGeorgia,includinglandterritory,internalwatersandterritorialsea,theairspaceabove them,inrespectofwhichGeorgiaexercisesitssovereignty,aswellastheexclusiveeconomiczoneand continentalshelfadjacenttoitsterritorialseainrespectofwhichGeorgiamayexerciseitssovereign rightsinaccordancewiththeinternationallaw; (c) theterms"aContractingState"and"theotherContractingState"meanLatviaorGeorgia,asthe contextrequires; (d) theterm"person"includesanindividual,acompanyandanyotherbodyofpersons;

(e) theterm"company"meansanybodycorporateoranyentitywhichistreatedasabody corporatefortaxpurposes; (f) theterms"enterpriseofaContractingState"and"enterpriseoftheotherContractingState" meanrespectivelyanenterprisecarriedonbyaresidentofaContractingStateandanenterprisecarried onbyaresidentoftheotherContractingState;

(g) theterm"internationaltraffic"meansanytransportbyashiporaircraftoperatedbyan enterpriseofaContractingState,exceptwhentheshiporaircraftisoperatedsolelybetweenplacesin theotherContractingState; (h) (i) (ii) (i) (i) theterm"national"means: theterm"competentauthority"means:

inLatvia,theMinistryofFinanceoritsauthorisedrepresentative; inGeorgia,theMinistryofFinanceoritsauthorisedrepresentative;

anyindividualpossessingthenationalityofaContractingState;

(ii) anylegalperson,partnershiporassociationderivingitsstatusassuchfromthelawsinforceina ContractingState. 2.AsregardstheapplicationoftheConventionatanytimebyaContractingState,anytermnotdefined thereinshall,unlessthecontextotherwiserequires,havethemeaningthatithasatthattimeunderthe lawofthatStateforthepurposesofthetaxestowhichtheConventionapplies,anymeaningunderthe applicabletaxlawsofthatStateprevailingoverameaninggiventothetermunderotherlawsofthat State. Article4 Resident 1.ForthepurposesofthisConvention,theterm"residentofaContractingState"meansanyperson who,underthelawsofthatState,isliabletotaxthereinbyreasonofhisdomicile,residence,placeof management,placeofincorporationoranyothercriterionofasimilarnature,andalsoincludesthat Stateandanypoliticalsubdivisionorlocalauthoritythereof.Thisterm,however,doesnotincludeany personwhoisliabletotaxinthatStateinrespectonlyofincomefromsourcesinthatStateorcapital situatedtherein. 2.Wherebyreasonoftheprovisionsofparagraph1anindividualisaresidentofbothContracting States,thenhisstatusshallbedeterminedasfollows:

(a) heshallbedeemedtobearesidentonlyoftheStateinwhichhehasapermanenthome availabletohim;ifhehasapermanenthomeavailabletohiminbothStates,heshallbedeemedtobea residentonlyoftheStatewithwhichhispersonalandeconomicrelationsarecloser(centreofvital interests); (b) iftheStateinwhichhehashiscentreofvitalinterestscannotbedetermined,orifhehasnota permanenthomeavailabletohimineitherState,heshallbedeemedtobearesidentonlyoftheState inwhichhehasanhabitualabode; (c) ifhehasanhabitualabodeinbothStatesorinneitherofthem,heshallbedeemedtobea residentonlyoftheStateofwhichheisanational; (d) ifheisanationalofbothStatesorofneitherofthem,thecompetentauthoritiesofthe ContractingStatesshallsettlethequestionbymutualagreement. 3.Wherebyreasonoftheprovisionsofparagraph1apersonotherthananindividualisaresidentof bothContractingStates,thecompetentauthoritiesoftheContractingStatesshallendeavourtosettle thequestionbymutualagreement.Untilsuchagreementhasnotbeenreached,forthepurposesofthe Convention,thepersonshallnotbeentitledtoclaimanybenefitsprovidedbythisConvention. Article5 Permanentestablishment 1.ForthepurposesofthisConvention,theterm"permanentestablishment"meansafixedplaceof businessthroughwhichthebusinessofanenterpriseiswhollyorpartlycarriedon. 2.Theterm"permanentestablishment"includesespecially: (a) (b) (c) (d) (e) (f) aplaceofmanagement; abranch; anoffice; afactory; aworkshop,and amine,anoilorgaswell,aquarryoranyotherplaceofextractionofnaturalresources.

 3.Abuildingsiteorconstructionorinstallationprojectconstitutesapermanentestablishmentonlyifit lastsmorethansixmonths. 4.NotwithstandingtheprecedingprovisionsofthisArticle,theterm"permanentestablishment"shallbe deemednottoinclude: (a) theuseoffacilitiessolelyforthepurposeofstorage,displayordeliveryofgoodsormerchandise belongingtotheenterprise; (b) themaintenanceofastockofgoodsormerchandisebelongingtotheenterprisesolelyforthe purposeofstorage,displayordelivery; (c) themaintenanceofastockofgoodsormerchandisebelongingtotheenterprisesolelyforthe purposeofprocessingbyanotherenterprise; (d) themaintenanceofafixedplaceofbusinesssolelyforthepurposeofpurchasinggoodsor merchandiseorofcollectinginformation,fortheenterprise; (e) themaintenanceofafixedplaceofbusinesssolelyforthepurposeofcarryingon,forthe enterprise,anyotheractivityofapreparatoryorauxiliarycharacter; (f) themaintenanceofafixedplaceofbusinesssolelyforanycombinationofactivitiesmentioned insubparagraphs(a)to(e),providedthattheoverallactivityofthefixedplaceofbusinessresulting fromthiscombinationisofapreparatoryorauxiliarycharacter. 5.Notwithstandingtheprovisionsofparagraphs1and2,whereapersonotherthananagentofan independentstatustowhomparagraph6appliesisactingonbehalfofanenterpriseandhas,and habituallyexercises,inaContractingStateanauthoritytoconcludecontractsinthenameofthe enterprise,thatenterpriseshallbedeemedtohaveapermanentestablishmentinthatStateinrespect ofanyactivitieswhichthatpersonundertakesfortheenterprise,unlesstheactivitiesofsuchpersonare limitedtothosementionedinparagraph4which,ifexercisedthroughafixedplaceofbusiness,would notmakethisfixedplaceofbusinessapermanentestablishmentundertheprovisionsofthat paragraph. 6.AnenterpriseshallnotbedeemedtohaveapermanentestablishmentinaContractingStatemerely becauseitcarriesonbusinessinthatStatethroughabroker,generalcommissionagentoranyother

agentofanindependentstatus,providedthatsuchpersonsareactingintheordinarycourseoftheir business. 7.ThefactthatacompanywhichisaresidentofaContractingStatecontrolsoriscontrolledbya companywhichisaresidentoftheotherContractingState,orwhichcarriesonbusinessinthatother State(whetherthroughapermanentestablishmentorotherwise),shallnotofitselfconstituteeither companyapermanentestablishmentoftheother. Article6 Incomefromimmovableproperty 1.IncomederivedbyaresidentofaContractingStatefromimmovableproperty(includingincomefrom agricultureorforestry)situatedintheotherContractingStatemaybetaxedinthatotherState. 2.Theterm"immovableproperty"shallhavethemeaningwhichithasunderthelawoftheContracting Stateinwhichthepropertyinquestionissituated.Thetermshallinanycaseincludepropertyaccessory toimmovableproperty,livestockandequipmentusedinagricultureandforestry,rightstowhichthe provisionsofgenerallawrespectinglandedpropertyapply,anyoptionorsimilarrighttoacquire immovableproperty,usufructofimmovablepropertyandrightstovariableorfixedpaymentsas considerationfortheworkingof,ortherighttowork,mineraldeposits,sourcesandothernatural resources.Shipsandaircraftshallnotberegardedasimmovableproperty. 3.Theprovisionsofparagraph1shallapplytoincomederivedfromthedirectuse,letting,oruseinany otherformofimmovableproperty,aswellasincomefromthealienationofimmovableproperty. 4.Wheretheownershipofsharesorothercorporaterightsinacompanyentitlestheownerofsuch sharesorcorporaterightstotheenjoymentofimmovablepropertyheldbythecompany,theincome fromthedirectuse,letting,oruseinanyotherformofsuchrighttoenjoymentmaybetaxedinthe ContractingStateinwhichtheimmovablepropertyissituated. 5.Theprovisionsofparagraphs1,3and4shallalsoapplytotheincomefromimmovablepropertyofan enterpriseandtoincomefromimmovablepropertyusedfortheperformanceofindependentpersonal services. Article7

Businessprofits 1.TheprofitsofanenterpriseofaContractingStateshallbetaxableonlyinthatStateunlessthe enterprisecarriesonbusinessintheotherContractingStatethroughapermanentestablishment situatedtherein.Iftheenterprisecarriesonbusinessasaforesaid,theprofitsoftheenterprisemaybe taxedintheotherStatebutonlysomuchofthemasisattributabletothatpermanentestablishment. 2.Subjecttotheprovisionsofparagraph3,whereanenterpriseofaContractingStatecarrieson businessintheotherContractingStatethroughapermanentestablishmentsituatedtherein,thereshall ineachContractingStatebeattributedtothatpermanentestablishmenttheprofitswhichitmightbe expectedtomakeifitwereadistinctandseparateenterpriseengagedinthesameorsimilaractivities underthesameorsimilarconditionsanddealingwhollyindependentlywiththeenterpriseofwhichitis apermanentestablishment. 3.IndeterminingtheprofitsofapermanentestablishmentinaContractingState,thereshallbeallowed asdeductionsexpenseswhichareincurredforthepurposesofthepermanentestablishment,including executiveandgeneraladministrativeexpensessoincurred,whetherintheStateinwhichthe permanentestablishmentissituatedorelsewhere. 4.Noprofitsshallbeattributedtoapermanentestablishmentbyreasonofthemerepurchasebythat permanentestablishmentofgoodsormerchandisefortheenterprise. 5.Forthepurposesoftheprecedingparagraphs,theprofitstobeattributedtothepermanent establishmentshallbedeterminedbythesamemethodyearbyyearunlessthereisgoodandsufficient reasontothecontrary. 6.WhereprofitsincludeitemsofincomewhicharedealtwithseparatelyinotherArticlesofthis Convention,thentheprovisionsofthoseArticlesshallnotbeaffectedbytheprovisionsofthisArticle. Article8 Shippingandairtransport 1.Profitsfromtheoperationofshipsoraircraftininternationaltrafficshallbetaxableonlyinthe ContractingStateinwhichtheplaceofeffectivemanagementoftheenterpriseissituated.

2.Theprovisionsofparagraph1shallalsoapplytoprofitsfromtheparticipationinapool,ajoint businessoraninternationaloperatingagency. Article9 Associatedenterprises 1.Where

(a) anenterpriseofaContractingStateparticipatesdirectlyorindirectlyinthemanagement, controlorcapitalofanenterpriseoftheotherContractingState;or (b) thesamepersonsparticipatedirectlyorindirectlyinthemanagement,controlorcapitalofan enterpriseofaContractingStateandanenterpriseoftheotherContractingState, andineithercaseconditionsaremadeorimposedbetweenthetwoenterprisesintheircommercialor financialrelationswhichdifferfromthosewhichwouldbemadebetweenindependententerprises, thenanyprofitswhichwould,butforthoseconditions,haveaccruedtooneoftheenterprises,but,by reasonofthoseconditions,havenotsoaccrued,maybeincludedintheprofitsofthatenterpriseand taxedaccordingly. 2.WhereaContractingStateincludesintheprofitsofanenterpriseofthatStateandtaxesaccordingly profitsonwhichanenterpriseoftheotherContractingStatehasbeenchargedtotaxinthatother Stateandtheprofitssoincludedareprofitswhichwouldhaveaccruedtotheenterpriseofthefirst mentionedStateiftheconditionsmadebetweenthetwoenterpriseshadbeenthosewhichwouldhave beenmadebetweenindependententerprises,thenthatotherStateshallmakeanappropriate adjustmenttotheamountofthetaxchargedthereinonthoseprofits.Indeterminingsuchadjustment, dueregardshallbehadtotheotherprovisionsofthisConventionandthecompetentauthoritiesofthe ContractingStatesshallifnecessaryconsulteachother. Article10 Dividends 1.DividendspaidbyacompanywhichisaresidentofaContractingStatetoaresidentoftheother ContractingStatemaybetaxedinthatotherState. 2.However,suchdividendsmayalsobetaxedintheContractingStateofwhichthecompanypayingthe dividendsisaresidentandaccordingtothelawsofthatState,butifthebeneficialownerofthe dividendsisaresidentoftheotherContractingState,thetaxsochargedshallnotexceed:

(a) 5percentofthegrossamountofthedividendsifthebeneficialownerisacompany(otherthan apartnership)whichholdsdirectlyatleast25percentofthecapitalofthecompanypayingthe dividendsandthevalueofthisinvestmentisnotlessthanseventyfivethousandUnitedStatesdollars (75000USD); (b) 3.Theterm"dividends"asusedinthisArticlemeansincomefromsharesorotherrights,notbeingdebt claims,participatinginprofits,aswellasincomefromotherrightswhichissubjectedtothesame taxationtreatmentasincomefromsharesbythelawsoftheStateofwhichthecompanymakingthe distributionisaresident. 4.Theprovisionsofparagraphs1and2shallnotapplyifthebeneficialownerofthedividends,beinga residentofaContractingState,carriesonbusinessintheotherContractingStateofwhichthecompany payingthedividendsisaresident,throughapermanentestablishmentsituatedtherein,orperformsin thatotherStateindependentpersonalservicesfromafixedbasesituatedtherein,andtheholdingin respectofwhichthedividendsarepaidiseffectivelyconnectedwithsuchpermanentestablishmentor fixedbase.InsuchcasetheprovisionsofArticle7orArticle14,asthecasemaybe,shallapply. 5.WhereacompanywhichisaresidentofaContractingStatederivesprofitsorincomefromtheother ContractingState,thatotherStatemaynotimposeanytaxonthedividendspaidbythecompany, exceptinsofarassuchdividendsarepaidtoaresidentofthatotherStateorinsofarastheholdingin respectofwhichthedividendsarepaidiseffectivelyconnectedwithapermanentestablishmentora fixedbasesituatedinthatotherState,norsubjectthecompany'sundistributedprofitstoataxonthe company'sundistributedprofits,evenifthedividendspaidortheundistributedprofitsconsistwhollyor partlyofprofitsorincomearisinginsuchotherState. Article11 Interest 1.InterestarisinginaContractingStateandpaidtoaresidentoftheotherContractingStatemaybe taxedinthatotherState. 10percentofthegrossamountofthedividendsinallothercases.

2.However,suchinterestmayalsobetaxedintheContractingStateinwhichitarisesandaccordingto thelawsofthatState,butifthebeneficialowneroftheinterestisaresidentoftheotherContracting State,thetaxsochargedshallnotexceed10percentofthegrossamountoftheinterest. 3.Notwithstandingtheprovisionsofparagraph2interestarisinginaContractingState,derivedand beneficiallyownedbytheGovernmentoftheotherContractingState,includingitspoliticalsubdivisions andlocalauthorities,theCentralBankoranyfinancialinstitutionwhollyownedbythatGovernment,or interestderivedonloansguaranteedbythatGovernmentshallbeexemptfromtaxinthefirst mentionedState. 4.Theterm"interest"asusedinthisArticlemeansincomefromdebtclaimsofeverykind,whetheror notsecuredbymortgageandwhetherornotcarryingarighttoparticipateinthedebtor'sprofits,andin particular,incomefromgovernmentsecuritiesandincomefrombondsordebentures,including premiumsandprizesattachingtosuchsecurities,bondsordebentures.Theterm"interest"shallnot includeanyincomewhichistreatedasadividendundertheprovisionsofArticle10.Penaltychargesfor latepaymentshallnotberegardedasinterestforthepurposeofthisArticle. 5.Theprovisionsofparagraphs1,2and3shallnotapplyifthebeneficialowneroftheinterest,beinga residentofaContractingState,carriesonbusinessintheotherContractingStateinwhichtheinterest arises,throughapermanentestablishmentsituatedtherein,orperformsinthatotherState independentpersonalservicesfromafixedbasesituatedtherein,andthedebtclaiminrespectofwhich theinterestispaidiseffectivelyconnectedwithsuchpermanentestablishmentorfixedbase.Insuch casetheprovisionsofArticle7orArticle14,asthecasemaybe,shallapply. 6.InterestshallbedeemedtoariseinaContractingStatewhenthepayerisaresidentofthatState. Where,however,thepersonpayingtheinterest,whetherheisaresidentofaContractingStateornot, hasinaContractingStateapermanentestablishmentorafixedbaseinconnectionwithwhichthe indebtednessonwhichtheinterestispaidwasincurred,andsuchinterestisbornebysuchpermanent establishmentorfixedbase,thensuchinterestshallbedeemedtoariseintheStateinwhichthe permanentestablishmentorfixedbaseissituated. 7.Where,byreasonofaspecialrelationshipbetweenthepayerandthebeneficialownerorbetween bothofthemandsomeotherperson,theamountoftheinterest,havingregardtothedebtclaimfor whichitispaid,exceedstheamountwhichwouldhavebeenagreeduponbythepayerandthe beneficialownerintheabsenceofsuchrelationship,theprovisionsofthisArticleshallapplyonlytothe

lastmentionedamount.Insuchcase,theexcesspartofthepaymentsshallremaintaxableaccordingto thelawsofeachContractingState,dueregardbeinghadtotheotherprovisionsofthisConvention. Article12 Royalties 1.RoyaltiesarisinginaContractingStateandpaidtoaresidentoftheotherContractingStatemaybe taxedinthatotherState. 2.However,suchroyaltiesmayalsobetaxedintheContractingStateinwhichtheyariseandaccording tothelawsofthatState,butifthebeneficialowneroftheroyaltiesisaresidentoftheotherContracting State,thetaxsochargedshallnotexceed10percentofthegrossamountoftheroyalties. 3.Theterm"royalties"asusedinthisArticlemeanspaymentsofanykindreceivedasaconsiderationfor theuseof,ortherighttouse,anycopyrightofliterary,artisticorscientificworkincluding cinematographfilmsandfilmsortapesforradioortelevisionbroadcasting,anypatent,trademark, designormodel,plan,secretformulaorprocess,orfortheuseof,ortherighttouse,industrial, commercialorscientificequipment,orforinformationconcerningindustrial,commercialorscientific experience. 4.Theprovisionsofparagraphs1and2shallnotapplyifthebeneficialowneroftheroyalties,beinga residentofaContractingState,carriesonbusinessintheotherContractingStateinwhichtheroyalties arise,throughapermanentestablishmentsituatedtherein,orperformsinthatotherStateindependent personalservicesfromafixedbasesituatedtherein,andtherightorpropertyinrespectofwhichthe royaltiesarepaidiseffectivelyconnectedwithsuchpermanentestablishmentorfixedbase.Insuchcase theprovisionsofArticle7orArticle14,asthecasemaybe,shallapply. 5.RoyaltiesshallbedeemedtoariseinaContractingStatewhenthepayerisaresidentofthatState. Where,however,thepersonpayingtheroyalties,whetherheisaresidentofaContractingStateornot, hasinaContractingStateapermanentestablishmentorafixedbaseinconnectionwithwhichthe liabilitytopaytheroyaltieswasincurred,andsuchroyaltiesarebornebysuchpermanentestablishment orfixedbase,thensuchroyaltiesshallbedeemedtoariseintheStateinwhichthepermanent establishmentorfixedbaseissituated.

6.Where,byreasonofaspecialrelationshipbetweenthepayerandthebeneficialownerorbetween bothofthemandsomeotherperson,theamountoftheroyalties,havingregardtotheuse,rightor informationforwhichtheyarepaid,exceedstheamountwhichwouldhavebeenagreeduponbythe payerandthebeneficialownerintheabsenceofsuchrelationship,theprovisionsofthisArticleshall applyonlytothelastmentionedamount.Insuchcase,theexcesspartofthepaymentsshallremain taxableaccordingtothelawsofeachContractingState,dueregardbeinghadtotheotherprovisionsof thisConvention. Article13 Capitalgains 1.GainsderivedbyaresidentofaContractingStatefromthealienationofimmovablepropertyreferred toinArticle6andsituatedintheotherContractingStateorsharesinacompanytheassetsofwhich consistmainlyofsuchpropertymaybetaxedinthatotherState. 2.Gainsfromthealienationofmovablepropertyformingpartofthebusinesspropertyofapermanent establishmentwhichanenterpriseofaContractingStatehasintheotherContractingStateorof movablepropertypertainingtoafixedbaseavailabletoaresidentofaContractingStateintheother ContractingStateforthepurposeofperformingindependentpersonalservices,includingsuchgains fromthealienationofsuchapermanentestablishment(aloneorwiththewholeenterprise)orofsuch fixedbase,maybetaxedinthatotherState. 3.Gainsfromthealienationofshipsoraircraftoperatedininternationaltrafficormovableproperty pertainingtotheoperationofsuchshipsoraircraft,shallbetaxableonlyintheContractingStatein whichtheplaceofeffectivemanagementoftheenterpriseissituated. 4.Gainsfromthealienationofanypropertyotherthanthatreferredtoinparagraphs1,2and3,shallbe taxableonlyintheContractingStateofwhichthealienatorisaresident. Article14 Independentpersonalservices 1.IncomederivedbyanindividualwhoisaresidentofaContractingStateinrespectofprofessional servicesorotheractivitiesofanindependentcharactershallbetaxableonlyinthatStateunlesshehasa fixedbaseregularlyavailabletohimintheotherContractingStateforthepurposeofperforminghis activities.Ifhehassuchafixedbase,theincomemaybetaxedintheotherStatebutonlysomuchofit asisattributabletothatfixedbase.Forthispurpose,whereanindividualwhoisaresidentofa ContractingStatestaysintheotherContractingStateforaperiodorperiodsexceedingintheaggregate

183daysinanytwelvemonthperiodcommencingorendinginthefiscalyearconcerned,heshallbe deemedtohaveafixedbaseregularlyavailabletohiminthatotherStateandtheincomethatisderived fromhisactivitiesreferredtoabovethatareperformedinthatotherStateshallbeattributabletothat fixedbase. 2.Theterm"professionalservices"includesespeciallyindependentscientific,literary,artistic, educationalorteachingactivitiesaswellastheindependentactivitiesofphysicians,lawyers,engineers, architects,dentistsandaccountants. Article15 Dependentpersonalservices 1.SubjecttotheprovisionsofArticles16,18and19,salaries,wagesandothersimilarremuneration derivedbyaresidentofaContractingStateinrespectofanemploymentshallbetaxableonlyinthat StateunlesstheemploymentisexercisedintheotherContractingState.Iftheemploymentisso exercised,suchremunerationasisderivedtherefrommaybetaxedinthatotherState. 2.Notwithstandingtheprovisionsofparagraph1,remunerationderivedbyaresidentofaContracting StateinrespectofanemploymentexercisedintheotherContractingStateshallbetaxableonlyinthe firstmentionedStateif: (a) therecipientispresentintheotherStateforaperiodorperiodsnotexceedingintheaggregate 183daysinanytwelvemonthperiodcommencingorendinginthefiscalyearconcerned;and (b) theremunerationispaidby,oronbehalfof,anemployerwhoisnotaresidentoftheother State;and (c) theremunerationisnotbornebyapermanentestablishmentorafixedbasewhichthe employerhasintheotherState. 3.NotwithstandingtheprecedingprovisionsofthisArticle,remunerationderivedinrespectofan employmentexercisedaboardashiporaircraftoperatedininternationaltraffic,maybetaxedinthe ContractingStateinwhichtheplaceofeffectivemanagementoftheenterpriseissituated. Article16 Directors'fees

Directors'feesandothersimilarremunerationderivedbyaresidentofaContractingStateinhis capacityasamemberoftheboardofdirectorsoranyothersimilarorganofacompanywhichisa residentoftheotherContractingStatemaybetaxedinthatotherState. Article17 Artistesandsportsmen 1.NotwithstandingtheprovisionsofArticles14and15,incomederivedbyaresidentofaContracting Stateasanentertainer,suchasatheatre,motionpicture,radioortelevisionartiste,oramusician,oras asportsman,fromhispersonalactivitiesassuchexercisedintheotherContractingState,maybetaxed inthatotherState. 2.Whereincomeinrespectofpersonalactivitiesexercisedbyanentertainerorasportsmaninhis capacityassuchaccruesnottotheentertainerorsportsmanhimselfbuttoanotherperson,thatincome may,notwithstandingtheprovisionsofArticles7,14and15,betaxedintheContractingStateinwhich theactivitiesoftheentertainerorsportsmanareexercised. Article18 Pensions Subjecttotheprovisionsofparagraph2ofArticle19,pensionsandothersimilarremunerationpaidtoa residentofaContractingStateinconsiderationofpastemploymentshallbetaxableonlyinthatState. Article19 Governmentservice 1. (a)Salaries,wagesandothersimilarremuneration,otherthanapension,paidbyaContracting Stateorapoliticalsubdivisionoralocalauthoritythereoftoanindividualinrespectofservicesrendered tothatStateorsubdivisionorauthorityshallbetaxableonlyinthatState. (b) However,suchsalaries,wagesandothersimilarremunerationshallbetaxableonlyintheother ContractingStateiftheservicesarerenderedinthatStateandtheindividualisaresidentofthatState who: (i) (ii) isanationalofthatState;or didnotbecomearesidentofthatStatesolelyforthepurposeofrenderingtheservices.

2. (a)Anypensionpaidby,oroutoffundscreatedby,aContractingStateorapoliticalsubdivision oralocalauthoritythereoftoanindividualinrespectofservicesrenderedtothatStateorsubdivisionor authorityshallbetaxableonlyinthatState. (b) However,suchpensionshallbetaxableonlyintheotherContractingStateiftheindividualisa residentof,andanationalof,thatState. 3.TheprovisionsofArticles15,16,17,and18shallapplytosalaries,wagesandothersimilar remuneration,andtopensions,inrespectofservicesrenderedinconnectionwithabusinesscarriedon byaContractingStateorapoliticalsubdivisionoralocalauthoritythereof. Article20 Students Paymentswhichastudent,anapprenticeoratraineewhoisorwasimmediatelybeforevisitinga ContractingStatearesidentoftheotherContractingStateandwhoispresentinthefirstmentioned Statesolelyforthepurposeofhiseducationortrainingreceivesforthepurposeofhismaintenance, educationortrainingshallnotbetaxedinthatState,providedthatsuchpaymentsarisefromsources outsidethatState. Article21 Offshoreactivities 1.TheprovisionsofthisArticleshallapplynotwithstandingtheprovisionsofArticles4to20ofthis Convention. 2.ForthepurposesofthisArticle,theterm"offshoreactivities"meansactivitiescarriedonoffshoreina ContractingStateinconnectionwiththeexplorationorexploitationoftheseabedandsubsoiland theirnaturalresourcessituatedinthatState. 3.ApersonwhoisaresidentofaContractingStateandcarriesonoffshoreactivitiesintheother ContractingStateshall,subjecttoparagraph4,bedeemedtobecarryingonbusinessinthatotherState throughapermanentestablishmentorafixedbasesituatedtherein.

4.Theprovisionsofparagraph3shallnotapplywheretheoffshoreactivitiesarecarriedonforaperiod orperiodsnotexceedingintheaggregate30daysinanytwelvemonthperiod.Forthepurposesofthis paragraph: (a) offshoreactivitiescarriedonbyapersonwhoisassociatedwithanotherpersonshallbe deemedtobecarriedonbytheotherpersoniftheactivitiesinquestionaresubstantiallythesameas thosecarriedonbythefirstmentionedperson,excepttotheextentthatthoseactivitiesarecarriedon atthesametimeasitsownactivities; (b) apersonshallbedeemedtobeassociatedwithanotherpersonifoneiscontrolleddirectlyor indirectlybytheother,orbotharecontrolleddirectlyorindirectlybyathirdpersonorthirdpersons. 5.Salaries,wagesandothersimilarremunerationderivedbyaresidentofaContractingStateinrespect ofanemploymentconnectedwithoffshoreactivitiesintheotherContractingStatemay,totheextent thatthedutiesareperformedoffshoreinthatotherState,betaxedinthatotherState.However,such remunerationshallbetaxableonlyinthefirstmentionedStateiftheemploymentiscarriedonforan employerwhoisnotaresidentoftheotherStateandforaperiodorperiodsnotexceedinginthe aggregate30daysinanytwelvemonthperiod. 6.GainsderivedbyaresidentofaContractingStatefromthealienationof: (a) explorationorexploitationrights;or

(b) propertysituatedintheotherContractingStatewhichisusedinconnectionwiththeoffshore activitiescarriedoninthatotherState;or (c) sharesderivingtheirvalueorthegreaterpartoftheirvaluedirectlyorindirectlyfromsuch rightsorsuchpropertyorfromsuchrightsandsuchpropertytakentogether; maybetaxedinthatotherState. Inthisparagraphtheterm"explorationorexploitationrights"meansrightstoassetstobeproducedby offshoreactivitiescarriedonintheotherContractingState,ortointerestsinortothebenefitofsuch assets. Article22

Otherincome 1.ItemsofincomeofaresidentofaContractingState,whereverarising,notdealtwithintheforegoing ArticlesofthisConventionshallbetaxableonlyinthatState. 2.Theprovisionsofparagraph1shallnotapplytoincome,otherthanincomefromimmovableproperty asdefinedinparagraph2ofArticle6,iftherecipientofsuchincome,beingaresidentofaContracting State,carriesonbusinessintheotherContractingStatethroughapermanentestablishmentsituated therein,orperformsinthatotherStateindependentpersonalservicesfromafixedbasesituated therein,andtherightorpropertyinrespectofwhichtheincomeispaidiseffectivelyconnectedwith suchpermanentestablishmentorfixedbase.InsuchcasetheprovisionsofArticle7orArticle14,asthe casemaybe,shallapply. Article23 Capital 1.CapitalrepresentedbyimmovablepropertyreferredtoinArticle6,ownedbyaresidentofa ContractingStateandsituatedintheotherContractingState,maybetaxedinthatotherState. 2.Capitalrepresentedbymovablepropertyformingpartofthebusinesspropertyofapermanent establishmentwhichanenterpriseofaContractingStatehasintheotherContractingStateorby movablepropertypertainingtoafixedbaseavailabletoaresidentofaContractingStateintheother ContractingStateforthepurposeofperformingindependentpersonalservices,maybetaxedinthat otherState. 3.Capitalrepresentedbyshipsandaircraftoperatedininternationaltrafficandbymovableproperty pertainingtotheoperationofsuchshipsoraircraft,shallbetaxableonlyintheContractingStatein whichtheplaceofeffectivemanagementoftheenterpriseissituated. 4.AllotherelementsofcapitalofaresidentofaContractingStateshallbetaxableonlyinthatState. Article24 Eliminationofdoubletaxation 1.InthecaseofaresidentofLatvia,doubletaxationshallbeavoidedasfollows:

(a) WherearesidentofLatviaderivesincomeorownscapitalwhich,inaccordancewiththis Convention,maybetaxedinGeorgia,unlessamorefavourabletreatmentisprovidedinitsdomestic law,Latviashallallow: (i) asadeductionfromthetaxontheincomeofthatresident,anamountequaltotheincometax paidthereoninGeorgia; (ii) asadeductionfromthetaxonthecapitalofthatresident,anamountequaltothecapitaltax paidthereoninGeorgia. Suchdeductionineithercaseshallnot,however,exceedthatpartoftheincometaxorcapitaltaxin Latvia,ascomputedbeforethedeductionisgiven,whichisattributable,asthecasemaybe,tothe incomeorthecapitalwhichmaybetaxedinGeorgia. (b) Forthepurposesofsubparagraph(a),whereacompanythatisaresidentofLatviareceivesa dividendfromacompanythatisaresidentofGeorgiainwhichitownsatleast10percentofitsshares havingfullvotingrights,thetaxpaidinGeorgiashallincludenotonlythetaxpaidonthedividend,but alsotheappropriateportionofthetaxpaidontheunderlyingprofitsofthecompanyoutofwhichthe dividendwaspaid. 2.InthecaseofaresidentofGeorgia,doubletaxationshallbeavoidedasfollows:

(a) WherearesidentofGeorgiaderivesincomeorownscapitalwhich,inaccordancewiththe provisionsofthisConvention,maybetaxedinLatvia,Georgiashallallow: (i) asadeductionfromthetaxontheincomeofthatresident,anamountequaltotheincometax paidinLatvia; (ii) asadeductionfromthetaxonthecapitalofthatresident,anamountequaltothecapitaltax paidinLatvia. Suchdeductionineithercaseshallnot,however,exceedthatpartoftheincometaxorcapitaltaxin Georgia,ascomputedbeforethedeductionisgiven,whichisattributable,asthecasemaybe,tothe incomeorthecapitalwhichmaybetaxedinLatvia.

(b) WhereinaccordancewithanyprovisionoftheConventionincomederivedorcapitalownedby aresidentofGeorgiaisexemptfromtaxinGeorgia,Georgiamaynevertheless,incalculatingthe amountoftaxontheremainingincomeorcapitalofsuchresident,takeintoaccounttheexempted incomeorcapital. Article25 Nondiscrimination 1.NationalsofaContractingStateshallnotbesubjectedintheotherContractingStatetoanytaxationor anyrequirementconnectedtherewith,whichisotherormoreburdensomethanthetaxationand connectedrequirementstowhichnationalsofthatotherStateinthesamecircumstances,inparticular withrespecttoresidence,areormaybesubjected.Thisprovisionshall,notwithstandingtheprovisions ofArticle1,alsoapplytopersonswhoarenotresidentsofoneorbothoftheContractingStates. 2.StatelesspersonswhoareresidentsofaContractingStateshallnotbesubjectedineitherContracting Statetoanytaxationoranyrequirementconnectedtherewith,whichisotherormoreburdensomethan thetaxationandconnectedrequirementstowhichnationalsoftheStateconcernedinthesame circumstances,inparticularwithrespecttoresidence,areormaybesubjected. 3.ThetaxationonapermanentestablishmentwhichanenterpriseofaContractingStatehasinthe otherContractingStateshallnotbelessfavourablyleviedinthatotherStatethanthetaxationleviedon enterprisesofthatotherStatecarryingonthesameactivities.Thisprovisionshallnotbeconstruedas obligingaContractingStatetogranttoresidentsoftheotherContractingStateanypersonalallowances, reliefsandreductionsfortaxationpurposesonaccountofcivilstatusorfamilyresponsibilitieswhichit grantstoitsownresidents. 4.Exceptwheretheprovisionsofparagraph1ofArticle9,paragraph7ofArticle11,orparagraph6of Article12,apply,interest,royaltiesandotherdisbursementspaidbyanenterpriseofaContractingState toaresidentoftheotherContractingStateshall,forthepurposeofdeterminingthetaxableprofitsof suchenterprise,bedeductibleunderthesameconditionsasiftheyhadbeenpaidtoaresidentofthe firstmentionedState.Similarly,anydebtsofanenterpriseofaContractingStatetoaresidentofthe otherContractingStateshall,forthepurposeofdeterminingthetaxablecapitalofsuchenterprise,be deductibleunderthesameconditionsasiftheyhadbeencontractedtoaresidentofthefirst mentionedState.

5.EnterprisesofaContractingState,thecapitalofwhichiswhollyorpartlyownedorcontrolled,directly orindirectly,byoneormoreresidentsoftheotherContractingState,shallnotbesubjectedinthefirst mentionedStatetoanytaxationoranyrequirementconnectedtherewithwhichisotherormore burdensomethanthetaxationandconnectedrequirementstowhichothersimilarenterprisesofthe firstmentionedStateareormaybesubjected. 6.TheprovisionsofthisArticleshall,notwithstandingtheprovisionsofArticle2,applytotaxesofevery kindanddescription. Article26 Mutualagreementprocedure 1.WhereapersonconsidersthattheactionsofoneorbothoftheContractingStatesresultorwillresult forhimintaxationnotinaccordancewiththeprovisionsofthisConvention,hemay,irrespectiveofthe remediesprovidedbythedomesticlawofthoseStates,presenthiscasetothecompetentauthorityof theContractingStateofwhichheisaresidentor,ifhiscasecomesunderparagraph1ofArticle25,to thatoftheContractingStateofwhichheisanational.Thecasemustbepresentedwithinthreeyears fromthefirstnotificationoftheactionresultingintaxationnotinaccordancewiththeprovisionsofthe Convention. 2.Thecompetentauthorityshallendeavour,iftheobjectionappearstoittobejustifiedandifitisnot itselfabletoarriveatasatisfactorysolution,toresolvethecasebymutualagreementwiththe competentauthorityoftheotherContractingState,withaviewtotheavoidanceoftaxationwhichis notinaccordancewiththeConvention.Anyagreementreachedshallbeimplementednotwithstanding anytimelimitsinthedomesticlawoftheContractingStates. 3.ThecompetentauthoritiesoftheContractingStatesshallendeavourtoresolvebymutualagreement anydifficultiesordoubtsarisingastotheinterpretationorapplicationoftheConvention.Theymayalso consulttogetherfortheeliminationofdoubletaxationincasesnotprovidedforintheConvention. 4.ThecompetentauthoritiesoftheContractingStatesmaycommunicatewitheachotherdirectly, includingthroughajointcommissionconsistingofthemselvesortheirrepresentatives,forthepurpose ofreachinganagreementinthesenseoftheprecedingparagraphs. Article27 Exchangeofinformation

1.ThecompetentauthoritiesoftheContractingStatesshallexchangesuchinformationasisnecessary forcarryingouttheprovisionsofthisConventionorofthedomesticlawsoftheContractingStates concerningtaxescoveredbytheConventioninsofarasthetaxationthereunderisnotcontrarytothe Convention.TheexchangeofinformationisnotrestrictedbyArticle1.Anyinformationreceivedbya ContractingStateshallbetreatedassecretinthesamemannerasinformationobtainedunderthe domesticlawsofthatStateandshallbedisclosedonlytopersonsorauthorities(includingcourtsand administrativebodies)concernedwiththeassessmentorcollectionof,theenforcementorprosecution inrespectof,orthedeterminationofappealsinrelationto,thetaxescoveredbytheConvention.Such personsorauthoritiesshallusetheinformationonlyforsuchpurposes.Theymaydisclosethe informationinpubliccourtproceedingsorinjudicialdecisions. 2.Innocaseshalltheprovisionsofparagraph1beconstruedsoastoimposeonaContractingStatethe obligation: (a) tocarryoutadministrativemeasuresatvariancewiththelawsandadministrativepracticeof thatoroftheotherContractingState; (b) tosupplyinformationwhichisnotobtainableunderthelawsorinthenormalcourseofthe administrationofthatoroftheotherContractingState; (c) tosupplyinformationwhichwoulddiscloseanytrade,business,industrial,commercialor professionalsecretortradeprocess,orinformation,thedisclosureofwhichwouldbecontrarytopublic policy(ordrepublic). Article28 Membersofdiplomaticmissionsandconsularposts NothinginthisConventionshallaffectthefiscalprivilegesofmembersofdiplomaticmissionsor consularpostsunderthegeneralrulesofinternationallaworundertheprovisionsofspecial agreements. Article29 Entryintoforce 1.EachoftheContractingStatesshallnotifytheotherthroughdiplomaticchannelsofthecompletionof theproceduresrequiredbyitslawfortheentryintoforceofthisConvention.

2.ThisConventionshallenterintoforceonthefirstdayofthethirdmonthnextfollowingthereceiptof latternotificationfromtheContractingStatesindicatingthecompletionofthelegalprocedures necessaryfortheentryintoforceofthisConvention.ThisConventionshallhaveeffectinbothStates: (a) inrespectoftaxeswithheldatsource,onincomederivedonorafterthefirstdayofJanuaryin thecalendaryearnextfollowingtheyearinwhichtheConventionentersintoforce; (b) inrespectofothertaxesonincomeandtaxesoncapital,fortaxeschargeableforanyfiscalyear beginningonorafterthefirstdayofJanuaryinthecalendaryearnextfollowingtheyearinwhichthe Conventionentersintoforce. Article30 Termination ThisConventionshallremaininforceuntilterminatedbyaContractingState.EitheroftheContracting Statemayaftertheexpirationofaperiodoffiveyearsfromthedateofitsentryintoforce,terminate thisConvention,bygivingwrittennoticeofterminationtotheotherContractingStatethroughthe diplomaticchannelsatleastsixmonthsbeforetheexpirationofanycalendaryear.Insuchevent,the ConventionshallceasetohaveeffectinbothContractingStates: (a) inrespectoftaxeswithheldatsource,onincomederivedonorafterthefirstdayofJanuaryin thecalendaryearnextfollowingtheyearinwhichthenoticehasbeengiven; (b) inrespectofothertaxesonincomeandtaxesoncapital,fortaxeschargeableforanyfiscalyear beginningonorafterthefirstdayofJanuaryinthecalendaryearnextfollowingtheyearinwhichthe noticehasbeengiven. Inwitnesswhereof,theundersigned,dulyauthorisedthereto,havesignedthisConvention. Doneinduplicateat....this13thdayofOctober2004,intheLatvian,GeorgianandEnglishlanguages,all threetextsbeingequallyauthentic.InthecaseofdivergenceofinterpretationtheEnglishtextshall prevail. PROTOCOL AtthesigningoftheConventionbetweentheRepublicofLatviaandGeorgiafortheavoidanceof doubletaxationandthepreventionoffiscalevasionwithrespecttotaxesonincomeandoncapitalthe undersignedhaveagreeduponthefollowingprovisionswhichformanintegralpartoftheConvention:

 1.Withreferencetoparagraph1ofArticle2: ItisunderstoodthatinthecaseofGeorgiatheterm"politicalsubdivisions"meansterritorial administrativesubdivisions. 2.WithreferencetotheprovisionsoftheConvention: Wheretheterm"businessprofits"appearsitisunderstoodthatthistermalsoincludesprofitsfrom economicactivity. 3.Withreferencetosubparagraph(e)ofparagraph1ofArticle3: Itisunderstoodthattheterm"company",inthecaseofGeorgia,alsoincludesanenterpriseasdefined underitsdomesticlaw. 4.Withreferencetoparagraph3ofArticle7: ItisunderstoodthattheexpensestobeallowedasdeductionsinaContractingStateshallnotinclude theexpenseswhichwouldnotbedeductibleifapermanentestablishmentwereaseparateenterprise ofthatContractingState. 5.WithreferencetoArticle8,Article13,Article15,Article23: Itisunderstoodthattheprovisionsofparagraph1ofArticle8,paragraph3ofArticle13,paragraph3of Article15andparagraph3ofArticle23arenotapplicableuntilLatviahasnotintroducedinitsdomestic legislationtheplaceofeffectivemanagementasacriteriaforthedeterminationofresidence,butthe followingprovisionsareapplicableinstead: Article8,paragraph1 "ProfitsofanenterpriseofaContractingStatefromtheoperationofshipsoraircraftininternational trafficshallbetaxableonlyinthatState".

Article13,paragraph3 "GainsderivedbyanenterpriseofaContractingStateoperatingshipsoraircraftininternationaltraffic fromthealienationofshipsoraircraftoperatedininternationaltrafficormovablepropertypertaining totheoperationofsuchshipsoraircraft,shallbetaxableonlyinthatState". Article15,paragraph3 "NotwithstandingtheprecedingprovisionsofthisArticle,remunerationderivedinrespectofan employmentexercisedaboardashiporaircraftoperatedininternationaltrafficbyanenterpriseofa ContractingStatemaybetaxedinthatState". Article23,paragraph3 "Capitalrepresentedbyshipsandaircraftoperatedininternationaltrafficbyanenterpriseofa ContractingStateandbymovablepropertypertainingtotheoperationofsuchshipsandaircraft,shall betaxableonlyinthatState". 6.WithreferencetoArticle22: Notwithstandingtheprovisionsofparagraph1,incomeofaresidentofaContractingStateintheform ofwinningsfromgaming,arisingintheotherContractingState,mayalsobetaxedinthatotherState. 7.WithreferencetoArticle23: Itisunderstoodthattheterm"capital"forpurposesofArticle23meansmovableandimmovable property,andmayincludecash,stockorotherevidenceofownershiprights,bondsorotherevidences ofindebtedness,andpatents,trademarks,copyrightsorotherlikerightorproperty. Inwitnesswhereof,theundersigned,dulyauthorisedthereto,havesignedthisProtocol.

Doneinduplicateat....this13thdayofOctober2004,intheLatvian,GeorgianandEnglishlanguages,all threetextsbeingequallyauthentic.InthecaseofdivergenceofinterpretationtheEnglishtextshall prevail.