In witness whereof the undersigned, duly authorised thereto, have signed this Convention.

Done in two originals in Athens the 3rd day of September 1987 in the English language.

For the Government    For the Government

of the Hellenic Republic     of the Republic of Italy

ADDITIONAL PROTOCOL (1987)

to the Convention between the Government of the Hellenic Republic and the Government of the Republic of Italy for the avoidance of double taxation with respect to taxes on income and on capital and the prevention of fiscal evasion.

At the signing of the Convention concluded today between the Government of the Hellenic Republic and the Government of the Republic of Italy for the avoidance of double taxation with respect to taxes on income and on capital and the prevention of fiscal evasion the undersigned have agreed upon the following additional provisions which shall form an integral part of the said Convention.

It is understood that:

a) in connection with the provisions of Article 2, where a tax on capital is subsequently introduced in Italy the Convention shall also apply to such tax;

b) with reference to Article 5, paragraph 2, an installation or structure used for the exploration of natural resources shall be considered as a “permanent establishment” only if it exists for more than six months;

c) with reference to Article 7, paragraph 3, the expression “expenses which are incurred for the purposes of the permanent establishment” means the expenses directly connected with the activity of the permanent establishment;

d) with reference to Article 8, an enterprise of a Contracting State deriving profits from the operation of ships or aircraft in international traffic shall not be subject to any local income tax imposed in the other Contracting State;

e) notwithstanding the provisions of Article 10, paragraph 2, dividends paid by a company which is a resident of Greece to a resident of Italy may be taxed in Greece according to the laws of Greece and if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed 35 per cent of the gross amount of the dividends, as long as profits of a company resident of Greece are taxable only in the hands of shareholders;

f) the Hellenic tax on capital levied in accordance with the Convention shall be set off against any tax on capital subsequently introduced in Italy in the manner provided for in Article 24, paragraph 2;

g) with reference to paragraph 1 of Article 26, the expression “irrespective of the remedies provided by the domestic law” means that the mutual agreement procedure is not alternative to the national contentious proceedings which shall be, in any case, preventively, initiated, when the claim is related with an assessment of taxes not in accordance with this Convention;

h) the provisions of paragraph 3 of Article 29 shall not affect the competent authorities of the Contracting States from the carrying out, by mutual agreement, of other practices for the allowance of the reductions for taxation purposes provided for in this Convention:

i) the remunerations paid to an individual in respect of services rendered:

1) in the case of Italy, to the Italian State Railways (F.S.), to the Italian State Post undertaking (PP.TT.), to the Italian Foreign Trade Institution (I.C.E.), to the Italian Tourism body (E.N.I.T.) and to the Bank of Italy;

2) in the case of Greece, to the Hellenic Railways Organisation (OSE), to the Hellenic Post Office (ELTA), to  the Hellenic National Tourist Organisation (EOT), to the Organisation for the Promotion of Foreign Trade (OPE) and to the Bank of Greece; are covered by the provisions concerning governmental functions and, consequently, by paragraphs 1 and 2 of Article 19 of the Convention.

Done in two originals at Athens the 3rd day of September 1987 in the English language.

For the Government    For the Government

of the Hellenic Republic    of the Republic of Italy