(1) Subject to the provisions of the following paragraphs, income from employment shall be taxable only in the Contracting State in which the personal activity from which the income is derived is performed. Income from employment shall be deemed to include salaries, wages, bonuses or other emoluments and any similar benefits paid or granted by persons other than those referred to in Article 14.
(2) Remuneration in respect of an activity performed on board a ship or aircraft in international traffic or on board a boat engaged in inland waterways transport shall be taxable only in the Contracting State in which the place of actual management of the enterprise is situated. If that State does not tax such remuneration, it shall be taxable in the Contracting State of which the recipient is a resident.
(3) Paragraph (1) shall not apply to students resident in one of the Contracting States who are gainfully employed by an enterprise of the other Contracting State for a period not exceeding 183 days in a calendar year for the purpose of acquiring necessary practical training. Income from such employment shall be taxable only in the State of which the student is a resident.
(4) Notwithstanding the provisions of paragraph (1), remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:
- (1) The recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the fiscal year concerned; and
- (2) The remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and
- (3) The remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.
- *(a) Notwithstanding the provisions of paragraphs (1), (3) and (4), income from employment of persons who work in the border area of a Contracting State and have their permanent home to which they generally return each day in the border area of the other Contracting State ("cross-border workers"), shall be taxable only in that other Contracting State.
- (b) The frontier zone of each Contracting State shall include rural districts whose territory is situated, in whole or in part, at a distance of not more than 20 kilometers from the frontier;
- (c) The arrangements specified in (a) shall also apply to all persons who have their permanent place of abode in one of the French departments adjacent to the frontier and who are employed in German rural districts whose territory is situated, in whole or in part, not more than 30 kilometers from the frontier.
(6) Notwithstanding the provisions of paragraphs (1) through (4), the compensation received by an employee who is a resident of one Contracting State in respect of employment exercised in the other Contracting State under an agreement entered into with a temporary employment firm shall be taxable in that other State. Such compensation shall also be taxable in the State of which the employee is a resident. In accordance with their domestic laws, the Contracting States may require both the hirer and the hiree to pay the tax that applies to such compensation or to hold them liable for such tax.
(7) For the purpose of this Article, the term 'employment' shall include, interalia, the functions of a director or manager exercised within a business which is a subject to the business tax.
*(8) Pensions, annuities (including payments from statutory social insurance) and other similar remuneration shall be taxable only in the State of which the recipient is a resident.