AGREEMENT
BETWEEN THE GRAND DUCHY OF LUXEMBOURG
AND THE PRINCIPALITY OF ANDORRA FOR THE AVOIDANCE OF DOUBLE TAXATION AND
THE PREVENTION OF FISCAL FRAUD
TAX EVASION WITH REGARD TO TAXES ON INCOME AND ON CAPITAL

 

The Government of the Grand Duchy of Luxembourg and the Government of the Principality of Andorra, desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital, have agreed as follows:

Article 1
AFFECTED INDIVIDUALS

This Convention shall apply to persons who are residents of one or both of the Contracting States.

Article 2
              TAXES REFERRED TO                   

1. This Convention shall apply to taxes on income and on capital imposed on behalf of a Contracting State or its local authorities, irrespective of the system of taxation. State or its local authorities, irrespective of the system of collection.

 

2. There shall be regarded as taxes on income and on capital taxes imposed on total income, on total capital, or on elements of income or on elements of income or capital, including taxes on gains from the alienation of movable or immovable property, taxes on the total amount of wages paid by enterprises, as well as taxes on capital gains.

 

3. The existing taxes to which the Convention shall apply include

(a) in the case of the Grand Duchy of Luxembourg:

(i) the personal income tax;

(ii) corporate income tax

(iii) the wealth tax; and

(iv) the municipal business tax;

(hereinafter referred to as “Luxembourg tax”);

(b) in respect of the Principality of Andorra:

(i) the corporation tax;

(ii) the tax on income from economic activities

(iii) the tax on income of non-tax residents; and

(iv) capital gains tax on the transfer of real estate assets;

(hereinafter referred to as “Andorran tax”).

 

4. The Convention shall apply also to any identical or substantially similar taxes imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes, and to any other tax imposed on the same basis date of signature of the Convention in addition to or in place of the existing taxes, and to any other taxes within the scope of this Convention which either within the scope of this Convention which may be imposed in the future by either Contracting State, in particular the personal income tax of Andorra. The competent authorities of the Contracting States shall inform each other of any significant changes in their tax laws.

 

 Article 3

           GENERAL DEFINITIONS

1. For the purposes of this Convention, unless the context otherwise requires

 

(a) 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;

(b) the term “Andorra” means the Principality of Andorra and, when used in a geographical sense, means the territory of the Principality of Andorra

(c) the terms “Contracting State” and “other Contracting State” mean Luxembourg or Andorra, as the case may be;

(d) the term “person” includes an individual, a company and any other body of persons;

(e) the term “company” means any legal person or any entity which is treated as a legal person for tax purposes

(f) “corporation” means any body corporate or any entity which is treated as a body corporate for tax purposes;

(g) the term “business” means the carrying on of any activity or business

(h) 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;

(i) the term “international traffic” means any transport by a ship, aircraft or road vehicle operated by an enterprise whose place of effective management is in a Contracting State, except where the ship, aircraft or road vehicle is operated solely between points in the other Contracting State

(j) the term “competent authority” means:

(i) in relation to Luxembourg, the Minister of Finance or his authorized representative;

(ii) in relation to Andorra, the Minister of Finance or his authorized representative;

(k) the term “national”, in relation to a Contracting State, means:

(i) any individual who is a national or citizen of that Contracting State; and

(ii) any legal person, partnership or association organized under the laws in force in that Contracting State

 (l) the terms “activity”, in relation to an enterprise, and “business” include the practice of professional or other activities of an independent character

 

2. For the purposes of the application of the Convention at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has at that time under the law of that State concerning the taxes to which the Convention applies, the meaning given to that term by the of that State in relation to the taxes to which the Convention applies, the meaning of such term under the tax law of that State prevailing law of that State shall prevail over the meaning given to that term or expression 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 in that State by reason of the person’s domicile under the laws of that State is liable to tax in that State by reason of his domicile, residence, place of management or any other criterion of a similar nature and shall also apply to that State and to all local authorities thereof. local authorities. However, this term shall not include any person who is subject to tax in that State only on income from sources

However, this term shall not include any person who is subject to tax in that State in respect only of income from sources in that State or of capital situated therein.

 

2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States

(a) such individual shall be deemed to be a resident of both Contracting States in respect of income from sources in that State or capital situated therein such individual 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 he has a permanent home available to him resident only of the State with which his personal and economic relations are closer (center of vital interests);

(b) if the State in which that person has his center of vital interests cannot be determined, or if he has no permanent home available to him in either State. if the State in which such person has his centre of vital interests cannot be determined, or if he has no permanent home available to him in either State, he shall be deemed to be a resident only of the State in which he is the State in which he has an habitual abode

(c) if that person is ordinarily present in both States or is not ordinarily present in either State, he shall be deemed to be a resident only of the State in which he is ordinarily present. if such person is ordinarily present 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

(d) if such person is a national of both States or of neither, the competent authorities of the Contracting States shall settle the question by mutual agreement.

 

3. Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, he shall be deemed to be a resident only of the State in which his 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 in particular:

(a) a place of management;

(b) a branch office

(c) an office;

(d) a factory

(e) a workshop;

(f) a mine, oil or gas well, quarry or other place of extraction of natural resources

And

(g) a farm, ranch or forestry operation.

 

3. A construction, assembly or dredging site constitutes a permanent establishment only if its duration exceeds 12 months.

 

4. Notwithstanding the foregoing provisions of this Article, the term “permanent establishment” shall be deemed not to include

(a) use is made of facilities solely for the purpose of storage, display or delivery of goods or merchandise use is made of facilities solely for the purpose of storing, displaying or delivering goods or merchandise belonging to the enterprise;

(b) goods or merchandise belonging to the enterprise are stored for the sole purpose of storage, display or delivery. goods belonging to the business are stored solely for the purpose of storage, display or delivery;

(c) goods owned by the business are stored solely for the purpose of processing by another business;

(d) a fixed place of business is used solely for the purpose of purchasing goods or gathering information for the enterprise

(e) a fixed place of business is used solely for the purpose of carrying on any other activity of a preparatory or auxiliary character for the enterprise

(f) a fixed place of business is used solely for the purpose of carrying on the activities referred to in subparagraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from such combination remains of a preparatory or auxiliary character of a preparatory or ancillary nature.

 

5. Notwithstanding the provisions of paragraphs 1 and 2, where a person – other than an agent with independent status to whom paragraph 6 applies – is acting on behalf of an enterprise and has in a Contracting State to whom paragraph 6 applies – is acting on behalf of an enterprise and has in a Contracting State the usual

(b) where a person – other than an agent of an independent status to whom paragraph 6 applies – is acting on behalf of an enterprise and has, and habitually exercises, an authority in a Contracting State to conclude contracts in the name of the enterprise, that

enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 and which, if carried on through a fixed place of business, would not permit to consider that place of business as a permanent establishment under the provisions of that paragraph.

 

6. An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business by reason only that it carries on business in that State through a broker, general commission agent or any other agent of an independent state provided that such persons are acting in the ordinary course of their business.

 

7. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is resident of the other Contracting State or carrying on business in that other State (whether through a permanent establishment or otherwise) is not 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 Contracting State (whether through a permanent establishment or otherwise) shall not of itself constitute a permanent establishment of the other company.

 

Article 6

      PROPERTY INCOME

1. Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.

 

2. The term “immovable property” shall have the meaning which it has under the law of the Contracting State in which the property concerned is situated. 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 the provisions of private law respecting landed property, the usufruct of immovable property and rights to payments for rights to variable or fixed payments for the exploitation or concession of the exploitation of mineral deposits, springs and

mineral deposits, springs and other natural resources; ships, boats and aircraft are not considered to be ships, boats and aircraft are not considered as real estate.

 

3. The provisions of paragraph 1 shall apply to income from the direct exploitation, rental or leasing, as well as from any other form of exploitation of real estate.

 

4. The provisions of paragraphs 1 and 3 shall also apply to income from the real estate of an enterprise.

 

  Article 7

         COMPANY 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. situated therein. If the enterprise carries on business in such a manner, the profits that are attributable to the permanent establishment in accordance with the provisions of paragraph 2 may be taxed in the other State.

 

2. For the purposes of this Article and Article 22, the profits which are attributable in each Contracting State to the permanent establishment referred to in paragraph 1 shall be those which it could have realized, in particular in its internal transactions with other parts of the internal transactions with other parts of the enterprise, if it had constituted a distinct and independent enterprise engaged in the same or similar activities under the same or similar conditions, taking into account the functions performed, the assets used and the risks assumed by the same or similar conditions, having regard to the functions performed, the assets used and the risks assumed by the enterprise through the permanent establishment and the other parts of the enterprise.

 

3. Where, in accordance with paragraph 2, a Contracting State adjusts the profits that are attributable to a permanent establishment of an enterprise of a permanent establishment of an enterprise of one of the Contracting States and taxes accordingly profits of the enterprise which have been taxed in the other State, that other State shall make an appropriate adjustment to the amount of tax which has been the tax that has been charged on those profits to the extent necessary to eliminate the double taxation on those profits. In determining such adjustment, the competent authorities of the Contracting States shall consult each other as necessary.

 

4. Where profits include items of income which are dealt with separately in other Articles of this Convention, the provisions of those Articles shall not be affected by the provisions of this Article.

 

 Article 8

       MARITIME, INLAND AND AIR NAVIGATION

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. Profits from the operation of inland waterway vessels shall be taxable only in the Contracting State in which in the Contracting State in which the place of effective management of the enterprise is situated.
3. If the place of effective management of a maritime or inland navigation enterprise is on board a ship or boat, that place of effective management shall be ship, that place of business shall be deemed to be in the Contracting State in which the home port of that ship or boat is situated, or ship or boat, or, if there is no home port, in the Contracting State of which the operator of the ship or boat is a resident.

 

4. The provisions of paragraph 1 shall also apply to profits from participation in a pool, a joint business or an international operating agency.

 

Article 9

     ASSOCIATED ENTERPRISES

1. Where

(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 

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and of an enterprise of the other Contracting State, and in either case the two enterprises are connected in their commercial or financial relations by conditions agreed upon or imposed which differ from those which would be agreed upon between independent profits which, but for those conditions, would have been earned by one of the enterprises but could not in fact have been earned by the other reason of those conditions, 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 taxed in that other State, and the profits have been taxed in that other State, then the profits shall be taxed in that other State. profits on which an enterprise of the other Contracting State has been taxed 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 agreed upon between the two enterprises had been those which would have been agreed upon between independent enterprises, the other State shall make an appropriate adjustment to the amount of tax imposed therein on such profits. In determining such adjustment, due regard shall be given to the other provisions of this Convention and, if necessary, the competent authorities of the competent authorities of the Contracting States shall 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, such dividends may also be taxed in the Contracting State of which the company paying the dividends is resident, and 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

(a) 5 percent of the gross amount of the dividends, if the beneficial owner is a company (other than a partnership) which holds directly at least 10 percent of the capital of the company paying the dividends

or 0 per cent of the gross amount of the dividends, if the beneficial owner directly and continuously holds uninterruptedly, for at least a 12-month period, at least 10 per cent of the capital of the company paying the dividends or a paying the dividends or a participation with an acquisition price of at least 1,200,000 Euro in the company paying the dividends;

(b) 15 percent 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 used to pay the dividends.

 

3. The term “dividends” as used in this article means income from shares, jouissance shares or warrants, mining shares, mining shares, founder’s shares or other profit shares, with the exception of claims, as well as income from other income from other shares which is subjected to the same taxation treatment as income from shares by the laws of the State of which the distributing company is resident.

 

4. The provisions of 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 business activity through a permanent establishment situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment. is effectively connected with it. In such case, the provisions of Article 7 shall apply.

 

5. 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 dividends paid by the company, except to the extent that such dividends are paid to a resident of that other State paid to a resident of that other State or to the extent that the holding in respect of which the dividends is effectively connected with a permanent establishment situated in that other State, nor impose any tax, in respect of the taxation of the company’s undistributed profits, even if the dividends paid or the undistributed profits consist of paid or the undistributed profits consist wholly or partly of profits or income arising in that other State.

 

 Article 11

INTERESTS

1. Interest arising in a Contracting State and beneficially owned by a resident of the other Contracting State shall be taxable only in that other State.

 

2. The term “interest” as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage or hypothec 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 public funds and bonds, including premiums and prizes attached thereto. Penalties for late payment shall not be penalties for late payment shall not be considered as interest within the meaning of this section.

 

3. The provisions of paragraph 1 shall not apply where the beneficial owner of the interest, being a resident of a Contracting State, exercises of a Contracting State carries on business in the other Contracting State in which the interest arises through a permanent establishment situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with effectively connected therewith. In such case, the provisions of Article 7 shall apply. 

 

4. Interest shall be deemed to arise in a Contracting State when the payer is a resident of that State. However, where the payer of the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in a Contracting State in connection with which the indebtedness on which the interest is paid was incurred and which interest, such interest shall be deemed to arise in the State in which the permanent establishment is situated.

 

5. Where, by reason of a special relationship between the debtor and the beneficial owner or between both of them and third parties, the amount of interest, taking into account the claim for which it is paid, is with third parties, the amount of interest, having regard to the claim for which it is paid, exceeds that which would the debtor and the beneficial owner would have agreed in the absence of such relationship, the provisions of this article shall apply only to the latter amount. In such a 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

  FEES

1. Royalties arising in a Contracting State and beneficially owned by a resident of the other Contracting State shall be taxable only in that other State.

 

2. The term “royalties” as used in this Article means payments of any kind received for the use of or the right to use of, or the right to use, any copyright of literary, artistic or scientific work, including cinematograph films, of a or scientific work, including motion pictures, a patent, a trade mark, a design or model, a plan, a formula or a secret plan, formula or process, and for information concerning experience in the industrial, commercial or scientific commercial or scientific field.

 

3. The provisions of paragraph 1 shall not apply where the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise through a permanent establishment situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment. is effectively connected with it. In such case, the provisions of Article 7 shall apply.

 

4. 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 State a permanent establishment in respect of which the taxpayer is liable to pay the royalties, the royalties shall be deemed to arise in that State a permanent establishment in connection with which the obligation to pay the royalties was incurred and which bears the borne by the payer of the royalties, such royalties shall be deemed to arise in the State in which the permanent establishment is situated.

 

5. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and the amount of the royalties, having regard to the service for which they are paid, exceeds the amount for which they are the amount of the royalties, taking into account the performance for which they are paid, exceeds the amount that would have been agreed upon by the obligor and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the latter amount. In such case, the excess part of the payments shall remain 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

     CAPITAL GAINS

 

1. Gains derived by a resident of a Contracting State from the alienation of real 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, including such gains from the alienation of that permanent establishment (alone or with the whole enterprise) may be taxed in that other State.

 

3. Gains from the alienation of ships or aircraft operated in international traffic, inland navigation vessels or movable property pertaining to the operation of such ships, aircraft or vessels shall be taxable only in the (b) the taxable income of the Contracting State in which the place of effective management of the enterprise is situated.

 

4. Gains from the alienation of shares, stocks or similar rights in a company whose assets are property situated in a Contracting State may be taxed in that Contracting 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 transferor is a resident

 

Article 14

EMPLOYMENT INCOME

1. Subject to the provisions of Articles 15, 17 and 18, 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 resident of that State is a national of another State. derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is the employment is exercised in the other Contracting State. If the employment is exercised in that State, remuneration received in respect thereof may be taxed in that other State.

 

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

 

(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 concerned, and 

(b) the remuneration is paid by or on behalf of an employer who is not a resident of the other State, and

(c) the remuneration is not borne by a permanent establishment 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, aircraft or road vehicle operated in international traffic, or aboard a vessel used for inland navigation, shall be inland navigation, may be taxed in the Contracting State in which the place of effective management of the of the enterprise is situated.

 

Article 15

TANTIEMS

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 as a member of the board of directors or supervisory board of a company which is a resident of the other Contracting State, may be taxed in that may be taxed in that other State.

 

Article 16

ARTISTS AND SPORTSMEN

1. Notwithstanding the provisions of Articles 7 and 14, income derived by a resident of a Contracting State from personal activities exercised in the other Contracting State as an entertainer, such as a theater, motion picture, radio or radio or television artiste, or musician, or as an athlete, may be taxed in that other State.

.

2. Where income from activities which an entertainer or sportsperson performs personally and in that capacity is attributed not to the entertainer or athlete himself but to another person, such income may be taxed, notwithstanding the provisions of Articles 7 and 14, such income may be taxed in the Contracting State in which the activities of the entertainer or sportsperson are carried on.

.

 Article 17

PENSIONS

1. Subject to the provisions of paragraph 2 of Article 18, pensions and other similar remuneration paid to a resident of a Contracting State in respect of past employment shall be taxable only in that State.

 

2. Notwithstanding the provisions of paragraph 1, pensions and other amounts paid under the social security legislation of a Contracting State to a resident of that State shall be taxable only in that State. social security legislation of a Contracting State shall be taxable only in that State.

 

3. Notwithstanding the provisions of paragraph 1, pensions and other similar remuneration (including remuneration (including lump-sum payments) arising in a Contracting State and paid to a resident of the other Contracting State shall not be taxable in the other Contracting State if such payments are derived from contributions, allowances or insurance premiums contributions, allowances or insurance premiums paid to a supplementary pension plan by or on behalf of the recipient, or contributions made by the contributions, allowances, insurance premiums or endowments made by the employer to a domestic plan, and if such contributions, allowances, insurance premiums or endowments have actually been taxed in the first-mentioned Contracting State.

 

Article 18

PUBLIC OFFICES

1. (a) Salaries, wages and other similar remuneration paid by a Contracting State 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.

(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:

(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. (a) Notwithstanding the provisions of paragraph 1, pensions and other similar remuneration paid by a

(a) Notwithstanding the provisions of paragraph 1, pensions and other similar remuneration paid by a Contracting State or a local authority thereof, either directly or out of funds established by them, to a person who has become a resident of that State solely for the purpose of rendering services. or out of funds constituted by them, to an individual in respect of services rendered to that State or local 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 that State and is a national of that State.

 

3. The provisions of Articles 14, 15, 16 and 17 shall apply to salaries, wages, pensions and other similar remuneration paid in respect of services rendered to the individual. remuneration paid in respect of services rendered in connection with a business carried on by a Contracting State or a State or a local authority thereof.

 

Article 19

STUDENTS

Amounts paid to a student or a trainee who is, or immediately before visiting a Contracting State was, a resident of that State in respect of services rendered in the course of a business carried on by a Contracting State or a local authority thereof. State, a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of pursuing his or her studies. education or training, receives to cover his maintenance, education or training expenses shall not be taxable in that State, provided that they are State, provided that they are derived from sources outside that State

 

Article 20

OTHER INCOME

1. Items of income of a resident of a Contracting State, wherever arising, which are not dealt with in the foregoing Articles of this Convention shall be taxable only in that State. the preceding Articles of this Convention shall be taxable only in that State.

 

2. The provisions of paragraph 1 shall not apply to income other than income from real property as defined in property as defined in paragraph 2 of Article 6, where the recipient of such income, being a resident of a Contracting State, carries on business in the Contracting State carries on business in the other Contracting State through a permanent establishment situated therein and situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment. In such case, the provisions of In such case, the provisions of Article 7 shall apply.

 

Article 21

FORTUNE

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 may be taxed in that other State.

 

3. Capital represented by ships and aircraft operated in international traffic, by vessels used for inland navigation, and by movable property pertaining to the operation of such ships, aircraft or vessels 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 22

ELIMINATION OF DOUBLE TAXATION

1. Subject to the provisions of the laws of Luxembourg regarding the elimination of double taxation which do not affect the general principle thereof, double taxation shall be eliminated in the following manner 

a) Where a resident of Luxembourg receives income or possesses capital which, in accordance with the provisions of this Convention, may be taxed in Andorra, Luxembourg shall exempt such income or capital from tax, subject to the provisions of this Convention. income or capital, subject to the provisions of subparagraphs (b) and (c), but may, for the purpose of calculating the amount of tax on the remainder of the resident’s income or capital, apply the same rates of tax as if the income or capital as if the income or capital had not been exempted.

b) When a resident of Luxembourg receives items of income which, in accordance with the provisions of Articles 10 and 16, may be taxed in Andorra, Luxembourg shall apply the personal income tax or tax on the income of individuals or on the income tax of communities of that resident, a deduction of an amount equal to the tax paid in Andorra. This deduction may not, however, exceed the fraction of the tax, calculated before deduction, corresponding to these items of income. deduction, corresponding to these items of income received in Andorra.

c) The provisions of subparagraph a) shall not apply to income received or capital owned by a resident of Luxembourg, where Andorra applies the provisions of this Convention to exempt such income or to exempt such income or capital from tax or applies the provisions of paragraph 2 of Article 10 to such income.

 

2. Subject to the provisions of the laws of Andorra concerning the elimination of double taxation which do not affect the general principle thereof principle, double taxation shall be eliminated as follows:

a) Where a resident of Andorra receives income or possesses capital which, in accordance with the provisions of this Convention, may also be taxed in Luxembourg, Andorra shall allow on the tax resident, a deduction from the tax which it collects from that resident of an amount equal to the tax on income or capital paid in Luxembourg. This deduction may not, however, exceed the fraction of the Andorran tax, calculated before deduction, corresponding to the income or wealth taxable in Luxembourg.

(b) Where, pursuant to the provisions of the Convention, a resident of Andorra receives income or possesses capital which is exempt from tax in Andorra, Andorra may nevertheless, for the purpose of calculating the tax due on the other elements of the income or capital of that resident, take into account the exempted income or exempted income or capital.

 

Article 23

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 or more burdensome than those to which nationals of that other State in the same circumstances, in particular with regard to residence, are or may be subjected. This provision shall apply to any person who is not a national of a Contracting State and is not a national of a Contracting State. This provision shall apply notwithstanding the provisions of Article 1, to persons who are not residents of one or both of the Contracting States.

 

2. The taxation of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favorably assessed in that other State than the taxation of enterprises of that other State carrying on the same business carrying on the same activity. This provision shall not be construed to require a Contracting State to grant to residents of the other Contracting State personal allowances, reliefs and reductions of tax on the basis of This provision shall not be construed to require a Contracting State to grant to residents of the other Contracting State the personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities that it grants to its own residents

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3. Unless the provisions of paragraph 1 of Article 9, paragraph 5 of Article 11 or paragraph 5 of Article 12 are 5 of Article 12 shall apply, interest, royalties and other expenses paid by an enterprise of a Contracting State to a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of that of that enterprise under the same conditions as if they had been paid to a resident of the first-mentioned State. Likewise, debts of an enterprise of a Contracting State to a resident of the other Contracting State shall be deductible in determining the taxable capital of that enterprise, under the same conditions as if they had been contracted with a resident of the first-mentioned State.

 

4. Enterprises of a Contracting State, the capital of which is wholly or partly, directly or indirectly 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 to any taxation or any requirement connected therewith to 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 other similar enterprises of the first-mentioned State.

 

5. The provisions of this Article shall apply, notwithstanding the provisions of Article 2, to taxes of every kind and description. nature or description.

 

Article 24

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 the provisions of this Convention, he may, irrespective of the remedies provided by the domestic law of those States, submit his case to the competent authority of the Contracting State of which it is a resident or, if its case comes under paragraph 1 of Article 23, to that of the Contracting State of which it is a national. State of which he is a national. The case must be submitted within three years from the first notification of the measure that results in taxation not in accordance with the provisions of the Convention.

 

2. The competent authority shall endeavor, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the matter. to resolve the case by mutual agreement with the competent authority of the other Contracting State with a view to Contracting State, with a view to the avoidance of taxation not in accordance with the Convention. The agreement shall be applied irrespective of the time limits provided by the domestic law of the Contracting States.

 

3. The competent authorities of the Contracting States shall endeavor by mutual agreement to resolve any difficulties or doubts or to resolve any doubts 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.

 

4. The competent authorities of the Contracting States may communicate directly with each other, including through a joint committee composed of such authorities or their representatives, with a view to reaching an agreement as described in the preceding paragraphs.

 

Article 25

EXCHANGE OF INFORMATION

 

1. The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant to carry out the provisions of this Convention or for the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the taxes of every kind and description imposed on behalf of the Contracting States or their local authorities to the extent that the 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.

 

2. 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 persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of the taxes referred to in paragraph 1 the assessment or collection of the taxes referred to in paragraph 1, in proceedings or prosecutions in respect of such taxes, in or in the determination of appeals in relation to such taxes, or in the enforcement of any of the foregoing. Such persons or authorities shall use such information only for such purposes. They may disclose such information in public court hearings or in judgments. court hearings or in judgments.

 

3. In no case shall the provisions of paragraphs 1 and 2 be construed to require a Contracting State to obligation

(a) to take administrative action at variance with the laws and administrative practice of that or of the other Contracting State

(b) to supply information that is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State

(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.

 

4. If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall the other Contracting State shall use the powers at its disposal to obtain the information requested, even if it does not need such information for its own tax purposes. The obligation in the preceding sentence is subject to the limitations of paragraph 3 except.  if such limitations are likely to prevent a Contracting State from communicating information solely because it has no domestic interest in the information.

 

5. In no case shall the provisions of paragraph 3 be construed as permitting a Contracting State to refuse to supply information State to refuse to supply requested information solely because the information is held by a bank, other financial a bank, other financial institution, nominee or person acting in an agency or fiduciary capacity or because the information relates to the property rights of a person.

 

      Article 26

      MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

The provisions of this Convention shall not affect the fiscal privileges of members of diplomatic missions or consular posts diplomatic missions or consular posts and members of permanent delegations to international organizations under the international organizations under the general rules of international law or under the provisions of special agreements.

 

      Article 27

     ENTRY INTO FORCE

1. Each of the Contracting States shall notify the other in writing, through diplomatic channels, of the completion of the procedures required by its legislation for the entry into force of this Convention. procedures required by its law for the entry into force of this Convention. The Convention shall enter into on the date of receipt of the last of these notifications.

 

2. The Convention shall apply

(a) in respect of taxes withheld at source, to income allocated on or after the first day of January in the calendar year immediately following the year in which the Convention enters into force

(b) in respect of other taxes on income and on capital, to the taxes payable in respect of any taxation year beginning on or after the first day of January in the calendar year immediately following the year in which the Convention enters into force in which the Convention enters into force.

 

Article 28

DISCLAIMER

1. This Convention shall remain in force until terminated by a Contracting State. Each Contracting State may denounce the Convention through diplomatic channels with a minimum notice of six months before the end of each calendar year. before the end of each calendar year.

 

2. The Convention shall cease to have effect

(a) with respect to taxes withheld at source, to income allocated on or after January 1 of the calendar year immediately following the year in which notice is given

(b) in respect of other income and capital taxes, to taxes payable for any taxation year beginning on or after January 1 of the calendar year immediately following the year in which the notice is given. in which the notice is given.

 

IN WITNESS WHEREOF, the undersigned, being duly authorized thereto, have signed this Convention.

Done in Luxembourg, this 2nd day of June 2014, in duplicate, in the French and Catalan 

languages, both texts being equally authentic.