PROTOCOL

At the signing of the Convention between the Federal Republic of Germany and the Argentine Republic for the avoidance of double taxation with respect to taxes on income and property, the undersigned, being duly authorized thereto, have agreed on the following provisions, which constitute an integral part of the Convention.

(1) Ad Article 2:

The Convention shall also apply to the following temporarily levied taxes:

• (a) In the Federal Republic of Germany: the surcharge on the corporation tax (Körperschaftsteuer);
• (b) In the Argentine Republic: the emergency tax on enterprises (Impuesto de emergencia a las empresas) and the emergency tax on remuneration for personal work done on own account or as an employee (Impuesto de emergencia a las retribuciones del trabajo personal con o sin relación de dependencia).

The Convention shall not apply to the Argentine tax on the transfer of profits under the Act on Foreign Investments. In the case of a resident of the Federal Republic of Germany, however, the tax may not be heavier or more burdensome than the tax provided for in Argentine Act No. 21.382, Article 15.

(2) Ad Article 8 and Article 22, paragraph (3):

The provisions of these Articles shall apply mutatis mutandis to all taxes, charges and royalties levied in the territory of those Argentine provinces which are subject to national jurisdiction on the exercise of gainful activities (el ejercicio de actividades lucrativas).

Notwithstanding the provisions of Article 29, this clause shall have effect for any taxable year for which the statute of limitations has not yet run.

The Argentine Government shall invite the provinces to grant a similar tax exemption.

(3) Ad Article 22:

Where a company which is a resident of a Contracting State is exempt in that State from the tax on property, there shall be credited against the tax on property to which a shareholder is subject in the said State the company's property tax which would have been payable in the absence of such exemption, if, and to the extent that, the law of the said State provides for the crediting of the last-mentioned tax against the tax on property to which the shareholder is subject.

(4) Ad Articles 10 and 11:

Notwithstanding the provisions of these Articles, dividends and interest arising in the Federal Republic of Germany may be taxed in accordance with the provisions of the legislation of that State if:

• (a) They are based on rights or debt-claims with a share in profits (including the income of a sleeping partner from his participation or income from partiarische Darlehen or Gewinnobligationen within the meaning of the tax law of the Federal Republic of Germany), and
• (b) The said amounts are deductible for the computation of the gain derived by the debtor.

(5) Ad Article 23:

• (a) Notwithstanding the provisions of paragraph (1), only the provisions of paragraph (2), with exclusion of those of paragraph (3), shall be applied to the profits of a permanent establishment and to property constituting the business property of a permanent establishment, to the dividends paid by a company, to the holding of shares in a company and to the profits referred to in Article 13, paragraphs (1) and (2), of the Convention, provided that the resident of the Federal Republic of Germany demonstrates that at least 90 per cent of the income of the permanent establishment or of the company originates in the production, sale or renting of goods or merchandise (including cases in which such goods or merchandise are sold or rented, in the course of commercial transactions carried on in the Argentine Republic, to customers outside the Argentine Republic), in technical counselling or in the rendering of commercial or technical services, or in banking or insurance operations, within the Argentine Republic, or in interests or royalties originating in the Argentine Republic and related to the aforementioned activities, or in interest paid by the Argentine Republic or a political subdivision thereof, or in interest or dividends paid by a company which is a resident of the Argentine Republic, if the said company derives at least 90 per cent of its income from the aforementioned activities.
• (b) Where a company which is a resident of the Federal Republic of Germany distributes dividends originating in income derived from sources in the Argentine Republic, paragraphs (1) to (3) shall not preclude the restoration of the tax on the distribution of dividends in accordance with the taxation law of the Federal Republic of Germany.

(6) Ad Article 30:

The competent authorities of the Contracting States shall, at the proposal of either State, meet at any time after the expiry of a period of four years following the date of entry into force of the Convention in order to consider the need to amend it on the basis of the experience acquired in its implementation during the preceding years and the changes made in their national taxation laws.