DT8005 - DT: Germany, Federal Republic: double taxation agreement, Article 6: Dividends
Article 6(1), Article 6(4) and Article 6(6)were substituted by SI 1971/874 . The current Article 6 is as follows:
(1) Dividends paid by a company resident in one of the territories to a resident of the other territory may also be taxed in the former territory. Tax shall not however, be charged in that former territory at a rate in excess of 15 per cent on the gross amount of such dividends provided that those dividends either are subject to tax in the other territory or, being dividends paid by a company which is resident in the United Kingdom, are exempt from Federal Republic tax under the provisions of sub- paragraph (a) of paragraph (2) of Article 18.
(2) Notwithstanding the provisions of paragraph (1) of this Article Federal Republic tax on dividends paid to a company resident in the United Kingdom by a company resident in the Federal Republic at least 25 per cent of the voting shares of which are owned directly or indirectly by the former company may be charged at a rate exceeding 15 per cent but not exceeding 25 per cent if the rate of Federal Republic corporation tax on distributed profits is lower than that on undistributed profits, and the difference between those two rates is 28 per cent or more; where the difference between the two rates is 20 per cent or more but less than 28 per cent Federal Republic tax on such dividends may be charged at a rate exceeding 15 per cent but not exceeding 20 per cent.
(3) Where a company which is a resident of one of the territories derives profits or income from sources within the other territory, there shall not be imposed in that other territory any form of taxation on dividends paid by the company to persons not resident in that other territory, or any tax in the nature of an undistributed profits tax on undistributed profits of the company, whether or not those profits represent, in whole or in part, profits or income so derived.
(4) The term `dividends` as used in this Article means income from shares jouissance shares or jouissance rights, mining shares, founders' shares or other rights not being debt-claims, participating in profits, as well as income from other corporate rights assimilated to income from shares by the taxation law of the territory of which the company making the distribution is a resident; in the case of the United Kingdom the term includes any item (other than interest or royalties exempt from United Kingdom tax under the provisions of Article 7 of this Convention) which under the law of the United Kingdom is treated as a distribution of a company- in the case of the Federal Republic the term includes income arising from participation in the capital and profits of a company resident in the Federal Republic, and the income derived by a sleeping partner from his participation as such.
(5) Paragraphs (1) and (2) of this Article shall not apply where a resident of one of the territories carries on a trade or business in the other territory through a permanent establishment situated therein, and such dividends are attributable to that permanent establishment; in such event the dividends may be subjected to tax in the territory where the permanent establishment is situated.
Article 6(6) was substituted by SI71/874 below;
(6) If the recipient of dividends is a company and if those dividends are exempt from tax in the territory of which that company is a resident, the provisions of the second sentence of paragraph (1) and the provisions of paragraph (2) of this Article shall not apply to the dividends to the extent that they can have been paid only out of income which accrued to the company paying the dividends in a period ending twelve months or more before the said recipient acquired the shares in respect of which the dividends are paid. Provided that this paragraph shall not apply if the shares were not acquired primarily for the purpose of securing the benefit of this Article.
