background image
Note: This Treaty may be impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). MLI impact on Tax Treaties is available with the Orbitax International Tax Research & Compliance Expert.

PROTOCOL

PROTOCOL TO THE AGREEMENT BETWEEN THE FEDERAL REPUBLIC OF GERMANY AND THE UNITED ARAB EMIRATES FOR THE AVOIDANCE OF DOUBLE TAXATION AND OF TAX EVASION WITH RESPECT TO TAXES ON INCOME SIGNED ON 1 JULY 2010, CORRESPONDING TO 19 RAJAB 1431 A.H.

The Federal Republic of Germany and the United Arab Emirates have in addition to the Agreement of 1 July 2010, corresponding to 19 Rajab 1431 A.H. for the avoidance of double taxation and of tax evasion with respect to taxes on income agreed on the following provisions, which shall form an integral part of the said Agreement:

(1) With reference to Article 4:

  • (a) It is understood that the status of a company as a resident of the United Arab Emirates is conditional on confirmation by the competent authority of the United Arab Emirates that the prerequisites mentioned in sub-paragraph (b) of paragraph (1) of Article 4 have been fulfilled. In case of disagreement between the competent authorities of the two Contracting States, the procedures under Article 24 shall be applied.
  • (b) If the authorities of either Contracting States have evidence which casts doubt on the statements which have been made by the person to whom the income is allocatable and which have been confirmed by the competent authority of the other Contracting State, the competent authority of the Contracting State shall present this evidence to the competent authority of the other Contracting State, the latter shall make fresh inquiries and shall inform the competent authority of the Federal Republic of Germany of the results.
  • (c) It is agreed upon that government institutions of the United Arab Emirates within the meaning of paragraph (2) of Article 4 shall include the following types of entities created under public law which are wholly owned and controlled by the United Arab Emirates or a political subdivision or local governments thereof:
    • (i) public corporations;
    • (ii) authorities;
    • (iii) government agencies;
    • (iv) foundations;
    • (v) development funds; and
    • (vi) directly or indirectly wholly owned entities of the above.
  • These entities have to provide the necessary documentation as prove of the meeting the above-mentioned conditions.
  • Subject to the provisions of sub-paragraph (c) of paragraph (2), further institutions can be recognized as government institutions.
  • (d) It is the mutual understanding of both sides that regardless of the interposing of a company or of companies, ultimately only individuals being residents of the United Arab Emirates, the United Arab Emirates and a government institution of the United Arab Emirates should enjoy the benefits of this Agreement.

This aim should be regarded in the interpretation of this Agreement. If doubts should arise in this respect the mutual agreement procedure should apply.

(2) With reference to Article 7:

  • (a) Where an enterprise of a Contracting State sells goods or merchandise or carries on business in the other Contracting State through a permanent establishment situated therein, the profits of that permanent establishment shall not be determined on the basis of the total amount received therefore by the enterprise but only on the basis of the amount which is attributable to the actual activity of the permanent establishment for such sales or business.
  • (b) In the case of contracts, in particular for the survey, supply, installation or construction of industrial, commercial or scientific equipment or premises, or of public works, where the enterprise has a permanent establishment in the other Contracting State, the profits of such permanent establishment shall not be determined on the basis of the total amount of the contract, but only on the basis of that part of the contract which is effectively carried out by the permanent establishment in the Contracting State in which it is situated. Profits derived from the supply of goods to that permanent establishment or profits related to the part of the contract which is carried out in the Contracting State in which the head office of the enterprise is situated shall be taxable only in that State.
  • (c) It is understood that payments for the furnishing of services, including consultancy services, are payments to which the provisions of Article 7 of the Agreement apply.

(3) With reference to Article 10:

  • (a) The Agreement shall not be interpreted as preventing the Federal Republic of Germany from taxing amounts which under part 4 of the German Foreign Tax Law (Außensteuergesetz) are included in the income of a resident of the Federal Republic of Germany. It is understood that the Federal Republic of Germany may tax under certain conditions mentioned in part 4 of the German Foreign Tax Law (Außensteuergesetz) passive income of residents of the Federal Republic of Germany which originated in the United Arab Emirates.
  • (b) With reference to sub-paragraph (c) of paragraph (2):
  • In the case of Germany a real estate investment company is a company according to paragraph (1) of section 1 of the German Act on German Real Estate Stock Corporations with Listed Shares (REIT Act).
  • (c) With reference to paragraph (5):
  • It is understood that paragraph (5) of Article 10 does not prevent the other Contracting State from taxing dividends paid by a non-resident company that derives income from immovable property located in that other Contracting State, in the case that it can claim tax-exempt treatment there regarding such income.

(4) With reference to Articles 10 and 11; Notwithstanding the provisions of Article 10 and 11 of this Agreement, dividends and interest may be taxed in the Contracting States in which they arise, and according to the law of that State,

  • (a) if they are derived from rights or debt-claims carrying a right to participate in profits, including income derived by a silent partner ("stiller Gesellschafter") from his participation as such, or from a loan with an interest rate linked to borrower's profit ("partiarisches Darlehen") or from profit-sharing bonds ("Gewinnobligationen") within the meaning of the tax law of the Federal Republic of Germany and
  • (b) under the condition that they are deductible in the determination of profits of the debtor of such income.

(5) With reference to paragraph (5) of Article 13:

It is understood that the term "any other property" referred to in paragraph (5) of Article 13 includes shares in a company other than shares of company dealt with in paragraph (2) in Article 13.

(6) With reference to Article 25:

If personal data is exchanged under this Article, the following additional provisions shall apply subject to the domestic laws of each Contracting State:

  • (a) The data supplying Contracting States shall be responsible for the accuracy of the data they supply. If it emerges that inaccurate data or data which should not have been supplied have been communicated, the receiving State shall be notified of this without delay. That State shall correct or destroy said data.
  • (b) The Contracting States shall keep official records of the transmission and receipt of personal data.
  • (c) The Contracting States shall take effective measures to protect the personal data communicated against unauthorised access, unauthorised alteration and unauthorised disclosure.
  • (d) Upon application the person concerned shall be informed of the information stored about him and of the use planned to be made of it. There shall be no obligation to give this information if on balance it appears that the public interest in withholding it outweighs the interest of the person concerned in receiving it.
  • (e) The right of the person concerned to be informed of the data stored about him shall be a matter of the domestic law of the Contracting State in whose sovereign territory the application for the information is made.

(7) With reference to the Agreement;

Notwithstanding any other provisions of this Agreement, except Article 24 and 25, income and profits of an enterprise of a Contracting State from the exploration and exploitation of natural resources in the other Contracting State shall be taxable only in that other State.