Double Tax Treaty between Luxembourg & Hong Kong

Convention 
between the Grand Duchy of Luxembourg and the Hong Kong Special Administrative Region of
the People’s Republic of China for the avoidance of double taxation and
the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital 

 

The Government of the Grand Duchy of Luxembourg and the Government of the Hong Kong Special Administrative Region Hong Kong Special Administrative Region of the People’s Republic of China;

Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to with respect to taxes on income and on capital;

HAVE AGREED as follows: 

Article 1

Persons covered

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

Article 2

Taxes Covered

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

 

  1. The term “tax on income and on capital” means a tax imposed on total income, on total capital, or on elements of income Taxes on income and capital shall be deemed to include taxes on total income, on total capital, or on elements of income or capital, including taxes on gains from the alienation of movable or immovable property, taxes on the property, taxes on the total amount of salaries paid by enterprises, as well as taxes on capital gains. capital gains taxes.

 

  1. The existing taxes to which the Convention shall apply are:

(a) in respect of the Hong Kong Special Administrative Region:

(i) the profits tax;

(ii) the payroll tax; and

(iii) property tax;

whether or not they are levied in the course of individual taxation;

(b) with respect to the Grand Duchy of Luxembourg:

(i) the personal income tax;

(ii) the tax on the income of communities;

(iii) the wealth tax; and

(iv) the municipal business tax. 

  1. The Convention shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of the the date of signature of the Convention and which are in addition to or in place of the existing taxes, as well as to other taxes referred to in paragraphs 1 and 2 of this Article which may be imposed in the future by a Contracting Party. The competent authorities of the Contracting Parties shall inform each other of significant changes in their tax laws.

 

  1. Existing taxes, as well as taxes introduced after the signature of the Convention, are, as the context requires, hereinafter referred to as the context, are hereinafter referred to as “Hong Kong Special Administrative Region tax” or “Luxembourg tax”.

 

Article 3

General Definitions

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

(a)

(i) the term “Hong Kong Special Administrative Region” means the entire territory to which the tax laws of the Hong Kong Special Administrative Region apply

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

(b) the terms “activity”, in relation to an enterprise, and “business” include the exercise of professions or other activities of an independent nature

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

(d) the term “competent authority” means:

(i) in relation to the Hong Kong Special Administrative Region, the Commissioner of Inland Revenue or his authorized representative;

(ii) in the case of Luxembourg, the Minister of Finance or his authorized representative;

(e) the term “Contracting Party” or “Party” means, as the context requires, the Hong Kong Special Administrative Region or Luxembourg;

(f) the term “enterprise” means the carrying on of any business or activity;

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

(h) the term “international traffic” means any carriage by a ship or aircraft operated by an enterprise of a Contracting Party, except where the ship or aircraft is operated only between points in the other Contracting Party;

(i) the term “national”, with respect to Luxembourg, means:

(i) any natural person who is a national of Luxembourg; and

(ii) any legal person, partnership or association formed in accordance with the laws in force in Luxembourg

(j) the term “person” includes natural persons, companies, partnerships and any other bodies of persons and, in relation to the Hong Kong Special Administrative Region,  also includes a trust;

(k) “tax” means, as the context requires, Hong Kong Special Administrative Region tax or Luxembourg tax.

 

  1. In this Convention, the terms “Hong Kong Special Administrative Region tax” and “Luxembourg tax” do not include penalties or interest levied in accordance with the laws of either Contracting Party in respect of taxes to which of the Contracting Parties in respect of taxes to which the Convention applies under Article 2.

 

  1. As regards the application of the Convention at any time by a Contracting Party, any term not defined in the Convention has defined therein shall, unless the context otherwise requires, have the meaning which it has at that time under the law of that Party concerning the taxes of that Party with respect to the taxes to which the Convention applies, the meaning given to such term under the tax law of that Party shall prevail. the tax law of that Party shall prevail over the meaning given to that term or expression under other laws of that Party.

 

Article 4

Resident

  1. For the purposes of this Convention, the term “resident of a Contracting Party” means

(a) with respect to the Hong Kong Special Administrative Region,

(i) any individual who is ordinarily resident in the Hong Kong Special Administrative Region

(ii) any individual who stays in the Hong Kong Special Administrative Region for more than 180 days in a tax year or for more than 300 days in two consecutive tax years, one of which years is the relevant tax year;

(iii) a company incorporated in the Hong Kong Special Administrative Region or, if incorporated outside the Hong Kong Special Administrative Region, which is regularly directed or controlled in the Hong Kong Special Administrative Region Hong Kong Special Administrative Region;

(iv) any other person incorporated under the laws of the Hong Kong Special Administrative Region or, if incorporated outside the Hong Kong Special Administrative Region, who is regularly directed or controlled in the Hong Kong Special Administrative Region;

(b) with respect to Luxembourg, any person who, under Luxembourg law, is subject to tax in Luxembourg by reason of his domicile, residence, place of management or any other criterion of a similar nature. However, this expression does not include persons who are subject to tax in Luxembourg only on income from sources in Luxembourg or on assets located in Luxembourg located therein;

(c) in the case of either Contracting Party, the Government of that Party and its local authorities.

  1. Where, under the provisions of paragraph 1, an individual is a resident of both Contracting Parties

(a) such person shall be deemed to be a resident only of the Party in which he has a permanent home resident only of the Party with which the person’s personal and economic relations are closer (center of of vital interests);

(b) if the Party in which the person’s center of vital interests is located cannot be determined, or if the person does not have a permanent home base in either Party, the person shall be treated as a resident only of the Party in which the person is of the Party in which the person is ordinarily present;

(c) if the person is ordinarily present in both Parties or is not ordinarily present in either Party, the person shall be considered to be a resident only of the Party in which the person has the right of abode (for the purposes of the right of abode (in the case of the Hong Kong Special Administrative Region) or whose nationality he or she the nationality of which (in the case of Luxembourg);

(d) if such person has the right of abode in the Hong Kong Special Administrative Region and also possesses Luxembourg nationality, or if such person does not have the right of abode in the Hong Kong Special Administrative Region and does not possess Luxembourg nationality, the competent authorities of the Contracting Parties shall decide the matter by mutual agreement.

 

  1. Where, under the provisions of paragraph 1, a person other than an individual is a resident of both Parties, he shall be deemed to be a resident only of the Party in which his place of effective management is located.

 

Article 5

Permanent Establishment

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

 

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

(a) a place of management,

(b) a branch office,

(c) an office,

(d) a factory,

(e) a workshop, and

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

 

  1. The term “permanent establishment” also includes:

(a) a construction or assembly site or supervisory activities thereon, but only where such site or activities are for a period of more than 6 months

(b) the provision of services, including consulting services, by an enterprise acting directly or through employees or other personnel engaged by the enterprise for that purpose, but only where such activities of this nature continue (for the same or a related project) in the territory of a Party for a period or periods totaling more than 180 days within any 12-month period.

 

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

(a) use is made of facilities solely for the purpose of storing, displaying or delivering goods or merchandise belonging to the enterprise;

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

(c) goods owned by the business are warehoused solely for the purpose of processing by another business;

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

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

(f) a fixed place of business is used solely for the purpose of carrying on the activities referred to in subparagraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from such combination remains of a preparatory or auxiliary character.

 

  1. Notwithstanding the provisions of paragraphs 1 and 2, where a person – other than an agent with independent status to whom paragraph 6 applies – is to whom paragraph 6 applies – acts in a Contracting Party for an enterprise of another Contracting Party, that Contracting Party, that enterprise shall be deemed to have a permanent establishment in the first-mentioned Contracting Party

(a) has and habitually exercises in that first Contracting Party such authority as to enter into contracts on behalf of the enterprise, unless the activities of that person are limited to those listed in paragraph 4 those listed in paragraph 4 which, if carried on through a fixed place of business would not qualify that fixed place of business as a permanent establishment under the the provisions of that paragraph; or

(b) not having such authority, customarily maintains in the first-mentioned Party a stock of goods or merchandise from which it regularly makes deliveries of goods or merchandise on behalf of the enterprise.

 

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

 

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

permanent establishment or not) shall not of itself constitute either company a permanent establishment of the other.

 

Article 6

Income from Real Property

  1. Income derived by a resident of a Contracting Party from immovable property (including income from agriculture or forestry) situated in the other Party shall be treated as income from a permanent establishment agricultural or forestry activities) situated in the other Contracting Party may be taxed in that other Party.

 

  1. The term “immovable property” shall have the meaning which it has under the law of the Contracting Party in which the property concerned is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry rights to which the provisions of private law concerning land ownership, the usufruct of immovable property and rights to of real estate and rights to variable or fixed payments for the exploitation or concession of exploration or mineral deposits, quarries, springs and other natural resources; ships and aircraft are not and aircraft are not considered as real estate.

 

  1. All property or rights referred to in paragraph 2 shall be deemed to be located at the place where the land, standing timber land, standing timber, mineral deposits, quarries, springs or natural resources, as the case may be, or at the place where their exploration or exploitation may take place.

 

  1. The provisions of paragraph 1 shall apply to income derived from direct exploitation, rental or leasing, and any other form of exploitation of real property.

 

  1. The provisions of paragraphs 1 and 4 shall also apply to income from the real estate of an enterprise.

 

Article 7

Business Profits

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

 

  1. Subject to the provisions of paragraph 3, where an enterprise of a Contracting Party carries on business in the other Contracting Party through a permanent establishment situated therein, there shall be attributed in each Contracting Party to that permanent Contracting Party, there shall be attributed to that permanent establishment the profits which it might be expected to make if it were a separate enterprise engaged in the same activities separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a part. the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.

 

  1. In determining the profits of a permanent establishment, there shall be allowed as deductions expenses incurred for the purposes of permanent establishment, including executive and general administrative expenses incurred, either in the Party in which incurred either in the Party in which such permanent establishment is situated or elsewhere.

 

  1. If it is customary in a Contracting Party to determine the profits attributable to a permanent establishment on the basis of an on the basis of an apportionment of the total profits of the enterprise to its various parts, or on the basis of such other which may be prescribed by the law of that Party, nothing in paragraph 2 shall prevent such Contracting Party from determining taxable profits according to the apportionment in use or another method; such apportionment or method adopted shall, however, be such as to produce a result consistent with the principles contained in this Article.

 

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

 

  1. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined annually using the same method, unless there is good and sufficient reason to the contrary.

 

  1. Where profits include items of income which are dealt with separately in other Articles of this 

Convention, the provisions of those Articles shall not be affected by the provisions of this Article.

 

Article 8

Maritime and Air Navigation

  1. Profits derived by an enterprise of a Contracting Party from the operation of ships or aircraft in international traffic shall not be or aircraft in international traffic shall be taxable only in that Party.

 

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

 

  1. For the purposes of this Article, profits from the operation of ships or aircraft in international traffic include, but are not limited to:

(a) income and gross receipts from the operation of ships or aircraft in international traffic for the transportation of persons, livestock, property, mail or goods, including:

(i) income from the bareboat charter of ships or aircraft where such charter is incidental to the operation of ships or aircraft in international traffic;

(ii) income from the sale of tickets and the provision of services in connection with such transport, whether on behalf of the enterprise itself or any other enterprise, provided that in the case of the provision of services such provision is incidental to the operation, in international traffic of ships or aircraft;

(b) interest on funds directly related to the operation of ships or aircraft in international traffic;

(c) profits from the leasing of containers by the enterprise, where such leasing is incidental to the operation of ships or aircraft in international traffic.

Article 9

Associated enterprises

  1. Where

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

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a contracting Party and an enterprise of the other contracting Party and in either case the two enterprises are bound in their commercial or financial relations by agreed or imposed conditions which conditions agreed or imposed which differ from those which would be agreed between independent enterprises, profits which, but for those conditions, would have accrued to one of the enterprises, but in fact did not because of those conditions, may be such conditions, may be included in the profits of that enterprise and taxed accordingly.

 

  1. Where a Contracting Party includes in the profits of an enterprise of that Party – and taxes accordingly – profits on which an enterprise of that Party profits on which an enterprise of the other Contracting Party has been taxed in that other Party, and the profits so Party, and the profits so included are profits that would have accrued to the enterprise of the first Party if the conditions agreed between the two enterprises had been those which would have been agreed between independent independent enterprises, the other Party shall make an appropriate adjustment to the amount of tax imposed therein on such profits. In determining such adjustment, regard shall be made to the other provisions of this Convention and, if necessary, the competent authorities of the Contracting Parties shall consult each other.

 

Article 10

Dividends

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

 

  1. However, such dividends may also be taxed in the Contracting Party of which the company paying the dividends is a resident, and according to the laws of that Party, but if the beneficial owner of the dividends is a resident of the other Contracting Party, the tax so charged shall not exceed

(a) 0 percent of the gross amount of the dividends, if the beneficial owner is a company (other than a partnership) which holds directly at least 10 percent of the capital of the company paying the dividends or a participation with an acquisition price of at least € 1,200,000 in the company paying the dividends;

(b) 10 percent of the gross amount of the dividends, in all other cases.

The competent authorities of the Contracting Parties shall by mutual agreement determine the manner of application of these limitations. 

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

 

  1. The term “dividends” as used in this article means income from shares, jouissance shares or warrants shares, mining shares, founder’s shares or other profit shares, with the exception of claims, as well as income from other shares subject to the same tax treatment as income from shares under the laws of the Party of which the distributing company is a resident, and in the case of Luxembourg, profit shares received as a result of in a commercial, industrial, mining or artisanal enterprise, by the financial backer remunerated in proportion to the profit, as well as arrears and interest on bonds when a right is granted for these securities to the attribution, apart from the fixed interest, of an additional interest varying according to the amount of the profit distributed.

 

  1. The provisions of paragraphs 1 and 2 shall not apply where the beneficial owner of the dividends, being a resident of a Contracting Party, carries on business in the other Contracting Party of which the company paying the dividends is a resident, a business activity through a permanent establishment situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment is effectively connected with it. In such a case, the provisions of Article 7 shall apply.

 

  1. Where a company which is a resident of a Contracting Party derives profits or income from the other Contracting Party, that other Party may not impose any tax on dividends paid by the company, except to the extent that such dividends are paid to a paid to a resident of that other Party or to the extent that the holding in respect of which the dividends are paid is effectively connected with the dividends is effectively connected with a permanent establishment situated in that other Party, nor impose any tax in respect of the any tax on the undistributed profits of the company, even if the dividends paid or the undistributed profits if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other Party.

 

Article 11

Interest

 

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

2. The term “interest” as used in this Article means income from debt-claims of every kind,  whether or not secured by mortgage or by a participation clause in the debtor’s profits, and in particular, income from public funds and bonds, including premiums and prizes attached to such securities. However, the term “interest” does not include income referred to in Article 10. Penalties for late payment shall not be considered interest for the purposes of this considered as interest within the meaning of this article.

3. The provisions of paragraph 1 shall not apply where the beneficial owner of the interest, being a resident of a Contracting Party, carries on business in the other Contracting Party in which the interest arises through a permanent establishment situated therein, and the debt-claim in respect of which the interest is paid is effectively connected effectively connected therewith. In such a case, the provisions of Article 7 shall apply.

4. Where, by reason of a special relationship between the debtor and the beneficial owner or between both of them and with third parties, the amount of interest exceeds, for whatever reason, that which would have been the debtor and the beneficial owner would have agreed in the absence of such relationship, the provisions of this apply only to the latter amount. In such a case, the excess part of the payments shall remain taxable under the laws of each Contracting Party and having regard to the other provisions of this Convention.

 

Article 12

Royalties

  1. Royalties arising in a Contracting Party and paid to a resident of the other Contracting Party may be taxed in that other Party.

 

  1. However, such royalties may also be taxed in the Contracting Party in which they arise and according to the laws of that Party, but if the beneficial owner of the royalties is a resident of that Party, the royalties may be taxed in that Party. However, such royalties may also be taxed in the Contracting Party in which they arise and according to the laws of that Party, but if the beneficial owner of the royalties is a resident of the other Contracting Party the tax so charged shall not exceed 3 percent of the gross amount of the royalties. The competent authorities of the Contracting Parties shall by mutual agreement settle the mode of application of this limitation.

 

  1. The term “royalties” as used in this Article means remuneration of any kind paid for the use or grant of, or the right to use, any copyright of literary, artistic or scientific work, including cinematograph films, or films or tapes used for radio or television broadcasting, of a patent, of a

trademark, design or model, secret plan, formula or process, or remuneration for the use of any of the foregoing or remuneration for the use of or the right to use industrial, commercial or scientific equipment or for information concerning industrial, commercial or scientific experience.

 

  1. The provisions of paragraphs 1 and 2 shall not apply where the beneficial owner of the royalties, being a resident of a Contracting Party, carries on business in the other Contracting Party from which the royalties arise through an activity through a permanent establishment situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment is effectively connected with it. In such a case, the provisions of Article 7 shall apply.

 

  1. Royalties shall be deemed to arise in a Contracting Party when the payer is a resident of that Party. However, where the payer of the royalties, whether or not a resident of a Contracting Party has in a Contracting Party a permanent establishment in respect of which the obligation giving rise to the payment of the royalties has been incurred and which bears the expense of such royalties, such royalties shall be deemed to arise in the Party where the permanent establishment is situated.

 

  1. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and the amount of the royalties exceeds, for whatever reason, the amount that would have been agreed upon by the debtor and the beneficial owner would have agreed in the absence of such relationship, the provisions of this Article shall apply only to the latter amount. In such a case, the excess part of the payments shall remain taxable under the laws of each Contracting Party and having regard to the other provisions of this Convention.

 

Article 13

Capital Gains

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

 

  1. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting Party has of a Contracting Party in the other Contracting Party, including such gains from the alienation of that permanent establishment (alone or with of that permanent establishment (alone or with the whole enterprise) may be taxed in that other Party.

 

  1. Gains derived by an enterprise of a Contracting Party from the alienation of ships or aircraft operated in international traffic, or movable property used in the operation of such ships or aircraft, shall be taxable only in that Party.

 

  1. Gains derived by a resident of a Contracting Party from the alienation of shares of a company that directly or indirectly derive more than 50 percent of their income from the operation of the company shall be taxable only in that Party. more than 50 percent of their value from real property situated in the other Contracting Party may be taxed in that other Party. taxable in that other Party. However, this paragraph shall not apply to gains from the alienation of shares:

(a) that are listed on a stock exchange accepted between the Parties; or

(b) that are disposed of or exchanged in connection with a corporate reorganization, merger, split-off or similar transaction; or 

(c) in a corporation that derives more than 50 percent of its value from real property in which it

 

  1. Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3 and 4 shall be tax conducts its business able only in the Contracting Party of which the transferor is a resident.

 

Article 14

Income from Employment

  1. Subject to the provisions of Articles 15, 17 and 18, salaries, wages and other similar remuneration derived by a resident of a Contracting Party in respect of an employment shall be taxable only in that Party unless the employment is exercised in the other Contracting Party. If the employment is exercised in that Party, remuneration received in respect of such employment may be taxed in that other Party.

 

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

(a) the recipient is present in the other Party for a period or periods not exceeding in the aggregate 183 days in any twelve month period beginning or ending in the taxable year concerned, and

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

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

 

  1. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment on board a ship or aircraft operated in international traffic by an enterprise of a Contracting Party shall be taxable only in that Party.

 

Article 15

Directors’ Fees

Directors’ fees and other similar payments received by a resident of a Contracting Party in his capacity as a member of the board of directors of an enterprise of a Contracting Party may be taxed only in that Party as a member of the board of directors or supervisory board of a company which is a resident of the other Contracting Party may be taxed in that Party.

 

Article 16

Artists and Sportsmen

  1. Notwithstanding the provisions of Articles 7 and 14, income derived by a resident of a Contracting Party from his or her personal activities as an entertainer, such as a performer, exercised in the other Contracting Party performer, such as a theater, motion picture, radio or television artiste, or a musician, or as an athlete, may be taxed in that other Party.

 

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

Article 17

Pensions and Alimony

  1. Subject to the provisions of paragraph 2 of Article 18, pensions and other similar remuneration (including a lump-sum payment) paid to an artist or (including a lump sum payment) paid to a resident of a Contracting Party in respect of past employment or self-employment shall be taxable only in that Party. independent activity, shall be taxable only in that Party.

 

  1. Notwithstanding the provisions of paragraph 1, pensions and other similar remuneration (including lump-sum

(a) a public scheme that is part of the social security system of a Contracting Party, or

(b) a plan in which individuals participate in order to receive retirement benefits and which is recognized for tax purposes in a Contracting Party, or

(c) the social security legislation of a Contracting Party, shall be taxable only in that Contracting Party.

 

  1. Alimony and other maintenance payments paid by a resident of a Contracting Party to a resident of the other Contracting Party shall be taxable only in that Party. of the other Contracting Party shall be taxable only in that Party to the extent that they are not deductible to the payer. deducted in favour of the debtor in the first Party.

 

Article 18

Public Offices

1. (a) salaries, wages and other similar remuneration, other than pensions, paid by the Government of a Contracting Party or a local authority thereof to an individual in respect of services rendered to that Party or authority shall be taxable only in that Party.

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

(i) in the case of the Hong Kong Special Administrative Region, has the right of abode therein, and in the case of Luxembourg, has the nationality of Luxembourg

Or

(ii) has not become a resident of that Party for the sole purpose of rendering the services.

 

  1. Pensions (including lump sums) paid by the Government of a Contracting Party or one of its Party or a local authority thereof, either directly or out of funds established or contributed by them, to an individual in respect of services rendered to that Party or local authority, shall be taxable only in that Party.

 

  1. The provisions of Articles 14, 15, 16 and 17 shall apply to salaries, wages, pensions (including in the form of a lump sum) and other benefits paid to individuals the taxable income of the Party or locality shall be taxed in that Party. business activity carried on by the Government of a Contracting Party or a local authority thereof.

 

Article 19

Students

Amounts which a student who is, or immediately before visiting a Contracting Party was, a resident of the other Contracting Party may be paid to him in respect of the other Contracting Party and who is staying in the first Party for the sole purpose of pursuing his or her studies there, received to defray the maintenance or education expenses of the individual shall not be taxable in that Party, provided that they from sources outside that Party.

 

Article 20

Other Income

  1. Items of income of a resident of a Contracting Party, wherever arising, which are not dealt with in the preceding Articles of this Convention may be taxed in that Party, provided that such items of income are derived from sources outside that Party. in the preceding Articles of this Convention shall be taxable only in that Party.

 

  1. The provisions of paragraph 1 shall not apply to income other than income from real property as defined in paragraph 2 of Article 6, where the recipient of such income, being a resident of a Contracting Party, carries on business in the Contracting Party carries on business in the other Contracting Party through a permanent establishment situated therein and permanent establishment situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment. In In such a case, the provisions of Article 7 shall apply.

 

Article 21

Assets

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

and situated in the other Contracting Party may be taxed in that other Party.

 

  1. Capital represented by movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting Party has in of a Contracting Party in the other Contracting Party may be taxed in that other Party.

 

  1. Capital represented by ships and aircraft operated in international traffic by an enterprise of a Contracting Party, and by property of the Contracting Party, as well as movable property used in the operation of such ships or aircraft, shall be taxable only in that Party.

 

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

 

Article 22

Methods for Elimination of Double Taxation

  1. Subject to the provisions of the law of the Hong Kong Special Administrative Region relating to the set-off against tax of the Hong Kong Special Administrative Region of tax paid in a jurisdiction outside the Hong Kong Special Administrative Region (which shall not affect the general principle of this Article),

the Luxembourg tax paid under the laws of Luxembourg and in accordance with this Convention, either directly or by way of withholding, in respect of income derived by a person who is a resident of the Hong Kong Special Administrative Region from sources in Luxembourg shall be credited against the tax of the Hong Kong Special the amount so deducted shall not exceed the amount of the tax of the Hong Kong Special Administrative Region on that income, provided that the amount so deducted shall not exceed the amount of the tax of the Hong Kong Special Administrative Region on that income. the amount of the tax of the Hong Kong Special Administrative Region computed in respect of such income in accordance with the tax laws of the Hong Kong Special Administrative Region.

 

  1. Subject to the provisions of the laws of Luxembourg concerning the elimination of double taxation which the general principle thereof, double taxation shall be avoided as follows:

(a) Where a resident of Luxembourg derives income or owns capital which, in accordance with the provisions of this Convention, may be taxed in the Hong Kong Special Administrative Region, Luxembourg shall, subject to the provisions of subparagraphs (b) and (c), exempt such income or capital from tax, but may, for the purpose of calculating the amount of tax on the remainder of the resident’s income

(b) Where a resident of Luxembourg receives items of income which, in accordance with the provisions of Articles 10, 12 and 16, may be taxed in the Hong Kong Special Administrative Region, Luxembourg shall allow a deduction of an amount equal to the amount of the an amount equal to the tax paid in the Hong Kong Special Administrative Region. Such deduction shall not, however, exceed the portion of the tax, computed before deduction, corresponding to such

(c) The provisions of subparagraph (a) shall not apply to income received or capital owned by a resident of Luxembourg, where the Hong Kong Special Administrative Region applies the provisions of this Convention to exempt such income or capital from tax or applies the provisions of paragraph 2 of Articles 10 or 12 to such income. 

 

Article 23

Non-discrimination

  1. Persons who, in respect of the Hong Kong Special Administrative Region, have the right of abode or have been incorporated or formed therein, and or have been incorporated or formed therein and, as regards Luxembourg, are nationals of Luxembourg, shall not be subject in the other Contracting Party to any taxation or any obligation relating thereto which is other or more burdensome than those to which persons who have the right to reside or who have been incorporated or formed in the other Party are or may be subject or created in the other Party (where that other Party is the Hong Kong Special Administrative Region) or the nationals of that other Party (where that other Party is Luxembourg) who are in the same situation in particular with respect to residence.

 

  1. Stateless persons who are residents of a Contracting Party shall not be subject in either Contracting Party to any taxation or Party to any taxation or obligation relating thereto which is other or more burdensome than those to which persons who have persons who have the right of abode in the Party (where the Party is the Hong Kong Special Administrative Region) or (where the Party is the Hong Kong Special Administrative Region) or nationals of the Party (where the Party is Luxembourg) who are in the (where the Party is the Hong Kong Special Administrative Region) who are in the same situation, in particular with respect to residence.

 

  1. The taxation of a permanent establishment which an enterprise of a Contracting Party has in the other Contracting Party shall not be less favourably assessed in that other Party than the taxation of enterprises of that other Party carrying on the same business.

 

  1. Unless the provisions of paragraph 1 of Article 9, paragraph 4 of Article 11 or paragraph 6 of Article 12 are applicable paragraph 6 of Article 12 shall apply, interest, royalties and other expenses paid by an enterprise of a Contracting Party to a Contracting Party to a resident of the other Contracting Party shall, for the purpose of determining profits, be deductible of that enterprise, under the same conditions as if they had been paid to a resident of the first Party. Similarly, debts of an enterprise of a Contracting Party to a resident of the other Contracting Party shall be deductible, in determining the taxable capital of that enterprise, under the same conditions as if they had been contracted with a resident of the first Party.

 

  1. Enterprises of a Contracting Party, the capital of which is wholly or partly, directly or indirectly owned or controlled by one or more residents of the other Contracting Party, shall not be subject in the first Party to any taxation or Party to any taxation or any requirement connected therewith which is other or more burdensome than those to which other similar enterprises of the first Party.

 

  1. Nothing in this Article shall be construed to require a Contracting Party to grant to residents of the other Contracting Party the personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities that it grants to its own residents.

Article 24

Mutual Agreement Procedure

  1. Where a person considers that measures taken by one or both Contracting Parties result or will result for him in taxation not in accordance with the provisions of this Convention, he may, independently of Convention, that person may, irrespective of the remedies available under the domestic law of those Parties, submit his case to the competent authority of the Contracting Party of which it is a resident or, if its case comes under paragraph 1 of Article of the Contracting Party in which he or she is entitled to reside or has been incorporated or formed (in the case of the Hong Kong Special Administrative Region, to the competent authority of the Contracting Party in which he or she is resident).

(in the case of the Hong Kong Special Administrative Region) or of which it is a national (in the case of Luxembourg). The case must be submitted within three years of the first notification of the measure that results in taxation not in accordance with the provisions of the Convention.

 

  1. The competent authority shall endeavor, if the objection appears to it to be well-founded and if it is not itself able to resolve it satisfactorily, to satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting Party, with a view to avoiding taxation not in accordance with the Convention. The agreement shall be applied irrespective of the time limits provided for in the domestic law of the Contracting Parties.

 

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

 

  1. The competent authorities of the Contracting Parties may communicate directly with each other, including through a joint committee composed of such authorities or their representatives, with a view to reaching agreement as described in the preceding paragraphs.

Article 25

Exchange of Information

  1. The competent authorities of the Contracting Parties shall exchange such information as may be necessary to carry out the provisions of this Convention or of the domestic laws of the Contracting Parties. of this Convention or of the domestic laws of the Contracting Parties relating to the taxes covered by the Convention to the extent that the taxation thereunder is not to the extent that the taxation thereunder is not contrary to the Convention. The information received by a Contracting Party shall be treated as secret in the same manner as information obtained under the domestic law of that Party and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of taxes covered by the Convention or prosecution in respect of such taxes, or in the determination of appeals in relation to such taxes. in relation to such taxes. Such persons or authorities shall use such information only for such purposes. They may disclose such information in public court proceedings or in judgments, including, with respect to the Hong Kong Special Administrative Region, decisions of the Board of Review. The information shall not be disclosed to a third jurisdiction for any purpose without the consent of the Contracting Party that originally provided the information.

 

  1. The provisions of paragraph 1 shall in no case be construed as imposing on a Contracting Party the obligation

(a) to take administrative action at variance with its own or the other Contracting Party’s legislation and administrative practice

(b) to supply information which could not be obtained under its laws or within the normal administrative practice or those of the other Contracting Party;

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

 

Article 26

Members of Government Missions

The provisions of this Convention shall not affect the fiscal privileges of members of governmental missions, including members of governmental missions, including consular posts, under the general rules of international law or under the law or under the provisions of special agreements.

Article 27

Miscellaneous provisions

  1. The provisions of this Convention shall not affect the right of each Contracting Party to apply its domestic laws and measures with regard to tax evasion, whether or not described as such.

 

  1. All communications between competent authorities in relation to matters covered by the Convention shall be in English, or, if in English, or, if not in English, accompanied by a translation into English (except for annexes provided by third parties).

 

Article 28

Entry into Force

  1. Each Contracting Party shall notify the other in writing of the completion of the procedures required by its law for the entry into force of this Convention. The Convention shall enter into force on the date of receipt of the last of these notifications.

 

  1. The provisions of the Convention shall apply

(a) in the Hong Kong Special Administrative Region: in respect of Hong Kong Special Administrative Region taxes, for any taxable year beginning on or after April 1, 2008

(b) in Luxembourg:

(i) in respect of withholding taxes, to income attributed on or after 1 January 2008;

(ii) in respect of other income and capital taxes, to taxes due for any taxable year beginning on or after January 1, 2008.

 

Article 29

Denunciation

This Convention shall remain in force until terminated by a Contracting Party. Each Contracting Party may terminate the Convention by giving at least six months’ written notice prior to the end of each calendar year commencing after the expiration of five years from the date of its entry into force. In such event, the Convention shall cease to be applicable:

(a) in the Hong Kong Special Administrative Region: in respect of taxes of the Hong Kong Special Administrative Region, for any taxable year beginning on or after the first day of April in the calendar year next following the year in which the notice is given is given;

(b) in Luxembourg:

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

(ii) in respect of other income taxes and capital taxes, to taxes payable for any taxation year beginning on or after January 1 of the calendar year immediately following the year in which the notice is given.

 

IN WITNESS WHEREOF, the undersigned, duly authorized thereto, have executed this Agreement.

 

DONE in duplicate at Hong Kong, this 2nd day of November 2007, in the English and French languages, both texts being equally authentic. 

 

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