Double Taxation Treaty Between Luxembourg And South Africa | Damalion

CONVENTION

between the Grand Duchy of Luxembourg and the Republic

of South Africa for the avoidance of double taxation

and the Prevention of Fiscal Evasion with respect to Taxes on

income and wealth

PREAMBLE

The Government of the Grand Duchy of Luxembourg and the Government of the Republic of South Africa signed a double taxation treaty for the avoidance of double taxation and the prevention of fiscal tax 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. The existing taxes to which the Convention shall apply are:

(a) in Luxembourg:

(i) the personal income tax;

(ii) the tax on the income of communities;

(iii) the special tax on directors’ fees

(iv) wealth tax; and

(v) the municipal business tax;

(hereinafter referred to as “Luxembourg tax”);

(b) in South Africa:

(i) the normal tax; and

(ii) the secondary corporate tax;

(hereinafter referred to as “South African tax”).

 

  1. The Convention shall also apply to any identical or substantially similar taxes which may be the date of signature of the Convention in addition to or in place of the existing taxes replace them. The competent authorities of the Contracting States shall notify each other of any substantial changes in their respective taxation laws.

Article 3

General Definitions

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

(a) the term,,Luxembourg” means the Grand Duchy of Luxembourg and,

(b) the term “South Africa” means the Republic of South Africa and, when used in a geographical sense, includes the territorial sea as well as any area outside the territorial sea, including the continental shelf, which has been or shall hereafter be designated under the law of South Africa and in accordance with international law as an area over which South Africa may exercise its sovereignty. South Africa may exercise its rights of sovereignty or judicial authority;

(c) the term “person” includes individuals, corporations and any other groupings of persons which are treated as entities for tax purposes;

(d) the term “corporation” means any body corporate or any entity which is considered to be a corporation or 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 “international traffic” means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except where the ship or aircraft is between points in the other Contracting State;

(g) the term “competent authority” means:

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

(ii) in South Africa, the Commissioner for Inland Revenue or his authorized representative;

(h) 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

  1. For the purposes of the application of the Convention at any time by a Contracting State, any term or expression defined therein shall, unless the context otherwise requires, have the meaning which it has under the law of that law of that State concerning the taxes to which the Convention applies, the meaning given to that term under the term or expression under the federal law of that State shall prevail over the meaning given to it by the other law of that State shall prevail over the meaning given to it by other branches of law of that State.

Article 4

Resident

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

(a) in Luxembourg, any person who, under the laws of Luxembourg, is liable to tax in that State by reason of his domicile, residence, place of management, or any other criterion of a similar nature, but the term shall not include any person who persons who are subject to tax in Luxembourg only in respect of income from sources in Luxembourg or on capital situated therein;

(b) in South Africa, any individual who is ordinarily resident in South Africa and any other person whose place of effective management is in South Africa; and

(c) in either case, that State and all political subdivisions or local authorities thereof.

  1. Where, Contracting States according to ants, the provisions of paragraph 1, its situation shall be resolved in the following manner:

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

(b)  if the State in which the person has his center of vital interests cannot be determined, or if he has no home has a permanent home in neither State, he shall be deemed to be a resident of the State in which he a resident of the State where he has a habitual abode;

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

(d) if he possesses the nationality of both States or of neither of them the competent authorities of the Contracting States shall settle the question by mutual agreement.

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

Article 5

Permanent Establishment

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

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

(a) a place of management,

(b) a branch office,

(c) an office,

(d) a factory,

(e) a workshop, and

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

3. A construction site is an establishment

4. Notwithstanding men t stable” if:

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

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

(c) goods belonging to the enterprise are stored solely for processing by another enterprise;

(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 combined activities referred to in subparagraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from such combination is of a preparatory or auxiliary character.

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

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

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

Article 6

Income from Real Estate

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

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

2. The provisions of paragraph 1 shall apply to the income from the use of the land or from the leasing of the land, or from any other source of income; and to income form of income. from the direct operation of real estate,

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

Article 7

Business Profits

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 so much of its profits as is attributable to that permanent establishment.

Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall be attributed in each the profits which it might be expected to make if it were a separate enterprise shall be attributed in each Contracting State to that permanent establishment if it had constituted a separate enterprise engaged in the same or similar activities under 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.

 

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

 

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

 

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

 

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

 

Article 8

  1. Profits which an enterprise of State ships or aircraft shall be taxable only in that State. The profits that an enterprise of a State derives from the operation of ships or aircraft in international traffic shall be taxable only in that State,

2. For the purposes of this Article, profits from the operation of ships or aircraft in international traffic include

(a) profits from the bareboat charter of ships or aircraft operated in international traffic

(b) profits from the use or rental of containers, where such profits are incidental to the profits to which the provisions of paragraph 1.

  1. The provisions of pool, a holding in paragraph in common 1 shall also apply to the benefits derived from 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 an enterprise of the other Contracting State, and in either case the two enterprises are connected in their commercial or financial relations by terms and conditions agreed upon or imposed which differ from those which would be agreed upon between independent enterprises, the profits which, without these conditions, would have been made by one of the enterprises, but which could not in fact have been realized by reason of those conditions, may be included in the profits of that 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 other Contracting State has been taxed in that other State, and other State, and the profits so included are profits that would have accrued to the enterprise of the first-mentioned State of the first-mentioned State if the conditions agreed upon between the two enterprises had been those which between independent enterprises, the other State shall make an appropriate adjustment to the amount of the amount of tax charged therein on such profits where that other State considers the adjustment to be justified. In determining such adjustment, due regard shall be had to the other provisions of this Convention and, if necessary, In determining such adjustment, due regard shall be had to the other provisions of this Convention and, if necessary, the competent authorities of the Contracting States shall consult each other.

Article 10

Dividends

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

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 person receiving the dividends is the beneficial owner thereof, the tax so charged shall not exceed

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

(b) 15 percent of the gross amount of the dividends in any other case. This paragraph shall not affect the taxation of the corporation in respect of the profits out of which the dividends are payment of dividends.

 

  1. The term “dividends” as used in this section means income from shares, founder’s shares or other profit shares (with the exception of debt claims), as well as income from other shares which is subject to the same taxation treatment as income from shares under the law of the State of the company the State of which the distributing company is a resident.

 

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

 

  1. Where a company that is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on dividends paid by the company except to the extent that such dividends are paid to a resident of that other State or to the extent that the holding in respect of which the dividends are paid is effectively connected with a permanent establishment the company shall not be liable to any tax on the dividends paid by the company except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor shall it be liable to any tax in respect of the taxation of undistributed profits of the company even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such 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 if such resident is the beneficial owner.

 

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

 

  1. The provisions of paragraph 1 shall not apply where the beneficial owner of the interested resident of a Contracting State, carries on business in another Contracting State in which the interest arises, either a business activity through a permanent establishment situated therein

or performing independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such fixed base is effectively connected with it. In this case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

 

  1. Where, by reason of a special relationship between the debtor and the beneficial owner or where both beneficiary, the amount of the interest, taking into account the claim for which it is paid, exceeds the amount for which it is paid, exceeds that which would have been agreed upon by the debtor and the beneficial owner in the 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 In such 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 12

Royalties

The royalties are taxable only from a Contracting State and paid to a resident of the other Contracting State in that other State, if such resident is the beneficial owner.

 

  1. The term “royalties” as used in this Article means payments of any kind whatsoever paid for the use of, or the right to use, any copyright of literary or artistic work or scientific work (including motion picture films and films, tapes or records used in connection with radio or television or scientific work (including cinematographic films and films, tapes or discs used for radio or television broadcasts), a patent, a trademark, a design or model, secret plan, formula or process, or for information relating to experience gained in the relating to industrial, commercial or scientific experience.

 

  1. The provisions of paragraph 1 shall not apply where the beneficial owner of the royalties resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, either a business activity through 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 royalties are paid is connected with such fixed base the right or property in respect of which the royalties 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, by reason of a special relationship between the debtor and the beneficial owner or where both with third parties, the amount of the royalties, taking into account the service for which they are paid, is 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

  1. Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the 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 an enterprise of a Contracting State has in the other Contracting State, or of movable property pertaining to a fixed base of which a resident belongs to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such permanent establishment (alone or with the whole enterprise) or fixed base, may be taxed in that other State.
  1. Gains derived by an enterprise of a Contracting State from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft shall be taxable only in that State

.

  1. Gains from the alienation of any property other than that referred to in subparagraph (a) may be taxed only in that State. Gains from the alienation of any property other than that referred to in paragraph 1 shall be taxable only in the Contracting State of which the alienator is a resident.

Paragraphs 1, 2 and 3 shall not apply.

 

Article 14

Independent Personal Services

  1. Income derived by an individual who is a resident of a Contracting State from professional services or other activities of an independent character shall be taxable only in that State unless the resident has or habitually disposes of the income unless that resident has or has had a fixed base in the other Contracting State for the purpose of performing his fixed base for the purpose of performing his activities. If he has or has had such a fixed base, the income may be taxed in the other State but If he has or has had such a fixed base, the income may be taxed in the other State but only so much of it as is attributable to that fixed base. For the purposes of this Convention, where an individual who is a resident of a Contracting State is present in the other Contracting State for a period or periods exceeding in the aggregate 183 days in any twelve-month period commencing or ending in the taxable year concerned, the individual person shall be deemed to have a fixed base regularly available to him in that other State and the income from his income derived from his activities in that other State shall be attributable to that fixed base.

 

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

 

Article 15

Dependent occupations.

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

 

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

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

(c) the remuneration is not borne by a permanent establishment or a fixed base which

the employer is in another State.

 

  1. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State may be taxed in that State.

 

Article 16

Directors’ Fees

Directors’ fees and other similar payments derived by a resident of a Contracting State 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 other State.

 

Article 17

Entertainers and Athletes

  1. Notwithstanding the provisions of Articles 7, 14, and 15, income derived by a resident of a Contracting State from his personal activities as an entertainer, such as a theater artist, actor or sportsman, exercised in the other Contracting State artist, such as a theater, motion picture, radio or television artiste, or a musician, or as a sportsman, 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 as such is attributed not to the entertainer or sportsman himself but to another person, such income may be notwithstanding the provisions of Articles 7, 14 and 15, such income may be taxed in the Contracting State in which the activities of the artist or athlete are carried on.

 

Article 18

Pensions and Annuities

  1. Subject to the provisions of paragraph 2 of Article 19, pensions and similar remuneration and annuities arising in a Contracting State may be taxed in that State.

 

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

 

Article 19

Public Offices

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

 

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

(i) is a national of that State, or

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

 

2.

(a) Pensions paid by a Contracting State or a political subdivision or local authority thereof, either directly or out of funds established by it, to an individual in respect of services rendered by the individual, shall be deemed to be a pension. individuals in respect of services rendered to that State or subdivision or local authority 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 a national of that State.

 

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

local authorities.

Article 20

Students, Apprentices, and Trainees

A student, apprentice or business trainee who is present in a Contracting State solely for the purpose of pursuing studies or training and who is, or was immediately before entering that State, a resident of the other Contracting State, shall be other Contracting State, shall be exempt from tax in the first-mentioned State on amounts derived from sources outside the first-mentioned sources outside the first-mentioned State to defray the expenses of his maintenance, education or training.

Article 21

Other Income

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

 

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

Article 22

Assets

  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 an enterprise of a Contracting State has in the other Contracting State, or by movable property that belongs to a fixed base belongs to a fixed base 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.

 

  1. Capital represented by ships and aircraft operated in international traffic by an enterprise of a Contracting State, and by movable property pertaining to the operation of such ships or aircraft, shall not be taxed in that other State or aircraft shall be taxable only in that State.

 

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

Article 23

Elimination of Double Taxation

  1. In Luxembourg, double taxation shall be eliminated 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 South Africa, Luxembourg shall, subject to the provisions of subparagraphs (b) and (c), but may, in calculating the amount of tax on the remaining income or capital of the

(b) Where a resident of Luxembourg derives income which, in accordance with the provisions of Article 10 or paragraph 1 of Article 18, may be taxed in South Africa, Luxembourg shall allow a deduction from the tax it levies on the income of that resident of an amount equal to the tax paid in South Africa. An amount equal to the tax paid in South Africa on that income. This deduction may not, however, be the fraction of the tax, calculated before deduction, corresponding to these items of income received from South Africa.

c) Where a company which is a resident of Luxembourg receives dividends from South African sources, Luxembourg shall exempt such dividends from tax, provided that such company which resident in Luxembourg holds directly since the beginning of its financial year at least 10 percent of the capital of the company paying the dividends and if that company is subject to a tax in South Africa to a tax corresponding to the Luxembourg corporate income tax. The above-mentioned shares or units of the South African company are, under the same conditions, exempt from Luxembourg wealth tax.

 

  1. In South Africa, the Luxembourg tax paid by South African residents on income taxable in Luxembourg, in accordance with income taxable in Luxembourg, in accordance with the provisions of this Convention, shall be deductible from the tax payable under South African tax law. However, such deduction shall not exceed an amount which bears to the total tax payable in South Africa the same ratio as the income concerned bears to the total tax payable in South Africa.

 

Article 24

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 that to which nationals of that other State are or may be subjected to nationals of that other State who are in the same position. This provision shall also apply, notwithstanding the provisions of Article 1, to persons who are not residents of a Contracting State of one or both of the Contracting States.

 

  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 levied in that other State than the taxation of enterprises of that other State carrying on the same activities. This provision shall not be construed to require a Contracting State to grant to residents of the other Contracting State personal deductions, allowances and reductions for taxation purposes on account of civil status or family responsibilities that it grants to its own residents.

 

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

 

  1. Enterprises of a Contracting State, the capital of which is wholly or partly 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 which is other or more burdensome than those to which other similar enterprises of the first-mentioned State are or may be subjected.

 

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

 

Article 25

  1. Where a person considers that the actions of one or both of the Contracting States result or will result for him in States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic law of those States submit its case to the competent authority of the Contracting State of which it is a resident or, if its case the Contracting State of which it is a resident or, if its case comes under paragraph 1 of Article 24, to that of the Contracting State of which it is national. The case must be submitted within three years after 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 case by mutual agreement with the competent authority of the other country 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 time limits provided by the domestic law of the States.

 

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

 

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

Article 26

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

 

(a) to take administrative measures or those of the other contracting State;

(b) to furnish information which is not obtainable under the laws 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 the public policy of the other contracting State to derogate from its laws or administrative practice or in public.

Article 27

Members of Diplomatic Missions and Consular Posts

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

Article 28

Exclusion of Certain Companies

This Convention shall not apply to holding companies within the meaning of the special Luxembourg legislation law of July 31, 1929, and the Grand Ducal Decree of December 17, 1938 nor to companies which are subject to a similar tax regime in Luxembourg. It does not apply to income derived by a resident of South Africa from such companies or to shares or other equity securities of such companies and capital securities of such companies owned by that person.

Article 29

Entry into force

  1. Each Contracting State shall notify the other State of the completion of its legislation for the entry into force of this Convention.

 

  1. The Convention shall enter into force on the date of receipt of the last of these notifications and its disa)

     (a) in Luxembourg:

(i) in respect of taxes withheld at source, on or after the first day of January next following the date on which the Convention enters into force

(ii) in respect of other taxes on income, and taxes on capital, to taxes payable in respect of any taxation year beginning on or after the first day of January next following the date on which the Convention enters into force

    (b) in South Africa, to taxable years beginning on or after the first day of January next immediately following the date on which  the Convention enters into force.

Article 30

This Convention shall remain in force until denounced by a Contracting State by a contracting State. Each Contracting State may denounce the Convention through diplomatic channels with a minimum of six months’ notice before the end of each calendar year following the period of five years from the date on which the Convention enters into force. In this case, the Convention shall cease to be applicable:

(a) in Luxembourg:

(i) in respect of taxes withheld at source, to income allocated on or after the first day of January of the calendar year immediately following the date on which notice is given

(ii) in respect of other taxes on income, and taxes on capital, to the taxes payable in respect of any taxation year commencing on or after the first day of January in the calendar year immediately following the date on which notice is given

(b) in South Africa, to taxation years beginning on or after the first day of January immediately following the date on which notice is given.

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

DONE in duplicate in Luxembourg, both texts being equally authentic. November 23, 1998, in the English and French languages.

 

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