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At the signature of the Convention between the Federal Republic of Germany and the Union of Soviet Socialist Republics for the Avoidance of Double Taxation with respect to Taxes on Income and Capital on 24 November 1981 at Bonn, the Contracting States have agreed upon the following provisions which shall form part of the Convention.

(1) With reference to Articles 4 and following:

The term "business activity" as used in this Convention shall comprise both entrepreneurial and independent activities.

(2) With reference to Article 5:

  • (a) Where a person resident in a Contracting State carries on business activities in the other Contracting State through a permanent establishment situated therein, then, subject to the provisions of paragraph (2) of Article 5, in either Contracting State there shall be attributed to that permanent establishment the income which it could have earned had it carried on its activities fully independently.
  • (b) Only income from building, construction or installation activities proper may be attributed to the Contracting State in which the permanent establishment is situated. Income derived through deliveries of goods connected to these activities by the principal permanent establishment or by another permanent establishment of the enterprise or by a third person shall not be attributable to the building site, construction or installation project.
  • (c) Income which is attributable to planning, construction or research projects as well as to technical services which a person resident in a Contracting State renders in that Contracting State, and which are related to a permanent establishment maintained in the other Contracting State, shall not be attributed to this permanent establishment.

(3) With reference to Article 7:

With respect to the Federal Republic of Germany the term "dividends" comprises income derived by a silent partner from his participation as a silent partner and distributions on participations in an investment fund.

(4) With reference to Articles 7 and 8:

Notwithstanding the provisions of these Articles, income mentioned therein which is derived from the Federal Republic of Germany may be taxed in accordance with the laws of the Federal Republic of Germany, if:

  • (a) it is based on rights or claims participating in profits (including income of a silent partner from his participation, income from profit-sharing loans (Partiarische Darlehen) and profit-sharing bonds in the meaning of the tax law of the Federal Republic of Germany), and
  • (b) this income is deductible in determining the profit of the debtor.

(5) With reference to Articles 8 and 9:

Where payments are higher than those which would have been agreed upon between independent persons, the excess amount may be taxed in accordance with the law of either Contracting State, subject to the other provisions of this Convention.

(6) With reference to Article 12:

Directors' fees and similar payments which a person resident in a Contracting State receives in his capacity as member of the board of directors or supervisory board of a legal entity which is a resident of the other Contracting State may be taxed in that other State.

(7) With reference to Article 13:

Employment for an organisation or enterprise which carries out a business activity shall not be deemed to constitute the fulfilment of public functions.

(8) With reference to Article 19:

With regard to the application of this Convention in the Federal Republic of Germany, the following shall apply: Where a legal entity resident in the Federal Republic of Germany uses income from sources within the Union of Soviet Socialist Republics for distribution, the provision of paragraph (1) of Article 19 shall not exclude the levy of the corporate income tax pursuant to the provisions of the tax law of the Federal Republic of Germany.

DONE at Bonn, 24 November 1981, in two originals, both in the German and Russian languages, each text being equally authentic.