
1 
This Order may be cited as the Double
Taxation Relief (Taxes on Income) (British Solomon Islands Protectorate) Order,
1950.
2 
It is hereby declared—
(a) that the arrangements specified in the
Arrangement set out in the Schedule
to this Order have been made with the Government of the British Solomon Islands
Protectorate with a view to affording relief from double taxation in relation
to income tax or profits tax and taxes of a similar character imposed by the
laws of the British Solomon Islands Protectorate; and
(b) that it is expedient that those arrangements
should have effect.
E. C. E. Leadbitter

SCHEDULE



ARRANGEMENT BETWEEN HIS MAJESTY'S GOVERNMENT AND THE GOVERNMENT OF THE BRITISH
SOLOMON ISLANDS PROTECTORATE FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE
PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

1 

(1) The taxes which are the subject of this
Arrangement are—
(a) In the United Kingdom:The income tax (including surtax) and the
profits tax (hereinafter referred to as “United
Kingdom tax”).
(b) In the British Solomon Islands Protectorate:
The normal tax and the surtax (hereinafter
referred to as “Protectorate tax”).

(2) This Arrangement shall also apply to
any other taxes of a substantially similar character imposed in the United
Kingdom or the British Solomon Islands Protectorate after this Arrangement
has come into force.
2 

(1) In this Arrangement, unless the context
otherwise requires—
(a) The term “United
Kingdom” means Great Britain and
Northern Ireland, excluding the Channel Islands and the Isle of Man.
(b) The term “the
Protectorate” means the British
Solomon Islands Protectorate.
(c) The terms 
“one of the territories” and 
“the other territory” mean 
the United Kingdom or the Protectorate, as the context requires.
(d) The term “tax”
 means United Kingdom tax or Protectorate
tax, as the context requires.
(e) The term “person”
 includes any body of persons, corporate
or not corporate.
(f) The term “company”
 includes any body of persons, corporate.

(g) The terms 
“resident of the United Kingdom” and “resident of the Protectorate” mean respectively any person who is resident in the United Kingdom for
the purposes of United Kingdom tax and not resident in the Protectorate for
the purposes of Protectorate tax and any person who is resident in the Protectorate
for the purposes of Protectorate tax and not resident in the United Kingdom
for the purposes of United Kingdom tax; and a company shall be
regarded as resident in the United Kingdom if its business is managed and
controlled in the United Kingdom and as resident in the Protectorate if its
business is managed and controlled in the Protectorate.
(h) The terms 
“resident of one of the territories” and “resident of the other territory” mean a person who is a resident of the United Kingdom or a person who
is a resident of the Protectorate, as the context requires.
(i) The terms 
“United Kingdom enterprise” and 
“Protectorate enterprise” mean 
respectively an industrial or commercial enterprise or undertaking carried
on by a resident of the United Kingdom and an industrial or commercial enterprise
or undertaking carried on by a resident of the Protectorate;
and the terms “enterprise of one of the territories”
 and “enterprise of the other
territory” mean a United Kingdom
enterprise or a Protectorate enterprise, as the context requires.
(j) The term “industrial
or commercial profits” includes
rentals in respect of cinematograph films.
(k) The term “permanent
establishment”, when used with respect to an enterprise
of one of the territories, means a branch, management
or other fixed place of business, but does not include an agency unless the
agent has, and habitually exercises, a general authority to negotiate and
conclude contracts on behalf of such enterprise or has a stock of merchandise
from which he regularly fills orders on its behalf.An enterprise of one of the territories shall not be deemed to
have a permanent establishment in the other territory merely because it carries
on business dealings in that other territory through a bona fide
broker or general commission agent acting in the ordinary course of his business
as such.The fact that an enterprise of one of the territories maintains
in the other territory a fixed place of business exclusively for the purchase
of goods or merchandise shall not of itself constitute that fixed place of
business a permanent establishment of the enterprise.The fact that a company which is a resident of one of the territories
has a subsidiary company which is a resident of the other territory or which
is engaged in trade or business in that other territory (whether through a
permanent establishment or otherwise) shall not of itself constitute that
subsidiary company a permanent establishment of its parent company.
(2) Where under this Arrangement any income
is exempt from tax in one of the territories if (with or without other conditions)
it is subject to tax in the other territory, and that income is subject to
tax in that other territory by reference to the amount thereof which is remitted
to or received in that other territory, the exemption to be allowed under
this Arrangement in the first mentioned territory shall apply only to the
amount so remitted or received.
(3) In the application of the provisions
of this Arrangement by the United Kingdom or the Protectorate, any term not
otherwise defined shall, unless the context otherwise requires, have the meaning
which it has under the laws of the United Kingdom, or, as the case may be,
the Protectorate, relating to the taxes which are the subject of this Arrangement.

3 

(1) The industrial or commercial profits
of a United Kingdom enterprise shall not be subject to Protectorate tax unless
the enterprise is engaged in trade or business in the Protectorate through
a permanent establishment situated therein. If it is so engaged, tax may be
imposed on those profits by the Protectorate but only on so much of them as
is attributable to that permanent establishment.
(2) The industrial or commercial profits
of a Protectorate enterprise shall not be subject to United Kingdom tax unless
the enterprise is engaged in trade or business in the United Kingdom through
a permanent establishment situated therein. If it is so engaged, tax may be
imposed on those profits by the United Kingdom, but only on so much of them
as is attributable to that permanent establishment.
(3) Where an enterprise of one of the territories
is engaged in trade or business in the other territory through a permanent
establishment situated therein, there shall be attributed to that permanent
establishment the industrial or commercial profits which it might be expected
to derive from its activities in that other territory if it were an independent
enterprise engaged in the same or similar activities under the same or similar
conditions and dealing at arm's length with the enterprise of which it is
a permanent establishment.
(4) No portion of any profits arising from
the sale of goods or merchandise by an enterprise of one of the territories
shall be attributed to a permanent establishment situated in the other territory
by reason of the mere purchase of the goods or merchandise within that other
territory.
4 
Where—
(a) an enterprise of one of the territories
participates directly or indirectly in the management, control or capital
of an enterprise of the other territory, or
(b) the same persons participate directly
or indirectly in the management, control or capital of an enterprise of one
of the territories and an enterprise of the other territory, and
(c) in either case conditions are made or
imposed between the two enterprises, in their commercial or financial relations,
which differ from those which would be made between independent enterprises,

then any profits which would but for those conditions have
accrued to one of the enterprises but by reason of those conditions have not
so accrued may be included in the profits of that enterprise and taxed accordingly.

5 
Notwithstanding the provisions of paragraphs 3 and 4, profits which
a resident of one of the territories derives from operating ships or aircraft
shall be exempt from tax in the other territory.
6 

(1) Dividends paid by a company resident
in one of the territories to a resident of the other territory who is subject
to tax in that other territory in respect thereof and not engaged in trade
or business in the first-mentioned territory through a permanent establishment
situated therein, shall be exempt from any tax in that first-mentioned territory
which is chargeable on dividends in addition to the tax chargeable in respect
of the profits or income of the company.
(2) Where a company which is a resident of
one of the territories derives profits or income from sources within the other
territory, the Government of that other territory shall not impose any form
of taxation on dividends paid by the company to persons not resident in that
other territory, or any tax in the nature of an undistributed profits tax
on undistributed profits of the company, by reason of the fact that those
dividends or undistributed profits represent, in whole or in part, profits
or income so derived.
7 

(1) Any royalty derived from sources within
one of the territories by a resident of the other territory who is subject
to tax in that other territory in respect thereof and is not engaged in trade
or business in the first-mentioned territory through a permanent establishment
situated therein, shall be exempt from tax in that first-mentioned territory;
but no exemption shall be allowed under this paragraph in respect of so much
of any royalty as exceeds an amount which represents a fair and reasonable
consideration for the rights for which the royalty is paid.
(2) In this paragraph the term “royalty” means 
any royalty or other amount paid as consideration for the use of, or for the
privilege of using, any copyright, patent, design, secret process or formula,
trade-mark, or other like property, but does not include a royalty or other
amount paid in respect of the operation of a mine or quarry or of other extraction
of natural resources.
8 

(1) Remuneration, including pensions, paid
by the Government of one of the territories to any individual for services
rendered to that Government in the discharge of governmental functions shall
be exempt from tax in the other territory if the individual is not ordinarily
resident in that other territory or (where the remuneration is not a pension)
is ordinarily resident in that other territory solely for the purpose of rendering
those services.
(2) The provisions of this paragraph shall
not apply to payments in respect of services rendered in connection with any
trade or business carried on by either of the Governments for purposes of
profit.
9 

(1) An individual who is a resident of the
United Kingdom shall be exempt from Protectorate tax on profits or remuneration
in respect of personal (including professional) services performed within
the Protectorate in any year of assessment if—
(a) he is present within the Protectorate
for a period or periods not exceeding in the aggregate 183 days during that
year, and
(b) the services are performed for or on
behalf of a person resident in the United Kingdom, and
(c) the profits or remuneration are subject
to United Kingdom tax.
(2) An individual who is a resident of the
Protectorate shall be exempt from United Kingdom tax on profits or remuneration
in respect of personal (including professional) services performed within
the United Kingdom in any year of assessment if—
(a) he is present within the United Kingdom
for a period or periods not exceeding in the aggregate 183 days during that
year, and
(b) the services are performed for or on
behalf of a person resident in the United Kingdom, and
(c) the profits or remuneration are subject
to Protectorate tax.
(3) The provisions of this paragraph shall
not apply to the profits or remuneration of public entertainers such as stage,
motion picture or radio artists, musicians and athletes.
10 

(1) Any pension (other than a pension paid
by the Government of the Protectorate for services rendered to it in the discharge
of governmental functions) and any annuity, derived from sources within the
Protectorate by an individual who is a resident of the United Kingdom and
subject to United Kingdom tax in respect thereof, shall be exempt from Protectorate
tax.
(2) Any pension (other than a pension paid
by the Government of the United Kingdom for services rendered to it in the
discharge of governmental functions) and any annuity, derived from sources
within the United Kingdom by an individual who is resident of the Protectorate
and subject to Protectorate tax in respect thereof, shall be exempt from United
Kingdom tax.
(3) The term “annuity”
 means a stated sum payable periodically
at stated times, during life or during a specified or ascertainable period
of time, under an obligation to make the payments in consideration of money
paid.
11 
The remuneration derived by a professor or
teacher who is ordinarily resident in one of the territories, for teaching,
during a period of temporary residence not exceeding two years, at a university,
college, school or other educational institution in the other territory, shall
be exempt from tax in that other territory.
12 
A student or business apprentice from one of
the territories who is receiving full-time education or training in the other
territory shall be exempt from tax in that other territory on payments made
to him by persons in the first-mentioned territory for the purposes of his
maintenance, education or training.
13 

(1) Subject to the provisions of the law
of the United Kingdom regarding the allowance as a credit against United Kingdom
tax of tax payable in a territory outside the United Kingdom, Protectorate
tax payable, whether directly or by deduction, in respect of income from sources
within the Protectorate shall be allowed as a credit against any United Kingdom
tax payable in respect of that income. Where such income is an ordinary dividend
paid without deduction of Protectorate tax by a company resident in the Protectorate,
the credit shall take into account the Protectorate tax payable in respect
of its profits by the company paying the dividend, and where it is a dividend
so paid on participating preference shares and representing both a dividend
at the fixed rate to which the shares are entitled and an additional participation
in profits, the Protectorate tax so payable by the company shall likewise
be taken into account in so far as the dividend exceeds that fixed rate.
(2) Subject to the provisions of the law
of the Protectorate regarding the allowance as a credit against Protectorate
tax of tax payable in a territory outside the Protectorate, United Kingdom
tax payable, whether directly or by deduction, in respect of income from sources
within the United Kingdom shall be allowed as a credit against any Protectorate
tax payable in respect of that income. Where such income is an ordinary dividend
paid by a company resident in the United Kingdom, the credit shall take into
account (in addition to any United Kingdom income tax appropriate to the dividend)
the United Kingdom profits tax payable by the company in respect of its profits,
and where it is a dividend paid on participating preference shares and representing
both a dividend at the fixed rate to which the shares are entitled and an
additional participation in profits, the profits tax so payable by the company
shall likewise be taken into account in so far as the dividend exceeds that
fixed rate.
(3) For the purposes of this paragraph profits
or remuneration for personal (including professional) services performed in
one of the territories shall be deemed to be income from sources within that
territory, and the services of an individual whose services are wholly or
mainly performed in ships or aircraft operated by a resident of one of the
territories shall be deemed to be performed in that territory.
(4) Where Protectorate tax is payable for
a year for which this Arrangement has effect in respect of any income in respect
of which United Kingdom income tax is payable for a year prior to the year
beginning on the 6th April, 1949, then—
(a) in the case of a person resident in the
Protectorate, the Protectorate tax shall, for the purposes of sub-paragraph
(2) of this paragraph, be deemed to be reduced by the amount of any relief
allowable in respect thereof under the provisions of 
Section 27 of the United Kingdom Finance
Act, 1920; and
(b) in the case of a person resident in the
United Kingdom, the provisions of Section 11
(2) of the British Solomon Islands
Protectorate Income Tax Regulation, 1947, shall
apply for the purposes of the allowance of relief from the Protectorate tax.

14 

(1) The taxation authorities of the United
Kingdom and the Protectorate shall exchange such information (being information
available under their respective taxation laws) as is necessary for carrying
out the provisions of this Arrangement or for the prevention of fraud or the
administration of statutory provisions against legal avoidance in relation
to the taxes which are the subject of this Arrangement. Any information so
exchanged shall be treated as secret and shall not be disclosed to any persons
other than those concerned with the assessment and collection of the taxes
which are the subject of this Arrangement. No information shall be exchanged
which would disclose any trade secret or trade process.
(2) As used in this paragraph, the term “taxation authorities” means the Commissioners of Inland Revenue or their authorised representative
in the case of the United Kingdom and the Treasurer or his authorised representative
in the case of the Protectorate.
15 
This Arrangement shall come into force on the
date on which the last of all such things shall have been done in the United
Kingdom and the Protectorate as are necessary to give the Arrangement the
force of law in the United Kingdom and the Protectorate respectively, and
shall thereupon have effect—
(a) In the United Kingdom:as respects income tax, for any year of assessment beginning on
or after the 6th April, 1949; as respects surtax, for any year of assessment
beginning on or after the 6th April, 1948; and as respects profits tax, in
respect of the following profits—
(i) profits arising in any chargeable accounting
period beginning on or after the 1st April, 1949;
(ii) profits attributable to so much of any
chargeable accounting period falling partly before and partly after that date
as falls after that date;
(iii) profits not so arising or attributable
by reference to which income tax is, or but for the present Arrangement would
be, chargeable for any year of assessment beginning on or after the 6th April,
1949;
(b) In the Protectorate:as respects normal tax and surtax, for the year of assessment beginning
on the first day of January, 1949, and subsequent years.
16 
This Arrangement shall continue in effect indefinitely
but either of the Governments may, on or before the 30th day of June in any
calendar year after the year 1950, give notice of termination to the other
Government and, in such event, this Arrangement shall cease to be effective—

(a) In the United Kingdom:as respects income tax, for any year of assessment beginning on
or after the 6th April in the calendar year next following that in which the
notice is given; as respects surtax, for any year of assessment beginning
on or after the 6th April in the calendar year in which the notice is given;
and as respects profits tax, in respect of the following profits—
(i) profits arising in any chargeable accounting
period beginning on or after the 1st April in the calendar year next following
that in which the notice is given;
(ii) profits attributable to so much of any
chargeable accounting period falling partly before and partly after that date
as falls after that date;
(iii) profits not so arising or attributable
by reference to which income tax is chargeable for any year of assessment
beginning on or after the 6th April in that next following calendar year;

(b) In the Protectorate: as respects normal
tax and surtax, for any year of assessment beginning on or after the first
day of January in the calendar year next following that in which such notice
is given.
