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Estonia - Germany Tax Treaty (as amended by 2020 protocol) — Orbitax Tax Hub

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.


The Republic of Estonia and the Federal Republic of Germany have agreed at the signing at Tallinn on 29 November 1996 of the Agreement between the two States for the avoidance of double taxation with respect to taxes on income and on capital upon the following provisions which shall form an integral part of the said Agreement.

(1) With reference to Articles 6 to 21:

It is understood, that if the taxation of income in a Contracting State is effected by way of withholding tax at source, and if this taxation is limited by the provisions of this Agreement, the application of this tax reduction or exemption shall be governed by the national law of that State in conjunction with the procedures agreed upon for this purpose between the competent authorities of the two Contracting States.

(2) With reference to Articles 6 and 13:

It is understood that all income and gains arising from the alienation of immovable property situated in a Contracting State may be taxed in that State in accordance with Article 13 of this Agreement.

(3) With reference to Article 7:

  • (a) In the Contracting State in which the permanent establishment is situated, no profits shall be attributed to a building site, a construction, and assembly or installation project except those which are the result of such activities themselves. Profits derived from the supply of goods connected with, or independent of, such activities and effected by the principal permanent establishment or any other permanent establishment of the enterprise or by a third party shall not be attributed to the building site, a construction, assembly or installation project.
  • (b) Income derived from design, planning, engineering or research or from technical services which a resident of a Contracting State performs in that Contracting State and which are connected with a permanent establishment referred to in sub-paragraph (a) in the other Contracting State shall not be attributed to that permanent establishment.

(4) With reference to Article 10:

  • *(a) For the purpose of taxation in the Federal Republic of Germany, the term "dividends" includes income derived by a sleeping partner ("stiller Gesellschafter") from his participation as such and distributions on certificates of an investment fund or investment trust.
  • #(b) It is understood, that the required minimum holding period laid down in sub-paragraph (a) of paragraph (2) of Article 10 can also be met subsequently to the day of the payment of the dividend.

(5) With reference to Articles 10 and 11:

Notwithstanding the provisions of these Articles, dividends and interest may be taxed in the Contracting State 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 sleeping partner from his participation as such from a "partiarisches Darlehen" and from "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.

(6) With reference to Article 12:

Payments received as a consideration for technical services, or for consultancy or managerial services shall be deemed not to be payments received as a consideration for information concerning industrial, commercial or scientific experience, except to the extent that the amounts of such payments are based on production, sales, performance, profits or any other similar basis related to the use of the said information.

In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.

(7) With reference to Article 23:

  • (a) Where a company being a resident of the Federal Republic of Germany distributes income derived from sources within the Republic of Estonia paragraph (2) shall not preclude the compensatory imposition of corporation tax on such distributions in accordance with the provisions of German tax law.
  • (b) The federal Republic of Germany shall avoid double taxation by a tax credit as provided for in paragraph (2)(b) of Article 23, and not by a tax exemption under paragraph (2)(a) of Article 23,
    • (aa) if in the Contracting States income is placed under differing provisions of the Agreement or attributed to different persons-other than under Article 9 (Associated to Enterprises)-and this conflict cannot be settled by a procedure pursuant to Article 25 and:
      • (i) If as a result of such placement or attribution the relevant income would be subject to double taxation; or
      • (ii) If as a result of such placement or attribution the relevant income would remain untaxed or be subject only to inappropriately reduced taxation in the Republic of Estonia and would (but for the application of this paragraph) remain exempt from tax in the Federal Republic of Germany; or
    • (bb) if the Federal Republic of Germany has, after due consultation and subject to the limitations of its internal law, notified the Republic of Estonia through diplomatic channels of other items of income to which it intends to apply this paragraph in order to prevent the exemption of income form taxation in both Contracting States or other arrangements for the improper use of the Agreement.
  • In the case of a notification under sub-paragraph (bb) the Republic of Estonia may, subject to notification through diplomatic channels, characterise such income under the agreement consistently with the characterisation of that income by the Federal Republic of Germany. A notification made under this paragraph shall have effect only from the first day of the calendar year following the year in which it was transmitted and any legal prerequisites under the domestic law of the notifying State for giving it effect have been fulfilled.

*(8) With reference to Article 26:

The processing of personal data under the Agreement shall be in conformity with the relevant EU law and any domestic data protection rules adopted by the Contracting State concerned.