DT8017 - Germany, Federal Republic: double taxation agreement, Article 18: Elimination of double taxation

(a) Federal Republic tax payable under the laws of the Federal Republic and in accordance with this Convention, whether directly or by deduction, on profits income or chargeable gains from sources within the Federal Republic (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Federal Republic tax is computed;

(b) in the case of a dividend paid by a company which is a resident of the Federal Republic to a company which is a resident of the United Kingdom and which controls directly or indirectly at least 25 per cent of the voting power in the Federal Republic company, the credit shall take into account (in addition to any Federal Republic tax creditable under the provisions of sub-paragraph (a) of this paragraph) the Federal Republic tax payable by the company in respect of the profits out of which such dividend is paid.

For the purposes of this paragraph the term `Federal Republic tax` shall not include Gewerbesteuer (trade tax) computed on a basis other than profits or Vermogensteuer (capital tax).

(a) Unless the provisions of sub-paragraph (b) below apply, there shall be excluded from the basis upon which Federal Republic tax is imposed any item of income from sources within the United Kingdom and any item of capital situated within the United Kingdom which, according to this Convention, may be taxed in the United Kingdom provided that capital gains referred to in paragraph (1) of Article 8 shall be so excluded only if they are subject to tax in the United Kingdom. The Federal Republic, however, retains the right to take into account in the determination of its rate of tax the items of income and capital so excluded. The first sentence of this sub-paragraph shall in the case of income from dividends apply only to such dividends as are paid to a company limited by shares (Kapitalgesellschaft) being a resident of the Federal Republic by a company limited by shares being a resident of the United Kingdom at least 25 per cent of the voting shares of which are owned by the first-mentioned company. There shall also be excluded from the basis upon which Federal Republic tax is imposed any participation the dividends on which are excluded, or if paid would be excluded, from the tax basis according to the foregoing sentence.

(b) Subject to the provisions of German tax law regarding credit for foreign tax there shall be allowed as a credit against Federal Republic tax on income payable in respect of the following items of income from sources within the United Kingdom:

(i) the United Kingdom tax payable under the laws of the United Kingdom and in accordance with this Convention on dividends not dealt with in sub-paragraph (a) above;

(ii) the United Kingdom tax payable under the laws of the United Kingdom and in accordance with this Convention on remuneration and pensions within the meaning Article 9 paid out of any fund established in the United Kingdom to an individual who is a German national without being also a national of the United Kingdom.

(a) profits or remuneration arising from the exercise of a profession or employment in one of the territories shall be deemed to be income from sources within that territory;

(b) the services of an individual whose services are wholly or mainly performed in ships or aircraft operated by a resident of one of the territories shall be deemed to be performed in that territory; and

(c) any remuneration or pension within the meaning of paragraphs (1) or (2) of Article 9 shall be deemed, notwithstanding the foregoing provisions of this paragraph, to be income from a source within the territory of the Contracting Party in whose territory the fund is established out of which the remuneration or pension is paid.