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ARTICLE 23
Elimination of Double Taxation
(1) In the case of residents of the Federal Republic of Germany, double taxation shall be avoided as follows:
- (1) Income arising in Morocco-with the exception of income dealt with in sub-paragraph (2)-and elements of capital situated in Morocco which, according to the foregoing Articles, may be taxed in that State shall be exempted from German tax. This exemption shall not limit the right of the Federal Republic of German to take into account, in determining the rate of German tax, the income and elements of capital so exempted. In the case of dividends, as defined in Article 10, paragraph (5), the first sentence shall apply only where the dividends are paid by a company limited by shares, which is a resident of Morocco to a joint stock company (Kapitalgesellschaft), which is a resident of the Federal Republic of Germany and which holds directly at least 25 per cent of the voting stock or voting shares of the first-mentioned company. The aforementioned stock or shares of the Moroccan company shall, under the same conditions, be exempted from the German capital tax.
- (2) The amount of the tax levied in Morocco in accordance with the provisions of this Convention shall be allowed as a credit against the income tax or corporation tax, including the surcharge thereon, levied by the Federal Republic of Germany on the following items of income:
- (a) dividends not dealt with in sub-paragraph (1);
- (b) interest dealt with in Article 11;
- (c) royalties dealt with in Article 12;
- (d) directors' fees and similar payments dealt with in Article 16;
- (e) remuneration dealt with in Article 18, paragraph (1), which according to that provision, is not exempt from German tax.
- (3) For the purposes of the credit referred to in paragraph (1), sub-paragraph (2)(a), the following shall apply: so long as dividends are, with a view to promoting the economic development of Morocco, exempted from tax or taxed at a rate lower than the rate specified in Article 10, paragraph (2), sub-paragraph (2), the amount of Moroccan tax to be allowed as a credit shall be 15 per cent of the gross amount of the dividends.
- (4) For the purposes of the credit referred to in paragraph (1), sub-paragraph (2)(b), the following shall apply: so long as interest is, with a view to promoting the economic development of Morocco, exempted from tax or taxed at a rate lower than the rate specified in Article 11, paragraph (2), the amount of Moroccan tax to be allowed as a credit shall be 10 per cent of the gross amount of the interest; however, where such interest is paid by the institutions specified in the Final Protocol, the amount of Moroccan tax to be allowed as a credit shall be 15 per cent.
(2) In the case of residents of Morocco, double taxation shall be avoided as follows:
- (1) Where a resident of Morocco derives income not dealt with in sub-paragraph (2) which may be taxed in the Federal Republic of Germany in accordance with the provisions of this Convention, Morocco shall exempt such income from tax but may, in calculating its taxes on the remaining income of that person, apply the rate of tax which would have been applicable if the exempted income had not been so exempted.
- (2) In the case of income of the kinds referred to in Articles 10, 11 and 12, Morocco may, in accordance with the provisions of its internal law, include such income in the bases upon which the taxes referred to in Article 2 are imposed; however, it shall grant, against the amount of the taxes pertaining to that income and within the limit of the said amount, a reduction corresponding to the amount of the taxes levied by the Federal Republic of Germany on the same income.