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The Federal Republic of Germany and the Grand Duchy of Luxembourg,

Have agreed to the following provisions supplemental to the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital from April 23rd, 2012:

(1) On the Convention as a whole:

(1) An investment fund established under the laws of a Contracting State that draws dividends or interest form the other Contracting State, can assert the restrictions on the tax law of the other Contracting State to this Convention under Articles 10 and 11 of the Convention to the extent that the shares in the investment fund are held by persons domiciled in the former State. With the recognition of this claim by an investment fund, the right of the shareholders in this investment fund to claim the same advantage is nullified.

In the sense of this provision, an investment fund is:

  • (a) In the Federal Republic of Germany, a special fund under terms of the Investment Act, managed by a capital investment company,
  • (b) In Luxembourg an investment fund (fonds commun de placement).

(2) Investment companies can independently claim the restrictions provided for under Article 10 and 11.

In the sense of this provision, an investment company is:

  • (a) In the Federal Republic of Germany, an investment stock company
  • (b) In Luxembourg:
    • (i) a risk investment company (société d'investissement en capital à risque AR]),
    • (ii) an investment company with variable capital (société d'investissement à capital variable AV]) und
    • (iii) an investment company with fixed capital (société d'investissement à capital fixe AF]).

The responsible authorities can rule on the details of the execution of this provision in mutual agreement in order to make sure that no unjustified reimbursements are paid on the basis of this provision.

(2) Concerning Articles 10 and 11:

(1) Irrespective of Article 10 and 11, dividends and interest that originate from the Federal Republic of Germany can be taxed according to its laws if they:

  • (a) derive from rights or obligations with profit participation, including earnings of a silent partner from participation as a silent partner or earnings from patriarchal loans or profit obligations, and
  • (b) they can be deducted when calculating the profits of the party owing the dividends or interest.

(2) In the case of Luxembourg, the following are also treated as dividends in the sense paragraph (3) of Article 10:

  • (a) Earnings from obligations that include both supplemental interest and fixed interest that are guided by the amount of the profit distribution and
  • (b) Earnings from participation as a silent partner.

(3) On Articles 10, 11, 12, 13 and 22:

Regardless of the regulations of Articles 10, 11, 12, 13 and 22, the provisions of the Guideline of the Council from July 23rd, 1990 concerning the Joint Taxation System for Mergers, Splits, Acquisition of Corporate Units and Exchange of Shares of Companies of Different Member States (90/434/EEC), Guideline of the Council from July 23rd, 1990 concerning the Joint Taxation System for Parent Companies and Subsidiaries of Different Member (90/435/EWG), the Guideline of the Council from June 3rd, 2003 concerning Joint Tax Regulation for Payments of Interest and Licensing Fees between Affiliated Companies of Different Member States (2003/49/EG) and the Guideline of the Council from June 3rd, 2003 in the Area of Taxing Interest Payments (2003/48/EG) each apply in the current edition.

(4) On paragraph (5) of Article 23:

Paragraph (5) of Article 23 may not be interpreted as if it prevented a Contracting State form restricting income taxation on a consolidated basis (Tax Group) to persons domiciled in this State.

(5) On Article 25:

(1) There is agreement that the competent authorities of a Contracting State must provide the following information when the competent authorities of the other Contracting State submit a request for administrative assistance under Article 25 of the Convention:

  • (a) adequate information to identify the person subject to an audit or investigation (typically, the name and, if known, the address, account number and other identifying information);
  • (b) the time period for which the information is demanded;
  • (c) a description of the demanded information and specifications of the manner and form in which the requesting State wishes to receive this information;
  • (d) the tax purpose for which the information is demanded;
  • (e) the reasons for the assumption that the requested information is held by the State being asked for it or is subject to the dispositional authority of a person in the sovereign territory of the State subject to the request;
  • (f) a declaration that the requesting State has already exhausted all the measures at its disposal to obtain the information excluding those that would present unreasonably significant difficulties, and
  • (g) the name and, to the extent known, the address of the person likely to possess the information being demanded.

(2) The purpose of the reference to information that could be considerable consists in assuring as extensive an exchange of information in tax matters as is possible without allowing the Contracting States to conduct unjustified investigations looking for evidence ("fishing expeditions") or demanding information whose significance with respect to tax concerning for a taxpayer is improbable. While paragraph (1) includes important procedural requirements that should prevent fishing expeditions, sub-paragraphs (a) to (g) must be interpreted in such a way that does not hinder an effective exchange of information.

(3) Although Article 25 of the Agreement does not restrict the possible procedures for this exchange of information, the Contracting States are not obligated to exchange information automatically or spontaneously. The Contracting States expect that they will mutually provide the information necessary to execute the Convention.

(4) There is an agreement that in the case of an Exchange of Information according to Article 25 of the Convention, the valid provisions of administrative and procedural law concerning the rights of taxpayers in the state subject to the request (e.g. the right to notification or the right to object) remain preserved before the information is to be sent to the requesting State. There is also an agreement that these provisions serve to grant the taxpayer a proper procedure and do not have the goal of preventing the efficient exchange of information or delaying it unreasonably.

(5) To the extent that personal data as defined in Article 25 are communicated, the following provisions also apply:

  • (a) the use of the data by the receiving office is only permissible in accordance with paragraph (2) of Article 25 and only for the purpose indicated by the communicating office and under the terms prescribed by the communicating office.
  • (b) The communicating office is obligated to review the accuracy of the data to be communicated and heed its provisional significance in the sense of sub-paragraph (1) of paragraph (1) of Article 25 and its relevance with reference to the purpose sought in communicating it. The data are provisionally significant and relevant if, in the actual case, there is the serious possibility that the other Contracting State has a right to taxation and there are no indications that the data is already known to the responsible party in the other Contracting State or that the responsible authorities of the other Contracting State could obtain knowledge of the object of this right of taxation without the information. If it proves that incorrect data or data that should not have been communicated were communicated, the receiving office must be informed immediately. This office is obligated to immediately correct or delete this data. If data were sent that were not requested, the receiving office must review to determine whether the data are necessary for the purpose for which they were sent; unnecessary data must be deleted immediately.
  • (c) The receiving office will inform the sending office, on request and in the individual case, and for the purpose of disseminating information to the party involved, concerning the use of the data and the results achieved.
  • (d) The receiving office must inform the party involved of the acquisition of data at the sending office; unless the data were sent without any request. The information can be held back to the extent and as long as there is a concern that the public interest in holding back the information outweighs the informational interest of the party involved.
  • (e) The party involved is to be informed, on request, of the personal information that is to be communicated as well as of the intended purpose for which it will be used. Sub-paragraph (d) of paragraph (2) shall apply.
  • (f) The sending and receiving offices are required to record the sending and receipt of these personal data in their files.
  • (g) The personal data sent must be deleted as soon as they are no longer required for the purpose for which they were sent.
  • (h) The sending and receiving offices are required to effectively protect personal data sent from unauthorised access, unauthorised modification and disclosure to unauthorised persons.