Double Tax Treaty between Luxembourg & Georgia

CONVENTION

between the Government of the Grand Duchy of Luxembourg and the Government of Georgia for the avoidance of double taxation and the prevention of fiscal fraud with regard to taxes on income and on capital

 

The Government of the Grand Duchy of Luxembourg and the Government of Georgia, desirous of concluding a Convention for the avoidance of double taxation and the prevention of fiscal fraud with regard to taxes on income and on capital, have agreed as follows: follows:

Article 1

Targeted persons

This Convention applies to persons who are residents of a Contracting State or of both Contracting States.

Article 2

Taxes covered

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

 

  1. Taxes on income and on capital shall be regarded as taxes imposed on total income, on total capital, or on elements of income or of capital, including taxes on gains from the alienation of movable or immovable property, taxes on the aggregate amount of wages paid by companies, as well as taxes on capital gains.

 

  1. The current taxes to which this Convention applies are in particular:

To)

in Georgia:

(i)

income tax,

(ii)

income tax, and

(iii)

property tax;

(hereinafter referred to as “Georgian tax”);

b)

in Luxembourg:

(i)

personal income tax,

(ii)

corporate income tax,

(iii)

wealth tax, and

(iv)

municipal business tax;

(hereinafter referred to as “Luxembourg tax”).

  1. This Convention shall also apply to taxes of an identical or similar nature which are established after the date of signature of this Convention and which are added to or replace the existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes made to their respective tax laws.

 

Article 3

General definitions

  1. For the purposes of this Convention, unless the context requires a different interpretation:

 

To)

the term “Georgia” means the territory of Georgia as recognized by the international community within the state borders of Georgia, including the land territory, internal waters and territorial waters, the air space above, over which Georgia exercises its sovereignty, as well as the contiguous zone, the exclusive economic zone and the continental shelf adjacent to its territorial waters, over which Georgia can exercise its sovereign rights in accordance with international law;

b)

the term “Luxembourg” designates the Grand Duchy of Luxembourg; and, when used in a geographical sense, it designates the territory of the Grand Duchy of Luxembourg;

vs)

the expressions “a Contracting State” and “the other Contracting State” mean, as the context requires, Georgia or Luxembourg;

d)

the term “person” includes an individual, a company and any other body of persons;

e)

the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes;

f)

the term “business” applies to the exercise of any activity or business;

g)

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;

h)

the expression “international traffic” means any transport effected by a ship or aircraft operated by an enterprise the place of effective management of which is situated in a Contracting State, except when the ship or aircraft is operated only between points located in the other Contracting State;

i)

the expression “competent authority” means:

(i)

in Georgia, the Ministry of Finance or its authorized representative,

(ii)

in Luxembourg, the Minister of Finance or his authorized representative;

j)

the term “national” means:

(i)

any natural person who has the nationality or citizenship of a Contracting State,

(ii)

any legal person, partnership or association constituted in accordance with the legislation in force in a Contracting State.

  1. For the application of this Convention at any time by a Contracting State, any term or expression which is not defined therein has, unless the context requires a different interpretation, the meaning assigned to it at that time. , the law of that State relating to taxes to which this Convention applies, the meaning attributed to such term or expression by the fiscal law of that State prevailing over the meaning attributed to it by other branches of the law of that State.

 

Article 4

Resident

  1. For the purposes of this Convention, the expression “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, of its residence, its place of management or any other criterion of a similar nature and also applies to that State as well as to all its politico-administrative subdivisions or to its local communities. However, this expression does not include persons who are subject to tax in that State only on income from sources situated in that State or on capital situated there.

 

  1. Where, in accordance with paragraph 1 of this article, a natural person is a resident of both Contracting States, his situation shall be settled as follows:

To)

this person is considered to be a resident only of the Contracting State in which he has a permanent home; if he has a permanent home in both states, he is considered a resident only of the state with which his personal and economic ties are closest (center of vital interests);

b)

if the State in which that person has the center of his vital interests cannot be determined, or if he does not have a permanent home in any of the States, he shall be regarded as a resident only of the State where she stays in the usual way;

vs)

if this person is habitually resident in the two States or if he does not habitually reside in either of them, he shall be considered as a resident only of the State of which he is a national;

d)

if this person possesses the nationality of both States or if he does not possess the nationality of either of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

  1. Where by reason of the provisions of paragraph 1 of this article a person other than an individual is a resident of both Contracting States, it shall be deemed to be a resident only of the State in which its place of effective management is situated.

 

Article 5

Stable establishment

  1. For the purposes of this Convention, the expression “permanent establishment” means a fixed place of business through which an enterprise carries out all or part of its activity.

 

  1. The term “permanent establishment” includes especially:

To)

a seat of management,

b)

branch,

vs)

a desk,

d)

factory,

e)

a workshop, and

f)

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

  1. A construction or assembly site constitutes a permanent establishment only if its duration exceeds 6 months.

 

  1. Notwithstanding the preceding provisions of this article, it is considered that there is no “permanent establishment” if:

To)

facilities are used for the sole purpose of storing, displaying or delivering goods belonging to the company;

b)

goods belonging to the company are stored for the sole purpose of storage, display or delivery;

vs)

goods belonging to the company are stored for the sole purpose of processing by another company;

d)

a fixed place of business is used for the sole purpose of purchasing goods or gathering information, for the business;

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)

a fixed place of business is used solely for the purposes of the cumulative exercise of the activities referred to in sub-paragraphs a) to e) of this paragraph, provided that the overall activity of the fixed place of business resulting from this accumulation retains a preparatory or auxiliary character.

  1. Notwithstanding the provisions of paragraphs 1 and 2 of this article, when a person – other than an agent enjoying an independent status to which paragraph 6 of this article applies – acts on behalf of an enterprise and has in a Contracting State powers which he habitually exercises there enabling him to conclude contracts on behalf of the enterprise, this enterprise is considered as having a permanent establishment in that State for all the activities that this person carries out for the enterprise , unless the activities of that person are limited to those mentioned in paragraph 4 of this article and which, if carried on through a fixed place of business,would not allow this installation to be considered as a permanent establishment under the provisions of this paragraph.

 

  1. An enterprise shall not be considered as having a permanent establishment in a Contracting State by the sole fact that it carries on business there through a broker, a commissionaire general or any other agent enjoying an independent status, provided that these persons act within the ordinary framework of their activity.

 

  1. 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 there (whether through (a permanent establishment or not) is not in itself sufficient to make any one of these companies a permanent establishment of the other.

 

Article 6

Real estate income

  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 expression “immovable property” has the meaning assigned to it by the law of the Contracting State in which the property in question is situated. The expression includes in all cases the accessories, the dead or alive livestock of agricultural and forestry operations, the rights to which the provisions of private law concerning land ownership, the usufruct of immovable property and the rights to variable payments apply. or fixed for the exploitation or concession of the exploitation of mineral deposits, sources and other natural resources; ships and aircraft are not considered real property.

 

  1. The provisions of paragraph 1 of this article shall apply to income derived from the direct exploitation, rental or leasing, as well as from any other form of exploitation of immovable property.

 

  1. The provisions of paragraphs 1 and 3 of this article shall also apply to income from immovable property of a business as well as to income from immovable property used for the exercise of an independent profession.

 

Article 7

Business profits

  1. The profits of an enterprise of a Contracting State may be taxed only in that State, unless the enterprise carries on its activity in the other Contracting State through a permanent establishment therein. located. If the enterprise carries on business in such a manner, the profits of the enterprise may be taxed in the other State, but only to the extent that they are attributable to that permanent establishment.

 

  1. Subject to the provisions of paragraph 3 of this article, where an enterprise of a Contracting State carries on its activity in the other Contracting State through a permanent establishment situated therein, it shall be charged, in each Contracting State, to this permanent establishment the profits which it could have made if it had set up a separate enterprise carrying out identical or similar activities under identical or similar conditions and dealing in complete independence with the enterprise of which it constitutes an establishment stable.

 

  1. In order to determine the profits of a permanent establishment, the expenses incurred for the purposes pursued by this permanent establishment are allowed as deduction, including the management expenses and general administrative expenses thus incurred, either in the State where it is located at that permanent establishment or elsewhere.

 

  1. While it is customary in a Contracting State to determine the profits attributable to a permanent establishment on the basis of an allocation of the total profits of the enterprise among its various parts, nothing in paragraph 2 of this Article does not prevent that Contracting State from determining the taxable profits according to the distribution in use; the distribution method adopted must, however, be such that the result obtained complies with the principles contained in this article.

 

  1. No profit is attributed to a permanent establishment simply because it has purchased goods for the enterprise.

 

  1. For the purposes of the preceding paragraphs of this article, the profits to be attributed to the permanent establishment shall be determined each year using the same method, unless there are valid and sufficient reasons for proceeding otherwise.

 

  1. Where profits include items of income treated separately in other articles of this Convention, the provisions of those articles shall not be affected by the provisions of this article.

 

Article 8

Maritime and air navigation

  1. Profits derived from the operation, in international traffic, of ships or aircraft may be taxed 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, this place of business shall be deemed to be situated in the Contracting State in which the home port of that ship is situated, or failing that home port, in the Contracting State of which the operator of the ship is a resident.
  3. The provisions of paragraph 1 of this article shall also apply to profits from the participation in a pool, a joint business or an international operating agency.

Article 9

Associated companies

  1. When

To)

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 of an enterprise of the other Contracting State,

and that, in either case, the two companies are, in their commercial or financial relations, bound by conditions agreed or imposed, which differ from those which would be agreed between independent companies, the profits which, without these conditions, would have been fulfilled by one of the undertakings, but could not in fact be fulfilled because of these conditions, can be included in the profits of that undertaking and taxed accordingly.

 

  1. When a Contracting State includes in the profits of an enterprise of that State – and taxes accordingly – profits on which an enterprise of the other Contracting State has been taxed in that other State, and the profits so included are profits which would have been realized by the enterprise of the first State if the conditions agreed between the two enterprises had been those which would have been agreed between independent enterprises, the other State makes an appropriate adjustment of the amount of tax which y was collected on these profits. In determining this adjustment, account shall be taken of the other provisions of this Convention and, if necessary, the competent authorities of the Contracting States shall consult each other.

 

Article 10

Dividends

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

 

  1. 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 beneficial owner of the dividends is a resident of the other Contracting State, the tax thus established may not exceed:

 

To)

0 per cent of the gross amount of the dividends if the beneficial owner is a company which directly or indirectly owns at least 50 per cent of the capital of the company which pays the dividends and which has invested more than 2 million euros, or its equivalent in Georgian currency, in the capital of the company paying the dividends;

b)

5 per cent of the gross amount of the dividends if the beneficial owner is a company which directly or indirectly owns at least 10 per cent of the capital of the company paying the dividends and which has invested more than 100,000 euros, or its equivalent in Georgian currency, in the capital of the company paying the dividends;

vs)

10 percent of the gross amount of the dividends in all other cases.

This paragraph does not affect the taxation of the company in respect of the profits out of which the dividends are paid.

 

  1. The term “dividends” used in this article designates income from shares, mine shares, founder’s shares or other beneficiary shares with the exception of claims, as well as income from other shares subject to the same. tax regime as income from shares by the legislation of the state of which the distributing company is a resident.

 

  1. The provisions of paragraphs 1 and 2 of this article do not apply, where the beneficial owner of the dividends, resident in a Contracting State, exercises in the other Contracting State of which the company paying the dividends is a resident, either an industrial or commercial activity through the intermediary of a permanent establishment located there, or an independent profession by means of a fixed base which is located there and which the dividend-generating participation actually attaches to it. In this case, the provisions of article 7 or article 14 of this Convention shall apply.

 

  1. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not levy any tax on the dividends paid by the company, except to the extent that these dividends are paid to a resident of that other State or to the extent that the dividend-generating participation is effectively attached to a permanent establishment or to a fixed base situated in that other State, nor to levy any tax, in respect of the taxation undistributed profits, on the undistributed profits of the company, even if the paid dividends or the undistributed profits consist wholly or in part of profits or income deriving from that other State.

 

Article 11

Interests

  1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed only in that other State, if that resident is the beneficial owner thereof.

 

  1. The term “interest” used in this article means income from debts of any kind, whether or not accompanied by mortgage guarantees or a profit-sharing clause of the debtor, and in particular income from public funds and debt obligations. ‘loans, including premiums and prizes attached to these securities. Penalties for late payment are not considered as interest within the meaning of this article.

 

  1. The provisions of paragraph 1 of this article shall not apply where the beneficial owner of the interest, resident in a Contracting State, exercises in the other Contracting State from which the interest arises, either an industrial or commercial activity by the intermediary of a permanent establishment located there, that is to say an independent profession by means of a fixed base located there, and that the debt generating interest actually relates to it. In this case, the provisions of article 7 or article 14 of this Convention shall apply.

 

  1. When, by reason of special relations existing between the debtor and the beneficial owner or that both have with third parties, the amount of interest, taking into account the claim for which it is paid, exceeds that agreed upon by the debtor and the beneficial owner in the absence of such a relationship, the provisions of this article only apply to the latter amount. In this case, the excess part of the payments remains taxable according to the legislation of each Contracting State and 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 may be taxed only in that other State if that resident is the beneficial owner thereof.

 

  1. The term “royalties” used in this article means remuneration of any kind paid for the use or the concession of the use of a copyright in a literary, artistic or scientific work, including motion pictures, a patent, a trademark, a design, a secret plan, a formula or a process and for information relating to experience acquired in the industrial, commercial or scientific field.

 

  1. The provisions of paragraph 1 of this article shall not apply where the beneficial owner of the royalties, resident of a Contracting State, exercises in the other Contracting State from which the royalties originate, either an industrial or commercial activity. through a permanent establishment located there, or an independent profession by means of a fixed base located there, and that the right or property generating the royalties is actually attached to it. In this case, the provisions of article 7 or article 14 of this Convention shall apply.

 

  1. When, by reason of special relations existing between the debtor and the beneficial owner or that both have with third parties, the amount of the royalties, taking into account the service for which they are paid, exceeds that agreed upon by the debtor and the beneficial owner in the absence of such a relationship, the provisions of this article only apply to the latter amount. In this case, the excess part of the payments remains taxable according to the legislation of each Contracting State and taking into account 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 of this Convention, and situated in the other Contracting State, may be taxed in that other State.

 

  1. Gains arising from the alienation of movable property which forms part of the assets of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, or of movable property which belongs to a base fixed establishment available to a resident of a Contracting State in the other Contracting State for the exercise of an independent profession, including such gains arising from the alienation of that permanent establishment (alone or with the whole of the company) or of this fixed base, are taxable in that other State.

 

  1. Gains from the alienation of ships or aircraft operated in international traffic or movable property assigned to the operation of such ships or aircraft, may be taxed only in the Contracting State where the place of effective management of the business is located.

 

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

 

Article 14

Independent professions

  1. Income which a resident of a Contracting State derives from a liberal profession or from other activities of a self-employed character may be taxed only in that State, unless such resident does not habitually dispose of it in the other Contracting State of a fixed base for the exercise of activities. If that resident 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 especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.

 

Article 15

Employment income

  1. Subject to the provisions of Articles 16, 18, 19, 20 and 21 of this Convention, wages, salaries and other similar remuneration which a resident of a Contracting State receives in respect of paid employment shall not be taxable only in that State, unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

 

  1. Notwithstanding the provisions of paragraph 1 of this article, remuneration which a resident of a Contracting State receives in respect of paid employment exercised in the other Contracting State shall be taxable only in the former State if:

 

To)

the beneficiary stays in the other State for a period or periods not exceeding in the aggregate 183 days during any twelve month period beginning or ending in the fiscal 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

vs)

the cost of remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.

  1. Notwithstanding the foregoing provisions of this article, remuneration received in respect of salaried employment exercised on board a ship or an aircraft operated in international traffic by an enterprise of a Contracting State, may be taxed in the State. Contracting State where the place of effective management of the enterprise is located.

 

Article 16

Tantièmes

Directors’ fees, attendance fees and other similar remuneration received by a resident of a Contracting State in his capacity as a member of the board of directors or supervisory board of a company which is a resident of the other Contracting State, are taxable. in that other state.

 

Article 17

Artists and athletes

  1. Notwithstanding the provisions of Articles 7, 14 and 15 of this Convention, the income which a resident of a Contracting State derives from his personal activities carried on in the other Contracting State as a performing artist, such as an artist in the theater, cinema, radio or television, or a musician, or as an athlete, are taxable in that other State.
  2. When the income from activities that an entertainer or an athlete exercises personally and in this capacity, are attributed not to the artist or to the athlete himself, but to another person, this income is taxable, notwithstanding the provisions of Articles 7, 14 and 15 of this Convention, in the Contracting State where the activities of the artist or sportsman are carried out.

 

  1. Notwithstanding the foregoing provisions of this article, the income which entertainers or sportsmen, who are residents of a Contracting State, derive from their activities carried on in the other Contracting State under a program of The cultural exchange agreed between the Governments of the two Contracting States is exempt from tax in that other State.

 

Article 18

Pensions

  1. Subject to the provisions of paragraph 2 of article 19 of this Convention, pensions and other similar remuneration paid to a resident of a Contracting State in respect of previous employment shall be taxable only in that State. .
  2. Notwithstanding the provisions of paragraph 1 of this article, pensions and other sums paid under the social security legislation of a Contracting State shall be taxable only in that State.

 

Article 19

Public functions

1.

To)

Salaries, wages and other similar remuneration, other than pensions, paid by a Contracting State or one of its political and administrative subdivisions or local authorities to a natural person, in respect of services rendered to that State or to that subdivision or collectivity, are taxable only in that State.

b)

However, such salaries, wages and other similar remuneration may be taxed only in the other Contracting State, if the services are rendered in that State and if the individual is a resident of that State who:

(i)

has the nationality of that State, or

(ii)

did not become a resident of that State for the sole purpose of rendering the services.

2.

To)

Pensions paid by a Contracting State or one of its politico-administrative subdivisions or local authorities, either directly or by deduction from funds they have established, to a natural person, for services rendered to that State or to this subdivision or community, are taxable only in that State.

b)

However, these pensions are taxable only in the other Contracting State if the individual is a resident of that State and holds its nationality.

  1. The provisions of Articles 14, 15, 16, 17 and 18 shall apply to wages, salaries and other similar remuneration as well as to pensions paid for services rendered in the course of an industrial or commercial activity exercised by a Contracting State or one of its political-administrative subdivisions or local authorities.

 

Article 20

Professors, teachers and scientific researchers

  1. A professor, teacher or scientific researcher, who travels to one of the Contracting States for a period not exceeding two years to teach or carry out research in a university, college, school or other institution teaching or research in that State, and who immediately before going to that State was a resident of the other Contracting State, is taxable only in that other State for any remuneration received for such teaching or research. However, this paragraph only applies for a period not exceeding two years from the date of the natural person’s first visit to the first State for the purposes mentioned.
  2. The provisions of this article are applicable to the income received for research only when such research is undertaken by the natural person in the public interest and not mainly for the benefit of another or other private persons.

 

Article 21

Students

  1. Amounts that a student or trainee who is, or who was immediately before going to a Contracting State, a resident of the other Contracting State and who stays in the first State for the sole purpose of continuing his studies or training, received to cover the costs of maintenance, studies or training, are not taxable in that State, provided they come from sources outside that State.

 

  1. The remuneration which a student or trainee who is, or who was immediately before going to a Contracting State, a resident of the other Contracting State, derives from a salaried employment which he exercises in the first State for a period or periods not exceeding in total 183 days during the fiscal year in question, are not taxable in the first State if the salaried employment is in direct relation with these studies or his internship carried out in this other State .

 

Article 22

Other income

  1. Items of income of a resident of a Contracting State, wherever they arise, which are not dealt with in the preceding articles of this Convention, shall be taxable only in that State.

 

  1. The provisions of paragraph 1 of this article shall not apply to income other than income from immovable property as defined in paragraph 2 of article 6 of this Convention, when the recipient of such income , resident of a Contracting State, exercises in the other Contracting State, either an industrial or commercial activity through a permanent establishment situated there, or an independent profession by means of a fixed base which is there located, and that the right or the income-generating property actually attaches to it. In this case, the provisions of article 7 or article 14 of this Convention shall apply.

 

  1. Notwithstanding the provisions of paragraphs 1 and 2 of this article, the items of income which an individual who is a resident of a Contracting State derives from games of chance and lottery and which derives from the other Contracting State, are taxable in that other State.

 

Article 23

Fortune

  1. Wealth constituted by immovable property referred to in article 6 of this Convention, which is owned by a resident of a Contracting State and which is situated in the other Contracting State, may be taxed in that other State.

 

  1. Wealth consisting of movable property which forms part of the assets of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State may be taxed in that other State.

 

  1. The fortune constituted by ships and aircraft operated in international traffic, as well as by movable property assigned to the operation of these ships or aircraft, is taxable only in the Contracting State where the place of effective management of the company is located.
  2. All other elements of the capital of a resident of a Contracting State may be taxed only in that State.

 

Article 24

Elimination of double taxation

1.

To)

Where a resident of Georgia receives income or owns capital which, in accordance with the provisions of this Convention, is taxable in Luxembourg, Georgia shall grant

(i)

on the tax it collects on the income of this resident, a deduction of an amount equal to the income tax paid in Luxembourg,

(ii)

from the tax it collects on the wealth of this resident, a deduction of an amount equal to the wealth tax paid in Luxembourg.

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

b)

Where, in accordance with any provision of this Convention, the income which a resident of Georgia receives or the capital he possesses is exempt from tax in Georgia, Georgia may nevertheless, for calculating the amount of the tax on the remainder of the income or fortune of this resident, take into account the exempted income or fortune.

  1. Subject to the provisions of Luxembourg law concerning the elimination of double taxation which do not affect the general principle, double taxation is avoided as follows:

To)

When a resident of Luxembourg receives income or possesses capital which, in accordance with the provisions of this Convention, is taxable in Georgia, Luxembourg shall exempt such income or capital from tax, subject to the provisions of sub-paragraphs b) and c), but may, in order to calculate the amount of tax on the remainder of the resident’s income or capital, apply the same tax rates as if the income or capital had not been exempted.

b)

When a resident of Luxembourg receives items of income which, in accordance with the provisions of Articles 10 and 17 of this Convention, are taxable in Georgia, Luxembourg grants on personal income tax or on personal income tax. the corporate income of that resident, a deduction in an amount equal to the tax paid in Georgia. This deduction may not, however, exceed the fraction of the tax, calculated before deduction, corresponding to these items of income received from Georgia.

vs)

The provisions of sub-paragraph a) shall not apply to income received or to capital possessed by a resident of Luxembourg, where Georgia applies the provisions of this Convention to exempt such income or capital from tax or applies the provisions of this Convention. the provisions of paragraph 2 of Article 10 of this Convention to this income.

Article 25

No discrimination

  1. Nationals of a Contracting State shall not be subject in the other Contracting State to any taxation or obligation relating thereto which is other or more onerous than those to which nationals of that other State who find themselves in the same situation, in particular with regard to residence. This provision shall, notwithstanding the provisions of Article 1 st of this Convention, persons who are not residents of one Contracting State or two Contracting States.

 

  1. Stateless persons who are residents of a Contracting State shall not be subject in either Contracting State to any taxation or obligation relating thereto which is other or more onerous than those to which nationals are or may be subject. of the State concerned who are in the same situation, in particular with regard to residence.

 

  1. The taxation of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be established in that other State in a less favorable manner than the taxation of enterprises of that other State. other State carrying out the same activity. This provision may not be interpreted as obliging a Contracting State to grant to residents of the other Contracting State the personal deductions, allowances and tax reductions according to the situation or the family responsibilities which it grants to its own residents. .

 

  1. Unless the provisions of paragraph 1 of article 9, paragraph 4 of article 11 or paragraph 4 of article 12 apply, interest, royalties and other expenses paid by an enterprise of a Contracting State to a resident of the other Contracting State, are deductible, for the determination of the taxable profits of that enterprise, under the same conditions as if they had been paid to a resident of the first State. Likewise, the debts of an enterprise of a Contracting State towards a resident of the other Contracting State are deductible, for the determination of the taxable fortune of this enterprise, under the same conditions as if they had been contracted towards a resident. of the first state.

 

  1. Enterprises of a Contracting State, the capital of which is wholly or in part, directly or indirectly, owned or controlled by one or more residents of the other Contracting State, shall not be subject in the first State to any taxation or obligation relating thereto, which is different or heavier than those to which other similar enterprises of the first State are or may be subject.

 

  1. The provisions of this article shall apply to the taxes covered by this Convention.

 

Article 26

Amicable procedure

  1. Where a person considers that the measures taken by a Contracting State or by both Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, independently of the remedies provided for by the internal law of those Contracting States States, submit her case to the competent authority of the Contracting State of which she is a resident or, if her case falls under paragraph 1 of Article 25 of this Convention, to that of the Contracting State of which she is a resident. Nationality. 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 this Convention.

 

  1. The competent authority shall endeavor, if the complaint appears to it to be justified and if it is not itself able to find a satisfactory solution, to resolve the case by amicable agreement with the authority. jurisdiction of the other Contracting State, for the avoidance of taxation not in accordance with this Convention. The agreement is applied regardless of the time limits provided for by the internal law of the Contracting States.

 

  1. The competent authorities of the Contracting States shall endeavor, by mutual agreement, to resolve any difficulties or to dispel any doubts which may arise in the interpretation or application of this Convention. They may also consult together for the elimination of double taxation in cases not provided for in this Convention.

 

  1. The competent authorities of the Contracting States may communicate with each other directly, including within a joint commission composed of these authorities or their representatives, with a view to reaching an agreement as indicated in the preceding paragraphs of this article.

 

Article 27

Exchange of information

  1. The competent authorities of the Contracting States shall exchange the information necessary for applying the provisions of this Convention or those of the domestic legislation of the Contracting States relating to the taxes covered by this Convention, insofar as the taxation it provides for does not is not contrary to this Convention. Information received by a Contracting State shall be kept secret in the same way as information obtained under the domestic law of that State and shall only be communicated to persons or authorities (including courts and administrative bodies) concerned by the decision. establishment or collection of taxes covered by the Convention, by proceedings or prosecutions relating to such taxes, or by decisions on appeals relating to such taxes. These persons or authorities only use this information for these purposes. They may reveal this information in public court hearings or in judgments.

 

  1. The provisions of paragraph 1 of this article may in no case be interpreted as imposing on a Contracting State the obligation:

To)

to take administrative measures at variance with its laws and administrative practice or those 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;

vs)

to provide information which would reveal a trade secret, industrial, professional or a trade process or information the communication of which would be contrary to public order.

Article 28

Members of diplomatic missions and consular posts

The provisions of this Convention are without prejudice to the fiscal privileges enjoyed by members of diplomatic missions or consular posts by virtue either of the general rules of international law or of the provisions of special agreements.

 

Article 29

Amendments and additions

The Contracting States may, in the form of separate Protocols and forming an integral part of this Convention, make amendments and additions to this Convention by mutual agreement. These amendments and additions shall enter into force in accordance with the provisions of article 30 of this Convention.

 

Article 30

Coming into force

  1. Each of the Contracting States shall notify the other in writing through the diplomatic channel of the completion of the procedures required by its law for the entry into force of this Convention. This Convention shall enter into force on the date of receipt of the last of these notifications.
  2. This Convention shall apply:

To)

in respect of taxes withheld at source, to income derived on or after 1 st January in the calendar year immediately following the year in which the Convention enters into force;

b)

in respect of other taxes on income and taxes on capital, for taxes chargeable for any tax year beginning on or after 1 st January in the calendar year immediately following the year in which the Convention will come into force.

Article 31

Denunciation

  1. This Convention shall remain in force indefinitely. Each Contracting State may denounce this Convention through the diplomatic channel with a minimum notice of six months before the end of each calendar year beginning after the expiration of a period of five years from the date of its entry into force.
  2. This Convention shall cease to be applicable:

To)

in respect of taxes withheld at source, to income derived on or after 1 st January in the calendar year immediately following the year in which the notice is given;

b)

in respect of other taxes on income and taxes on capital, for taxes chargeable for any year of assessment beginning on or after 1 st January in the calendar year immediately following the year in which the notice given.

IN WITNESS WHEREOF the undersigned, being duly authorized for this purpose, have signed this Convention.

DONE in duplicate at Luxembourg on October 15, 2007, in the French, Georgian and English languages, the three texts being equally authentic.

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