Obsah (6)

Article 26Article 11Article 7Article 1Article 2Article 164t

loi portant approbation de la « Convention between the Grand Duchy of Luxembourg and the Federal Democratic Republic of Ethiopia for the elimination of double taxation with respect to taxes on income

this paragraph be construed to affect a Contracting State's right to tax its own residents. Article 2 TAXES COVERED 1. This Convention shall apply to taxes on income and on capital imposed on behalf of a Contracting State or of its political subdivisions or local authorities, irrespective of the manner in which they are levied. 2. There shall be regarded as taxes on income and on capital all taxes imposed on total income, on total capital, or on elements of income or of capital, including taxes on gains from the alienation of movable or immovable property. 3. The existing taxes to which the Convention shall apply are in particular:

1. a)in the case of Luxembourg: (
2. i)the income tax on individuals (l'impôt sur le revenu des personnes physiques); (
3. ii)the corporation tax (l'impôt sur le revenu des collectivités); (iii) the capital tax (l'impôt sur la fortune); and (
4. iv)the communal trade tax (l'impôt commercial communal); (hereinafter referred to as "Luxembourg tax");
5. b)in the case of Ethiopia: (
6. i)the tax on income and profit; and (
7. ii)the tax on income from mining, petroleum and agricultural activities; (hereinafter referred to as "Ethiopian tax"). 4. The Convention shall apply also to any identical or substantially similar taxes that are imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes that have been made in their respective taxation laws. Article 3 GENERAL DEFINITIONS 1. For the purposes of this Convention, unless the context otherwise requires:
8. a)the terms "a Contracting State" and "the other Contracting State" mean Luxembourg or Ethiopia as the context requires; and the term "Contracting States" means Luxembourg and Ethiopia;
9. b)the term "Luxembourg" means the Grand Duchy of Luxembourg and, when used in a geographical sense, means the territory of the Grand Duchy of Luxembourg;
10. c)the term "Ethiopia" means the Federal Democratic Republic of Ethiopia and, when used in a geographical sense, it means the national territory and any other area which in accordance with intemational law and the laws of Ethiopia is or may be designated as an area in which Ethiopia exercises sovereign rights or jurisdictions;
11. d)the term "person" includes an individual, a company and any other body of persons;
12. e)the term "company" means any body corporate or any entity that is treated as a body corporate for tax purposes;
13. f)the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;
14. g)the term "intemational traffic" means any transport by a ship or aircraft operated by an enterprise that has its place of effective management in a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;
15. h)the term "competent authority" means: (
16. i)in the case of Luxembourg, the Minister of Finance or his authorised representative; (ii)in the case of Ethiopia, the Minister of Finance or his authorised representative;
17. i)the term "national", in relation fo a Contracting State, means: (
18. i)any individual possessing the nationality or citizenship of that Contracting State; and (
19. ii)any legal person, partnership or association deriving its status as such from the laws in force in that Contracting State. 2. As regards the application of the Convention at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires or the , competent authorities agree to a different meaning pursuant to

Article 26

, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Convention applies, any meaning undör the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State. Article 4 RESIDENT

1. For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of incorporation, place of management or any other criterion of a similar nature, and also includes that State and any political subdivision or local authority thereof. This term, however, does not include any person who is liable to tax in that State in respect only of income from sources in that State or capital situated therein.
2. Where by reason of

paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:

1. a)he shall be deemed to be a resident only of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his personat and economic relations are closer (centre of vital interests);
2. b)if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident only of the State in which he has an habituai abode;
3. c)if he has an habituai abode in both States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national;
4. d)if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. 3. Where by reason of

paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident oraly of the State in which its place of effective management is situated. Article 5 PERMANENT ESTABLISHMENT 1. For the purposes of this Convention, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on. 2. The term "permanent establishment" includes especially:

1. a)a place of management;
2. b)a branch;
3. c)an office;
4. d)a factory;
5. e)a sales outlet;
6. f)a workshop;
7. g)a commercial warehouse; and
8. h)a mine, an oil or gas well, a quarry or any other place of extraction of natural resources. 3. A building site, a construction, installation or dredging project constitutes a permanent establishment only if it lasts more than six months. 4. Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall be deemed not to include:
9. a)the use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise;
10. b)the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display;
11. c)the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;
12. d)the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise;
13. e)the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character; Or
14. f)the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs
15. a)to e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character. 5. Notwithstanding

paragraphs 1 and 2, where a person - other than an agent of an independent status to whom paragraph 7 applies - is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed fo have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under

that paragraph.

1. Notwithstanding the preceding provisions of this Article, an insurance enterprise of a Contracting State shall, except in regard to re-insurance, be deemed to have a permanent establishment in the other. Contracting State if it collects premiums in the territory of that other State or insures risks situated therein through a person other than an agent of independent status to whom paragraph 7 applies.
2. An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, and conditions are made or imposed between that enterprise and the agent in their commercial and financial relations which differ from those which would have been made between independent enterprises, he will not be considered an agent of an independent status within the meaning of this paragraph.
3. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other. Article 6 INCOME FROM IMMOVABLE PROPERTY 1 Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.
4. The term "immovable property" shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which

general lar respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, minerai deposits, sources and other natural resources; ships and aircraft shall not be regarded as immovable property. 3.

paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property. 4.

paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the perforrnance of independent personal services. Article 7 BUSINESS PROFITS 1 The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment. 2. Subject to

paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment. • 3 ln the determination of the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the business of the permanent establishment including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere. However, no such deduction shall be allowed in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission, for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the permanent establishment. Likewise, no account shall be taken, in the determination of the profits of a permanent establishment, for amounts charged (otherwise than towards reimbursement of actual expenses), by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in retum for the use of patents or other rights, or by way of commission for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the head office of the enterprise or any of its other offices. 4. lnsofar as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article. 5. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. 6. For the purposes of the preceding paragraphs, the profits to be attributed fo the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary. 7. Where profits include items of income which are dealt with separately in other Articles of this Convention, then

those Articles shall not be affected by

this Article. Article 8 INTERNATIONAL TRAFFIC 1. Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. 2. If the place of effective management of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship is a resident. 3. For the purposes of this Article, profits from the operation of ships or aircraft in intemational traffic include:

1. a)profits from the rental on a bareboat basis of ships or aircrafts; and
2. b)profits from the use, maintenance or rental of containers (including trailers and related equipment for the transport of containers) used for the transport of goods or merchandise,
3. c)profits from the sale of tickets for such transportation on behalf of other enterprises where such rental, use, maintenance or sale of tickets, as the case may be, is incidental to the operation of ships or aircraft in intemational traffic. 4. For the purposes of this Article, interest on funds directly connected with the operation of ships or aircraft in international traffic shall be regarded as profits derived from the operation of such ships or aircraft, and

Article 11not apply in relation to such interest.

5.

paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an intemational operating agency. Article 9 ASSOCIATED ENTERPRISES 1 Where

1. a)an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, Or
2. b)the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprisis in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. 2. Where a Contracting State includes in the profits of an enterprise of that State and taxes accordingly - profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Convention and the competent authorities of the Contracting States shall if necessary consult each other. Article 10 DIVIDENDS 1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. 2. However, dividends paid by a company which is a resident of a Contracting State may also be taxed in that State according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed:
3. a)5 per •cent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 25 per cent of the capital of the company paying the dividends; 10
4. b)per cent of the gross amount of the dividends in all other cases. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. 3. The term "dividends" as used in this Article means income from shares, mining shares, founders' shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident. 4.

paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. ln such cases,

Article 7or Article 15, as the case may be, shall apply.

1. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State. Article 11 INTEREST
2. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
3. However, interest arising in a Contracting State may also be taxed in that State according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 5 per cent of the gross amount of the interest.
4. Notwithstanding

paragraph 2, interest arising in a Contracting State shall be exempt from tax in that State if it is paid by or to or guaranteed by:

1. a)the Government of a Contracting State, or a political subdivision or a local authority thereof; or
2. b)the Central Bank of a Contracting State; or
3. c)the export financing agency of a Contracting State. 4. The term "interest" as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article. 5.

paragraph 1, 2 and 3 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. ln such cases

Article 7or Article 15, as the case may be, shall apply.

1. Interest shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated.
2. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship,

this Article shall apply only to the last-mentioned amount. ln such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention. Article 12 ROYALTIES

1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
2. However, royalties arising in a Contracting State may also be taxed in that State according to the laws of that State, but if the beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed 5 per cent of the gross amount of the royalties.
3. The term "royalties" as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including computer software, cinematograph films, or films or tapes used for radio or television broadcasting, any patent, trademark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientific equipment or for information concerning industrial, commercial or scientific experience. 4.

paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, caries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. ln such cases,

Article 7or Article 15, as the case may be, shall apply.

1. Royalties shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment or fixed base, then such royalties shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated.
2. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship,

this Article shall apply only to the last-mentioned amount. ln such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention. Article 13 FEES FOR TECHNICAL SERVICES

1. Fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
2. However, fees for technical services arising in a Contracting State may also be taxed in that State according to the laws of that State, but if the beneficial owner of the fees for technical services is a resident of the other Contracting State, the tax so charged shall not exceed 7.5 per cent of the gross amount of the fees for technical services.
3. The term "fees for technical services" as used in this Article means payments of any kind to any person, other than to an employee of the person making the payments, in consideration for any services of a technical, managerial or consultancy nature. 4,

paragraphs 1 and 2 shall not apply if the beneficial owner of the fees for technical services, being a resident of a Contracting State, carries on business in the other Contracting State in which the fees for technical services ahse through a permanent establishment situated therein, or performs in that other Contracting State independent personal services from a fixed base situated therein, and the fees for technical services are effectively connected with such permanent establishment or fixed base. ln such cases,

Article 7or Article 15, as the case may be, shall apply.

1. Fees for technical services shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the fees for technical services, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or fixed base in connection with which the liability to pay the fees for technical services was incurred, and such fees for technical services are borne by such permanent establishment or fixed base, then such fees for technical services shall be deemed to ahse in the Contracting State in which the permanent establishment or fixed base is situated.
2. Where, by reason of a special relationship between the payer and the beneficial owner of the fees for technical services or between both of them and some other person, the amount of the fees, having regard to the services for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship,

this Article shall apply only to the last-mentioned amount. ln such case, the excess part of the fees shall remain taxable according fo the laws of each Contracting State, due regard being had to the other provisions of this Convention. Article 14 CAPITAL GAINS

1. Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.
2. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such fixed base, may be taxed in that other State.
3. Gains from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
4. Gains derived by a resident of a Contracting State from the alienation of shares or comparable interests, such as interests in a partnership or trust, may be taxed in the other Contracting State if, at any time during the 365 days preceding the alienation, these shares or comparable interests derived more than 50 per cent of their value directly or indirectly from immovable property, as defined in Article 6, situated in that other State.
5. Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3 and 4, shall be taxable only in the Contracting State of which the alienator is a resident. Article 15 INDEPENDENT PERSONAL SERVICES
6. Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State unless he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities. If he has such a fixed base, the income may be taxed in the other State but only so much of it as is attributable to that fixed base.
7. The term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants. Article 16 DEPENDENT PERSONAL SERVICES
8. Subject to

Articles 17, 19, 20 and 21, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State. 2. Notwithstanding

paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:

1. a)the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve month period commencing or ending in the calendar year concemed, and
2. b)the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and
3. c)the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. 3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in intemational traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. Article 17 DIRECTORS' FEES Directors' fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State. Article 18 ENTERTAINERS AND SPORTSPERSONS 1. Notwithstanding

Articles 15 and 16, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsperson, from that resident's personal activities as such exercised in the other Contracting State, may be taxed in that other State. 2. Where income in respect of personal activities exercised by an entertainer or a sportsperson acting as such accrues not to the entertainer or sportsperson but to another person, that income may, notwithstanding

Articles 7, 15 and 16 be taxed in the Contracting State in which the activities of the entertainer or sportsperson are exercised. 3. Notwithstanding

paragraphs 1 and 2, income derived in respect of the activities referred to in paragraph 1 within the framework of any cultural or sports exchange programme agreed to by both Contracting States shall be exempt from tax in the Contracting State in which these activities are exercised. Article 19 PENSIONS 1. Subject to

paragraph 2 of Article 20, pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State. 2. Notwithstanding

paragraph 1, pensions and other payments made under the social security legislation of a Contracting State shall be taxable only in that State. 3. Notwithstanding

paragraph 1, pensions and other similar remuneration (including lump-sum payments) arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in the firstmentioned State, provided that such payments derive from contributions paid to or from provisions made under a pension scheme by the recipient or on his behalf and that these contributions, provisions or the pensions or other similar remuneration have been subjected to tax in the first-mentioned State under the ordinary rules of its tax laws. Article 20 GOVERNMENT SERVICE 1.

1. a)Salaries, wages and other similar remuneration paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or authority shall be taxable only in that State.
2. b)However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who: (
3. i)is a national of that State; or (ii)did not become a resident of that State solely for the purpose of rendering the services. 2.
4. a)Notwithstanding

paragraph 1, pensions and other similar remuneration paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State. b) However, such pensions and other similar remuneration shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State. 3.

Articles 16, 17, 18 and 19 shall apply to salaries, wages, pensions, and other similar remuneration in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof. Article 21 STUDENTS

1. Payments which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State.
2. A student at an university or other institution for higher education in a Contracting State, or a business apprentice, who is or was immediately before visiting that Contracting State a resident of the other Contracting State and who is present in the first-mentioned State for a continuous period not exceeding two years, shall not be taxed in that State in respect of remuneration he receives for services rendered in that State, provided that the services are in connection with his studies or training and the remuneration constitutes eamings necessary for his maintenance. Article 22 OTHER INCOME
3. Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Convention shall be taxable only in that State. 2.

paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. ln such case

Article 7or Article 15, as the case may be, shall apply.

3. Notwithstanding

paragraphs 1 and 2, items of income of a resident of a Contracting State not dealt with in the foregoing Articles of this Convention and arising in the other Contracting State may also be taxed in that other State. Article 23 CAPITAL

1. Capital represented by immovable property referred to in Article 6, owned by a resident of a Contracting State and situated in the other Contracting State, may be taxed in that other State.
2. Capital represented by movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or by movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, may be taxed in that other State.
3. Capital represented by ships and aircraft operated in intemational traffic and by movable property pertaining to the operation of such ships and aircraft, shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
4. All other elements of capital of a resident of a Contracting State shall be taxable only in that State. Article 24 EL1MINATION OF DOUBLE TAXATION
5. Subject to

the law of Luxembourg regarding the elimination of double taxation which shall not affect the general principle hereof, double taxation shall be eliminated as follows: a) Where a resident of Luxembourg derives income or owns capital which, in accordance with

this Convention, may be taxed in Ethiopia, Luxembourg shall, subject to

sub-paragraphs

1. b)and c), exempt such income or capital from tax, but may, in order to calculate the amount of tax on the remaining income or capital of the resident, apply the same rates of tax as if the income or capital had not been exempted.
2. b)Where a resident of Luxembourg derives income which, in accordance with

Articles 10, 11, 12, 13, paragraph 4 of Article 14, Article 18 and paragraph 3 of Article 22 may be taxed in Ethiopia, Luxembourg shall allow as a deduction from the income tax on individuals or from the corporation tax of that resident an amount equal to the tax paid in Ethiopia. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable to such items of income derived from Ethiopia. c)

sub-paragraph a) shall not apply to income derived or capital owned by a resident of Luxembourg where Ethiopia applies

this Convention to exempt such income or capital from tax or applies

paragraph 2 of Article 10, 11, 12 or 13 to such income. 2. Subject to

the law of Ethiopia regarding the elimination of double taxation which shall not affect the general principle hereof, double taxation shall be eliminated as follows: a) Where a resident of Ethiopia derives income or owns capital which may be taxed in Luxembourg in accordance with

this Convention (except to the extent that these provisions allow taxation by Luxembourg solely because the income is also income derived by a resident of Luxembourg or because the capital is also capital owned by a resident of Luxembourg), Ethiopia shall allow:

1. i)as a deduction from the tax on the income of that resident an amount equal to the income tax paid in Luxembourg;
2. ii)as a deduction from the tax on the capital of that resident, an amount equal to the capital tax paid in Luxembourg. Such deduction in either case shall not, however, exceed that part of the income tax or capital tax, as computed before the deduction is given, which is attributable, as the case may be, to the income or the capital which may be taxed in Luxembourg.
3. b)Where, in accordance with any provision of this Convention, income derived or capital owned by a resident of Ethiopia is exempt from tax in Luxembourg, Ethiopia may nevertheless, in calculating the amount of tax on the remaining income or capital of such resident, take into account the exempted income or capital. Article 25 NON-DISCRIMINATION 1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected. This provision shall, notwithstanding

Article 1

, also apply to persons who are not residents of one or both of the Contracting States.

1. The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.
2. Except where

paragraph 1 of Article 9, paragraph 7 of Article 11, paragraph 6 of Article 12 or paragraph 6 of Article 13, apply, interest, royalties, fees for technical services and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State. Similarly, any debts of an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable capital of such enterprise, be deductible under the same conditions as if they had been contracted to a resident of the first-mentioned State. 4. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State fo any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected. 5.

this Article shall, notwithstanding

Article 2, apply to taxes of every kind and description.

Article 26 MUTUAL AGREEMENT PROCEDURE 1. Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with

this Convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of either Contracting State. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with

the Convention.

1. The competent authority shall endeavour, if the objection appears to it to be justtfied and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Convention. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States.
2. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention.
3. The competent authorities of the Contracting States may communicate with each other directly, including through a joint commission consisting of themselves or their representatives, for the purpose of reaching an agreement in the sense of the preceding paragraphs. Article 27 EXCHANGE OF INFORMATION
4. The competent authorities of the Contracting - States shall exchange such information as is foreseeably relevant for carrying out

this Convention or to the administration or enforcement of the domestic laws conceming taxes of every kind and description imposed on behalf of the Contracting States, or of their political subdMsions or local authorities, insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Articles 1 and

2. Any information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, the determination of appeals in relation to the taxes referred to in paragraph 1, or the oversight of the above. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. Notwithstanding the foregoing, information received by a Contracting State may be used for other purposes when such information may be used for such other purposes under the laws of both States and the competent authority of the supplying State authorises such use.
3. ln no case shall

paragraphs 1 and 2 be construed so as to impose on a Contracting State the obligation:

1. a)to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;
2. b)to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;
3. c)to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information the disclosure of which would be contrary to public policy (ordre public). 4. If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall use its information gathering measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 but in no case shall such limitations be construed to permit a Contracting State to decline to supply information solely because it has no domestic interest in such information. 5. ln no case shall

paragraph 3 be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person. Article 28 MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS Nothing in this Convention shall affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of intemational law or under

special agreements. Article 29 ENTITLEMENT TO BENEFITS 1. Notwithstanding the other provisions of this Convention, a benefit under this Convention shall not be granted in respect of an nem of income or capital if it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining that benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit in these circumstances would be in accordance with the object and purpose of the relevant provisions of this Convention. 2. Where a benefit under this Convention is denied to a person under paragraph 1, the competent authority of the Contracting State that would otherwise -have granted this benefit shall nevertheless treat that pérson as being entitled to this benefit, or to different benefits with respect to a specific item of income or capital, if such competent authority, upon request from that person and after consideration of the relevant facts and circumstances, determines that such benefits would have been granted to that person in the absence of the transaction or arrangement referred to in paragraph 1. The competent authority of the Contracting State to which the request has been made will consult with the competent authority of the other State before rejecting a request made under this paragraph by a resident of that other State. Article 30 ENTRY INTO FORCE 1. The Contracting States shall notify each other in writing, through diplomatic channels, that the procedures required by its law for the entry into force of this Convention have been satisfied. The Convention shall enter into force on the date of receipt of the last notification. 2. The Convention shall have effect:

1. a)in the case of Luxembourg: (
2. i)in respect of taxes withheld at source, to income derived on or after 1 January of the calendar year next following the year in which the Convention enters into force; (
3. ii)in respect of other taxes on income, and taxes on capital, to taxes chargeable for any taxable year beginning on or after 1 January of the calendar year next following the year in which the Conventipn enters into force;
4. b)in the case of Ethiopia: (
5. i)with regard to taxes withheld at source, in respect of amounts paid on or after the eighth day of July next following the date on which thi's Convention enters into force; and (
6. ii)with régard to other taxes, in respect of tax year beginning on or after the eighth day of July next following the date on which this Convention enters into force. Article 31 TERMINATION 1 This Convention shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Convention, through diplomatic channels, by giving notice of termination at least six months before the end of any calendar year beginning after the expiration of a period of five years from the date of its entry into force. 2. The Convention shall cease to have effect:
7. a)in the case of Luxembourg: (
8. i)in respect of taxes withheld at source, to income derived on or after 1 January of the calendar year next following the year in which the notice is given; (
9. ii)in respect of other taxes on income, and taxes on capital, to taxes chargeable for any taxable year beginning on or after 1 January of the calendar year next following the year in which the notice is given;
10. b)in the case of Ethiopia: (
11. i)with regard to taxes withheld at source, in respect of amounts paid on or after the eighth day of July next following the date on which the period specified in the said notice of termination expires; and (
12. ii)with regard to other taxes, in respect of tax year beginning on or after the eighth day of July next following the date on which the period specified in the said notice of termination expires. ln witness whereof the undersigned, duly authorised thereto, have signed this Convention. Done in duplicate at Luxembourg, on the 29th day of June 202'1, in the English language. For the Government of the Grand Duchy of Luxembourg For the Govemme f the Federal ic of Ethiopia Democratic Re Pierre GRAMEGNA Minister of Finance Hirut Zemene KASSA Ambassador of the Federal Democratic Republic of Ethiopia to the Grand Duchy of Luxembourg PROTOCOL At the moment of the signing of the Convention between the Grand Duchy of Luxembourg and the Federal Democratic Republic of Ethiopia for the elimination of double taxation with respect to taxes on income and on capital and the prevention of tax evasion and avoidance, both sides have agreed upon the following provisions, which shall form an integral part of the Convention: 1. With reference to Article 4:
13. a)A collective investment vehicle which is established in a Contracting State and that is treated as a body corporate for tax purposes in this Contracting State shall be considered as a resident of the Contracting State in which it is established and as the beneficial owner of the income it receives.
14. b)A collective investment vehicle which is established in a Contracting State and that is not treated as a body corporate for tax purposes in this Contracting State shall be considered as an individual who is resident of the Contracting State in which it is established and as the beneficial owner of the income it receives. 2. Nothing in this Convention shall prevent Luxembourg from applying

Article 164t

er of the income tax law or any other similar provision that amends or replaces the above-mentioned Article. ln witness whereof the undersigned, duly authorised thereto, have signed this Convention. Done in duplicate at Luxembourg, on the 29th day of June 2021, in the English language. For the Government of the Grand Duchy of Luxembourg For the Govemment of the Federal Democratic Rep lic of Ethiopia Pierre GRAMEGNA Minister of Finance Hirut Zemene KASSA Ambassador of the Federal Democratic Republic of Ethiopia fo the Grand Duchy of Luxembourg