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France - Germany Tax Treaty (as amended through 2015 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.



(1) The profits of an enterprise of one of the Contracting States shall be taxable only in that State, unless the enterprise carries on business in the other State through a permanent establishment situated therein. If the enterprise carries on such business, the profits of the enterprise may be taxed in the other State, but only to the extent that they are attributable to the permanent establishment. This part of the profits shall not be taxable in the first-mentioned Contracting State.

(2) Where an enterprise of one of the Contracting States carries on business in the other State through a permanent establishment situated therein, there shall be attributed to that permanent establishment the profits which it might have derived if it had been an independent enterprise engaged in the same or similar business under the same or similar conditions and dealing at arm's length with the enterprise of which it is a permanent establishment.

(3) Shares of the profits of an enterprise operated as an unincorporated society, a partnership or a commandité partnership accruing to a partner therein, and shares of the profits of a société de fait, association en participation or société civile under French law shall be taxable only in the State in which the enterprise has a permanent establishment, but only to the extent of the partner's share of the profits of the permanent establishment.

*(4) Paragraphs (1) and (3) shall apply both to income derived from direct administration and enjoyment and to income derived from the lease or use in any other form of the business enterprise.

(5) No portion of the profits accruing to an enterprise in one of the Contracting States shall be attributed to a permanent establishment situated in the other State by reason of the mere purchase of goods in that State by the enterprise.

(6) The profit derived from the activities of a permanent establishment shall as a general rule be determined on the basis of the balance sheet of the establishment. In this connection, account shall be taken of all expenditure attributable to the establishment, including a proportion of the general expenses of the enterprise. In special cases, the profit may be determined by apportioning the total profit of the enterprise-so far as concerns insurance enterprises, the basis used in such cases shall be the ratio between the premium income of the establishment and the total premium income of the enterprise.

(7) Paragraph (1) shall apply mutatis mutandis to business tax levied on a base other than the commercial profit.

(8) The competent authorities of the Contracting States shall if necessary agree on the formulation of rules for apportioning the profits of an enterprise, in default of regular accounts showing exactly and separately the profits accruing to the permanent establishments in their respective territories.

*(9) The provisions of paragraphs (1) and (3) shall not be construed as preventing a Contracting State from taxing, in accordance with this Convention, income derived by an enterprise of the other Contracting State from sources within the first-mentioned Contracting State (income from immovable property, capital gains within the meaning of paragraphs (1) and (4) of Article 7, dividends), if such income cannot be attributed to a permanent establishment situated in the territory of the first-mentioned State.