The Governments of Denmark, Finland, Iceland, Norway and Sweden,

Wishing to conclude a Convention for the avoidance of double taxation with respect to taxes on inheritances and gifts,

Have agreed as follows:

Article 1

Inheritances and gifts covered by the convention

This Convention shall apply to:

(a) Inheritances in cases where the deceased was domiciled at the time of death in one or more of the Contracting States,

(b) Gifts between individuals, in cases where the donor was domiciled, at the time when liability for tax arose, in one or more of the Contracting States.

Article 2

Taxes covered by the convention

1. This Convention shall apply to taxes on inheritances and gifts imposed on behalf of a Contracting State, regardless of the manner in which they are levied.

2. There shall be regarded as taxes on inheritances all taxes payable on inheritances and other transfers of assets inter vivos or in the event of death which, on the death of a person, entail the payment of tax on transfers of assets, under the law of a Contracting State.

3. There shall be regarded as taxes on gifts all taxes levied on transfers of assets inter vivos in so far as they are not covered by paragraph 2, but only if such transfers are made for no consideration for less than full consideration.

4. The existing taxes to which this Convention shall apply are:

(a) In Denmark: The inheritance duty and the gift duty, and also the income tax on the value of gifts,

(b) In Finland: The inheritance tax and the gift tax, and also the municipal income tax, in so far as this is imposed on assets received by inheritance, as maintenance or compensation according to Chapter 8 of the Inheritance Code, under a will or as a gift,

(c) In Iceland: The inheritance tax and the income tax on the value of gifts,

(d) In Norway: The inheritance duty and the gift duty,

(e) In Sweden: The inheritance tax and the gift tax.

5. The Convention shall also apply to any identical or substantially similar taxes which are imposed after the date of signature of the Convention in addition to or instead of the existing taxes. The competent authorities of the Contracting States shall notify each other of any substantial changes made in their taxation laws.

6. The Convention shall not apply in any Contracting State to special taxes on winnings from lotteries or betting, tax on documents (stamp duty) or duty pertaining to the winding-up of an estate (distribution duty). Nor shall it apply to income tax levied on gains derived, under the law of a Contracting State, from transfers or to taxes and duties levied as compensation for a previously allowed deduction in connection with income tax.

Article 3

General definitions

1. For the purposes of this Convention, unless the context otherwise requires: (a) "Contracting State" means Denmark, Finland, Iceland, Norway and Sweden; "Denmark" does not include the Faroe Islands or Greenland; "Finland" does not include the county of Aland as regards the municipal tax in Finland; "Norway" does not include Svalbard (with Bjrnoya), Jan Mayen or the Norwegian dependencies (biland) outside Europe;

(b) "Inheritance" means all assets the transfer of which is subject to such taxes on inheritance as are covered by the Convention;

(c) "Gift" means all assets the transfer of which is subject to such taxes on gifts as are covered by the Convention;

(d) "National" means an individual who has the nationality of a Contracting State and any body corporate or other entity established under the laws applicable in a Contracting State;

(e) "Competent authority" means:

(1) In Denmark: the Minister for Taxes;

(2) In Finland: the Ministry of Finance;

(3) In Iceland: in the case of gifts, the Minister for Finance and, in the case of inheritances, the Minister for Social Affairs;

(4) In Norway: the Ministry of Finance and Customs;

(5) In Sweden: the Minister for Finance,

or the authority in each of these States delegated to deal with questions relating to this Convention.

2. In the application of this Convention by a Contracting State, any term not defined in the Convention shall, unless the context otherwise requires, have the meaning which it has under the laws of that State relating to the taxes to which the Convention applies.

Article 4

Fiscal domicile

1. For the purposes of this Convention, the term "person domiciled in a Contracting State" means any person who leaves an inheritance or makes a gift which, under the law of that State, is liable to tax therein by reason of the domicile or residence of that person or any other criterion of a similar nature, or by virtue of his nationality. However, this term does not include any person who is liable to pay tax in that State in respect only of assets situated therein.

2. Where, on the basis of the provisions of paragraph 1, an individual is deemed to be domiciled in more than one Contracting State, his domicile shall be determined in the following manner:

(a) He shall be deemed to be domiciled in the State in which he has a permanent home available to him; if he has such a home in more than one State, he shall be deemed to be domiciled in the State with which his personal and economic relations are closest (centre of vital interests);

(b) If the State in which the individual has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in any of the States, he shall be deemed to be domiciled in the State in which he has an habitual abode;

(c) If he has an habitual abode in more than one of the States or in none of them, he shall be deemed to be domiciled in the State of which he is a national;

(d) If he is a national of more than one State or of none of them, the competent authorities of the Contracting States concerned shall settle the question by mutual agreement.

3. Where an individual:

(a) Is a national of one Contracting State but not of another Contracting State; and

(b) Is, in accordance with paragraph 1, domiciled in both of these States on other grounds than nationality; and

(c) In accordance with paragraph 1 has been domiciled in the State - of which he is not a national - for, in the aggregate, less than 5 of the preceding 7 years (including periods of temporary absence), then he shall be deemed, notwithstanding the provisions of paragraph 2, to be domiciled in the Contracting State of which he is a national.

Article 5

Immovable property

1. Immovable property which is transferred by inheritance from a person who at the time of his death was domiciled in a Contracting State, and which is situated in another Contracting State, may be taxed in that other State.

2. Immovable property which is transferred by gift from a person who, at the time when liability for tax arises, is domiciled in a Contracting State and which is situated in another Contracting State, may be taxed in that other State.

3.

(a) Subject to the provisions of sub-paragraph (b), the term "immovable property" shall have the meaning which it has under the law of the Contracting State in which the property in question is situated.

(b) The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, buildings, rights to which the provisions of civil law respecting immovable property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, springs or other natural resources.

4. Transfers by inheritance or gift of shares or other certificates of participation in a company whose chief and actual purpose is the ownership of immovable property may be taxed in the Contracting State in which the immovable property owned by that company is situated.

5. The provisions of paragraphs 1 to 4 shall also apply to immovable property owned by an enterprise and to immovable property used for the performance of independent personal services.

Article 6

Assets pertaining to a permanent establishment or fixed base

1. Assets of an enterprise, which are transferred by inheritance from a person who at the time of death was domiciled in a Contracting State, and which are part of a permanent establishment situated in another Contracting State, may be taxed in that other State.

2. Assets of an enterprise, which are transferred by gift from a person who, at the time when liability for tax arises, is domiciled in a Contracting State, and which are part of a permanent establishment situated in another Contracting State, may be taxed in that other State.

3. For the purposes of this Convention, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

4. The term "permanent establishment" includes especially:

(a) A place of management,

(b) A branch,

(c) An office,

(d) A factory,

(e) A workshop,

(f) A mine, an oil or gas well, a quarry or any other place of extraction of natural resources.

5. A building site or construction, installation or assembly project, or activity consisting of planning, supervision, consultation or other auxiliary work by personnel connected with such a project, shall constitute a permanent establishment, but only if the project or activities continue for more than 12 months in a Contracting State.

6. In calculating the period referred to in paragraph 5, an activity carried on by an enterprise associated with another enterprise shall be deemed to be carried on by the enterprise with which it is associated if the activity is substantially of the same kind as the activity carried on by the last-mentioned enterprise and the activities of the two enterprises relate to the same project. Enterprises shall be deemed to be associated enterprises if one of the enterprises participates directly or indirectly in the management or control of the other enterprise or owns a substantial part of the capital of that enterprise or if the same persons participate directly or indirectly in the management or control of both enterprises or own a substantial part of their capital of both enterprises.

7. Notwithstanding the preceding provisions of this article, the term "permanent establishment" shall be deemed not to include:

(a) The use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;

(b) The maintenance of a stock of goods or merchandise solely for the purpose of storage, display or delivery;

(c) The maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

(d) The maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise;

(e) The maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character;

(f) The maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (e) provided that the overall activity of

the fixed place of business resulting from such combination is of a preparatory or auxiliary character.

8. Assets which are transferred by inheritance from a person who at the time of death was domiciled in a Contracting State, and which pertain to a fixed base situated in another Contracting State, may be taxed in that other State.

9. Assets which are transferred by gift from a person who, at the time when liability for tax arises, is domiciled in a Contracting State, and which pertain to a fixed base situated in another Contracting State, may be taxed in that other State.

10. The term "fixed base" means a base that is regularly available for the performance of professional services or other activities of an independent character.

11. Notwithstanding the provisions of paragraphs 1 to 10, immovable property shall be covered by article 5.

Article 7

Other assets

1. Assets which are not dealt with in articles 5 and 6 and which are transferred by inheritance from a person who at the time of death was domiciled in a Contracting State shall be taxable only in that State, wherever they are situated.

2. Assets which are not dealt with in articles 5 and 6 and which are transferred by gift from a person who at the time when liability for tax arises is domiciled in a Contracting State shall be taxable only in that State, wherever they are situated.

Article 8

Subsidiary taxation rights

1. Where a Contracting State is unable to exercise its right to levy tax under articles 5 to 7 and, as a consequence, assets are not taxed in any of the Contracting States, another Contracting State may levy tax, provided that the inability to levy tax is due to the fact that either

(a) The first-mentioned Stated can not tax assets of that kind under its own legislation on the territorial scope of tax liability, or

(b) The first-mentioned State can not levy tax under its own legislation on tax liability based on personal ties.

2. If several States are able to levy tax under paragraph 1, the following provisions shall determine which State is entitled to levy tax:

(a) The Contracting State in which the deceased or donor was domiciled shall be entitled to levy tax.

(b) If the Contracting State in which the deceased or the donor was domiciled is unable to exercise its right to levy tax, the State in which the beneficiary is domiciled shall be entitled to levy tax.

(c) If, under the rules laid down in sub-paragraphs (a) and (b), it cannot be determined which Contracting State is entitled to levy tax, the competent authorities of the Contracting States concerned shall decide the matter by mutual agreement.

Article 9

Assessment and deductions

1. In determining the taxable amount each Contracting State shall assess the assets in accordance with its own legislation. Similarly, each Contracting State shall allow deductions under its own legislation.

2. In determining the taxable amount each Contracting State shall, under the provisions of its own legislation, take into account revenue and expenditure relating to each asset, including amounts replacing the asset.

Article 10

Methods for the elimination of double taxation

1. If the deceased or the donor was domiciled in Denmark, Finland or Sweden, double taxation shall be avoided in the following manner:

(a) The Contracting State in which the deceased was domiciled at the time of death shall allow as a deduction from the inheritance tax as determined under its legislation an amount (including an amount previously or subsequently calculated) which is equal to the tax paid in another Contracting State on the basis of the same transfer of the same asset from the same person and which, in accordance with the provisions of this Convention, may be taxed in that other State.

(b) The Contracting State in which the donor was domiciled shall deduct from the gift tax as determined under its legislation an amount (including an amount previously or subsequently calculated) which is equal to the tax paid in another Contracting State on the basis of the same transfer of the same asset between the same persons and which, in accordance with the provisions of this Convention, may be taxed in that other State.

(c) Deductions under sub-paragraphs (a) and (b) shall, however, not exceed the part of the tax in the first-mentioned Contracting State, as calculated before the deduction, which is attributable to the assets in respect of which the deduction is allowed.

(d) For the purposes of applying sub-paragraphs (a) and (b) a spouse's retention of undivided possession of a joint estate (fællesbo til hensidden i uskiftet bo) shall be considered a separate transfer.

2. If the deceased or the donor was domiciled in Iceland or Norway, double taxation shall be avoided in the following manner:

(a) The Contracting State in which the deceased was domiciled at the time of death shall exempt from inheritance tax all assets which in relation to the same transfer of the same assets from the same person may, under the provisions of this Convention, be taxed in another Contracting State.

(b) The Contracting State in which the donor was domiciled shall exempt from gift tax all assets which in relation to the same transfer of the same assets between the same persons may, under the provisions of this Convention, be taxed in another Contracting State.

(c) In each case a Contracting State may take the exempted assets into account when calculating the amount of tax on any other assets in that State.

3. In the case of the assets for which deductions are allowed under paragraph 1 or which are exempt from tax under paragraph 2, each Contracting State shall, in determining the amount on which tax is to be computed, take account under the provisions of its own legislation of revenue and expenditure relating to each asset, including amounts replacing such assets.

Article 11

Non-Discrimination

1. Nationals of a Contracting State, wherever they are domiciled, shall not be subjected in another Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected.

2. Stateless persons who are domiciled in a Contracting State shall not be subjected in any Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of the State concerned in the same circumstances are or may be subjected.

3. The provisions of this article shall, notwithstanding the provisions of article 2, apply to taxes of every kind and description.

Article 12

Mutual agreement procedure

1. Where a person considers that the actions of one or more of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State in which he is domiciled or, if his case comes under paragraph 1 of article 11, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Convention.

2. The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State concerned in the matter, with a view to the avoidance of taxation which is not in accordance with the Convention. If the State to whose competent authority the person concerned has presented his case is not itself concerned in the matter, that competent authority shall refer the case to the competent authority of one of the States concerned in the matter.

3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. The competent authorities may also consult together for the elimination of double taxation in cases not provided for in the Convention or in order to resolve by mutual agreement cases which are not provided for in the Convention and which may arise as a result of differences in the principles applied by the States concerned when calculating tax, or for other reasons, in relation to the taxes covered by article 2.

Before a decision on any case referred to in the first sub-paragraph is taken, the competent authorities of the other Contracting States shall be notified of the outcome of the aforesaid consultations as soon as possible. If the competent authority of a Contracting State considers that consultations should be held by the competent authorities of all the Contracting States, such consultations shall be held without delay at the request of the competent authority of the first-mentioned Contracting State.

Article 13

Diplomatic agents and consular officers

Nothing in this Convention shall affect the fiscal privileges of diplomatic agents or consular officers under the general rules of international law or under the provisions of special agreements.

Article 14

Territorial extension

1. This Convention may be extended, either in its entirety or with any necessary modifications, to cover the territories excluded from the scope of the Convention in accordance with the provisions of article 3, sub-paragraph 1 (a), provided that taxes identical or substantially similar to those to which the Covention applies are imposed there. Any such extension shall take effect from such date, and subject to such modifications and conditions, including conditions as to termination, as may be specified and agreed upon between the Contracting States in notes to be exchanged through the diplomatic channel.

2. If the Convention ceases to have effect in accordance with article 16, it shall also, unless otherwise agreed between the Contracting States, cease to have effect in respect of any territory to which the Convention has been extended in accordance with this article.

Article 15

Entry into force

1. This Convention shall enter into force on the 30th day after the date on which all Contracting States have notified the Ministry of Foreign Affairs of Finland that the Convention has been approved. The Ministry of Foreign Affairs of Finland shall notify the other Contracting States of the receipt of such notifications and of the date of entry into force of the Convention.

2. After the entry into force of the Convention, its provisions shall apply:

(a) In respect of inheritance tax, to deaths occurring on or after the 60th day following the date on which the Convention enters into force;

(b) In respect of gift tax, to gifts for which liability for tax arises in one of the Contracting States on or after the 60th day following the date on which the Convention enters into force.

3. The following Agreements shall cease to apply to inheritances and gifts to which the present Convention applies under paragraph 2:

The Convention of 17 December 1949 between the Kingdom of Norway and the Kingdom of Sweden for the avoidance of double taxation with respect to death duties;

The Agreement of 31 March 1950 between the Republic of Finland and the Kingdom of Sweden for the avoidance of double taxation with respect to death duties;

The Agreement of 27 October 1953 between the Kingdom of Denmark and the Kingdom of Sweden for the avoidance of double taxation, with respect to death duties, as subsequently amended;

The Agreement of 29 March 1954 between the Republic of Finland and the Kingdom of Norway for the avoidance of double taxation with respect to taxes on inheritances;

The Agreement of 18 July 1955 between the Kingdom of Denmark and the Republic of Finland for the avoidance of double taxation with respect to death duties, as subsequently amended;

The Agreement of 23 May 1956 between the Kingdom of Denmark and the Kingdom of Norway for the avoidance of double taxation with respect to death duties.

These Agreements shall cease to apply as from the last date on which the present Convention becomes applicable under the preceding provisions of the aforesaid paragraph.

4. In addition, the Convention between the Nordic countries in force at any time for the avoidance of double taxation with respect to taxes on income and capital shall not apply with respect to income tax on gifts covered by the present Convention under paragraph 2.

Article 16

Termination

A Contracting State may, at the latest by 30 June of a calendar year beginning after the expiry of a five-year period following the date of entry into force of the Convention, denounce the Convention by giving written notice of denunciation to the Ministry of Foreign Affairs of Finland, which shall notify the other Contracting States of the receipt of such notice and of its contents. If the time-limit for denunciation has been observed, the Convention shall cease to have effect as between the State denouncing it and the other Contracting States:

(a) In respect of inheritance tax, to deaths occurring on or after the 60th day following the date on which the Ministry of Foreign Affairs of Finland received notice of denunciation;

(b) In respect of gift tax, to gifts for which liability for tax arises in the States concerned on or after the 60th day following the date on which the Ministry of Foreign Affairs of Finland received notice of denunciation.

The original copy of this Convention shall be deposited with the Ministry of Foreign Affairs of Finland, which shall provide certified copies thereof to the other Contracting States.

IN WITNESS WHEREOF the undersigned plenipotentiaries have signed this Convention.

DONE at Helsinki on 12 September 1989 in one copy in the Danish, Finnish, Icelandic, Norwegian and Swedish languages, there being two texts in Swedish, one for Finland and one for Sweden, all the texts being equally authentic.

Unless otherwise indicated, the translation of this text into English has been made by the Secretariat of the United Nations, See 1698UNTS29388.

Signing of agreement

Date: Sep 12, 1989