CONVENTION

between the Government of the Grand Duchy of Luxembourg and the Government of the Kingdom of Denmark for the avoidance of double taxation and the establishment of rules of mutual administrative assistance in respect of taxes on income and on capital.

The Government of the Grand Duchy of Luxembourg and the Government of the Kingdom of Denmark, desiring to conclude a Convention for the avoidance of double taxation and the establishment of mutual administrative assistance in respect of taxes on income and on capital 

have agreed as follows:

Article 1
PERSONS COVERED

This Convention shall apply to persons who are residents of one or both Contracting States.

Article 2

TAXES REFERRED TO

1. This Convention shall apply to taxes on income and on capital imposed on behalf of a Contracting State, its political subdivisions or its local authorities, irrespective of the system of collection.

 

2. The following shall be considered to be taxes on income and capital: taxes imposed on total income or on elements of income or capital, including taxes on gains from the alienation of movable or immovable property, taxes on the total amount of wages paid by wages paid by businesses, as well as taxes on capital gains.

 

3. The existing taxes to which the Convention shall apply include:

(a) for Denmark:

1) the State income tax (income tax to the state) ;

2) the municipal income tax (the municipal income tax);

3) the county income tax (the county income tax);

the old-age pension contributions (public pension contributions);

the tax paid by seamen (demand tax);

6) the special income tax (the special income tax);

7) the church tax (church tax);

8) the dividend tax (the dividend tax);

9) the health insurance contribution “per diem” (contribution to the daily allowance fund);

10) the state wealth tax (wealth tax to the state) (hereinafter referred to as “Danish tax”) ;

(b) for Luxembourg:

(1) the personal income tax;

(2) the tax on the income of communities ;

(3) the special tax on directors’ fees

4) the wealth tax;

5) the municipal business tax on the basis of operating profit and capital

6) the municipal tax on total wages (hereinafter referred to as “Luxembourg tax”).

 

4. The Convention shall also apply to any identical or substantially similar taxes imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall inform each other at the end of each year of the essential changes in their respective taxation laws.

 

Article 3

GENERAL DEFINITIONS

1. For the purposes of this Convention, unless the context otherwise requires

(a) the terms “a Contracting State” and “the other Contracting State” mean, as the context requires Denmark or Luxembourg;

(b) “Denmark” means the Kingdom of Denmark, including any area outside the territorial waters of Denmark which sovereignty rights relating to the exploration and exploitation of the natural resources of the seabed or the or subsoil; the term does not include the Faeroe Islands and Greenland;

(c) “Luxembourg” means the territory of the Grand Duchy of Luxembourg;

(d) the term “person” includes natural persons, companies and any other bodies of persons

(e) “corporation” means any body corporate or any entity that is treated as a body corporate for tax purposes;

(f) the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State ;

(g) the term “international traffic” means any transport by a ship or aircraft operated by an enterprise whose place of effective management is in a Contracting State, except when the ship or aircraft is operated only between points in the other Contracting State;

(h) the term “competent authority” means;

(1) in the case of Denmark, the Minister of Taxes or his duly authorized representative

(2) in the case of Luxembourg, the Minister of Finance or his duly authorized representative.

 

2. For the purposes of the application of the Convention by a Contracting State, any term not defined therein shall have the meaning which it has under the law of that State concerning the taxes to which the Convention, unless the context otherwise requires.

 

Article 4

RESIDENT

1. For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of his domicile the term “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax in that State by reason of his domicile, residence, place of management or any other criterion of a similar nature. However, this term shall not include any person who is subject to tax in that State in respect only of income from sources within its territory. However, this term shall not include any person who is subject to tax in that State in respect only of income from sources in that State or capital situated therein.

 

2. Where by reason of the provisions of paragraph 1 an individual is a resident of both

(a) he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer

(b) if the State in which such person has his centre of vital interests cannot be determined, or if he has no permanent home in either State, he shall be deemed to be a resident of the State in which he has an habitual abode;

(c) if such person has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he has the nationality ;

(d) if such person is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

 

3. Where, under the provisions of paragraph 1, a person other than an individual is a resident of both Contracting States, he shall be deemed to be a resident of the State in which his place of effective management is situated.

 

Article 5

PERMANENT ESTABLISHMENT

1. 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.

 

2. The term “permanent establishment” includes in particular:

(a) a place of management

(b) a branch office

(c) an office,

(d) a factory,

(e) a workshop, and

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

 

3. A construction or assembly site constitutes a permanent establishment only if its duration exceeds twelve months.

 

4. Notwithstanding the foregoing provisions of this Article, the term “permanent establishment” shall be deemed not to include

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

(b) goods or merchandise belonging to the enterprise are stored for the sole purpose of storage, display or delivery;

(c) goods owned by the business are stored solely for the purpose of processing by

another enterprise;

(d) a fixed place of business is used solely for the purpose of purchasing goods or collecting information for the enterprise;

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

(f) a fixed place of business shall be used solely for the purpose of carrying on the activities referred to in subparagraphs (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

 

5. Notwithstanding the provisions of paragraphs 1 and 2, where a person other than an agent independent status to whom paragraph 6 applies acts on behalf of an enterprise and has in a enterprise and has and habitually exercises in a Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of all a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of that person are limited to those mentioned in paragraph 4 which, if they were paragraph 4 and which, if exercised through a fixed place of business, would not enable that fixed place of business to be would not qualify that place of business as a permanent establishment under the provisions of that paragraph.

 

6. An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their are acting in the ordinary course of their business.

 

7. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State or which carries on business in that other State (whether through a permanent establishment or otherwise) shall not of itself constitute a permanent establishment of the other.

 

Article 6

INCOME FROM REAL PROPERTY

1. Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.

 

2. The term “immovable property” shall have the meaning which it has under the law of the Contracting State in which the property is situated. The term shall in any case include property accessory to immovable property, livestock and equipment of agricultural and forestry undertakings, rights to which the provisions of private law concerning land property, the usufruct of immovable property and rights to variable or fixed payments for the use or for the exploitation or concession of the exploitation of mineral deposits, natural resources; ships and aircraft are not considered as real estate.

 

3. The provisions of paragraph 1 shall apply to income from the direct exploitation of rental or leasing, as well as from any other form of exploitation of real estate.

 

4. The provisions of paragraphs 1 and 3 shall also apply to income from the real property of an property of an enterprise as well as to income from real estate used for the exercise of a independent profession.

 

Article 7

ENTERPRISE PROFITS

1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business in such a manner, the profits of the enterprise may be taxed in the other State but only so much of its profits as is attributable to that permanent establishment.

 

2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries its business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might the profits which it might have realised if it had constituted a separate enterprise engaged in the same or similar activities under the same or similar conditions the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.

 

3. In determining the profits of a permanent establishment, there shall be allowed deductions as expenses of permanent establishment, including executive and general administrative expenses incurred, shall be deducted and general administrative expenses incurred, whether in the State in which the permanent establishment is situated or elsewhere.

4. If it is customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts nothing in paragraph 2 shall prevent that Contracting State from determining the profits chargeable to tax under the customary apportionment; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in The method of apportionment adopted shall, however, be such that the result obtained shall be in accordance with the principles contained in this Article.

 

5. No profit shall be attributed to a permanent establishment by reason of its having merely purchased goods or goods for the enterprise.

 

6. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined annually by the same method unless there are good and sufficient reasons to the contrary.

 

7. Where profits include items of income which are dealt with separately in other Articles of this Convention, the provisions of those Articles shall not be affected by the provisions of this Article.

 

Article 8

SEA AND AIR NAVIGATION

1. Profits 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. If the place of effective management of a shipping enterprise is on board a ship that place of business shall be deemed to be in the Contracting State in which the home port of that ship is situated, or, if there is no home port, in the Contracting State of which the operator of the ship is a resident.

 

3. The provisions of paragraph 1 shall also apply to profits from participation in a pool, joint business or international operating agency.

 

4. With respect to profits earned by the Danish, Norwegian and Swedish Air Transport Consortium known as the Scandinavian Airlines System (SAS), the provisions of paragraphs 1 and 3 shall not the provisions of paragraphs 1 and 3 shall apply only to that part of the profits which relates to the shareholding Det Danske Luftfartstilsynet (DDL), the Danish partner of  “Scandinavian Airlines System (SAS).

 

Article 9

ASSOCIATED ENTERPRISES

1. Where

(a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case the two enterprises are connected in their commercial or financial relations by terms and conditions agreed upon or imposed which differ from those which would be agreed upon between independent enterprises, the profits which, but for these conditions, would have been made by one of the enterprises, but which could not in fact have been realized by reason of those conditions, may be included in the profits of that profits of that enterprise and taxed accordingly.

 

2. Where a Contracting State includes in the profits of an enterprise of that State, and taxes accordingly, profits on which an enterprise of that profits on which an enterprise of the other Contracting State has been taxed in that other State, and State, and the profits so included are profits that would have accrued to the enterprise of the first-mentioned State if the conditions agreed upon between the two enterprises had been those that the other State shall make an appropriate adjustment to the amount of tax which would have been appropriate adjustment to the amount of tax imposed therein on such profits. In determining such adjustment due regard shall be had to the other provisions of this Convention and, if necessary, the competent authorities of the Contracting States shall consult together.

 

Article 10

DIVIDENDS

1. Dividends paid by a company that is a resident of a Contracting State to a resident of the other Contracting State may be taxed as dividends.

 

2. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident, and according to the laws of that State, but if the person receiving the dividends is the beneficial owner thereof, the tax so charged shall not exceed :

(a) 5 percent of the gross amount of the dividends if the beneficial owner is a corporation (other than a partnership) that directly owns at least 25 per cent of the capital of the corporation paying the dividends

(b) 15 percent of the gross amount of the dividends in all other cases. The competent authorities of the Contracting States shall by mutual agreement settle the mode of the application of these limitations. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are payment of dividends.

 

3. The term “dividends” as used in this article means income from shares, shares or profit sharing certificates, founders’ shares or other profit shares, with the exception of shares, founder’s shares or other profit shares, with the exception of debt claims, as well as income from other shares which is subject to the same tax regime as income from shares under the legislation of the income from shares by the legislation of the State of which the distributing company is a resident.

 

4. The provisions of paragraphs 1 and 2 shall not apply where the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, either paying the dividends is a resident, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in the other Contracting State of which the company paying the dividends is a resident, independent personal services from a fixed base the person who pays the dividends is a resident, either carrying on a trade or business through a permanent establishment situated therein, or performing independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

 

5. Where a company that is a resident of a Contracting State derives profits or income from the other Contracting State, the company shall be deemed to have of the other Contracting State, that other State may not impose any tax on dividends paid by the company, except to the extent that such dividends are paid to a resident of that other State or to the extent that to the extent that the holding in respect of which the dividends are paid is effectively connected with a

permanent establishment or a fixed base situated in that other State, nor impose any tax on the undistributed profits distributed profits, on the undistributed profits of the company, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in that other State.

 

Article 11

INTERESTS

1. Interest arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in that other State if such resident is the beneficial owner.

 

2. The term “interest” as used in this Article means income from debt claims of every kind, whether or not secured by mortgage or by a participation clause in the debtor’s profits, and in particular income from debtor, and in particular income from government securities and bonds, including premiums and prizes attaching to such premiums and prizes attached to such securities. Penalties for late payment shall not be considered interest for the purposes of this as interest within the meaning of this section.

 

3. The provisions of paragraph 1 shall not apply where the beneficial owner of the interest a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, either a business activity through a permanent establishment situated therein or engaged in independent personal services, or through a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such fixed base. In this case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

 

4. Where, by reason of a special relationship between the debtor and the beneficial owner or where both beneficiary, the amount of the interest, taking into account the claim for which it is paid, is for which it is paid, exceeds that which would have been agreed upon by the debtor and the beneficiary in the absence of such relationship, the provisions of this article shall apply only to the latter amount. In such a case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, taking into account the other provisions of this Convention.

 

Article 12

ROYALTIES

1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in that other State if such resident is the beneficial owner thereof.

 

2. The term “royalties” as used in this Article means remuneration of any kind paid for the use or enjoyment paid for the use of, or the right to use, any copyright of literary, artistic or scientific work, including films, scientific work, including motion pictures, a patent, a trademark, copyright, a design patent, a design, plan, formula or process, as well as for the use of a copyright in a literary, artistic or scientific work, including cinematographic films, a patent, a trademark, a design or model, a plan, a formula or a secret, as well as for the use of or the right to use industrial, commercial or scientific equipment and for information relating to the experience acquired in the industrial, commercial or scientific field.

 

3. The provisions of paragraph 1 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in the other Contracting State independent personal services from a fixed base situated therein, and that the right or property in respect of which the royalties are paid is effectively connected with that place. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

 

4. Where, by reason of a special relationship between the obligor and the beneficial owner or between the obligor and the beneficial owner and third parties, the amount of the royalties, taking into account the performance for which they are paid, exceeds the amount that would have been agreed upon by the obligor and the beneficial owner in the absence of such relationship, the provisions of this article shall apply only to that amount. apply only to the latter amount. In such a case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being due to the other provisions of this Convention.

 

Article 13

CAPITAL GAINS

1. Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.

 

2. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such permanent establishment (alone or with the whole enterprise) or of such fixed base may be taxed in that other State.

 

3. Gains from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft shall be taxable only in the Contracting State where the place of effective management of the enterprise is situated.

 

4. Gains from the alienation of any property other than that referred to in paragraphs 1, 2 and 3 shall be taxable only in the Contracting State of which the transferor is a resident.

 

Article 14

INDEPENDENT PERSONAL SERVICES

1. Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State unless the resident has a fixed base regularly available in the other Contracting State for the purpose of performing his activities. If he has such a fixed base, the income may be taxed in the other State but only to the extent that it is attributable to that fixed base.

 

2. The term “professional services” includes, in particular, independent activities of a scientific, literary, artistic, scientific, literary, artistic, educational or teaching activities, as well as the independent activities of doctors, lawyers, engineers, architects, dentists and accountants.

 

Article 15

DEPENDENT PROFESSIONS

1. Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State, unless the employment is exercised in the other Contracting State. If the employment is exercised in that State, remuneration derived therefrom may be taxed in that other State.

 

2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if :

(a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the calendar year concerned, and

(b) the remuneration is paid by or on behalf of an employer who is not a resident of the other State, and

(c) the remuneration is not borne by a permanent establishment or a fixed base which the employer is in another State.

 

3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised on board a ship or aircraft operated in international traffic may be taxed in the Contracting State in which the place of effective management of the enterprise is situated.

 

4. Where a resident of Denmark receives remuneration in respect of employment on board an aircraft operated in international traffic by the Scandinavian Airlines System (SAS) Consortium

such remuneration shall be taxable only in Denmark.

 

Article 16

TANTIEMES

Directors’ fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State.

 

Article 17

ARTISTS AND SPORTSMEN

1. Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State from his personal activities as an entertainer in the other Contracting State, such as a theater, motion picture, radio or television artiste, or a musician, or as a sportsman, may be taxed in that other State. as a sportsman, may be taxed in that other State.

2. Where income from activities which an entertainer or sports person performs personally and in that capacity is attributed and in that capacity is attributed not to the entertainer or athlete himself but to another person such income may be taxed, notwithstanding the provisions of Articles 7, 14 and 15, in the Contracting State in which the activities of the entertainer or athlete are exercised.

 

Article 18

PUBLIC SOCIAL SECURITY PENSIONS AND BENEFITS

1. Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a Contracting State in respect of past employment shall be taxable only in that State.

 

2. Notwithstanding the provisions of paragraph 1, pensions and other amounts paid under the social security legislation of a Contracting State shall be taxable only in that State.

 

Article 19

PUBLIC OFFICES

(a) Remuneration, other than a pension, paid by a Contracting State or a political subdivision or local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

(b) However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who:

(i) is a national of that State, or

(ii) did not become a resident of that State solely for the purpose of rendering the services.

(a) Pensions paid by a Contracting State or a political subdivision or local authority thereof, either directly or out of funds established by it, to an individual in respect of services rendered by that individual in the course of his or her employment in the Contracting State.

(b) However, such pensions shall be taxable only in the other Contracting State if the individual is a resident of that State and is a national of that State.

 

3. The provisions of Articles 15, 16 and 18 shall apply to remuneration and pensions paid in respect of services rendered in connection with a business carried on by a Contracting State or one of its Contracting State or a political subdivision or local authority thereof.

 

Article 20

STUDENTS

Amounts which a student or trainee who is, or immediately before visiting a Contracting State was to a Contracting State, a resident of the other Contracting State and who is present in the first-mentioned State for the sole purpose of furthering his education or training, receives to defray the expenses of his maintenance, education or training shall not be taxable in that State, provided that such remuneration is derived from sources outside that State.

 

Article 21

OTHER INCOME

1. Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this not dealt with in the foregoing Articles of this Convention shall be taxable only in that State.

 

2. The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State of such income, being a resident of a Contracting State, carries on business in the other Contracting State through business activity through a permanent establishment situated therein, or performs in the other Contracting State the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

 

Article 22

FORTUNE

1. Capital represented by immovable property referred to in Article 6 owned by a resident of a Contracting State and situated in the other Contracting State may be taxed in that other State.

 

2. Capital represented by movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, or by movable property which belong to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, may be taxed in that other State.

 

3. Capital represented by ships and aircraft operated in international traffic and by movable property pertaining to the operation of such ships or aircraft shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

 

4. All other elements of the capital of a resident of a Contracting State shall be taxable only in that State.

 

Article 23

METHODS FOR ELIMINATION OF DOUBLE TAXATION

Double taxation shall be avoided as follows:

1. In Denmark:

(a) Subject to the provisions of subparagraph (c), where a resident of Denmark receives income or possesses capital which, in accordance with the provisions of this Convention may be taxed in Luxembourg, Denmark shall allow:

(1) a deduction from the tax imposed by it on the income of that resident in an amount equal to the income tax paid in Luxembourg;

(2) from the tax it levies on the capital of such resident, a deduction equal to the tax on capital paid in Luxembourg

 

(b) In either case, however, such deduction may not exceed the fraction of the income tax or wealth tax, calculated before deduction, corresponding to the income or wealth taxable in income or wealth taxable in Luxembourg, as the case may be.

 

(c) Where a resident of Denmark derives income or owns capital which, in accordance with the provisions of this Convention, may be taxed only in Luxembourg, Denmark may include such income and capital in the basis of assessment, but shall deduct it from the income or capital the part of the Danish income tax or capital tax which is deducted from the income tax or capital tax of the Danish income tax or wealth tax that corresponds, as the case may be, to the income received from Luxembourg or to the assets owned in Luxembourg.

 

2. In Luxembourg :

(a) Where a resident of Luxembourg receives income or possesses capital which, in accordance with the provisions of this Convention, may be taxed in Denmark, Luxembourg shall exempt such income or capital from tax, subject to the provisions of

 

(b) Where a resident of Luxembourg receives income which, in accordance with the provisions of Article 10, may be taxed in Denmark, Luxembourg shall allow a deduction from the tax imposed on that resident in an amount equal to the tax paid in Denmark. The amount so deducted shall not, however, exceed the fraction of the tax, calculated before the deduction corresponding to the income received from Denmark.

 

(c) By way of derogation from subparagraph (b), dividends distributed by a capital company resident in Denmark and subject in that State to a capital company resident in Luxembourg which, since the beginning of its financial year, has had the beginning of its financial year directly at least 25 per cent of the capital of the first company. The above-mentioned shares or units of the Danish company are, under the same conditions, exempt from Luxembourg wealth tax.

 

Article 24

NON-DISCRIMINATION

1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or obligation that is different from or more burdensome than those to which the nationals of that other State who are in the same situation are or may be subject to. The provision shall also apply, notwithstanding the provisions of Article 1, to persons who are not residents of one or both of the Contracting States.

 

2. The term “nationals” means :

(a) all individuals who possess the nationality of a Contracting State ;

(b) all legal persons, partnerships and associations organized in accordance with the laws in force in a contracting State.

 

3. The taxation of a permanent establishment which an enterprise of a Contracting State has in the other State shall not be less favorably assessed in that other State than the taxation of enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State the personal allowances, reliefs and reductions for taxation purposes on account of civil status or This provision shall not be construed to require a Contracting State to grant to residents of the other Contracting State the personal allowances, reliefs and reductions for status or dependency that it grants to its own residents.

 

4. Unless the provisions of paragraph 1 of Article 9, paragraph 4 of Article 11 or paragraph 4 of Article 12 are applicable, interest, royalties and other expenses paid by an enterprise of a Contracting State to a resident of the other Contracting State shall be deductible in determining the taxable profits of that enterprise, under the same conditions as if they had been paid to a resident of the other Contracting State as if they had been paid to a resident of the first-mentioned State. Similarly, debts of an enterprise of a Contracting State to a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the same conditions as if they had been contracted with a resident of the first-mentioned State, in determining the taxable capital of that enterprise to a resident of the first-mentioned State.

 

5. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, owned or controlled by one or more residents of the other Contracting State, shall not be subject in the first-mentioned State to any the first-mentioned State to any taxation or any requirement connected therewith which is other or more than those to which other similar enterprises of the first-mentioned State are or may be subjected State.

 

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

 

Article 25

AMICABLE PROCEDURE

1. Where a person considers that the actions of one or both 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 those States, submit its case to the competent authority of the Contracting State of which it is a resident or, if the case comes under paragraph 1 of Article 24, to the competent authority of the Contracting State of which it is a nationality. The case must be submitted within three years after the first notification of the measure which results in taxation not in accordance with the provisions of the Convention.

 

2. The competent authority shall endeavor, if the objection appears to it to be justified and if it is not itself in a position to resolve the case by mutual agreement with the competent authority of the other country authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with the Convention. The agreement shall be applied irrespective of the time limits provided by the domestic law of the States.

 

3. The competent authorities of the Contracting States shall endeavor by mutual agreement to resolve any difficulties or doubts arising as to the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention.

 

4. The competent authorities of the Contracting States may communicate directly with each other with a view to reaching an agreement as described in the preceding paragraphs. If an oral exchange of views agreement, such discussions may take place in a Commission composed of representatives of the competent authorities of the Contracting States.

 

Article 26

EXCHANGE OF INFORMATION

1. The competent authorities of the Contracting States shall exchange such information as is necessary to the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention to the extent that the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Article 1. The information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the Convention. Such persons or authorities shall use such information only for such purposes. They may disclose such information in public court proceedings or in judgments.

 

2. In no case shall the provisions of paragraph 1 be construed to require a Contracting State to

(a) to take administrative action at variance with the laws and administrative practice of that State or of the other Contracting State;

(b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

(c) to supply information which would disclose any trade, business, industrial, commercial or professional secret, or information, the disclosure of which would be contrary to public policy.

 

Article 27

ASSISTANCE IN MATTERS OF RECOVERY

1. The Contracting States undertake to render aid and assistance to each other in the collection of the taxes subject of this Convention and for the collection of interest, costs, surcharges and fines not of a criminal nature.

 

2. The request made for this purpose shall be accompanied by the documents required by the laws of the State to establish that the sums to be recovered are definitely due.

 

3. In the light of these documents, service and collection measures shall be carried out in the requested State in accordance with the laws of that State. in the requested State in accordance with the laws applicable to the collection of its own taxes. In particular, bills of collection shall be made enforceable in the form provided for by the law of that State.

 

4. Tax claims to be collected shall not be considered as privileged claims in the requested State.

 

5. With respect to tax claims which are still subject to appeal, the creditor State to safeguard its rights, the creditor State may request the other State to notify the debtor of a constraint or a collection order. Objection to such notification may be brought only before the competent court of the requesting State.

 

Article 28

DIPLOMATIC AGENTS AND CONSULAR OFFICERS

The provisions of this Convention shall not affect the fiscal privileges of diplomatic agents or consular officials diplomatic agents or consular officers under the general rules of international law or under the provisions of special agreements.

 

Article 29

TERRITORIAL EXTENSION

1. The present Convention may be extended, either as it stands or with the necessary modifications, to any part of the territory of the Contracting States which is specifically excluded from the scope of the Convention and which imposes taxes similar in character to those to which the Convention applies. Any such extension shall take effect from the date, with the modifications and under the conditions, including the conditions relating to termination, as may be mutually agreed upon by the Contracting States by exchange of diplomatic notes or by any other procedure in accordance with their constitutional provisions.

 

2. Unless the two Contracting States have agreed otherwise, the denunciation of the Convention by either of them under Article 31 shall also terminate, under the conditions provided for in that the application of the Convention to any part of the territory of the Contracting States to which it has been extended in accordance with this Article.

 

Article 30

ENTRY INTO FORCE

1. The Governments of the Contracting States shall notify each other that the constitutional requirements for the entry into force of this Convention have been fulfilled.

 

2. This Convention shall enter into force on the date of the last of the notifications referred to in paragraph 1 and its provisions shall be applicable for the first time in each of the two

(a) taxes due at source on income allocated or paid on or after January 1, 1979;

(b) other taxes imposed on income for taxable periods ending after December 31 of the year 1978 ;

(c) wealth taxes assessed for taxable periods ending after December 31, 1978.

 

Article 31

DENUNCIATION

This Convention shall remain in force until denounced by a Contracting State. by a contracting State. Each Contracting State may denounce the Convention through diplomatic channels with a minimum of six months’ notice before the end of each subsequent calendar year commencing after the expiration of five years from the date of its entry into force. In such case, the Convention shall last apply in each of the two States to

(a) to taxes due at source on income allocated or paid on or before December 31 of the year of denunciation;

(b) other taxes assessed on income from taxable periods ending on or before December 31 of the same year;

c) to taxes on wealth assessed for taxable periods ending on or before December 31 of the same year.

 

IN WITNESS WHEREOF the undersigned, duly authorized for such purposes, have executed this Agreement.

 

DONE in duplicate at Luxembourg, this 17th day of November 1980 in the French and Danish languages, both texts being equally authentic.