To avoid double taxation, Germany concludes a double taxation agreement (DTA) with the respective contracting state. Germany and the respective contracting state take into account both the taxation interests and the economic conditions (e.g. import, export) among themselves during the negotiations. Every DBA is therefore different and must be checked accordingly. The OECD has therefore developed a model agreement to ensure taxation interests and international uniformity of DTAs: the OECD-MA. In the design of the actual DTA, the OECD-MA is usually used as a basis, so that the contracting states only have to adapt individual articles. The rest of the OECD-MA is generally adopted unchanged. Therefore, read here an overview of the most important articles in the sample DBA in order to understand the functioning of the DBA. The DBA law is also taught at universities and colleges based on the OECD-MA.

(2) For the purposes of this Agreement, income generated by or through an entity or entity which is wholly or partly tax transparent under the tax law of one of the Contracting States shall be considered as income of a person resident in a Contracting State, but only to the extent that such income is treated as income of a person resident in that Contracting State for the purposes of taxation by that State.

(3) Nothing in this Agreement shall affect the taxation by a Contracting State of a person resident in a Contracting State, with the exception of the benefits granted under Articles 7(3), 9(2) and 19, 20, 23, 24, 25 and 28.

Article 2. Taxes covered by the Agreement

(1) This Convention applies, irrespective of the method of collection, to taxes on income and property levied on behalf of a Contracting State or its territorial authorities.

(2) Taxes on income and property shall be deemed to be all taxes levied on total income, assets or parts of income or property, including taxes on the profit on sale of movable or immovable property, payroll taxes and taxes on capital gains.

(3) Existing taxes to which the Agreement applies include in particular [A]

(4) The Agreement shall also apply to all taxes of the same or substantially similar nature levied after the signature of the Agreement in addition to or in place of existing taxes. The competent authorities of the Contracting States shall notify each other of the significant changes in their tax laws.

Art. 3. General definitions

(1) For the purposes of this Agreement, unless the context requires otherwise,

a) means the term ‘person’ means natural persons, companies and any other association of persons;

b) the term “company” means legal persons or entities treated as legal persons for taxation;

c) the term “undertaking” refers to the pursuit of a business activity;

d) means the terms “undertaking of a Contracting State” and “undertaking of the other Contracting State”, as the case may be, an undertaking operated by a person resident in a Contracting State or an undertaking operated by a person resident in the other Contracting State;

e the term “international traffic” means any carriage by seagoing vessel or aircraft, unless the seagoing vessel or aircraft is operated exclusively between locations in a Contracting State and the company operating the seagoing vessel or aircraft is not an enterprise of that Contracting State;

f) means the term “competent authority”

(in State A): [A]

(in State B): [A]

g) means the term ‘national’ in relation to a Contracting State:

any natural person who holds the nationality or citizenship of that Contracting State; and

any legal person, partnership or other association of persons established in accordance with the law in force in that Contracting State;

h) the expression “business activity” includes the pursuit of a professional or other self-employed activity.

(i) the term “recognised pension fund” of a State means an entity or entity constituted in that State Party which is deemed to be an independent person under the tax law of that State Party and which:

is established and operated exclusively or almost exclusively for the purpose of administering or providing pension and ancillary or ancillary services to natural persons and, as such, is subject to the supervision of that State Party or one of its territorial authorities; or

is established and operated exclusively or almost exclusively for the purpose of investing funds in legal entities or entities described in point (i).

(2) In the application of the Convention by a Contracting State, unless the context requires otherwise or unless the competent authorities agree on a different meaning in accordance with the provisions of Article 25, any term not defined in the Convention shall have the meaning assigned to it in the period of application under the law of that State concerning the taxes to which the Convention applies, the meaning having priority under the tax law applicable in that State over a meaning which the term has under other law of that State.

Art. 4 Resident

(1) For the purposes of this Agreement, ‘a person resident in a Contracting State’ means a person who, under the law of that State, is taxable there by reason of his residence, permanent residence, place of management or any other similar characteristic, and includes that State and its territorial authorities, as well as a recognised special pension fund of that State. However, the term does not include a person who is taxable in that State only with income from sources in that State or with property located in that State.

If, in accordance with paragraph 1, a natural person is established in both Contracting States, the following shall apply:

a the person is considered to be resident only in the State where he has a permanent residence; if it has a permanent residence in both States, it shall be deemed to be resident only in the State with which it has closer personal and economic relations (centre of vital interests);

b) cannot be determined in which State the person has the centre of his interests in life, or if he has no permanent residence in any of the States, he shall be deemed to be resident only in the State in which he has his habitual residence;

(c) if the person has his habitual residence in both States or in none of the States, he shall be deemed to be resident only in the State of which he is a national;

If the person is a national of both States or none of the States, the competent authorities of the States Parties shall settle the question by mutual agreement.

(3) If, in accordance with paragraph 1, a person other than a natural person is established in both Contracting States, he shall

the competent authorities of States Parties shall endeavour to determine, by mutual agreement, the State Party in which that person is deemed to be domiciled, taking into account the place of his effective management, the place of his establishment or other constitution and any other relevant factors for the purposes of this Agreement. Without such an understanding, that person shall be entitled to the tax relief or exemption provided for in this Agreement only to the extent and in the manner agreed by the competent authorities of the Contracting States.

Art. 5 Establishment

(1) For the purposes of this Agreement, ‘permanent establishment’ means a permanent establishment through which the business activity of an undertaking is carried out in whole or in part.

(2) The term “establishment” includes in particular: