PROTOCOL
The Federal Republic of Germany and the Republic of Ecuador, have agreed at the signing at Quito of the Convention for the avoidance of double taxation with respect to taxes on income and on capital of 7 December 1982 upon the following provisions which shall form an integral part of the Convention:
(1) With reference to Article 11:
Article 11, paragraph (1) shall not prevent the Government of the Republic of Ecuador from applying the provisions of Decree No. 506 of 6 July 1976 and its amendments.
(2) With reference to Article 23:
Where a company which is a resident of the Federal Republic of Germany distributes dividends derived from sources within the Republic of Ecuador, then nothing in Article 23 shall prevent a tax on distributed profits being levied under the provisions of the taxation law of the Federal Republic of Germany.
(3) With reference to Article 23:
Notwithstanding the provisions of Article 23, paragraph (1), sub-paragraph (a), the provisions of sub-paragraph (b) of this Article with the exception of the additional provisions of sub-paragraph (c) shall likewise apply to the profits of, and to the assets forming part of the business property of, a permanent establishment, to the dividends paid by and to participations in a company and to gains referred to in paragraphs (1) and (2) of Article 13 of this Convention, unless the resident of the Federal Republic of Germany proves that the receipts of the permanent establishment or company are derived exclusively or almost exclusively:
- (a) from one of the following activities exercised in the Republic of Ecuador: the producing or selling of goods or merchandise, the supply of technical advice or the rendering of technical services, banking or insurance, or;
- (b) from dividends paid by one or more companies resident in the Republic of Ecuador, more than 25% of the capital of which is owned by the first-mentioned company, which companies themselves derive their receipts exclusively or almost exclusively from one of the following activities exercised in the Republic of Ecuador: the producing or selling of goods or merchandise, the supply of technical advice and the rendering of technical services, banking or insurance.
FOR THE GOVERNMENT OF THE REPUBLIC OF ECUADOR:
LUÍS VALENCIA RODRIGUEZ
MINISTER OF FOREIGN RELATIONS
FOR THE GOVERNMENT OF THE FEDERAL REPUBLIC OF GERMANY:
JOSEPH ENGELS
AMBASSADOR