Double Tax Treaty between Luxembourg & Laos Lao

CONVENTION

between the Government of the Grand Duchy of Luxembourg and the Government of the Lao People’s Democratic Republic for the avoidance of double taxation and to Prevent Fiscal Evasion with Respect to Taxes on Income and on Capital as well as the exchange of letters relating thereto, signed in Vientiane on November 4, 2012

 

The Government of the Grand Duchy of Luxembourg and the Government of the Lao People’s Democratic Republic, desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion 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 of the Contracting States.

Article 2

Taxes Covered

  1. This Convention shall apply to taxes on income and on capital imposed on behalf of a Contracting State or its local authorities, irrespective of the system of taxation. State or its local authorities, irrespective of the system of collection.
  1. There shall be regarded as taxes on income and on capital taxes imposed 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 total amount of wages paid by enterprises, as well as taxes on capital gains.
  1. The existing taxes to which this Convention shall apply are in particular

(a) in the case of the Lao People’s Democratic Republic (hereinafter referred to as “La PDR”)

(i) the tax on profits (income) of enterprises and organizations; and

(ii) personal income tax;

(hereinafter referred to as “Lao tax”);

(b) in respect of the Grand Duchy of Luxembourg:

(i) the personal income tax;

(ii) the corporate income tax;

(iii) the wealth tax; and

(iv) the municipal business tax;

(hereinafter referred to as “Luxembourg tax”).

  1. The Convention shall apply also to any identical or substantially similar taxes imposed after the date of signature of the Convention in addition to, or in place of, those referred to in paragraph 3. The competent authorities of the Contracting States shall inform each other of any significant changes which may be made in their respective taxation laws. their respective taxation laws.

Article 3

General Definitions

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

(a) the term “Lao PDR” means the territory of the Lao People’s Democratic Republic; when used in a geographical sense, it means all of its national territory, including its territorial waters and any area beyond its territorial waters territorial waters as well as any area beyond its territorial waters over which the Lao PDR, in accordance with the laws of the Lao PDR and international law, exercises Lao PDR, in accordance with the laws of the Lao PDR and international law, exercises its sovereign rights with respect to the exploration and exploitation of the natural resources of the seabed, its subsoil and the overlying waters;

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

(c) the term “person” includes natural persons, corporations and any other body of persons; and

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

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

(f) the term “national” means:

(i) any individual who is a national of a Contracting State;

(ii) any legal person, partnership or association organized under the laws of a Contracting State;

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

(h) the term “competent authority” means:

(i) in relation to Lao PDR, the Minister of Finance or his authorize representative;

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

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

Article 4

Resident

  1. For the purposes of this Convention, the term “resident of a Contracting State” means any person who under the laws of that State is liable to tax in that State by reason of his domicile, residence, place of management or any other criterion of a similar nature and shall also apply to that State and to all local authorities thereof. local authorities. However, the term shall not include any person who is subject to tax in that State only in respect of income from sources within that State. However, the term does not include persons who are subject to tax in that State only on income from sources in that State or on capital situated therein.
  1. Where, under the provisions of paragraph 1, an individual is a resident of both Contracting States his status shall be determined as follows:

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

(b) if the person is ordinarily resident in the State in which he or she is ordinarily present

(c) if such person is ordinarily present in both States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national;

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

  1. Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both States, he shall be deemed to be a resident only of the State in which his place of effective management is situated. If its place of effective management cannot be determined, the competent authorities of the Contracting States shall settle the question by mutual agreement.

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,

(f) a mine, oil or gas well, quarry or other place of extraction or exploitation of natural resources, a drilling rig or a vessel used for the exploration or exploitation of

(g) a farm or plantation.

  1. The term “permanent establishment” also includes:

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

(b) the supply of services, including consulting services, by an enterprise of one of the Contracting States acting through employees or other personnel engaged by the enterprise for that purpose, but only where activities of that nature are carried on (for the same or a related project) in the territory of a Contracting State for a period or periods aggregating more than six months within any twelve-month period.

  1. Notwithstanding the preceding 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 stored solely for 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 1 applies – is independent status to which paragraph 6 applies – acts on behalf of an enterprise and has in a Contracting State where a person – other than an agent of an independent status to whom paragraph 6 applies – is acting on behalf of an enterprise and has in a Contracting State an authority habitually exercised by that person to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which enterprise, unless the activities of such person are limited to those referred to in paragraph 4 which referred to in paragraph 4 and which, if exercised through a fixed place of business would not qualify that place of business as a permanent establishment under the provisions of that paragraph.
  1. An insurance enterprise of a Contracting State shall, except in the case of reinsurance, be deemed to have a permanent establishment in the other Contracting State if it collects premiums in that other Contracting State or insures risks incurred therein through an employee or representative who is not an agent of that State and who has independent status within the meaning of paragraph 7.
  1. An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent enjoying independent status, provided that such persons are acting in the ordinary course of their business. However, where the activities of such an agent are carried on exclusively or almost exclusively on behalf of that enterprise, he shall not be considered an independent agent within the meaning of this paragraph.
  1. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is resident of the other Contracting State or carrying on business in that other State (whether through a permanent establishment The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State or which carries on business in that other Contracting State (whether through a permanent establishment or otherwise) shall not of itself constitute a permanent establishment of the other company.

 

Article 6

Real estate income

  1. Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.
  1. The term “immovable property” shall have the meaning which it has under the law of the Contracting State in which the property concerned is situated. 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 respecting landed property, the usufruct of immovable property and rights to payments for rights to variable or fixed payments for the exploitation or concession of the exploitation of mineral deposits, springs and mineral deposits, springs and other natural resources; ships, boats and aircraft are not considered to be ships, boats and aircraft are not considered as real estate.
  1. The provisions of paragraph 1 shall apply to income derived from the direct operation, rental or leasing, and any other form of exploitation of real property.
  1. The provisions of paragraphs 1 and 3 shall also apply to income from immovable property of an enterprise and to income from immovable property used for the performance of independent professional activities.

 

Article 7

Business 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 such a manner, the profits of the enterprise may be taxed in the other State, but only to the extent that they are 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 State carries on business in the in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that Contracting State, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a separate enterprise engaged in the enterprise carrying on 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 taxpayer shall be deemed to have paid the tax on the profits which it would have realized if it had constituted a 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 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 State in which they incurred either in the State in which the permanent establishment is situated or elsewhere.
  1. If it is customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the permanent establishment, then the profits of the permanent establishment shall be attributed to that permanent establishment. on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall prevent that Contracting State from determining the taxable profits according to the customary apportionment; the method of apportionment method of apportionment adopted shall, however, be such that the result shall be in accordance 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

Shipping, Air and Land Transport

  1. Profits from the operation of ships, aircraft or road vehicles in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
  1. For the purposes of this Article, profits from the operation of ships, aircraft or road vehicles in international traffic include

(a) profits from the leasing of ships, aircraft or road vehicles; and

(b) profits from the use, maintenance or rental of containers (including trailers and equipment relating to the transport of containers) used for the transport of goods where such use, maintenance or rental of containers is incidental to the operation in international traffic of ships, aircraft or road vehicles.

  1. For the purposes of this article, interest on funds relating to the operation of ships, aircraft or road vehicles in international traffic shall be considered as vehicles shall be treated as profits from the operation of such ships, aircraft or road vehicles, and the vehicles, and the provisions of Article 11 shall not apply to such interest.
  1. If the place of effective management of a shipping enterprise is on board a ship, that place of effective management shall be deemed to be in the Contracting State in which the home port of that ship is situated, or in the absence of a home port in the Contracting State of which the operator of the ship is a resident.
  1. The provisions of paragraphs 1, 2 and 3 shall also apply to profits from the participation in a pool or an international operating agency.

Article 9

Associated enterprises

  1. Where

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

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

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

 

Article 10

Dividends

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

(a) five (5) percent of the gross amount of the dividends, if the beneficial owner is a company (other than a partnership) that owns directly at least ten (10) percent of the capital of the company paying the dividends

(b) fifteen (15) percent of the gross amount of the dividends, in all other cases.

This subsection shall not affect the taxation of the corporation on the profits from which the dividends are paid.

  1. Notwithstanding the provisions of paragraph 2, dividends arising in a Contracting State and paid to the other State, a local authority thereof or a public institution thereof shall be exempt from tax in the first-mentioned State.
  1. The term “dividends” as used in this Article means income from shares, jouissance shares or warrants, mining shares, founders’ shares or other profit shares, except debt-claims, and income from other shares which is subjected to the same taxation treatment as income from shares by the laws of the State of which the distributing company is resident.

 

  1. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State of a Contracting State carries on business in the other Contracting State of which the company paying the dividends is a resident, either a business activity through a permanent establishment situated therein, or by means of a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with it. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.
  1. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not State, that other State may not impose any tax on dividends paid by the company except to the extent that such dividends are paid to a resident of the other State. the dividends are paid to a resident of that other State or to the extent that the holding in respect of which the dividends are paid dividends is effectively connected with a permanent establishment or a fixed base situated in that other State, or any tax on the undistributed profits of the company by way of taxation on undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in that other State.

Article 11

Interest

  1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
  1. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the beneficial owner of the interest is a resident of that State, the interest may be taxed in that State. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not  exceed ten (10) percent of the gross amount of the interest.
  1. Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempt from tax in that State, if it is paid

(a) in the case of the Lao PDR:

(i) to the Government of the Lao PDR;

(ii) the Bank of Lao PDR

(iii) to a local government of Lao PDR;

(iv) a public institution of the Lao PDR; and

(v) a financial institution;

(b) in respect of Luxembourg:

(i) to such State or the Central Bank or any local government thereof;

(ii) by the State in which the interest was earned, by a local authority thereof or by a public institution thereof

(iii) under a loan, claim or credit that is owed to or made, granted, guaranteed or insured by this state or any of its local governments or export financing agencies; and

(iv) a financial institution.

  1. The term “interest” as used in this section means income from debt obligations of any kind, whether or not secured by mortgage or other collateral. mortgage-backed or unsecured, and includes income from public funds and government bonds. public funds and bonds, including premiums and prizes attached thereto. Penalties for late payment shall not be penalties for late payment shall not be considered as interest within the meaning of this section.
  1. The provisions of paragraphs 1, 2 and 3 shall not apply where the beneficial owner of the interest, being a resident of a Contracting State, exercises of a Contracting State carries on business in the other Contracting State in which the interest arises through a business through a permanent establishment situated therein, or performs in the other Contracting State in which the interest arises independent personal services from a fixed base situated therein a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.
  1. Interest shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment, or a branch, in that State, the interest shall be deemed to arise in that State. a permanent establishment or a fixed base in a Contracting State in connection with which the indebtedness in respect of which the interest is paid was incurred and which was incurred and who bears the expense of that interest, such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.
  1. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and persons, the amount of interest, having regard to the debt-claim for which it is paid, exceeds that which would 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 according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

 

Article 12

Royalties

  1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
  1. However, such royalties may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the beneficial owner of the royalties is a resident of that State, the royalties may be taxed in that State. of that State, but if the beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed five (5) shall not exceed five (5) percent of the gross amount of the royalties.
  1. The term “royalties” as used in this Article means remuneration of any kind paid for the use of or the right to use the use of, or the right to use, any copyright in any literary, artistic or scientific work, including software, motion picture films, or films or tapes or records used for television or radio, a patent, a trademark patent, trademark, design or model, secret plan, formula or process, and information relating to the and for information relating to industrial, commercial or scientific experience.
  1. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State from which the royalties are derived. of a Contracting State, carries on business in the other Contracting State in which the royalties arise through a permanent establishment situated therein business activity through a permanent establishment situated therein, or performing independent personal services from a fixed base situated therein. the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base.  In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.
  1. Royalties shall be deemed to arise in a Contracting State when the payer is a resident of that that State. However, where the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability giving rise to the payment of the royalties was incurred and which bears the expense of such royalties, such royalties shall be deemed to arise in the State in which the permanent establishment or fixed base 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, having regard to the service for which they are paid, exceeds the amount for which they are the amount of the royalties, taking into account the performance for which they are paid, exceeds the amount that would have been agreed upon by the obligor and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the latter amount. In such a case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being due to the other provisions of this Convention.

Article 13

Capital Gains

  1. Gains derived by a resident of a Contracting State from the alienation of real property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.
  1. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has enterprise of a Contracting State has in the other Contracting State, or movable property pertaining to a fixed base of which a resident of a property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services including such gains from the alienation of that permanent establishment (alone or with the whole enterprise) or of that enterprise) or fixed base, may be taxed in that other State.
  1. Gains from the alienation of ships, aircraft or road vehicles operated in international traffic, or movable property pertaining to the operation of such ships, aircraft or road vehicles shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
  1. Gains from the alienation of any property other than that referred to in paragraphs 1, 2 and 3 shall be taxable only in the Contracting State of which the transferor is a resident.

 

Article 14

Independent Personal Services

  1. Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that Contracting State;  if However, such income may also be taxed in the other Contracting State in the following circumstances:

(a) if he has a fixed base regularly available in the other State for the purpose of performing his activities; in such case, only that portion of the income which is attributable to such fixed base may be taxed in that other State; or

(b) if his stay in the other State extends over a period or periods exceeding in the aggregate 183 days in any twelve-month period commencing or ending in the taxable year concerned; in such case, only the portion of in such case, only that portion of the income derived from his activities in that other State may be taxed in that other State.

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

 

Article 15

Dependent Professions

  1. Subject to the provisions of Articles 16, 18, 19, 20 and 21, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State, unless the employment is exercised in the other Contracting State. If the employment is exercised in that State, remuneration received in respect thereof may be taxed in that other State. If the employment is exercised in that State, remuneration received in respect thereof may be taxed in that other State.
  1. Notwithstanding the provisions of paragraph 1, remuneration or income derived by a resident of a Contracting State received in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if

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

(b) the remuneration or income is paid by or on behalf of an employer who is resident of the other State, and

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

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

 

Article 16

Bonuses

  1. Directors’ fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of an enterprise. as a member of the board of directors or supervisory board of a company which is a resident of the other Contracting State may be taxed in that
  1. Remuneration derived by a person referred to in paragraph 1 from a company for the performance of a day-to-day managerial or technical function may be taxed in accordance with the provisions of Article

Article 17

Artists and sportsmen

  1. Notwithstanding the provisions of Articles 7, 14 and 15, income derived by a resident of a Contracting State as an entertainer from personal activities as an entertainer, such as a theater, motion picture, radio or television artiste, exercised in the other Contracting State, radio or television artiste, or musician, or as an athlete, may be taxed in that other State.
  1. Where income from activities which an entertainer or sports person performs personally and in that capacity is attributed not to the entertainer or athlete himself but to another person, such income may be taxed, notwithstanding the provisions of Articles 7, 14 and 15, such income may be taxed in the Contracting State in which the activities of the entertainer or sports person are carried on.
  1. Notwithstanding the provisions of paragraphs 1 and 2, income derived from activities referred to in paragraph 1 shall be exempt from tax in the Contracting State in which the activities are performed if the stay in that State is financed wholly or substantially from public funds of the other Contracting State, a local authority thereof or a public institution thereof.

 

Article 18

Pensions and Social Security Payments

  1. Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a Contracting State in respect of past employment shall be taxable only in that State.
  1. Notwithstanding the provisions of paragraph 1, pensions and other amounts paid under a public plan that is part of the which forms part of the social security legislation of a Contracting State shall be taxable only in that State.
  1. Notwithstanding the provisions of paragraph 1, pensions and other similar remuneration (including lump-sum payments) arising in a Contracting State and paid to a resident of the other Contracting State shall not be taxable in the other Contracting State if such payments are derived from contributions, allowances or insurance premiums contributions, allowances or insurance premiums paid to a supplementary pension plan by or on behalf of the recipient, or contributions made by the contributions, allowances, insurance premiums or endowments made by the employer to a domestic plan, and if such contributions, allowances, insurance premiums or endowments have actually been taxed in the first-mentioned Contracting State.

Article 19

Public Offices

(a) Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting State, a local authority or a public institution thereof to an individual in respect of services rendered to that State, local authority or public institution shall be taxable only in that State.

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

(i) is a national of that State, or

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

  1. (a) Pensions paid by a Contracting State, a local authority thereof, or a public institution thereof, either directly or through institutions thereof, either directly or out of funds constituted by them, to an individual in respect of services rendered to that State, local authority or public institution, shall be taxable only in that State.

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

  1. The provisions of Articles 15, 16, 17 and 18 shall apply to salaries, wages and similar remuneration as well as to pensions paid in respect of the employment of an individual. and pensions paid in respect of services rendered in connection with a business carried on by a Contracting State, either of which a Contracting State, a local authority thereof or a public institution thereof.

 

Article 20

Students and Trainees

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

 

Article 21

Teachers and researchers

  1. A teacher or researcher who is a resident of a Contracting State immediately prior to visiting the other Contracting State and who, at the invitation of a public university, college, other educational institution or State and who, at the invitation of a public university, college, other similar educational institution or scientific research institution or scientific research institution, is visiting that other Contracting State solely for the purpose of teaching research, or for both such purposes, in such educational or research institutions for a period not exceeding research, for a period not exceeding two years from the date of his arrival in that State, shall be exempt from tax in that from taxation in this State on all remuneration received by him for such teaching or research. However, where the stay in that other State exceeds two years, the other State may tax the individual with respect to the period which exceeds two years.
  1. This Article shall not apply to income received in respect of research if such research is principally undertaken for the private benefit of a particular person or persons.

Article 22

Other income

  1. Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this the preceding Articles of this Convention shall be taxable only in that State.
  1. The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in that State. Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein a permanent establishment situated therein, or performing independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.
  2. Notwithstanding the provisions of paragraphs 1 and 2 of this Article, items of income which an  an individual who is a resident of a Contracting State derived from games of chance and lotteries and arising in the other Contracting may be taxed in that other State.

Article 23

Wealth

  1. Capital represented by immovable property referred to in Article 6 owned by a resident of a Contracting State and situated in the other Contracting State may be taxed in that other State.
  1. Capital represented by movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, or by movable property pertaining to a fixed base of which a resident of a Contracting State has in the other Contracting State for the purpose of performing independent personal services, may be taxed in that other State.

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

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

 

Article 24

Methods for Eliminating Double Taxation

  1. In the case of the Lao PDR, double taxation shall be eliminated in the following manner:

(a) Where a resident of the Lao PDR derives income or owns capital which, in accordance with the provisions of this Convention, may be taxed in Luxembourg, the Lao PDR shall allow on the Lao tax Lao PDR shall allow a deduction from the Lao tax which it levies on the income or capital of that resident in an amount equal to the tax paid in Luxembourg. However, this deduction cannot exceed the fraction of the Laotian tax, calculated before deduction, corresponding to these deductions, corresponding to these items of income.

(b) Where the income arising in Luxembourg is a dividend paid by a company which is a resident of Luxembourg to a company which is a resident of Luxembourg to a company that is a resident of the Lao PDR, and that holds at least ten (10) percent of the shares of the company paying the shares of the company paying the dividend, the deduction takes into account the Luxembourg tax due by the company paying the company paying the dividend on account of its income.

  1. With respect to Luxembourg and subject to the provisions of Luxembourg law concerning the elimination of the elimination of double taxation which do not affect the general principle, double taxation is avoided in the following manner:

(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 Lao PDR, Luxembourg shall exempt from tax such income or capital, subject to the provisions of subparagraphs (b) and (c), but may, for the purpose of calculating the amount of tax on the remainder of the resident’s income or capital, apply the same rates of tax as if the

(b) Where a resident of Luxembourg receives items of income which, in accordance with the provisions of Articles 10, 11, 12 and 17, may be taxed in the Lao PDR, Luxembourg shall accord to the personal income tax or the corporate income tax of such resident, a deduction equal to the tax paid in the Lao PDR equal to the tax paid in Lao PDR. This deduction may not, however, exceed the fraction of the tax, calculated before deduction, corresponding to these deductions, corresponding to such items of income received from the Lao PDR.

(c) The provisions of subparagraph (a) shall not apply to income received or capital owned by resident of Luxembourg, where the Lao PDR applies the provisions of this Convention to exempt such income or to exempt such income or capital from tax or applies the provisions of paragraph 2 of Articles 10, 11 and 12 to such income.

 

Article 25

Non-discrimination

  1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than those to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected.
  1. The taxation of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favorably assessed in that other State than the taxation of enterprises of that other State carrying on the same business. carrying on the same activity. This provision shall not be construed to require a Contracting State to grant to residents of the other Contracting State personal allowances, reliefs and reductions of tax on the basis of the This provision shall not be construed to require a Contracting State to grant to residents of the other Contracting State the personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities that it grants to its own residents.
  1. Enterprises of a Contracting State, the capital of which is wholly or partly, directly or indirectly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected. other similar enterprises of the first-mentioned State.
  1. Unless the provisions of paragraph 1 of Article 9, paragraph 7 of Article 11 or paragraph 6 of  of Article 12 shall apply, interest, royalties and other expenses paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of that enterprise under the same conditions as if they had been paid to a resident of the first-mentioned State. Likewise, debts of an enterprise of a Contracting State to a resident of the other Contracting State 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-mentioned State.
  1. The provisions of this Article shall apply to taxes covered by this Convention.
  1. Tax incentives granted by the Lao PDR to its nationals to promote economic or social development shall not be deemed to be discrimination under this Article.

Article 26

Mutual Agreement Procedure

  1. Where a person considers that measures taken by one or both of the Contracting States result or will result in taxation not in accordance with the provisions of this Convention, he may, independently of the remedies provided by the may, irrespective of the remedies provided by the domestic law of those States, submit his case to the competent authority of the Contracting State of which it is a resident or, if its case comes under paragraph 1 of Article 25, to that of the Contracting State of which it is a State of which it is a national. The case must be submitted within three years from 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 justified and if it is not itself able to arrive at a satisfactory solution, to resolve the matter. to resolve the case by mutual agreement with the competent authority of the other  Contracting State, with a view to the avoidance of taxation not in accordance with the Convention. The agreement shall be applied irrespective of The agreement shall be applied irrespective of the time limits provided by the domestic law of the Contracting States.
  1. The competent authorities of the Contracting States shall endeavor to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of this Agreement. or to resolve any doubts 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 States may communicate directly with each other, including in a joint committee composed of such authorities or their representatives, with a view to reaching an agreement as set forth in the preceding paragraphs.

Article 27

Exchange of Information

  1. The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant to carry out the provisions of this Convention or for the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the taxes of every kind and description imposed on behalf of the Contracting States or their local authorities to the extent that the local authorities insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Articles 1 and 2.
  1. Information received under paragraph 1 by a Contracting State shall be treated as secret in 

the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of the taxes referred to in paragraph 1 in the assessment or collection of, proceedings or prosecutions in respect of, or appeals in relation to, the taxes or the oversight of any of the foregoing. Such persons or authorities shall use such information only for such purposes. They may disclose such information in public court hearings or in judgments. court hearings or in judgments.

  1. In no case shall the provisions of paragraphs 1 and 2 be construed to require a Contracting  State the obligation:

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

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

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

  1. If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall the other Contracting State shall use the powers at its disposal to obtain the information requested, even if it does not need such information for its own tax purposes.

tax purposes. The obligation in the preceding sentence is subject to the limitations of paragraph 3 unless such limitations are likely to prevent a Contracting State from providing information solely because it has no domestic interest in the information.

  1. In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to refuse to supply requested information solely because it is held by a bank financial institution, nominee or person acting in an agency or fiduciary capacity or because the information relates to the property rights of a person.

 

Article 28

Members of Diplomatic Missions and Consular Posts

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

Article 29

Entry into force

  1. Each of the Contracting States shall notify the other in writing, through diplomatic channels, of the completion of the procedures required by its law for the entry into force of this Convention. The Convention shall enter into force The Convention shall enter into force on the thirtieth day following the date of receipt of the last of these notifications.
  1. The Convention shall apply

(a) with respect to taxes withheld at source, to income allocated on or after the first day of January in the calendar year immediately following the year in which the Convention enters into force

(b) in respect of other taxes on income and on capital, to the taxes imposed for any taxation year beginning on or after the first day of January in the calendar year immediately following the year in which the Convention enters into force

 

Article 30

Denunciation

  1. This Convention shall remain in force until denounced by a Contracting State. Each Contracting State may denounce the Convention through diplomatic channels with a minimum of six months written notice before the end of each calendar year beginning after the expiration of five years from the date of its entry into force. date of its entry into force.
  1. The Convention shall cease to have effect:

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

(b) in respect of other income 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 Vientiane, this 4th day of November 2012, in the Lao, French, and English languages, all texts being equally authentic.

 

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