Agreement between the Federal Republic of Germany and the Kingdom of Denmark
for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital, as well as on Estate, Inheritance and Gift Taxes, and for Mutual Assistance in Tax Matters (German–Danish Tax Treaty) [1] [2] [3]
Dated 22 November 1995 (Federal Law Gazette 1996 II p. 2566)
[1] Drawn up in the German and Danish languages, both texts being equally authentic.
[2] The Bundestag approved the Convention with the consent of the Bundesrat, see Act of 31 October 1996 (Federal Law Gazette II p. 2565). The Agreement entered into force on 25 December 1996, see Notice of 17 February 1997 (Federal Law Gazette II p. 728).
[3] Title revised by Protocol of 1 October 2020 (Federal Law Gazette 2021 II p. 484).
Table of Contents
- Art. 1 Objective of the Agreement
- Art. 2 Scope of the Agreement
- Art. 3 General Definitions
- Art. 4 Resident Persons
- Art. 5 Permanent Establishment
Section II Taxation of Income and Capital
- Art. 6 Income from Immovable Property
- Art. 7 Business Profits
- Art. 8 Shipping, Inland Waterway Transport and Air Transport
- Art. 9 Associated Enterprises
- Art. 10 Dividends
- Art. 11 Interest
- Art. 12 Royalties
- Art. 13 Capital Gains
- Art. 14 Independent Personal Services
- Art. 15 Dependent Personal Services
- Art. 16 Directors’ Fees
- Art. 17 Artists and Athletes
- Art. 18 Pensions and Similar Payments
- Art. 19 Payments from Public Funds
- Art. 20 Students
- Art. 21 Other Income
- Art. 22 Capital
- Art. 23 Activities in Connection with Preliminary Surveys and the Exploration of Hydrocarbon Deposits as well as the Extraction of Hydrocarbons
- Art. 24 Elimination of Double Taxation
Section III Taxation of Estates, Inheritances and Gifts
Section IV Assistance in Tax Matters
Section V Protection of the Taxpayer and Mutual Agreement Procedure
Section I
Article 1 – Objective of the Agreement
Article 1 repealed by the Protocol of 1 October 2020 (Federal Law Gazette 2021 II pp. 483, 484)
Article 2 Scope of the Agreement
1. This Agreement shall apply, irrespective of the manner in which they are levied, to the following taxes imposed on behalf of a Contracting State or its territorial authorities:
a) Section II applies to taxes on income and capital; these include all taxes imposed on total income, total capital, or elements of income or capital, including taxes on gains from the alienation of movable or immovable property and taxes on increases in capital;
b) Section III applies to estate and inheritance taxes as well as gift taxes; these include taxes that are
aa) levied upon death as estate taxes, inheritance taxes, duties on transfers of property, or taxes on gifts made in contemplation of death; or
bb) levied on transfers between living persons solely because the transfers are made without consideration or for insufficient consideration;
c) Section IV applies to taxes of every kind and description, unless the context requires otherwise; however, customs duties, monopoly levies, and excise taxes are excluded. Value-added taxes and luxury taxes shall not be regarded as excise taxes within the meaning of this section.
2) The taxes currently in force to which the sections of this Agreement apply are listed in the Annex to this Agreement.
3) The Agreement shall also apply to any taxes of the same or substantially similar nature that are imposed after the signing of the Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes in their tax laws.
4) For the purposes of this Agreement:
a) Section II shall apply to persons who are residents of a Contracting State or of both Contracting States;
b) Section III shall apply to:
aa) estates and inheritances where the deceased was, at the time of death, a resident of one Contracting State or of both Contracting States; and
bb) gifts where the donor was, at the time the gift was made, a resident of one Contracting State or of both Contracting States;
c) Section IV shall apply to all persons, regardless of whether they are residents of a Contracting State or another State, or whether they are nationals of a Contracting State or another State.
Article 3 General Definitions
1) For the purposes of this Agreement, unless the context otherwise requires:
a) the terms “a Contracting State” and “the other Contracting State” mean, depending on the context, the Federal Republic of Germany or the Kingdom of Denmark, and the term “States” means the Federal Republic of Germany and the Kingdom of Denmark;
b) the term “Federal Republic of Germany”, when used in a geographical sense, means the territory of the Federal Republic of Germany as well as the area of the seabed, its subsoil, and the super jacent waters adjacent to the territorial sea, in which the Federal Republic of Germany exercises sovereign rights or jurisdiction in accordance with international law and its domestic legislation for the purpose of exploring, exploiting, conserving and managing living and non-living natural resources, or for energy production from renewable sources;
c) the term “Denmark” means the Kingdom of Denmark, including areas outside the Danish territorial sea which, in accordance with international law, have been designated or may in the future be designated under Danish law as areas in which Denmark may exercise sovereign rights with respect to the exploration and exploitation of the natural resources of the seabed and subsoil and the waters above, and with regard to other activities related to the economic exploration and exploitation of the area concerned.
The term does not include the Faroe Islands and Greenland;
d) the term “person” includes individuals and companies;
e) the term “company” means any legal person or any entity that is treated as a legal person for tax purposes;
f) the term “immovable property” shall have the meaning 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 equipment used in agriculture and forestry, rights to which the provisions of private law regarding land apply, usufruct of immovable property and 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 shall not be regarded as immovable property;
g) the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean, respectively, an enterprise carried on by a person resident in a Contracting State or an enterprise carried on by a person resident in the other Contracting State;
h) the term “international traffic” means any transport by a ship or aircraft operated by an enterprise whose place of effective management is in a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;
i) the term “property forming part of the estate or a gift of a person resident in a Contracting State” includes all assets the transfer of which is subject to a tax covered by Section III of the Agreement;
j) the term “national” means:
aa) in respect of the Federal Republic of Germany, all Germans within the meaning of Article 116(1) of the Basic Law (Grundgesetz) for the Federal Republic of Germany and all legal persons, partnerships and other associations of persons established under the law in force in the Federal Republic of Germany.
bb) in respect of Denmark, all individuals who possess Danish nationality, and all legal persons, partnerships, and other associations of persons established under the law in force in Denmark;
k) the term “competent authority” means:
aa) in the case of the Federal Republic of Germany, the Federal Ministry of Finance or the authority to which it has delegated its powers;
bb) in the case of Denmark, the Minister for Taxation or the Minister’s authorized representative.
2) As regards the application of the Agreement by a Contracting State, unless the context otherwise requires, any term not defined in the Agreement shall have the meaning it has under the law of that State concerning the taxes to which the Agreement applies for the period in which the Agreement is applied. Any meaning under the tax law of that State shall prevail over a meaning the term may have under other laws of that State.
Article 4 Resident Persons
1) For the purposes of this Agreement, the term “resident of a Contracting State” means:
a) for the purposes of taxes on income and capital, any person who, under the law of that State, is liable to tax therein by reason of their domicile, residence, place of management, or any other criterion of a similar nature, and also includes that State and its territorial authorities.
However, the term does not include any person who is liable to tax in that State only in respect of income from sources in that State or capital situated therein;
b) for the purposes of estate, inheritance and gift taxes, any person who is liable to tax in that State with respect to an estate or gift, by reason of their domicile, residence, place of management, or any other similar criterion.
However, the term does not include a person whose estate or gift is taxable in that State only with respect to property located in that State.
2) Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then the following rules shall apply:
a) the individual shall be deemed to be a resident of the State in which they have a permanent home available;
if they have a permanent home available in both States, they shall be deemed to be a resident of the State with which their personal and economic relations are closer (centre of vital interests);
b) if the State in which the individual has their centre of vital interests cannot be determined, or if they do not have a permanent home in either State, they shall be deemed to be a resident of the State in which they have their habitual abode;
c) if the individual has a habitual abode in both States or in neither, they shall be deemed to be a resident of the State of which they are a national;
d) if the individual is a national of both States or of neither, the competent authorities of the Contracting States shall settle the question by mutual agreement.
3) Where by reason of paragraph 1 a person other than an individual is a resident of both Contracting States, it shall be deemed to be a resident of the State in which its place of effective management is situated.
Article 5 Permanent Establishment
1) For the purposes of this Agreement, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on.
2) The term “permanent establishment” includes especially:
a) a place of management,
b) a branch,
c) an office,
d) a factory,
e) a workshop, and
f) a mine, oil or gas well, quarry, or any other place of extraction of natural resources.
3) A building site or construction or installation project constitutes a permanent establishment only if it lasts more than twelve months.
4) Notwithstanding the preceding provisions of this Article, the following shall not be considered permanent establishments:
a) the use of facilities solely for the purpose of storage, display, or delivery of goods or merchandise belonging to the enterprise;
b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display, or delivery.
c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of being processed or manufactured by another enterprise;
d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or collecting information for the enterprise;
e) the maintenance of a fixed place of business solely for the purpose of carrying on for the enterprise any other activities of a preparatory or auxiliary character;
f) the maintenance of a fixed place of business solely for any combination of the activities mentioned in subparagraphs a to e, provided that the overall activity resulting from this combination is of a preparatory or auxiliary character.
5) Where a person — other than an independent agent within the meaning of paragraph 6 — is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State the authority to conclude contracts in the name of the enterprise, the enterprise shall, notwithstanding paragraphs 1 and 2, be deemed for the purposes of Section II to have a permanent establishment in that State in respect of any activities that person undertakes for the enterprise. This shall not apply if the activities of such person are limited to those mentioned in paragraph 4 which, if carried on through a fixed place of business, would not make that fixed place of business a permanent establishment under 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, commission agent, or any other independent agent, provided that such persons act in the ordinary course of their business.
7) The fact that a company resident in a Contracting State controls or is controlled by a company resident in 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 either company a permanent establishment of the other.
Section II
Article 6 Income from Immovable Property
1) Income derived by a resident of a Contracting State from immovable property (including income from agriculture and forestry) situated in the other Contracting State may be taxed in that other State.
2) Paragraph 1 shall apply to income derived from the direct use, letting or leasing, or any other form of use of immovable property.
3) Paragraphs 1 and 2 shall also apply to income from immovable property of an enterprise.
Article 7 Business Profits
1) The profits of an enterprise of a Contracting State shall be taxable only in that State, unless the enterprise carries on business in the other Contracting State through a permanent establishment situated there. If the enterprise carries on business in this way, the profits that are attributable to the permanent establishment in accordance with paragraph 2 may be taxed in the other State.
2) For the purposes of this Article and Article 24, the profits attributable in each Contracting State to the permanent establishment referred to in paragraph 1 shall be the profits which the permanent establishment might be expected to make if it were a separate and independent enterprise engaged in the same or similar activities under the same or similar conditions.
This determination shall take into account the functions performed, assets used, and risks assumed by the enterprise through the permanent establishment and through the other parts of the enterprise.
3) Where, in accordance with paragraph 2, a Contracting State adjusts the profits attributable to a permanent establishment of an enterprise of the other Contracting State and taxes profits that have already been taxed in the other State, the other Contracting State shall, to the extent necessary to eliminate double taxation, make a corresponding adjustment if it agrees with the adjustment made by the first-mentioned State. If the other Contracting State does not agree, the Contracting States shall endeavor to eliminate the resulting double taxation through mutual agreement.
4) Where profits include items of income that are dealt with separately in other Articles of this Agreement, those Articles shall not be affected by this Article.
Article 8 Shipping, Inland Waterway Transport and Air Transport
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. These profits also include income derived by the enterprise from the use, maintenance, or rental of containers (including trailer ships, barges, and similar equipment used for transporting containers) used for the transport of goods or merchandise in international traffic, provided that such income is incidental to the profits referred to in the preceding sentence.
2) Profits from the operation of ships engaged in inland waterway transport shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
3) If the place of effective management of a shipping enterprise is situated aboard a ship, it shall be deemed to be located in the Contracting State in which the home port of the ship is situated, or, if there is no home port, in the Contracting State in which the person operating the ship is resident.
4) Paragraphs 1 and 2 shall also apply to profits derived from participation in a pool, a joint business operation, 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 conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits that would have accrued to one of the enterprises but have not so accrued because of those conditions may be included in the profits of that enterprise and taxed accordingly.
2) 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 the profits so included are profits that would have accrued to the enterprise of the first-mentioned State if the conditions between the enterprises had been those that would have been made between independent enterprises, then the other State shall make an appropriate adjustment to the amount of tax charged on those profits, insofar as necessary to eliminate double taxation. In determining such adjustment, the other provisions of this Agreement shall be taken into account, and if necessary the competent authorities of the Contracting States shall consult each other.
Article 10 – Dividends
1) Dividends paid by a company resident in a Contracting State to a resident of the other Contracting State may be taxed in that other State.
2) However, such dividends may also be taxed in the Contracting State in which the company paying the dividends is resident, according to the law of that State. But if the recipient is the beneficial owner of the dividends, the tax so charged shall not exceed 15 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.
3) Notwithstanding paragraph 2, the tax shall not exceed 5 percent of the gross amount of the dividends if the beneficial owner is a company that directly holds at least 10 percent of the capital of the company paying the dividends.
4) The term “dividends” as used in this Article means income from shares, profit participation rights, profit-sharing certificates, mining shares, founders’ shares, or other rights — not being debt claims — participating in profits, as well as income from other corporate rights that is treated as income from shares under the tax law of the State in which the distributing company is resident. In the Federal Republic of Germany, the term “dividends” also includes: income of a silent partner (stiller Gesellschafter) from their participation as a silent partner, income from profit-participating loans and income from profit bonds. And similar profit-related remuneration, as well as distributions on units in an investment fund.
5) Notwithstanding paragraphs 2 and 3, income from rights or claims participating in profits (in the Federal Republic of Germany including income of a silent partner from participation as a silent partner, or income from profit-participating loans and profit bonds) may be taxed in the Contracting State from which it originates, and according to the law of that State, if such income is deductible in determining the profits of the debtor in that State. However, the tax shall not exceed 25 percent of the gross amount of the income.
6) Paragraphs 1 to 3 and 5 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State, in which the company paying the dividends is resident, through a permanent establishment situated there, and the holding in respect of which the dividends are paid is effectively connected with that permanent establishment. In that case, Article 7 (Business Profits) shall apply.
7) Where a company resident in a Contracting State derives profits or income from the other Contracting State, that other State may not tax the dividends paid by the company, unless: the dividends are paid to a resident of that other State, or the holding in respect of which the dividends are paid is effectively connected with a permanent establishment situated in that other State. Nor may that other State impose a tax on the company’s undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in that other State.
Article 11 Interest
1) Interest arising in a Contracting State and paid to a resident of the other Contracting State shall, if that person is the beneficial owner, be taxable only in the other State.
2) The term “interest” as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor’s profits. It includes in particular income from government securities and bonds, including premiums and prizes attaching to such securities. Penalty charges for late payment shall not be regarded as interest for the purposes of this Article. However, the term does not include income dealt with in Article 10 (Dividends).
3) Paragraph 1 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State, from which the interest arises, through a permanent establishment situated there, and the debt-claim in respect of which the interest is paid is effectively connected with that permanent establishment. In such a case, Article 7 (Business Profits) shall apply.
4) Where, by reason of a special relationship between the debtor and the beneficial owner, or between both of them and a third person, the amount of the interest paid exceeds the amount which would have been agreed upon in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess amount may be taxed according to the laws of each Contracting State, taking into account the other provisions of this Agreement.
Article 12 – Royalties
1) Royalties arising in a Contracting State and paid to a resident of the other Contracting State shall, if that person is the beneficial owner, be taxable only in the other State.
2) The term “royalties” as used in this Article means payments of any kind received as consideration for the use of, or the right to use: copyrights of literary, artistic or scientific works, including cinematographic films, films or video recordings for television, or recordings for radio broadcasting; patents, trademarks, designs or models, plans, secret formulas or processes, or for the use of, or the right to use, industrial, commercial or scientific experience.
3) Paragraph 1 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State, from which the royalties arise, through a permanent establishment situated there, and the rights or property in respect of which the royalties are paid are effectively connected with that permanent establishment. In that case, Article 7 (Business Profits) shall apply.
4) Where, by reason of a special relationship between the payer and the beneficial owner, or between both of them and a third person, the royalties paid exceed the amount that would have been agreed upon without such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess amount may be taxed according to the law of each Contracting State, taking into account the other provisions of this Agreement.
Article 13 Capital Gains
1) Gains derived by a resident of a Contracting State from the alienation of immovable property situated in the other Contracting State may be taxed in that other State. Gains from the alienation of shares, rights, or interests in a company, another legal entity, or a partnership whose assets consist principally of immovable property situated in a Contracting State, or of rights relating to such immovable property, or of shares in a company whose assets consist principally of such immovable property or rights, may be taxed in the State in which the immovable property is situated.
2) Gains from the alienation of movable property forming part of the business property of a permanent establishment that an enterprise of a Contracting State has in the other Contracting State, including gains from the alienation of such a permanent establishment (alone or together with the whole enterprise), may be taxed in the other State.
3) Gains from the alienation of ships or aircraft operated in international traffic, of ships engaged in inland waterway transport, or of movable property pertaining to the operation of such ships or aircraft, shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. Article 8(3) shall apply mutatis mutandis.
4) Gains from the alienation of property other than that referred to in paragraphs 1 to 3 shall be taxable only in the Contracting State of which the alienator is a resident.
5) Where an individual has been a resident of a Contracting State for at least five years and becomes a resident of the other Contracting State, paragraph 4 shall not affect the right of the first-mentioned State to tax, in accordance with its domestic law, the increase in value of shares up to the time of the change of residence. If the subsequent disposal of the shares results in a gain taxed in the other Contracting State under paragraph 4, that other State shall allow a deduction from its tax on that income corresponding to the income tax paid in the first-mentioned State. However, the deduction shall not exceed the portion of the income tax, calculated before the deduction, which is attributable to the income that may be taxed in the first-mentioned State under the first sentence of this paragraph.
Article 14 Independent Personal Services
Article 14 repealed by the Protocol of 1 October 2020 (Federal Law Gazette 2021 II pp. 483–484).
Article 15 Income from Employment
1) Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages, and other similar remuneration derived by a resident of a Contracting State in respect of employment shall be taxable only in that State, unless the employment is exercised in the other Contracting State.
If the employment is exercised there, the remuneration derived therefrom may be taxed in that other State.
2) Notwithstanding paragraph 1, remuneration derived by a resident of a Contracting State in respect of employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:
a) the employment is exercised in the other State for a period or periods not exceeding a total of 183 days during the relevant calendar 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 that the employer has in the other State.
3) Notwithstanding the preceding provisions of this Article, remuneration in respect of employment exercised aboard a ship or aircraft operated in international traffic, or aboard a ship engaged in inland waterway transport, may be taxed in the Contracting State in which the place of effective management of the enterprise is situated.
4) The provisions of paragraph 2 do not apply to remuneration for work performed within the framework of commercial employee leasing (temporary employment / labor leasing).
The competent authorities shall conclude agreements in accordance with Article 43 that are necessary to determine how these rules are to be applied. To avoid a double collection of withholding taxes and to safeguard the tax claims of the two Contracting States.
Article 16 Directors’ and Supervisory Board Fees
1) Directors’ or supervisory board fees and similar payments derived by a resident of a Contracting State in their capacity as a member of the supervisory board or board of directors of a company resident in the other Contracting State may be taxed in that other State.
2) Salaries, wages, and other similar remuneration derived by a resident of a Contracting State, or several such persons, in their capacity as managing directors responsible under commercial law of a company resident in the other Contracting State, may be taxed in that other State.
Article 17 Artists and Athletes
1) Notwithstanding Articles 7 and 15, income derived by a resident of a Contracting State as an entertainer — such as a stage, film, radio, or television performer or a musician — or as a sportsman, from their personal activities exercised in the other Contracting State, may be taxed in that other State.
2) Where income from personal activities exercised by an entertainer or athlete in that capacity accrues not to the entertainer or athlete themselves but to another person, that income may, notwithstanding Articles 7 and 15, be taxed in the Contracting State where the activities are exercised.
3) Paragraphs 1 and 2 shall not apply if the stay in a Contracting State by the entertainer or athlete is wholly or substantially supported directly or indirectly from public funds of the other Contracting State.
Article 18 Pensions and Similar Payments
1) Subject to Article 19(2), pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State.
2) Notwithstanding paragraph 1, benefits received by an individual resident in a Contracting State under the social security legislation of the other Contracting State shall be taxable only in that other State.
3) Pensions and other recurring or lump-sum payments paid by a Contracting State or by another public or private legal entity of that State as compensation for damage caused as a consequence of acts of war or political persecution shall be taxable only in that State.
4) Where an individual who was a resident of one Contracting State becomes a resident of the other Contracting State, paragraph 1 or Article 21 shall not affect the right of the first-mentioned State, in accordance with its domestic law, to tax pensions, similar remuneration, and annuities arising in that State, unless the individual became resident in the other State before the entry into force of the Agreement.
5) The term “annuities” means stated sums payable periodically at fixed times, either for life or during a specified or ascertainable period, under an obligation to make the payments in return for adequate and full consideration in money or money’s worth.
6) Alimony payments or similar payments arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in that other State.
When determining the taxable income of an individual resident in the Federal Republic of Germany, in respect of alimony or similar payments made to a person resident in Denmark, the amount taken into account shall be the amount that would be taken into account if the recipient were fully taxable in Germany.
7) Subject to paragraphs 2 and 3, scholarships as well as grants for students and artists received by an individual resident in a Contracting State from public funds of the other Contracting State or one of its territorial authorities may be taxed in the other State.
8) Payments referred to in paragraph 7 shall not be taxed in the State of residence of the recipient if they would be exempt from tax under the law of the other Contracting State if paid to a resident of that State.
Article 19 Government Service
1) Remuneration, other than pensions, paid by a Contracting State, one of its Länder, one of its territorial authorities, or another legal entity under public law of one of the two States to an individual for services rendered shall be taxable only in that State. However, such remuneration may be taxed only in the other Contracting State if: the services are performed in that State, the individual is resident in that State, and the individual is not a national of the first-mentioned State, and the first-mentioned State cannot exercise its taxing right under its domestic legislation.
2) Pensions paid by a Contracting State, one of its Länder, one of its territorial authorities, or another public law legal entity of one of the States to an individual in respect of past services shall be taxable only in that State.
3) In respect of remuneration and pensions for services rendered in connection with a commercial activity carried on by a Contracting State, one of its Länder, one of its territorial authorities, or another public law legal entity of one of the States, the provisions of Articles 15, 16, and 18 shall apply.
4) Paragraph 1, and — as far as subparagraph (a) is concerned — paragraphs 1 and 2, shall also apply to payments made:
a) in the case of the Federal Republic of Germany by Deutsche Post AG, Deutsche Postbank AG, Deutsche Telekom AG, Deutsche Bahn AG
to civil servants, as well as by the Deutsche Bundesbank, and in the case of Denmark by the national Danish postal service provider, the national Danish railway operator, and Danmarks Nationalbank;
b) by or for the Goethe-Institut (Germany), the Danish Cultural Institute (Det Danske Kulturinstitut), and other similar or comparable institutions designated by the competent authorities of the Contracting States, in respect of services rendered to those institutions;
c) from the public funds of a Contracting State as compensation to teachers temporarily employed in the other Contracting State, and for such payments made from public funds directly or indirectly by institutions designated by the competent authorities of the Contracting States. If such payments are not subject to taxation in the State from which they originate, then Article 15 shall apply.
Article 20 Students
1) Payments received by a student, trainee, or apprentice who is present in a Contracting State solely for the purpose of education or training, and who is or was immediately before entering that State a resident of the other Contracting State, for the purpose of maintenance, education, or training, shall not be taxed in the first-mentioned State, provided that such payments arise from sources outside that State.
Article 21 Other Income
1) Items of income of a resident of a Contracting State, wherever arising, not dealt with in the preceding Articles, shall be taxable only in that State.
2) Paragraph 1 shall not apply to income, other than income from immovable property as defined in Article 3(1)(f), if the recipient — being a resident of a Contracting State — carries on business in the other Contracting State through a permanent establishment situated there, and the rights or property in respect of which the income is paid are effectively connected with that permanent establishment. In that case, Article 7 (Business Profits) shall apply.
Article 22 Capital
1) Immovable property owned by a resident of a Contracting State and situated in the other Contracting State may be taxed in that other State.
2) Movable property forming part of the business property of a permanent establishment that an enterprise of a Contracting State has in the other Contracting State may be taxed in that other State.
3) Ships and aircraft operated in international traffic, ships engaged in inland waterway transport, and movable property pertaining to the operation of such ships or aircraft shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. Article 8(3) shall apply accordingly.
4) All other elements of capital of a resident of a Contracting State shall be taxable only in that State.
Article 23 Activities Relating to Preliminary Surveys, the Exploration of Hydrocarbon Deposits, and the Extraction of Hydrocarbons
1) Notwithstanding Article 5, a person resident in a Contracting State who carries on activities in the other Contracting State relating to preliminary surveys, the exploration of hydrocarbon deposits, or the extraction of hydrocarbons carries out activities relating to the extraction of hydrocarbons, shall be treated as carrying on a business activity in the other Contracting State through a permanent establishment situated there.
2) Paragraph 1 shall not apply where the activities are carried on for a period not exceeding 30 days in total within any twelve-month period. However, for the purposes of this paragraph, activities carried on by an enterprise associated with another enterprise within the meaning of Article 9 shall be regarded as carried on by the enterprise with which it is associated if the activities concerned are substantially the same as those carried on by the latter enterprise.
3) Notwithstanding paragraphs 1 and 2, offshore activities carried out by a drilling rig shall constitute a permanent establishment only if the activities continue for more than 365 days within an 18-month period. For the purposes of this paragraph, activities carried on by an enterprise associated with another enterprise within the meaning of Article 9 shall be regarded as carried on by the enterprise with which it is associated if the activities concerned are substantially the same as those carried on by the latter enterprise.
4) Notwithstanding paragraphs 1 and 2, profits derived by a resident of a Contracting State from the transport of supplies or personnel by ships or aircraft to a location where offshore activities relating to preliminary surveys, exploration of hydrocarbon deposits, or extraction of hydrocarbons are carried on in the other Contracting State, or from the operation of tugboats and similar vessels in connection with such activities, shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
5) Salaries, wages, and similar remuneration derived by an individual resident in a Contracting State from employment exercised aboard a ship or aircraft referred to in paragraph 4 shall be taxed in accordance with Article 15(3).
6) Notwithstanding the provisions of Article 13, a capital gain attributable to a resident of a Contracting State in connection with drilling rigs used for the activities mentioned in paragraph 3 shall be exempt from tax in the other State if the drilling-rig activities are no longer taxed in that other State. For the purposes of this paragraph, the term “capital gain” means the amount by which the market value exceeds the residual value (increased by depreciation claimed) at the time of the transfer.
Article 24 Elimination of Double Taxation
1) For a person resident in the Federal Republic of Germany, taxation shall be determined as follows:
a) Unless subparagraph b applies, income arising in Denmark and assets situated in Denmark which, in accordance with this Agreement, may be taxed in Denmark, shall be exempt from the German tax base.
The above provisions shall apply to dividends only if the dividends are paid to a company resident in Germany by a company resident in Denmark, and the German company directly holds at least 10 percent of the capital of the Danish company.
For the purposes of taxes on capital, participations shall also be excluded from the German tax base if the dividends from such participations would, if paid, be exempt from the tax base under the preceding sentence.
b) In respect of German income tax, subject to the provisions of German tax law concerning the crediting of foreign taxes, the Danish tax paid under Danish law and in accordance with this Agreement shall be credited against German tax in respect of the following income:
aa) dividends not falling under subparagraph a;
bb) income that may be taxed in Denmark under Article 13(1) sentence 2, Article 15(4), Article 16, Article 17, Article 18(4), and Article 23.
c) The Federal Republic of Germany reserves the right to take into account the income and assets exempt from German tax under this Agreement when determining the applicable tax rate.
2) Double taxation shall be eliminated in Denmark as follows:
a) Subject to subparagraph f, where a resident of Denmark derives income or owns capital which, in accordance with this Agreement, may be taxed in the Federal Republic of Germany, Denmark shall:
aa) allow as a deduction from the tax on the income of that person an amount equal to the income tax paid in Germany (including any trade tax on business profits).
bb) as a deduction from the tax on the capital of that person, an amount equal to the capital tax paid in the Federal Republic of Germany (including any trade capital tax, if applicable).
b) The deduction shall in no case exceed the portion of the income tax or capital tax, calculated before the deduction, which is attributable to the income or capital that may be taxed in the Federal Republic of Germany.
c) Subject to subparagraph d, dividends paid by a company resident in the Federal Republic of Germany to a company resident in Denmark that directly or indirectly holds at least 10 percent of the capital of the dividend-paying company shall be exempt from Danish tax.
d) Subparagraph c shall apply only insofar as:
aa) the profits from which the dividends are paid have been subject to the general corporate income tax in the Federal Republic of Germany or to a tax comparable to Danish tax in Germany or in another State; or
bb) the dividends paid by the German-resident company consist of dividends derived from shares or other rights in a company resident in a third State, and such dividends would have been exempt from Danish tax if the shares or rights had been held directly by the Danish-resident company.
e) Where dividends paid by a German-resident company to a Danish-resident company that directly or indirectly holds at least 10 percent of the capital of the dividend-paying company are not exempt from Danish tax under subparagraph c, the German tax shall be taken into account for credit purposes, including the portion of the German trade tax attributable to the profits from which the dividends are paid.
f) Where a resident of Denmark derives income or owns capital that, under this Agreement, may be taxed only in the Federal Republic of Germany or may be taxed there under Article 15(1) and (3), Denmark may include such income or capital in its tax base, but shall allow as a deduction from the income tax or capital tax the portion of tax corresponding to the income derived from Germany or the capital situated there.
g) In respect of income taxable in Germany under Article 15(1) and (3), subparagraph f shall apply only if documentation is submitted to the Danish tax authorities showing that arrangements have been made for the payment of German tax on that income.
3) For the purposes of this Article, profits or income of a resident of a Contracting State shall be deemed to arise from sources in the other Contracting State if they may be taxed in that other State in accordance with this Agreement.
Section III
Taxation of Estates, Inheritances, and Gifts
Article 25 – Rules of Taxation
1) Immovable property forming part of the estate or a gift of a person resident in a Contracting State, and situated in the other Contracting State, may be taxed in that other State.
2) Movable property belonging to an enterprise, forming part of the estate or a gift of a person resident in a Contracting State, and constituting business property of a permanent establishment situated in the other Contracting State, may be taxed in that other State.
3) All other property forming part of the estate or a gift of a person resident in a Contracting State shall, irrespective of where it is situated, be taxable only in that State, unless Article 26 provides otherwise.
Article 26 Elimination of Double Taxation
1) Double taxation shall be avoided in the Federal Republic of Germany as follows:
a) If the deceased was resident in Germany at the time of death or the donor was resident in Germany at the time of the gift, Germany shall, in accordance with the provisions of German law concerning the crediting of foreign taxes, allow as a credit against the tax assessed under German law the tax paid in Denmark on property that may be taxed in Denmark under Article 25(1) and (2).
b) If the beneficiary was resident in Germany at the time of the death of the deceased or at the time of the gift, the Federal Republic of Germany may tax the entire property acquired by that person and shall, in accordance with the provisions of German law concerning the crediting of foreign taxes, credit against the tax assessed under German law the tax paid in Denmark on all property that may not be taxed in Germany under Article 25(1) and (2).
2) Double taxation shall be avoided in the case of Denmark as follows:
a) If the deceased at the time of death or the donor at the time of the gift was resident in Denmark, Denmark shall, in accordance with the provisions of Danish law concerning the crediting of foreign taxes, credit against the tax assessed under Danish law the tax paid in the Federal Republic of Germany on property that may be taxed in Germany under Article 25(1) and (2).
b) If the beneficiary was resident in Denmark at the time of the death of the deceased or at the time of the gift, Denmark may tax the entire property acquired by that person and shall, in accordance with the provisions of Danish law concerning the crediting of foreign taxes, credit against the tax assessed under Danish law the tax paid in the Federal Republic of Germany on all property that may not be taxed in Denmark under Article 25(1) and (2).
3) The amount of tax to be credited under paragraphs 1 and 2 shall not exceed the portion of the German or Danish tax, calculated before the credit is given, which is attributable to the property in respect of which the credit is granted.
Article 27 – Five-Year Rule
1) If the deceased at the time of death or the donor at the time the gift is made:
a) was a national of one Contracting State without simultaneously being a national of the other Contracting State,
b) was fully liable to tax in the first-mentioned State under its tax law, and
c) had been resident in the other State under Article 4(1)(b) for a period not exceeding five years, then, notwithstanding Article 4, that person shall be deemed to be resident in the Contracting State of which they were a national.
2) Paragraph 1 shall apply accordingly to an heir or beneficiary of a gift if that person fulfils the conditions of paragraph 1 at the time of the inheritance or the gift.
Article 28 Deduction of Debts
1) Debts that are specifically secured by the property referred to in Article 25 shall be deducted from the value of that property.
Debts that are not specifically secured by such property but were incurred in connection with the acquisition, modification, repair, or maintenance of that property shall also be deducted from the value of that property.
2) Subject to paragraph 1, debts connected with a permanent establishment referred to in Article 25(2) shall be deducted from the value of the permanent establishment.
3) All other debts shall be deducted from the value of the property to which Article 25 applies.
4) If a debt exceeds the value of the property from which it is to be deducted in a Contracting State under paragraphs 1 or 2, the excess amount shall be deducted from the value of the remaining property taxable in that State.
5) If, after the deductions under paragraphs 3 or 4 in a Contracting State, a balance of debt remains, that balance shall be deducted from the value of the property that may be taxed in the other Contracting State.
6) If a Contracting State would, under paragraphs 1 to 5, be required to allow a greater deduction of debts than is permitted under its domestic law, those paragraphs shall apply only to the extent that the other Contracting State is not required to deduct the same debts under its domestic law.
Section IV
Assistance in Tax Matters
Article 29 Subject of Assistance
1) The competent authorities of the Contracting States shall exchange information that is necessary for: carrying out the provisions of this Agreement, or the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States or their territorial authorities that is foreseeably relevant, insofar as the taxation under that law is not contrary to this Agreement. The exchange of information is not restricted by Articles 1 and 2.
2) Any information received by a Contracting State under paragraph 1 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 taxes, the enforcement or prosecution in respect of those taxes, the determination of appeals, or the supervision of the above activities.
Such persons or authorities shall use the information only for these purposes. They may disclose the information in public court proceedings or in judicial decisions. Notwithstanding sentences 1 to 3, information received by a Contracting State may be used for other purposes if: the information may be used for those other purposes under the laws of both States, and the competent authority of the transmitting State consents to such use. Without prior consent of the competent authority of the transmitting State, use for other purposes shall only be permitted in individual cases where it is necessary to avert an imminent danger to life, physical integrity, or personal liberty, or to protect significant assets, and where there is urgency. In such cases, the competent authority of the transmitting State shall immediately be requested to grant subsequent approval for the change of purpose. If approval is refused, the further use of the information for the other purpose shall be prohibited, and the receiving authority must immediately delete the transmitted data. Any damage caused by the use of the information for a different purpose shall be compensated.
3) Paragraphs 1 and 2 shall not be construed as imposing on a Contracting State the obligation:
a) to carry out administrative measures at variance with the laws or administrative practice of that or the other Contracting State;
b) to supply information which cannot be obtained under the laws or in the normal course of administration of that or the other Contracting State;
c) to supply information which would disclose a trade, business, industrial, commercial, or professional secret or a trade process, or information the disclosure of which would be contrary to public policy (order public).
4) If a Contracting State requests information under this Article, the other Contracting State shall use the information-gathering measures available to it to obtain the requested information, even if that State does not need the information for its own tax purposes. The obligation contained in sentence 1 is subject to the limitations of paragraph 3, but those limitations shall not be interpreted as allowing a Contracting State to decline to supply information solely because it has no domestic interest in such information.
5) Paragraph 3 shall not be interpreted as permitting a Contracting State to decline to supply information solely because the information is held by: a bank, another financial institution, an agent, a representative, or a trustee, or because the information relates to ownership interests in a person.
Article 30 Assistance in the Collection of Taxes
1) The Contracting States shall provide mutual assistance in the collection of tax claims. This assistance is not restricted by Articles 1 and 2.
The competent authorities of the Contracting States may agree by mutual agreement on how this Article shall be implemented.
2) The term “tax claim” for the purposes of this Article means an amount owed in respect of taxes of every kind and description imposed on behalf of a Contracting State or one of its territorial authorities, insofar as the taxation is not contrary to this Agreement or any other agreements to which the Contracting States are parties. It also includes interest related to that amount, penalties, enforcement costs, and costs of precautionary measures.
3) Where a tax claim of a Contracting State is enforceable under the laws of that State and is owed by a person who, at that time, cannot prevent its collection under the law of that State, that tax claim shall, at the request of the competent authority of that State, be accepted for the purposes of collection by the competent authority of the other Contracting State. The tax claim shall then be collected by the other State in accordance with its own laws concerning the enforcement and collection of its own taxes, as if the tax claim were a tax claim of that other State.
4) Where a tax claim of a Contracting State is a claim in respect of which that State may take measures of conservancy (security measures) under its law, that tax claim shall, at the request of the competent authority of that State shall recognize the tax claim for the purpose of initiating precautionary (security) measures through the competent authority of the other Contracting State. That other State shall take precautionary measures in accordance with its own laws with respect to that tax claim as if the tax claim were a tax claim of that other State, even if, at the time such measures are taken: the tax claim is not yet enforceable in the first-mentioned State, or it is owed by a person who has the right to prevent enforcement.
5) Notwithstanding paragraphs 3 and 4, a tax claim recognized by a Contracting State for the purposes of paragraph 3 or 4 shall not be subject in that State to time limits (statutes of limitation) or provisions relating to priority treatment of tax claims under the law of that State.
Furthermore, a tax claim recognized by a Contracting State for the purposes of paragraph 3 or 4 shall not have the priority in that State that it has under the law of the other Contracting State.
6) Proceedings concerning the existence, validity, or amount of a tax claim of a Contracting State may not be brought before the courts or administrative authorities of the other Contracting State.
7) If, after a request has been made by a Contracting State under paragraph 3 or 4, and before the other Contracting State has collected and remitted the tax claim to the first-mentioned State, the tax claim concerned ceases to be:
a) in the case of a request under paragraph 3, a tax claim of the first-mentioned State that is enforceable under its law and owed by a person who cannot prevent enforcement, or
b) in the case of a request under paragraph 4, a tax claim of the first-mentioned State in respect of which that State may take precautionary measures under its law, then the competent authority of the first-mentioned State shall promptly notify the competent authority of the other State, and the request shall either be suspended or withdrawn, at the option of the other State.
8) This Article shall not be construed as imposing on a Contracting State the obligation:
a) to carry out administrative measures that differ from the laws or administrative practice of that or the other Contracting State;
b) to take measures contrary to public policy (order public);
c) to provide assistance where the other Contracting State has not exhausted all reasonable measures available under its laws or administrative practice to collect or secure the tax claim;
d) to provide assistance where the administrative burden for that State would be clearly disproportionate to the benefit derived by the other Contracting State.
Article 31 Exchange of Information Without Request
Article 31 repealed by the Protocol of 1 October 2020 (Federal Law Gazette 2021 II pp. 483–484).
Article 32 Conflicting Information
Article 32 repealed by the Protocol of 1 October 2020 (Federal Law Gazette 2021 II pp. 483–484).
Article 33 Recovery of Tax Claims
Article 33 repealed by the Protocol of 1 October 2020 (Federal Law Gazette 2021 II pp. 483–484).
Article 34 Time Limits
Article 34 repealed by the Protocol of 1 October 2020 (Federal Law Gazette 2021 II pp. 483–484).
Article 35 Periods of Application
Article 35 repealed by the Protocol of 1 October 2020 (Federal Law Gazette 2021 II pp. 483–484).
Article 36 Content and Reply to Requests
Article 36 repealed by the Protocol of 1 October 2020 (Federal Law Gazette 2021 II pp. 483–484).
Article 37 Limits of the Obligation to Provide Assistance
Article 37 repealed by the Protocol of 1 October 2020 (Federal Law Gazette 2021 II pp. 483–484).
Article 38 Confidentiality
Article 38 repealed by the Protocol of 1 October 2020 (Federal Law Gazette 2021 II pp. 483–484).
Article 39 Legal Remedies
Article 39 repealed by the Protocol of 1 October 2020 (Federal Law Gazette 2021 II pp. 483–484).
Article 40 Costs
Article 40 repealed by the Protocol of 1 October 2020 (Federal Law Gazette 2021 II pp. 483–484).
Section V
Protection of the Taxpayer and Mutual Agreement
Article 41 Non-Discrimination
1) Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith that is different from or more burdensome than the taxation and related requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected. This provision shall apply notwithstanding Article 2(4) also to persons who are not residents of either Contracting State.
2) The taxation of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourable than the taxation of enterprises of that other State carrying on the same activities. However, this provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State personal allowances, reliefs, and reductions for tax purposes which it grants only to its own residents.
3) Except where Article 9(1), Article 11(4), or Article 12(4) applies, interest, royalties, and other payments paid by an enterprise of a 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 owed by an enterprise of one State to a resident of the other State shall be deductible in determining the taxable capital of that enterprise under the same conditions as debts owed to a resident of the first-mentioned State.
4) Enterprises of a Contracting State whose capital 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 requirement connected therewith that is different from or more burdensome than the taxation and related requirements to which other similar enterprises of that first-mentioned State are or may be subjected.
5) This Article shall apply notwithstanding Article 2 to taxes of every kind and description.
Article 42 Consultation
1) Where a person considers that the actions of one or both Contracting States result or will result in taxation not in accordance with this Agreement, that person may, irrespective of the remedies provided by the domestic law of those States, present the case to the competent authority of the Contracting State of which they are a resident. If the case falls under Article 41(1), the person may instead present the case to the competent authority of the Contracting State of which they are a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the Agreement.
2) If the competent authority considers the objection justified and is not itself able to arrive at a satisfactory solution, it shall endeavour to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to avoiding taxation not in accordance with this Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States.
3) The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of this Agreement. They may also consult together to eliminate double taxation in cases not provided for in this Agreement.
4) The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching agreement within the meaning of paragraphs 1 to 3, including through a joint commission consisting of themselves or their representatives if necessary.
Article 43 Mutual Agreement
Article 43 repealed by the Protocol of 1 October 2020 (Federal Law Gazette 2021 II pp. 483–484).
Article 44 Procedure
Article 44 repealed by the Protocol of 1 October 2020 (Federal Law Gazette 2021 II pp. 483–484).
Section VI
Special Provisions
Article 45 Application of the Agreement in Certain Cases
1) The State of residence shall eliminate double taxation by means of a tax credit under Article 24 and not by exemption under that Article:
a) where income or capital, or parts thereof, are allocated differently under the provisions of this Agreement by the Contracting States, and as a result of this different allocation the income or capital concerned would be taxed twice or not taxed or taxed at a lower rate, and, in the case of double taxation, the conflict cannot be resolved through a procedure under Section V; or
b) where the State of residence, after appropriate consultation and subject to the limitations of its domestic law, notifies the other Contracting State through diplomatic channels of other items of income to which it intends to apply this paragraph. Such notification shall take effect on the first day of the calendar year following the year in which the notification was transmitted, provided that all legal requirements under the domestic law of the notifying State for the notification to become effective have been fulfilled.
2) This Agreement shall not be interpreted as preventing:
a) a Contracting State from applying its domestic provisions aimed at preventing tax evasion or tax avoidance;
b) the Federal Republic of Germany from taxing amounts that must be included in the income of a person resident in Germany under Parts Four, Five, and Seven of the German Foreign Tax Act (Außensteuergesetz);
c) Denmark from levying taxes in accordance with provisions corresponding in purpose and effect to those referred to in subparagraph b. If the above provisions lead to double taxation, the competent authorities shall consult each other in accordance with Article 43(3) to determine how the double taxation shall be avoided.
3) Notwithstanding any other provisions of this Agreement, a benefit under this Agreement shall not be granted with respect to an item of income or capital if, having regard to all relevant facts and circumstances, it is reasonable to conclude that obtaining that benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit in those circumstances would be consistent with the object and purpose of the relevant provisions of this Agreement.
Article 46 Refund of Withholding Taxes
1) Where taxes on dividends, interest, royalties, or other income are levied at source in one of the Contracting States, the right to levy the tax at the rate provided for under the domestic law of that State shall not be affected by this Agreement.
2) The tax levied at source shall be refunded upon application to the extent that its levy is restricted by this Agreement.
3) The time limit for submitting an application for refund shall be four years after the end of the calendar year in which the dividends, interest, royalties, or other income were received.
4) The Contracting State from which the income originates may require an official certificate from the Contracting State in which the taxpayer is resident confirming that the conditions for full tax liability in that State are met.
5) The competent authorities of the Contracting States shall implement the above provisions by mutual agreement in accordance with Article 43.
6) The competent authorities of the Contracting States may also establish other procedures by mutual agreement for implementing the tax reductions provided for in this Agreement.
Article 47 Members of Diplomatic Missions and Consular Posts
1) This Agreement shall not affect the fiscal privileges of members of diplomatic missions or consular posts and officials of international organizations under the general rules of international law or under special agreements.
2) To the extent that income or capital is not taxed in the receiving State because of such privileges, the right to tax shall belong to the sending State.
3) Notwithstanding Article 4, an individual who is a member of a diplomatic mission, a consular post, or the permanent mission of a Contracting State in the other Contracting State or in a third State shall, for the purposes of this Agreement, be regarded as resident in the sending State if:
a) under international law, in the receiving State the person is not subject to tax on income from sources outside that State or on property located outside that State, and
b) in the sending State, the person is subject to tax on their entire income or property in the same way as persons resident in that State.
4) This Agreement shall not apply to international organizations, their bodies or officials, nor to members of a diplomatic mission, consular post, or the permanent mission of a third State who are present in a Contracting State but are not taxed in either Contracting State on their income or capital as residents of those States.
Article 48 Extension of the Territorial Scope
1) This Agreement may be extended, either in whole or with the necessary modifications, to any part of the territory of the Contracting States that is expressly excluded from the application of the Agreement and in which taxes are imposed that are substantially similar to those covered by this Agreement. Such an extension shall take effect from the date and subject to the modifications and conditions agreed between the Contracting States, including conditions regarding termination, by means of notes exchanged through diplomatic channels or by another procedure consistent with the constitutional requirements of those States.
2) Unless the Contracting States agree otherwise, termination of the Agreement by one Contracting State under Article 50 shall also terminate, in the manner provided for in that Article, the application of the Agreement to any part of the territory to which it has been extended under this Article.
Article 49 Entry into Force
1) This Agreement shall be subject to ratification, and the instruments of ratification shall be exchanged in Copenhagen as soon as possible.
2) This Agreement shall enter into force one month after the exchange of the instruments of ratification and shall apply in both States:
a) with respect to taxes on income and capital, for the tax year corresponding to or replacing the calendar year immediately following the year in which the Agreement enters into force, and for subsequent income years;
b) with respect to estate and inheritance taxes, to the estates of persons who die on or after 1 January of the calendar year following the year in which the Agreement enters into force, and with respect to gift tax, to gifts made on or after 1 January of that year;
c) with respect to assistance measures, to actions taken on or after 1 January of the calendar year following the year in which the Agreement enters into force;
d) with respect to withholding taxes on dividends, interest, and royalties, to amounts paid or credited on or after 1 January of the calendar year following the year in which the Agreement enters into force.
3) Upon the entry into force of this Agreement, the Agreement signed on 30 January 1962 in Copenhagen between the Federal Republic of Germany and the Kingdom of Denmark for the avoidance of double taxation and for mutual administrative and legal assistance in the field of taxes on income and capital, as well as trade tax and property tax, shall cease to have effect for the taxes to which this Agreement applies under paragraph 2.
Article 50 Duration and Termination
This Agreement shall remain in force indefinitely. However, either Contracting State may terminate the Agreement by written notice through diplomatic channels to the other Contracting State on or before 30 June of any calendar year after five years from the date of entry into force. In such case, the Agreement shall cease to apply in both States:
a) with respect to taxes on income and capital, for tax years already running on 1 January of the calendar year following the year of termination, or beginning on or after that date;
b) with respect to estate and inheritance taxes, to estates of persons who die on or after 1 January of the calendar year following the year of termination, and with respect to gift tax, to gifts made on or after 1 January of that year;
c) with respect to assistance measures, to actions taken on or after 1 January of the calendar year following the year of termination.
d) in the case of taxes levied by withholding on dividends, interest and royalties, this Agreement shall apply to amounts paid or credited on or after 1 January of the calendar year following the year of termination.
Annex
1. In the Federal Republic of Germany:
The taxes currently in force to which the Agreement applies include in particular:
|
Section II
|
Section III
Inheritance tax and gift tax |
Section IV
|
2. in Denmark:
|
Section II
|
Section III
Inheritance and gift tax |
Section IV
|
Protocol
The Federal Republic of Germany and the Kingdom of Denmark, upon signing the Agreement between the two States for the avoidance of double taxation with respect to taxes on income and capital as well as inheritance and gift taxes and for mutual assistance in tax matters (German-Danish tax treaty) on 22 November 1995 in Bonn, agreed on the following provisions relating to Section IV, which form an integral part of the Agreement:
If, pursuant to this Agreement and in accordance with domestic law, personal data are transmitted, the following additional provisions shall apply:
a) The receiving Contracting State may use the data only for the purposes specified in Article 38 and under the conditions set out therein.
b) Upon request, the receiving Contracting State shall inform the transmitting Contracting State about the use of the transmitted data and the results obtained from it.
c) The transmitting Contracting State shall ensure the accuracy of the data transmitted and the necessity and proportionality of the transmission with respect to the purpose pursued.
In doing so, any transmission prohibitions under the applicable domestic law must be observed in accordance with Article 37.
If it is found that incorrect data or data that should not have been transmitted were transmitted, the receiving Contracting State must be notified immediately.
That State is obliged to correct or delete the data.
d) Upon request, the person concerned shall be informed by the receiving Contracting State of the information transmitted about them and the intended purpose of its use.
However, this obligation does not apply if, after balancing the interests involved, the public interest in withholding the information outweighs the individual’s interest in receiving it.
Otherwise, the right of the person concerned to obtain information about the transmitted data is governed by the domestic law of the Contracting State to which the request is submitted.e) If a person suffers unlawful damage as a result of the transmission of data under this Agreement, the receiving Contracting State shall be liable in accordance with its domestic law.
In relation to the injured party, the receiving Contracting State may not relieve itself of liability by arguing that the damage was caused by the transmitting Contracting State.
f) If deletion periods exist under the domestic law of the transmitting Contracting State, the transmitting State shall indicate this when transmitting the data.
Regardless of these periods, the transmitted personal data must be deleted as soon as they are no longer required for the purpose for which they were transmitted.
g) The transmitting and the receiving Contracting States are obliged to keep records of the transmission and receipt of personal data.
h) The transmitting and the receiving Contracting States are obliged to effectively protect the transmitted personal data against unauthorized access, unauthorized alteration, and unauthorized disclosure.