Double Tax Treaty between Luxembourg & Tunisia | Damalion

CONVENTION

between the Grand Duchy of Luxembourg and the Tunisian Republic for the avoidance of double taxation and
prevention of fiscal evasion with respect to income and wealth taxes

 

The Government of the Grand Duchy of Luxembourg and the Government of the Republic of Tunisia, 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 upon the following provisions:

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, its political subdivisions and local authorities, irrespective of the system of collection.

 

2. Taxes on total income, on total wealth, or on items of income or wealth, including taxes on gains from the alienation of movable or immovable property, taxes on the amount of wages and salaries as well as taxes on capital gains.

 

  1. The existing taxes to which the Convention shall apply include

 

(a) in the case of Tunisia

– personal income tax;

– the tax on companies;

– the tax on industrial, commercial or professional establishments

– the hotel tax

– the tax on professional training;

– the fund for the promotion of housing for employees

 (hereinafter referred to as “Tunisian tax”);

(b) in the case of Luxembourg

– the personal income tax;

– the tax on the income of communities;

– the special tax on directors’ fees

– wealth tax;

– the communal commercial tax based on operating profits and capital

 (hereinafter referred to as “Luxembourg tax”).

 

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

Article 3

General definitions

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

(a) the terms “a Contracting State” and “the other Contracting State” mean Tunisia or Luxembourg, as the context requires

(b) the term “Tunisia” means the territory of the Tunisian Republic and the areas adjacent to the territorial waters of Tunisia over which, in accordance with international law, Tunisia may exercise the rights relating to the bed of the sea, the marine subsoil and their natural resources

(c) “Luxembourg” means the territory of the Grand Duchy of Luxembourg;.

(d) the term “persons” includes natural persons, companies and all other groups of persons

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

(f) 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 State

(g) the term “nationals” means all natural persons possessing the nationality of a Contracting State and all legal persons, partnerships and associations formed in accordance with the laws in force in a Contracting State

(h) the term “international traffic” means any transport by a ship or aircraft operated by an enterprise having its place of effective management in a Contracting State, except where the ship or aircraft is not operated by a company having its place of effective management in a Contracting State.

(i) the term “competent authority” means

– in Tunisia: the Minister of Finance or his authorized representative;

– in Luxembourg: the Minister of Finance or his authorized representative.

 

  1. For the purposes of the application of the Convention by a Contracting State, any term not otherwise defined shall have the meaning under the laws of that State relating to taxes covered by the Convention, unless the context otherwise requires a different interpretation.

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 under the laws of that State, is liable to tax in that State by reason of his domicile, residence by reason of his domicile, residence, place of management or any other criterion of a similar nature.

 

  1. Where, under the provisions of paragraph 1 of this Article, an individual is considered to be a resident of each of the Contracting States, the individual shall be deemed to be

(a) he shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him; where he has a permanent home available to him in each of the Contracting resident of the Contracting State with which its personal and economic relations are closer (center of vital interests);

(b) if the Contracting State in which such person has his center of vital interests cannot be determined, or he has no permanent home available to him in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has a habitual abode;

(c) if such person is ordinarily present in each of the Contracting States or is not ordinarily present in either of them, he shall be deemed to be a resident of the Contracting State of which he is a national

(d) if such person is a national of both Contracting 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 deemed to be resident of each of the Contracting States, he shall be deemed to be a resident of the State in which its place of effective management.

 

Article 5

Permanent Establishment

  1. For the purposes of this Convention, the term “permanent establishment” means a fixed place of business where the enterprise carries on all or part of its business.

 

  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, quarry, or other place of natural resource extraction

(g) a construction site, or temporary assembly operations, or supervisory activities thereon, 

where such site, temporary assembly operations or supervisory activities are of a duration of more than six months or where such assembly operations or supervisory activities are incidental to the sale of machinery or equipment; and the sale of machines or equipment have a duration of more than three months and the assembly or supervision exceed 10% of the price of such machinery or equipment.

 

  1. Notwithstanding the foregoing provisions of this Article, a “permanent establishment” shall be deemed not to exist if:

 

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

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

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

(d) a fixed place of business is used for the purpose of advertising

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

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

 

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

(a) has and habitually exercises in that State general powers to negotiate and conclude contracts for or on behalf of the enterprise

(b) habitually takes orders in the first-mentioned State exclusively or almost exclusively for the enterprise itself or for the enterprise and other enterprises which are controlled by it or which have a controlling interest in it or which are under common control.

 

  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 State if it collects premiums in the territory of that State or insures risks therein through an employee or through an agent who does not come within the category of persons referred to in who does not fall within the category of persons referred to in paragraph 6 below.

 

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

 

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

 

Article 6

Income from Real Property

  1. Income derived by a resident of a Contracting 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 be defined in accordance with the law of the Contracting State in which the property concerned is situated. The term shall, in any case, include property accessory to immovable property, livestock, and equipment used in agriculture and forestry, rights to which the provisions of private law concerning land ownership apply, usufruct of real estate and rights to variable or fixed royalties for the exploitation or concession of exploitation of mineral deposits, springs and other soil resources. Ships, boats and aircraft are not considered as real estate.

 

  1. The provisions of paragraph 1 shall apply to income from the direct exploitation, rental or leasing, as well as from any other form of exploitation of real estate.

 

  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 exercise of a self-employed profession.

 

Article 7

Company profits

  1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business in such a manner, the profits of the enterprise may be taxed in 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 them as is attributable to that permanent establishment.

 

  1. Where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, 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 distinct and separate enterprise engaged in the same or similar activities 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, expenses incurred for the purpose of the business of that permanent establishment, including the actual executive and general administrative expenses incurred either in the Contracting State in which the permanent establishment is situated or elsewhere. However, no deduction shall be allowed in respect of amounts, if any, paid by the permanent establishment to the permanent establishment to the head office of the enterprise or to any of its other establishments as royalties, fees or other similar payments in respect of licences, patents or other rights, as commissions (other than reimbursement for actual expenses incurred) for services rendered or for management activity or, except in the case of a banking enterprise, as interest on money lent to the permanent establishment. Similarly, in determining the profits of a permanent establishment, the following shall not be included among the expenses of the head office of the enterprise or of any of its other establishments, royalties, fees or the taxpayer shall be deemed to have paid the taxpayer a taxable benefit in respect of the use of the taxpayer’s assets and liabilities in the taxpayer’s hands (other than reimbursement for actual expenses incurred) for services rendered or for management or, except in the case of a banking institution, interest on money lent to the head office of the enterprise or to any or any of its other establishments.

 

  1. If it is customary in a Contracting State to determine the profits attributable to a permanent establishment on the basis of an apportionment of the profits of the enterprise to its various parts, nothing in paragraph 2 of this Article shall not prevent that Contracting State from determining the profits chargeable to tax under the customary allocation the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles set forth in this Article.

 

  1. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be computed annually the same method, unless there are good and sufficient reasons for proceeding otherwise.
  2. No profit shall be attributed to a permanent establishment by reason of its having merely purchased goods or merchandise for the enterprise; at the same time, no expense in this respect shall be allowed as a deduction.

 

  1. The provisions of the preceding paragraphs as well as those of Article 5 shall also apply to partnerships and other groups of persons whose profits are taxable in the hands of the partners or members.

 

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

 

Article 8

Maritime and Air Navigation

  1. Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

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 enterprise is situated. deemed to be situated in the Contracting State in which the home port of that ship is situated or, if there is no homeport in the Contracting State of which the operator of the ship is a resident.

 

  1. Profits from the operation of ships or aircraft between places in a Contracting State shall be taxable only in that State.

 

  1. The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business 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 in the 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, both the two enterprises are, in their commercial or financial relations, bound together by conditions agreed upon or imposed, which differ from those which would be agreed upon between independent enterprises, profits which, but for those conditions, would have been earned by one of the enterprises but could not be earned by the other enterprise by reason of such 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 taxed accordingly, profits on which an enterprise of that profits on which an enterprise of the other Contracting State has been taxed in that other State, and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions 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 charged therein on such profits. In determining such adjustment, 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 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 resident, and according to the laws of that State, but if the recipient of the dividends is the beneficial owner, the tax so charged shall not exceed 10 percent of the gross amount of the dividends. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

dividends.

 

  1. The term “dividends” as used in this section means income from shares or profit sharing certificates shares, founders’ shares or other profit shares, with the exception of debt claims, as well as income from shares which are assimilated to income from shares by the taxation law of the State of which the company making the distribution is resident.

 

  1. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends

resident of a Contracting State carries on business in the other Contracting State of which the company paying the dividends is a business activity through a permanent establishment situated therein independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such fixed base is effectively connected with it. In such cases, 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 the extent that such dividends are paid to a resident of that other State or to the extent that the holding dividends are effectively connected with a permanent establishment or a fixed base situated in that other State, or other State, nor impose any tax on the undistributed profits of the company by reason of the taxation of undistributed profits, even if the company, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in that 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

 

  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 person receiving the interest is the 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 person receiving the interest is the beneficial owner, the tax so charged shall not exceed:

(a) 7.5 percent of the gross amount of the interest, if the interest-bearing loan is guaranteed or financed by the other State or by a financial institution that is a resident of that other State and the loan is for a minimum period of five years;

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

 

  1. The term “interest” as used in this Article means income from debt-claims of every kind, whether or not secured or unsecured by a mortgage or by a provision for participation in the debtor’s profits, and includes income from public funds and income from government securities and bonds, including premiums and prizes attached thereto. The penalties for late payment shall not be considered as interest within the meaning of this section.

 

  1. The provisions of paragraphs 1 and 2 shall not apply if 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, either business activity through a permanent establishment situated therein, or performing independent personal services from a fixed by means of a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such fixed base. effectively connected with it. In such cases, 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 debtor is that State a political subdivision, a local authority or a resident of that State. However, where the payer of the interest whether or not he is a resident of a Contracting State, has in a Contracting State a permanent establishment or a fixed base, in respect of which the indebtedness on which the interest is paid was incurred and which bears the expense of that interest, such interest shall be deemed to be interested, such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 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 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 recipient of the royalties of that State, but if the person receiving the royalties is the beneficial owner thereof, the tax so charged shall not exceed 12 per cent the tax so charged shall not exceed 12 per cent of the gross amount of the royalties.

 

  1. The term “royalties” as used in this Article means payments of any kind for the use of or the right to use the use of, or the right to use, any copyright of literary, artistic or scientific work, including cinematographic films, of including motion pictures, a patent, a trade mark, a design or model, a copyright, a trade secret or a design, plan, formula or secret process, as well as for the use of or the right to use of industrial, commercial, harbour, agricultural or scientific equipment and for information relating to experience acquired in the industrial, commercial or scientific field, with the exception of remuneration for the chartering of ships or aircraft used in international traffic, or for technical or economic studies or economic studies or for the provision of technical assistance carried out in the State in which the royalties originate.

 

  1. The provisions of paragraphs 1 and 2 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 independent personal services from a fixed base situated therein, and the property or right in respect of which the royalties are paid is effectively connected with that is effectively connected with it. In such cases, 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 that State itself, a political subdivision, a local authority or a resident of that State. However, where the payer of the royalties whether or not he is a resident of a Contracting State, has in a Contracting State a permanent establishment or a fixed base in a Contracting State in connection with which the contract giving rise to the payment of the royalties was made and which bears as such the cost of such royalties, the as such, those royalties shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base permanent establishment or fixed base is situated.

 

  1. Where, by reason of a special relationship between the payer and the beneficial owner or between the payer and the beneficial owner and beneficial owner, the amount of the royalties, having regard to the service for which they are paid, exceeds the amount for which they are paid, exceeds the amount that would have been agreed upon by the debtor and the beneficial owner in the absence of the provisions of this Article shall apply only to the latter amount. In such 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. the other provisions of this Convention.

Article 13

Capital Gains

  1. Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 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 in the other Contracting State, or movable property pertaining to a fixed base available to a resident of 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 fixed base, may be taxed in that other State.

 

  1. Gains from the alienation of ships or aircraft operated in international traffic, or movable property ships or aircraft operated in international traffic, or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in the Contracting State in which the place of 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 not be taxable only in the Contracting State of which the transferor is a resident.

Article 14

Independent professions

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

(a) if the individual concerned has a fixed base regularly available in the other Contracting State for the purpose of performing his activities; in that case, only that part of the income which is attributable to the said fixed base may be taxed in the other Contracting State

Or,

(b) if his stay in the other Contracting State extends over a period or periods equal to or exceeding 90 days in the taxable year.

 

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

Article 15

Dependent Professions ‘

  1. Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other similar remuneration 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 State. remuneration received in respect thereof 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

 

(a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the taxable year concerned

(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 has in the other State.

 

  1. Notwithstanding the preceding provisions of this Article, remuneration in respect of an employment exercised on board a ship or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

Article 16

Directors’ Fees

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, supervisory board or a similar organ of a company which is a resident of the other Contracting State may be taxed in that other State.

Article 17

Artists and Athletes

  1. Notwithstanding the provisions of Articles 14 and 15, income derived by professional entertainers, such as theatrical, motion picture radio or television artistes and musicians, as well as sportsmen and sportswomen, from their personal activities as such may be taxed in that other State. personal activities as such may be taxed in the Contracting State in which such activities are carried on.

 

  1. Where income in respect of activities exercised by an entertainer or a sportsman in his personal capacity as such is attributed not to the income from activities which an entertainer or sportsperson performs personally and in that capacity is attributed not to the entertainer or sportsperson 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 artist or the activities of the artist or athlete are carried on.

Article 18

Pensions

  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 the social security legislation of a Contracting State to a resident of that State shall be taxable only in that State. of a Contracting State to a resident of the other Contracting State may be taxed  in the first-mentioned State, but the tax shall not exceed 15 per cent of the amount subject to tax.

Article 19

Public Offices

  1. (a) Remuneration, other than a pension, paid by a Contracting State or a political subdivision or local authority thereof to an individual who is a resident of the other Contracting State may be taxed in the first-mentioned State, but the tax shall not exceed 15 percent of the amount subject to tax.

Remuneration, other than a pension, paid by a Contracting State or a political subdivision or local authority thereof to an individual in respect of services rendered to that State, subdivision or authority shall not be taxed as remuneration. subdivision or local authority shall be taxable only in that State,

(b) However, such 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

– is a national of that State, or

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

 

  1. (a) Pensions paid by a Contracting State or a political subdivision or local authority thereof either directly or out of funds constituted by them, to an individual in respect of services rendered to that State or subdivision or local authority, may be taxed 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 and 18 shall apply to remuneration and 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 political subdivisions or local authorities.

Article 20

Students and Trainees

  1. Any resident of one of the Contracting States who is present in the other State exclusively

(a) as a student enrolled in a university, college or school of that other State;

(b) as an apprentice in trade or industry; or

(c) as the recipient of a scholarship, grant or allowance by way of reward from a religious, charitable, scientific or educational institution the primary purpose of which is to enable him to pursue studies or research, shall be exempt from tax in that other State in respect of amounts with respect to amounts received by him from abroad for his maintenance, education or training in respect of any scholarship or fellowship held by him or her or in respect of any amount received by him or her as remuneration for a non-independent gainful activity which he is pursuing in that other State with a view to acquiring practical training.

 

  1. Any individual of one of the Contracting States who is present in the other Contracting State for a period not exceeding two years as an employee of an enterprise of the first-mentioned State or of one of the organizations referred to in subparagraph (c) of referred to in subparagraph (c) of paragraph 1 of this Article, or under contract with such enterprise or organization, for the sole purpose of the organization, for the sole purpose of acquiring technical or professional experience or business experience from a person other than such enterprise or organization shall be exempt from tax in such other State with respect to the State with respect to the remuneration he receives during the said period.

 

Article 21

Other Income

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

 

  1. The provisions of paragraph 1 shall not apply to income other than income from real property as defined in paragraph 2 of Article 6, where the recipient of such income, being a resident of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, or performs in the other Contracting State independent personal services from a fixed base situated and the right or property in respect of which the income is paid is effectively connected with such permanent establishment. In such cases the provisions of Article 7 or Article 14, as the case may be, shall 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 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 property that 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, may be taxed in that other State.

 

  1. 3. Capital represented by ships and aircraft operated in international traffic and by movable property used in the operation of such ships or aircraft shall be taxable only in the Contracting State in which  the place where the enterprise is effectively managed.

 

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

 

Article 23

Methods for Elimination of Double Taxation

Double taxation shall be avoided in the following manner:

 

  1. With respect to Tunisia

(a) Where a resident of Tunisia receives income which, in accordance with the provisions of this Convention, may be taxed in Luxembourg, Tunisia shall deduct from the tax it collects on the income of the resident an amount equal to the income tax paid in Luxembourg.

(b) Where a company which is a resident of Tunisia receives dividends from a company which is a resident of Luxembourg and of which it owns at least 10 percent of the capital, the deduction shall take into account, in addition to any Luxembourg and of which it holds at least 10 percent of the capital, the deduction shall take into account, in addition to any Luxembourg tax-deductible under subparagraph (a), the Luxembourg tax payable by the first company in respect of the profits used to pay such dividends.

c) However, the amount deducted in either case may not exceed the fraction of the income tax calculated before the deduction, corresponding as the case may be to the income taxable in Luxembourg.

  1. With respect to Luxembourg:

(a) Where a resident of Luxembourg receives income or possesses capital which, in accordance with the provisions of this Convention, may be taxed in Tunisia, Luxembourg shall exempt from tax

(b) Notwithstanding the provisions of subparagraph (a), if a bank or financial holding company which is a resident of Luxembourg realizes income which, in accordance with the provisions of Article 7, is taxable in taxable in Tunisia, but which has been totally or partially exempted from tax under Tunisian incentive legislation investment incentives, Luxembourg shall grant a deduction from the tax it levies on the income of such resident Luxembourg grants a deduction from the tax it collects on the income of the resident in an amount equal to the tax paid in Tunisia. This deduction may not, however, exceed however, cannot exceed the fraction of the tax, calculated before deduction, corresponding to this income received from Tunisia.

(c) Where a resident of Luxembourg receives income which, in accordance with the provisions of Articles 10, 11, 12, and paragraph 2 of Article 18, may be taxed in Tunisia, Luxembourg shall allow a deduction from the tax it collects on that resident’s income in an amount equal to the tax paid in Tunisia. This deduction may not, however, exceed the fraction of the tax, calculated before deduction, corresponding to such income received from Tunisia.

(d) For the purposes of subparagraph (c)

– dividends received by an individual who is a resident of Luxembourg shall be considered to have been subject to the payment of the tax to have been subject to tax in Tunisia at the rate of 15 percent, provided that the company paying the dividends is subject in Tunisia to the corporate income tax referred to in Article 2; is also considered as a company subject in Tunisia to corporate income tax, a Tunisian company which benefits from tax exemptions or reductions under special investment incentive measures (except for banks)investment incentives (with the exception of banks and investment companies with fixed and variable capital)  in Tunisia;

– interest and royalties are considered to have been subject to tax in Tunisia

at the respective rates of Articles 11 and 12, in the event that tax exemptions or reductions are granted under the special investment incentives (except for banks and fixed capital investment companies and investment companies with fixed and variable capital) in Tunisia. The provisions of this subparagraph apply during a period of 15 years starting January 1 of the calendar year following that in which the Convention enters into force. This period may be extended by mutual agreement between the competent authorities of the two States.

e) Where a company which is a resident of Luxembourg receives dividends from Tunisian sources

– Luxembourg shall exempt such dividends from tax, provided that such company which is a resident of Luxembourg has held directly since the beginning of its fiscal year at least 10 percent of the capital of the company paying the dividends and that the latter company is subject in Tunisia to the corporate tax on companies referred to in Article 2. The aforementioned shares or units of the Tunisian company are, under the same conditions, exempt from Luxembourg wealth tax. The exemption provided for by this subparagraph also applies even if the Tunisian company benefits from tax exemptions or reductions under special investment incentives (with the exception of banks and fixed capital investment companies). investment companies with fixed and variable capital) in Tunisia;

– the dividends are, in the case where the conditions of participation referred to in the first indent are not fulfilled, the dividends are considered to have been subject to tax in Tunisia at the rate of 20 provided that the company paying the dividends is subject in Tunisia to the corporation tax referred to in Article 2; a Tunisian company that benefits from a tax exemption is also considered to be a company subject to corporate income tax in Tunisia. Tunisian company that benefits from tax exemptions or reductions under the special investment incentives (except for banks and investment companies with fixed and variable capital) in Tunisia. The provisions referred to in the second indent of this subparagraph apply for a period of 15 years beginning on January 1 of the calendar year following that in which the Convention enters into force. This period may be extended by mutual agreement between the competent authorities of the two Contracting States.

 

Article 24

Non-discrimination and encouragement of investment

  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 State are or may be subjected. or more burdensome than those to which nationals of that other State in the same circumstances, in particular with respect to other State in the same circumstances, in particular with regard to residence.

 

  1. The taxation of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favorably assessed in that other State than the taxation of enterprises of that other State carrying on the same activity. State carrying on the same activity. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State the of the other Contracting State personal allowances, reliefs and reductions of tax on account of family status or This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State the personal allowances, reliefs and reductions for taxation purposes on account of family status or dependency or other personal circumstances which 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 tax or duty connected therewith. State to any taxation or any requirement connected therewith which is other or more burdensome than that to which other enterprises of the same kind in that first-mentioned State.

 

  1. Unless the provisions of paragraph 1 of Article 9, paragraph 6 of Article 11 or paragraph 6 of Article 12 are 6 of Article 12 shall apply, interest, royalties and other expenses paid by an enterprise of a Contracting Contracting State to a resident of the other Contracting State shall be deductible in 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. 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 enterprise, be deductible under the same conditions as if they had been contracted with a resident of the first-mentioned State.

 

  1. The term “taxation” as used in this Article means taxes of every kind and description referred to in Article 2 of this Convention.

 

  1. The provisions of this Convention shall not preclude the application of more favorable tax provisions of the law of any of the Contracting States in favor of investments.

Article 25

Mutual Agreement Procedure

  1. Where a resident of a Contracting State considers that the actions of one or both of the Contracting States will result in a loss to the resident of that State, the resident of that State shall be entitled to a refund of the tax paid by the resident of that State. The Contracting States will result in taxation not in accordance with this Convention, it may, irrespective of the may, irrespective of the remedies provided by the domestic laws of those States, present his case to the competent authority of the Contracting State of which he is a resident. 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. taxation not in accordance with the provisions of the Convention.

 

  1. That 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 by mutual agreement with the competent authority of the other Contracting State, with a view to avoiding taxation not in accordance with the Convention.

 

  1. The competent authorities of the Contracting States shall endeavor by mutual agreement to resolve any difficulties or doubts or to resolve doubts as to the interpretation or application of the Convention. They may also consult together for the avoidance 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 oral exchanges of views appear likely to facilitate such agreement, such exchanges of facilitating such agreement, such exchanges of views may take place in a Commission composed of representatives of the competent authorities of the Contracting States.

Article 26

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 o taxes of every kind and description imposed on behalf of the Contracting States, their political subdivisions or local authorities thereof 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 assessment or collection of the taxes referred to in paragraph 1, in proceedings or prosecutions in respect of such taxes in connection with the assessment or collection of, or the determination of appeals in relation to, the taxes referred to in paragraph 1, or in connection with the review of any of the foregoing. the foregoing. Such persons or authorities shall use such information only for such purposes. They may disclose such information They may disclose such information in public court hearings or in judgments.

 

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

(a) to take administrative action at variance with the laws and administrative practice of that or the other 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 the information for its own tax purposes. The obligation in the preceding sentence is subject to the limitations of paragraph 3 unless such limitations would prevent a Contracting State from providing information solely because the information The obligation in the preceding sentence shall be subject to the limitations set forth in paragraph 3 unless such limitations would prevent a Contracting State from communicating information solely on the basis that the information is not relevant to that Contracting State for domestic purposes.

 

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

 

Section 27

Diplomatic and Consular Officers

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

 

Article 28

Entry into force

  1. The present Convention shall be ratified and the instruments of ratification shall be exchanged in Luxembourg as soon as possible.

 

  1. It shall enter into force upon the exchange of the instruments of ratification and its provisions shall apply

(a) to taxes due at source on income allocated or paid on or after the first day of January in the calendar year following that in which the instruments of ratification are exchanged;

(b) to other taxes for any taxable year ending after the first day of January in the calendar year following the year in which the instruments of ratification are exchanged.

Article 29

Denunciation

This Convention is concluded for an unlimited period, but either Contracting State may, on or before June 30 of any calendar year after the fifth year from the date of the exchange of instruments of ratification, denounce it in writing denounce it, in writing and through diplomatic channels, to the other contracting State. In the event of denunciation before July 1 of any such year, the Convention shall apply for the last time

(a) to taxes due at source on income allocated or paid on or before December 31 of the year of termination; and

(b) to other taxes for any taxation year ending on or before December 31 of the year of termination.

 

Want to know more about LUXEMBOURG with Damalion?

Damalion offers you from bespoke advice by directly operational experts in the fields that challenge your business.
We advice you to give information at its best, so we can qualify your demand and revert to you under the next 8 hours.