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 CONVENTION

Between the Grand Duchy of Luxembourg and the Federal Republic of Germany

for the avoidance of double taxation and the prevention of fiscal evasion

with respect to taxes on income and on capital,

signed in Berlin on 23 April 2012

 

The Grand Duchy of Luxembourg

and

the Federal Republic of Germany,

 

Guided by the desire to promote their economic relations through the reduction of tax obstacles and to consolidate their cooperation in the tax field

 

HAVE AGREED AS FOLLOWS:

 

Article 1

Persons covered by the Agreement

This Agreement shall apply to persons who are residents of a Contracting State or of both Contracting States.

 

Article 2

Taxes covered by the Convention

(1) This Convention shall apply, irrespective of the manner in which they are levied, to taxes on income and on capital which are levied on behalf of a Contracting State, of one of its territorial authorities or, in the case of the Federal Republic of Germany, of one of its Länder.

 

(2) Taxes on income and on capital shall be deemed to be all taxes levied on the total income, on the total capital, or on any part of the income or capital, including taxes on the gain from the alienation of movable or immovable property, payroll taxes, as well as taxes on the capital gains.

 

(3) The presently existing taxes to which this Agreement applies include in particular

 

  1. a) in the Federal Republic of Germany

– the income tax,

– the corporation tax,

– the trade tax, and

– the wealth tax

including the surcharges levied thereon

(hereinafter referred to as the “German Tax”);

 

  1. b) in the Grand Duchy of Luxembourg:

– the income tax,

– the corporate income tax

– the trade tax, and

– the net worth tax

including the surcharges levied thereon

(hereinafter referred to as the “Luxembourg tax”).

 

(4) The Agreement shall also apply to any taxes of the same or substantially similar nature imposed after the signing of the Agreement are imposed in addition to or in lieu of existing taxes. The competent authorities of the Contracting States shall notify each other of significant changes which have occurred in their tax laws.

 

Article 3

General definitions

(1) For the purposes of this Agreement, unless the context otherwise requires,

 

(a) the expressions “a Contracting State” and “the other Contracting State” mean, according to the context, the Federal Republic of Germany or the Grand Duchy of Luxembourg;

b) the expression “the Federal Republic of Germany” means the territory of the Federal Republic of Germany and the area of the seabed, the subsoil and the water column above it adjoining the territorial sea, insofar as the water column above it, insofar as the Federal Republic of Germany has jurisdiction therein in accordance with in accordance with international law and its domestic legal provisions, sovereign rights and sovereign powers there for the purpose of exploration, exploitation, conservation and management of the living and non-living natural resources;

 c) the term “Luxembourg” means the Grand Duchy of Luxembourg and, when used in a geographical sense used, the territory of the Grand Duchy of Luxembourg;

 d) the term “person” includes natural persons, companies and all other associations of persons;

 e) the term “company” means legal persons or entities which are treated for taxation purposes as if they were legal persons for taxation purposes;

 (f) the term “business” refers to the conduct of a business activity;

 (g) the term “business” shall include the practice of a professional or other self-employed activity; and self-employed activity;

 (h) the expressions “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean, as the case may be, an enterprise carried on by a resident of a Contracting State, or an enterprise operated by a resident of the other Contracting State;

(i) the term “international transport” means any transport by sea or air carried is operated by an enterprise having its effective management in a Contracting State, unless, the sea-going vessel or aircraft is operated exclusively between points in the other Contracting State;

(j) the term “national” means.

a) in relation to the Federal Republic of Germany, all Germans within the meaning of the Basic Law for the Federal Republic of Germany as well as all legal persons, partnerships and other associations of persons established in accordance with the law in force in the Federal Republic of Germany; and have been established;

b) with respect to Luxembourg, all natural persons who are Luxembourg nationals, as well as all legal entities, partnerships and other associations of persons established in accordance with the law in force in Luxembourg;

k) the term “competent authority” means

a) in the Federal Republic of Germany, the Federal Ministry of Finance or the authority to which it has delegated its has delegated its powers;

b) in Luxembourg, the Minister of Finance or his authorized representative.

 

(2) In the application of the Agreement by a Contracting State, unless the context otherwise requires, any expression not defined in the Agreement shall have the meaning given to it in the period of application under the law of of that State relating to the taxes to which the Agreement applies, the meaning under the tax law applicable in that State taking applicable in such State shall prevail over any meaning given to such term under any other law of such State.

of that State.

 

Article 4

Resident

(1) For the purposes of this Agreement, the expression “a resident of a Contracting State” means a person who, under the law of that State, is taxable there by reason of his domicile, his permanent residence, the place of his of management or other similar characteristic, and shall also include such State, any of its territorial authorities or, in the case of the Federal Republic of Germany, one of its Länder. The term shall however, not include a person who is subject to tax in this State only on income derived from sources in this State or on property situated in that State.

(2) If, under paragraph (1), an individual is a resident of both Contracting States, the following shall apply:

(a) the individual shall be deemed to be a resident only of the State in which he has a permanent home; if he has a permanent home in State, he or she shall be deemed to be a resident only of the State with which he or she has the closest personal and economic ties (centre of gravity). personal and economic relations (center of vital interests);

(b) it cannot be determined in which State the person has the center of his vital interests, or has no permanent home in any of the States, he shall be deemed to be a resident only of the State in which he has his habitual in which he or she has his or her habitual residence;

(c) if the person has his or her habitual residence in both States or in neither of them, he or she shall be deemed to be a resident only resident in the State of which he or she is a national;

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

 

(3) If, in accordance with paragraph 1 of this article, a person other than a natural person is a resident of both Contracting States, he shall be deemed to be a resident only of the State in which the place of his effective management is situated.

 

Article 5

Permanent establishment

(1) For the purposes of this Agreement, the term “permanent establishment” means a fixed place of business through which the activities of an enterprise are wholly or partly activity 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) a place of business

d) a manufacturing plant

(e) a workshop; and

(f) a mine, oil or gas deposit, quarry, or other site of exploitation of natural resources.

 

(3) A construction or assembly operation is a permanent establishment only if its duration exceeds twelve months.

 

(4) Notwithstanding the foregoing provisions of this Article, the following shall not be considered permanent establishments:

 

(a) facilities used exclusively for the storage, display or delivery of goods or merchandise of the enterprise are used;

(b) stocks of goods or merchandise of the enterprise maintained exclusively for storage, display or delivery;

(c) inventories of goods or merchandise of the enterprise maintained exclusively for the purpose, to be handled or processed by another enterprise;

(d) a fixed place of business maintained solely for the purpose of purchasing goods or merchandise for the business or goods or to procure information for the enterprise;

(e) a fixed place of business maintained for the sole purpose of carrying on for the enterprise other activities that are preparatory or ancillary to the business;

(f) a fixed place of business maintained for the sole purpose of carrying on more than one of the activities referred to in points (a) to (e), provided that the resulting overall activity of the fixed place of business is preparatory or ancillary. overall activity of the fixed place of business is of a preparatory nature or constitutes an auxiliary activity.

 

(5) Where a person, other than an independent representative as defined in paragraph (6), works for an enterprise and has authority in a Contracting State to enter into contracts on behalf of the enterprise, and habitually exercises the authority there, the enterprise shall, notwithstanding the provisions of paragraphs 1 and 2, be deemed to have State for all activities carried on by the person on behalf of the enterprise, unless those activities are confined activities are limited to those referred to in paragraph 4, which, if carried on through a fixed place of business, that place of business would be considered a permanent establishment under paragraph 4. business establishment, would not make that establishment a permanent establishment under that paragraph.

 

(6) An enterprise shall not be treated as having a permanent establishment in a Contracting State merely because it carries on its business there through a broker, commission agent or other independent representative, provided that such persons are acting in the ordinary course of their business.

 

(7) The mere fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of or carries on business (whether through a permanent establishment or otherwise) in the other Contracting State or otherwise), neither company shall become a permanent establishment of the other.

 

Article 6

Income from immovable property

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

 

(2) The expression “immovable property” shall have the meaning given to it under the law of the Contracting State in which the property is situated. The expression shall in any case include the appurtenances to immovable property, the living and dead inventory of agricultural and forestry holdings, the rights to which the provisions of private law apply in respect of land, rights to use immovable property, and rights to variable or fixed remunera or the right to exploit mineral deposits, springs and other natural resources; ships and aircraft are excluded. resources; vessels and aircraft shall not be considered immovable property.

 

(3) Paragraph (1) shall apply to income derived from the direct use, rental or leasing, and any other type of use of immovable property.

 

(4) Paragraphs (1) and (3) shall also apply to income from immovable property of an enterprise.

 

Article 7

Company 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 a permanent establishment situated therein. If the enterprise carries on business in this manner, the profits attributable to the permanent establishment in accordance with paragraph 2 may be taxed in the other State.

 

(2) For the purposes of this Article and Article 22, the profits attributable in each Contracting State to a permanent establishment referred to in referred to in paragraph 1 of this article shall be the profits which the permanent establishment earns, in particular in its in its economic relations with other parts of the enterprise, would be expected to derive if it were were a separate and independent enterprise and carried on the same or similar activities under the same or similar or similar conditions, taking into account the functions carried out by the permanent establishment and by the other parts of the of the enterprise, the assets used and the risks assumed by the enterprise.

 

(3) Where, in accordance with paragraph (2), a Contracting State adjusts the profits attributable to the permanent establishment of an enterprise of a Contracting State and, accordingly, taxes profits of the enterprise already taxed in the other State, the other State shall, to the extent necessary to eliminate any taxation of such profits, the other State shall, to the extent necessary to eliminate double taxation of such profits, make an appropriate State shall make an appropriate adjustment of the tax imposed on such profits if it consents to the adjustment made by the first the other Contracting State does not consent, the Contracting States shall eliminate any resulting double taxation by a mutual agreement procedure.

 

(4) If the profits include income dealt with in other articles of this Convention, the provisions of those Articles shall not be affected by the provisions of this Article.

 

Article 8

Maritime, inland waterway and air transport

(1) Profits from the operation of sea-going vessels 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) Profits from the operation of inland waterway vessels shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. place of effective management of the enterprise is situated.

 

(3) For the purposes of this Article, the term “profits from the operation of sea-going vessels or aircraft in international traffic” also includes profits derived from

 

(a) occasional hiring out of empty sea-going vessels or aircraft; and

(b) use or rental of containers (including trailers and related equipment used for the transport of the containers), if these activities are part of the operation of sea vessels or aircraft in international traffic. The same shall apply to profits from the operation of inland vessels.

 

(4) If the place of effective management of an enterprise engaged in maritime or inland navigation is located on of a ship, it shall be deemed to be situated in the Contracting State in which the home port of the ship is situated, or, if there is there is no home port, it shall be deemed to be situated in the Contracting State in which the person operating the ship is a resident.

 

(5) Paragraph (1) shall also apply to profits from participation in a pool, joint venture or international operating agency.

 

Article 9

Affiliated enterprises

(1) If

(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 of an enterprise of the other Contracting State of an enterprise of a Contracting State and an enterprise of the other Contracting State and, in such cases, the commercial or financial relations of the two enterprises are subject to or financial relations are bound by agreed or imposed terms and conditions that differ from those that would be agreed between enterprises would agree with each other, the profits that would have been earned by one of the enterprises in the absence of those but did not make because of those conditions, may be included in the profits of that company and taxed accordingly. enterprise and taxed accordingly.

 

(2) Where, in a Contracting State, profits are attributed to the profits of an enterprise of that State – and are taxed accordingly taxed accordingly – with which an enterprise of the other Contracting State has been taxed in that State, and the profits so attributed are profits which the enterprise of the first-mentioned State would have earned if the terms agreed upon between the two enterprises had been the same as would be agreed upon between independent enterprises, the other State shall make a corresponding adjustment to the tax there tax levied on such profits. In making such modification, the other provisions of this Agreement shall be taken into account and, if necessary, the competent authorities of the Contracting States shall consult each other.

 

Article 10

Dividends

(1) Dividends paid by a resident of a Contracting State to a resident of the other Contracting State may be taxed in the other State.

 

(2) However, such dividends may also be taxed in the Contracting State in which the company paying the dividends is a of that State; provided, however, that if the beneficial owner of the dividends is a resident of the other Contracting dividends is a resident of the other Contracting State, the tax shall not exceed:

 

(a) 5 percent of the gross amount of the dividends, if the beneficial owner is a corporation (but not a partnership or investment company) which directly owns at least 10 percent of the capital of the company of the company paying the dividends;

(b) 15 percent of the gross amount of the dividends in all other cases;

(c) notwithstanding the provisions of subparagraphs (a) and (b), 15 percent of the gross amount of the dividends if the distributing company is a real estate investment company whose profits are fully or partially exempt from tax or which may deduct the distributions in determining its profits.

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

 

(3) The term “dividends” as used in this Article means income from shares, participation rights or profit participation certificates, coxes, founder’s shares, or other income that is treated for tax purposes as income from shares under the law of the State in which the distributing company is resident, as well as distributions on unit certificates in an investment fund.

 

(4) The provisions of paragraphs (1) and (2) shall not apply if the beneficial owner who is a resident of a Contracting State is resident in the other Contracting State of which the company paying the dividends is a resident carries on business through a permanent establishment situated other Contracting State in which the company paying the dividends is a resident, carries on business through a permanent establishment situated therein, and the shareholding in respect of which the dividends are paid permanent establishment. In this case, Article 7 shall apply.

 

(5) Where a resident of a Contracting State derives profits or income from the other Contracting State, that other State shall not tax the dividends paid by the company unless such dividends are paid to a resident of the other State. dividends are paid to a resident of the other State, or that the interest in respect of which the dividends are paid actually belongs to a resident of the other actually belongs to a permanent establishment situated in the other state, nor profits of the company subject to a tax on undistributed profits, even if the dividends paid or the undistributed profits consist in whole or in part of profits or income earned in the other State.

 

Article 11

Interest

(1) Interest arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in the other State.

 

(2) The term “interest” as used in this Article means income from claims of every kind, even if the claims are secured by liens on immovable property, and in particular income from public bonds and from bonds, including related premiums and profits from lot bonds. Surcharges for late payment shall not be considered as interest for the purposes of this Article. However, the term “interest” shall not include the income dealt with in Article 10.

 

(3) The provisions of paragraph (1) shall not apply if the beneficial owner, being a resident of a Contracting State, carries on business in the other Contracting State from which the interest arises through a permanent establishment situated therein and the debt-claim in respect of which the interest is paid actually belongs to that permanent establishment. In this case, Article 7 shall apply.

 

(4) If there are special relations between the debtor and the beneficial owner, or between each of them and a third party and, therefore, the interest, measured by the underlying claim, exceeds the amount which the debtor and the beneficial owner would have agreed upon in the absence of such relations, this Article shall be shall apply only to the latter amount. In such case, the excess amount may be recovered in accordance with the law of any Contracting State and taking into account the other provisions of this Agreement.

 

Article 12

Royalties

(1) Royalties derived from a Contracting State and paid to a resident of the other Contracting State may be taxed in the other State.

 

(2) However, such royalties may also be taxed in the Contracting State from which they arise in accordance with the law of that State; provided, however, that if the beneficial owner of the royalties is a resident of the other Contracting State, the tax shall not exceed 5 percent of the gross amount of the royalties.

 

(3) The term “royalties” as used in this Article means remuneration of any kind paid for the use of, or for the right to use, copyrights in literary, artistic or scientific works, including cinematographic films, of patents, trademarks, designs or models, plans, secret formulas or processes, or for the communication of industrial, commercial or scientific experience. shall be paid.

 

(4) The provisions of paragraphs (1) and (2) shall not apply if the right holder resident in a Contracting State in the other Contracting State from which the royalties arise, carries on business through a permanent establishment situated therein, and the rights or assets in respect of which the royalties are paid actually belong to that permanent establishment. In this case, Article 7 shall apply.

 

(5) Royalties shall be deemed to arise in a Contracting State if the debtor is a resident of that State. However, if the debtor of the royalties, whether or not he is a resident of a Contracting State of a Contracting State and the obligation to pay the royalties has been incurred for the purposes of the permanent establishment, and purposes of the permanent establishment and the permanent establishment bears the royalties, the royalties shall be deemed to arise in the State in which the permanent establishment is situated.

 

(6) If there are special relationships between the debtor and the beneficial owner, or between each of them and a third party, and if, as a result, the royalties exceed, measured by the underlying performance, the amount which would have been agreed upon by the debtor and the beneficial owner in the absence of such relations, this Article shall be applied shall apply only to the latter amount. In such a case, the excess amount may be recovered in accordance with the law of any Contracting State and taking into account the other provisions of this Convention.

 

Article 13

Gains from the alienation of property

(1) Gains derived by a resident of a Contracting State from the alienation of immovable property within the meaning of referred to in Article 6 which is situated in the other Contracting State may be taxed in the other State.

 

(2) Gains derived by a resident of a Contracting State from the alienation of shares or comparable rights in a company more than 50 percent of the value of which consists directly or indirectly of immovable property situated in the other Contracting State may be taxed in the other State.

 

(3) Gains from the alienation of movable property which is the business property of a permanent establishment which an State has in the other Contracting State, including such gains realized on the alienation of such a permanent establishment (alone or with the rest of the enterprise), may be taxed in the other State.

 

(4) Gains from the alienation of sea-going vessels or aircraft operated in international traffic, of vessels used for inland waterway transport, and of movable property used in the operation of such vessels or aircraft may be taxed only in the Contracting State in which the place of effective management of the enterprise is situated.

 

(5) Gains from the alienation of property not referred to in paragraphs (1) to (4) may be taxed only in the Contracting State of which the alienator is a resident.

 

(6) In the case of an individual who has been a resident of a Contracting State for at least five years and who has become a resident of the of the other Contracting State, the provisions of paragraph 5 shall not affect the right of the first-mentioned State, in the case of shares in of companies which are residents of the first-mentioned Contracting State, in accordance with its domestic law, to the person an increase in his capital until his change of residence. In this case, the capital gain taxed in the first-mentioned State shall not be included in the determination by the other State of the subsequent capital gain. State shall not be included.

 

Article 14

Income from employment

(1) Subject to the provisions of Articles 15 to 19, salaries, wages and similar remuneration derived by a resident of a Contracting State from employment shall be taxable only in that State, unless the work is is performed in the other Contracting State. If the work is performed there, the remuneration received therefor may be taxed in the other State

 

(2) Notwithstanding paragraph (1), remuneration received by a resident of a Contracting State in respect of employment carried on in the other Contracting State may be taxed in the first-mentioned State only if

(a) the recipient is not present in the other State for more than 183 days in the aggregate during any period of twelve months beginning or ending during the calendar year in question, and

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

(c) the remuneration is not borne by a permanent establishment that the employer has in the other state.

 

(3) The provisions of subsection (2) shall not apply to remuneration for work performed in the course of a commercial hiring out of employees.

 

(4) Notwithstanding the foregoing provisions of this Article, remuneration for work performed on board an ocean-going vessel, aircraft in international traffic, or a vessel used for inland navigation, may be taxed in the Contracting State. work performed on board a sea-going vessel or an aircraft used for inland navigation may be taxed in the Contracting State in which the place of effective management of the enterprise operating the vessel or aircraft is situated. As long as that State does not tax the income from such work, the State of taxed, the State of residence shall have the right of taxation in respect of such income.

 

Article 15

Remuneration of supervisory board and board of directors

Remuneration of supervisory boards or boards of directors and similar payments received by a resident of a Contracting State in his capacity of a company which is a resident of the other Contracting State may be taxed in the State of residence.

 

Article 16

Artists and sportsmen

(1) Notwithstanding the provisions of Articles 7 and 14, income derived by a resident of a Contracting State as an artist, such as stage, film, radio and television artists and musicians, or as a sportsman, from his personal activities in the other Contracting carried on personally in the other Contracting State shall be taxed in the other State.

 

(2) If income from an activity personally pursued by an artist or sportsman in that capacity flows not to the artist or sportsman himself but to another person, such income may, notwithstanding the provisions of Articles 7 and 14, such income may be taxed in the Contracting State in which the artist or sportsman carries on his activities.

 

(3) The provisions of paragraphs (1) and (2) of this article shall not apply to income derived from activities carried on by artists or sportsmen in a Contracting State if the residence in that State is wholly or mainly financed from public funds of the other State of the other State or of one of its Länder or of one of their regional or local authorities, or by an institution recognized as a charitable recognized as a non-profit organization in the other state. In this case, the income may be taxed only in the other Contracting State.

 

Article 17

Pensions, annuities and similar allowances

(1) Subject to the provisions of paragraph (2) of Article 18, pensions and similar allowances or annuities received by a resident of a Contracting State may be taxed only in the first-mentioned State.

 

(2) Remuneration received by a resident of a Contracting State from the compulsory social insurance scheme of the other Contracting other Contracting State may, notwithstanding paragraph 1, be taxed only in that other State.

 

(3) Pensions, similar allowances or annuities originating in the Federal Republic of Germany which are wholly or part of which are based on contributions which, in the Federal Republic of Germany, for a period of more than twelve years

a) did not form part of taxable income, or

b) were tax-deductible, or

c) were otherwise tax-privileged, may, notwithstanding paragraph 1, be taxed only in the Federal Republic of Germany. This paragraph shall not Federal Republic of Germany actually taxes the retirement pensions, similar remunerations or annuities, if the tax taxation, if the tax concession has been reclaimed for any reason, or if the period of twelve years in accordance with sentence 1 has been fulfilled in both Contracting States.

 

(4) Notwithstanding the provisions of paragraph (1), pensions and similar remuneration (including lump-sum payments) which Luxembourg and paid to a resident of the Federal Republic of Germany may not be taxed in the Federal Republic of Germany if they are paid to a resident of the Federal Republic of Germany. Federal Republic of Germany if these payments result from contributions, allocations and insurance premiums paid by or on behalf of the recipient to a supplementary pension scheme, or from endowments made by the employer to an in-house scheme, and these contributions, allocations, insurance premiums or endowments are taxed in Germany, insurance premiums or endowments were taxed in Luxembourg.

 

(5) Recurring and non-recurring remuneration paid by a Contracting State or a local authority thereof to a resident of the other Contracting State by way of compensation for political persecution or for wrongs or injuries on account of acts of war (including reparations) or military or civilian service, or of a crime, vaccination, or similar occurrence, may, notwithstanding paragraph (1), be taxed only in the first-mentioned State.

 

(6) The term “annuity” means a specified amount paid periodically at stated times for life or during a definite or determinable period of time by reason of an obligation to make such payments as consideration for a reasonable benefit effected in money or money’s worth.

 

Article 18

Public service

(1) 

(a) Salaries, wages and similar remuneration, other than pensions, paid by a Contracting State, one of State, one of its provinces or one of its local authorities, or by any other legal person governed by public of that State to an individual for services rendered to that State, to one of its countries, to one of their territorial authorities, or to another legal person governed by public law may be taxed only in this State.

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

(a) is a national of that State; or

(b) has not become a resident of that State solely for the purpose of performing the services.

 

(2) 

(a) Pensions paid by a Contracting State, one of its Länder, one of their local authorities, or any other legal person under public law of that State, or from pensions paid by that State, one of its States, one of its regional or local authorities, or another legal person governed by public law to a natural person on behalf of that State, one of its Länder, one of their territorial authorities or another territorial authorities or another legal person under public law, may be taxed only in that State.

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

 

(3) Salaries, wages and similar remuneration, and pensions for services rendered in connection with a business activity of a Contracting State, of one of its countries, of one of its territorial authorities, or of another legal person governed by public law of that State, Articles 14, 15, 16 or 17 shall apply.

 

(4) The provisions of paragraphs 1 and 2 of this article shall also apply to wages, salaries and similar remuneration and pensions paid to natural persons for services rendered to the Goethe-Institut, the German Academic Exchange Service and other similar institutions to be mutually determined by the competent authorities of the Contracting States. to be determined by mutual agreement. If such remuneration is not taxed in the State in which the institution is established, the provisions of taxed in the State in which the institution is established, Article 14 shall apply.

 

Article 19

Visiting professors, teachers and students

(1) An individual who, at the invitation of a Contracting State or of a university, college, school, a museum or other cultural institution of that Contracting State, or in the course of official cultural exchanges, resides in that Contracting State for a period not exceeding two years solely for the purpose of teaching, giving or for the purpose of conducting research at such institution, and who is a resident of the other Contracting State or was a resident of the other Contracting State immediately prior to entering the first-mentioned State, shall be entitled in the first-mentioned State with respect to their remuneration received for such activity, provided that such remuneration is are received from outside this state.

 

(2) Payments received by a student, trainee, or apprentice who is present in a Contracting State solely for the purpose of study or training and who is a resident of the other Contracting State or was a resident of that State immediately from the time of entering State for the purpose of his maintenance, study, or training, shall not be taxed in the first-mentioned State, provided that such payments are derived from sources outside that State.

 

Article 20

Other income

(1) Income of a resident of a Contracting State which has not been dealt with in the preceding Articles, may be taxed only in that State without regard to its source.

 

(2) The provisions of paragraph 1 of this article shall not apply to income other than income from immovable property within the meaning of paragraph 2 of Article 6, paragraph 2, if the recipient, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein and the rights or assets in respect of which the income is paid actually belong to that permanent establishment. In this case, Article 7 shall apply.

 

Article 21

Property

(1) Immovable property, as defined in Article 6, belonging to a resident of a Contracting State and situated in the other Contracting State may be taxed in the other State.

(2) Movable property which is the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State may be taxed in the other State.

(3) Sea-going vessels and aircraft operated in international traffic and vessels used for inland navigation, as well as movable property used in the operation of such vessels or aircraft, may be taxed only in the Contracting State in which the place of effective management of the enterprise is situated.

(4) All other property of a resident of a Contracting State may be taxed only in that State.

 

Article 22

Avoidance of double taxation in the State of residence

(1) In the case of a resident of the Federal Republic of Germany, the tax shall be determined as follows:

(a) from the basis of assessment of the German tax shall be excluded the income from Luxembourg and the assets situated in Luxembourg which are actually taxed in Luxembourg in accordance with this Agreement and which are not covered by subparagraph taxed in Luxembourg under this Agreement and which are not subject to subparagraph (b).The foregoing provisions shall apply to income from dividends only if such dividends are paid to a resident in the Federal Republic of Germany but not to a partnership) by a company resident in Luxembourg. resident in Luxembourg, at least 10 percent of the capital of which is directly owned by the German company, and in which owned directly by the German company and have not been deducted in determining the profits of the distributing company. have been deducted.For the purposes of taxes on assets, the tax base for German tax purposes also excludes the distributions of which, if paid, would have been excluded from the taxable amount under the preceding rates. from the tax base in accordance with the preceding sentences.

(b) The German tax on income for the following items of income shall be credited in accordance with the provisions of German tax law on the crediting of foreign taxes, the Luxembourg tax which, under the law of Luxembourg and in accordance with the provisions of this Agreement, has been paid in respect of such income

a) dividends other than those referred to in subparagraph (a) above

b) royalties;

c) income which may be taxed in Luxembourg in accordance with paragraph 2 of Article 13;

d) income which may be taxed in Luxembourg in accordance with Article 14, paragraph 3

e) remuneration of supervisory boards and boards of directors;

f) income which may be taxed in Luxembourg in accordance with Article 16.

(c) Instead of the provisions of subparagraph (a), the provisions of subparagraph (b) shall apply to income referred to in Articles 7 and 10 and the assets underlying such income, if the person resident in the Federal Republic of Germany does not prove that the permanent establishment in the fiscal year, in which it has made the profit, or the Luxembourg resident company in the financial year for which it has for which it made the distribution, derived its gross income exclusively or almost exclusively from income taxable under § Section 8(1) of the German Foreign Tax Act.

(d) The Federal Republic of Germany shall, however, retain the right to tax the income and capital gains which are exempt from German tax under the provisions of this Agreement in determining its tax rate. to be taken into account.

(e) Notwithstanding the provisions of subparagraph (a), double taxation shall be avoided by tax credit under subparagraph b,

 

(a) where, in the Contracting States, income or assets are subject to different treaty provisions or attributed to different persons (other than under Article 9) and such conflict cannot be conflict cannot be resolved by a procedure under Article 24, paragraph 3, and if, as a result of such different attribution or attribution, the income or property in question would remain untaxed or would remain untaxed or would be taxed at a lower rate than in the absence of such conflict; or

b) if the Federal Republic of Germany, after consultation through diplomatic channels, notifies other income to which it intends to apply the imputation method under subparagraph (b). The Double taxation shall be avoided for the notified income by means of a tax credit in accordance with subparagraph (b) from the first day of the calendar year following the calendar year in which the notification was sent.

 

(2) In Luxembourg, subject to the provisions of Luxembourg legislation concerning the avoidance of double taxation which do not affect this general principle, double taxation shall be eliminated as follows:

(a) Where a resident of Luxembourg derives income or has property and such income or property may be taxed in the Federal Republic of Germany in accordance with the provisions of this Convention Luxembourg shall, subject to subparagraphs (b) and (c), exempt such income or property from taxation, but may exempt it from taxation in the case of taxation, but may, in assessing the tax on the remaining income or property of such person’s other income or property at the same rates as if the income or property were not exempt from taxation.

(b) Where a resident of Luxembourg derives income which is exempt from taxation in the Federal Republic of Germany under Articles 10, 12, 16 and para. 2 of the Protocol is taxable in the Federal Republic of Germany, Luxembourg shall deduct from Luxembourg shall credit against the income tax of natural persons or against the corporation tax of that person the amount which is which corresponds to the tax paid in the Federal Republic of Germany. However, the amount to be credited may not exceed the portion of the tax determined before the credit is applied that is attributable to the income received from the Federal Republic of Germany.

 

(c) Subparagraph (a) shall not apply to income or property of a resident of Luxembourg if theFederal Republic of Germany applies this Agreement in such a manner that it exempts such income or property from taxation or applies paragraph 2 of Articles 10 and 12 to such income.

 

Article 23

Equal treatment

(1) Nationals of a Contracting State shall not be subject in the other Contracting State to any taxation or to any obligation connected therewith which is different from or more burdensome than the taxation and connected obligations to which nationals of the other State are or may be subject in like circumstances, in particular with respect to residency, are or may be subject to. This provision shall apply, notwithstanding Article 1, also to persons who are not residents of any Contracting State.

 

(2) Stateless persons who are residents of a Contracting State shall not be subject in any Contracting State to any taxation or related State to any taxation or related obligation which is different from, or more burdensome than, the taxation and related obligations to which nationals of the State concerned are or may be subject in like circumstances.

 

(3) The taxation of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State State shall not be less favorable than that imposed on enterprises of the other State carrying on the same activity. Nothing in this provision shall be construed as obliging a Contracting State to grant to residents of the other State tax allowances, reliefs, and reductions on account of civil status or family or family burdens which it grants only to its residents.

 

(4) Unless Article 9, paragraph 1, or Article 12, paragraph 6, is applicable, royalties and other fees, paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining of the taxable profits of that enterprise under the same conditions as payments made to a resident of the first-mentioned State. Accordingly, debts incurred by an enterprise of a State to a resident of the other Contracting State shall be allowed as a deduction for the purpose of determining the taxable assets of such enterprise under the same conditions as debts owed 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, by a resident of the other Contracting State or by several such persons shall not be subject to not be subjected in the first-mentioned State to any taxation or to any obligation incidental thereto which is different from, or more burdensome than, the taxation and related obligations to which other similar enterprises of the first similar enterprises of the first-mentioned State are or may be subjected to.

(6) This Article shall apply to taxes of every kind and description, notwithstanding the provisions of Article 2.

 

Article 24

Mutual agreement procedure

(1) If a person considers that measures taken by one or both Contracting States have resulted or will result for him in taxation which does not conform to the provisions of this Convention, he may, without prejudice to the remedies provided for by the domestic law of those States, he may present his case to the competent authority of the Contracting State, of which he is a resident or, if his case is covered by paragraph 1 of Article 23, to the competent authority of the Contracting State of which he is a national. The case must be submitted within three years from the date of the first communication of the measure resulting in taxation not in accordance with the Convention.

 

(2) If the competent authority considers the objection to be well-founded and is not itself in a position to bring about a satisfactory solution, it shall endeavor to settle the case by agreement with the competent authority of the other Contracting State in such a way as to avoid taxation which is not in accordance with the Convention. The mutual agreement settlement shall be carried out notwithstanding the time limits of the domestic law of the Contracting States.

 

(3) The competent authorities of the Contracting States shall endeavor to resolve any difficulties or doubts that may arise in the interpretation or application of the Agreement shall be resolved by mutual agreement. They may also consult together on how to avoid double taxation in cases not covered by the Convention. dealt with in the Agreement.

 

(4) The competent authorities of the Contracting States may, for the purpose of reaching an agreement within the meaning of the preceding paragraphs may communicate directly with each other, if necessary through a joint commission consisting of them or their representatives.

 

(5) If

(a) a person referred to in paragraph 1 of this article submits a case to the competent authority of a Contracting State on the grounds that State or both Contracting States has resulted in taxation in respect of him which is not in accordance with this Convention. not in accordance with this Convention; and

(b) the competent authorities are unable to agree within two years, in accordance with paragraph 2, on the resolution of the case since the submission of the case to the competent authority of the other Contracting State. any unresolved issues in the case shall be submitted to arbitration at the request of the person. However, such unresolved issues shall not be submitted to arbitration if a judicial decision has already been rendered on them in one of the states. Unless a person directly affected by the case objects to the plea agreement implementing the award, the award shall be binding on both states and shall be enforced notwithstanding the time limits of the domestic law of those States. The competent authorities of the Contracting States shall, by mutual agreement, regulate the application of this paragraph.

 

Article 25

Exchange of information

(1) The competent authorities of the Contracting States shall exchange such information as may be necessary for the implementation of this Agreement or for the application or enforcement of domestic law relating to taxes of every kind and denomination levied on behalf of a Contracting State, one of its territorial authorities or, in the case of the Federal Republic of Germany, one of its Länder, is likely to be relevant, in so far as the taxation corresponding to such law taxation corresponding to this law is not contrary to the Agreement. The exchange of information is not restricted by articles 1 and 2.

 

(2) Any information received by a Contracting State in accordance with the provisions of paragraph 1 of this article shall be kept secret in the same manner as information obtained under the information obtained pursuant to the domestic law of that State and shall be disclosed only to persons or authorities (including the courts and administrative authorities) concerned with the assessment or collection, the enforcement collection, enforcement or prosecution, or adjudication of appeals with respect to, or supervision of, the taxes referred to in paragraph 1. Such persons or authorities may use the information only for such purposes. They may disclose the information in a public court proceeding or disclose in a court decision. Notwithstanding the foregoing, the information may be used for other purposes if, under the laws of both states, it may be used for those other purposes and the competent authority of the communicating State has consented to such use.

 

(3) Paragraphs (1) and (2) shall not be construed as requiring a Contracting State,

 

(a) to take administrative measures for the communication of information which are not permitted by the laws or administrative practice of that or the other State Party;

(b) to provide information that cannot be obtained under the laws or in the normal administrative procedure of that or the other State Party cannot be obtained;

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

 

(4. If a State Party requests information pursuant to this article, the other State Party shall use the means at its available to it to obtain the information requested, even if that other State does not require does not need such information for its own tax purposes. The obligation contained in the preceding sentence obligation shall be subject to the limitations set forth in paragraph 3, provided, however, that it shall not be construed to permit a Contracting State to refuse to furnish information solely because it has no domestic tax interest in such information.

 

(5) Nothing in paragraph (3) of this article shall be construed as permitting a Contracting State to refuse to supply information solely because the information is held by a bank, other financial institution, agent, representative, or trustee, or because it relates to the ownership of a person.

 

Article 26

Rules of procedure for taxation at source

(1) Where tax is withheld in a Contracting State from dividends, interest, royalties or other income received by another Contracting State, the right of the first-mentioned State to deduct tax at the rate provided by its domestic law shall not be affected by this Convention. shall not be affected by this Agreement. The tax levied by way of deduction shall be refunded at the request of the taxpayer, if and to the extent that it is reduced or eliminated by the Agreement.

 

(2) The applications for refund shall be submitted before the end of the fourth calendar year following the calendar year of assessment of the withholding tax on the dividends, interest, royalties, or other income.

 

(3) Notwithstanding paragraph (1), each Contracting State shall establish procedures for ensuring that payments of income which are under this Convention are not subject to tax or are subject only to reduced tax in the source State may be made without or only with the deduction of tax provided for in the relevant article.

 

(4) The Contracting State from which the income originates may issue a certificate of the competent authority on the residency in the other Contracting State.

 

(5) The competent authorities may, by mutual agreement, regulate the implementation of the provisions of this Article, and establish, where appropriate, other procedures for the implementation of the tax reductions or exemptions provided for in the Agreement.

 

Article 27

Application of the Agreement in certain cases

(1) Nothing in this Agreement shall be construed as preventing a Contracting State from applying its domestic laws or regulations for the purpose of preventing the avoidance or evasion of taxes.

 

(2) If the foregoing provisions result in double taxation, the competent authorities shall consult with each other in accordance with Article 24, paragraph 3, in order to avoid double taxation.

 

Article 28

Members of diplomatic missions and consular posts

Nothing in this Agreement shall affect the tax privileges accorded to members of diplomatic missions and consular missions under the general rules of international law or under special conventions.

Article 29

Protocol

The annexed Protocol shall form an integral part of this Agreement.

 

Article 30

Entry into force

(1) This Agreement shall be subject to ratification; the instruments of ratification shall be exchanged as soon as possible in Luxembourg. 

 

(2) The Agreement shall enter into force on the date of the exchange of the instruments of ratification and shall apply in both Contracting States to be applied

a) in the case of taxes levied by deduction, to amounts paid on or after January 1 of the calendar year following the year in which the Agreement entered into force; and

(b) in the case of other taxes, to taxes levied in respect of periods beginning on or after Januar1 of the calendar year following the year in which the Agreement entered into force.

 

(3) Upon the entry into force of this Agreement, the Agreement of August 23, 1958, between the Federal Republic of Germany and the Grand Duchy of Luxembourg for the Avoidance of Double Taxation and on Mutual Administrative and Legal mutual administrative and legal assistance in the field of taxes on income and on the property, as well as on business taxes in the version of the Supplementary Protocol of 15 June 1973 and the Revision Protocol of 11 December 2009 shall cease to be in force. Its provisions shall continue to apply until the applicability of this Agreement as provided for in paragraph 2. To tax matters prior to the entry into force of the present Convention, the provisions of the Convention of August 23, 1958, shall remain applicable.

 

Article 31

Termination

This Agreement shall remain in force indefinitely; provided, however, that any Contracting State may denounce the Agreement at the end of five years from the date of entry into force, by giving not less than six months’ notice to the end of any calendar year, in which case months’ notice to the end of a calendar year, in which case the Agreement shall cease to apply.

(a) in the case of taxes levied by deduction, to amounts paid on or after January 1 of the calendar year following the year of termination;

(b) in the case of other taxes, to taxes levied in respect of periods beginning on or after January 1 of the calendar year following the year of notice.

 

Done at Berlin, this 23rd day of April 2012, in two originals in the German language.

 

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