CONVENTION
between the Grand Duchy of Luxembourg and Barbados for the avoidance of double taxation and the
prevention of fiscal fraud with regard to taxes on income and on capital

The Government of the Grand Duchy of Luxembourg and the Government of Barbados, desirous of concluding a Convention for the avoidance of double taxation and the prevention of fiscal fraud with regard to taxes on income and on capital, have agreed as follows: follows:

Article 1 Persons concerned

This Convention applies to persons who are residents of a Contracting State or of both Contracting States.

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 local authorities, regardless of the system of collection.

2. Taxes on total income, on total capital, or on elements of income or of capital, including taxes on gains from the alienation of movable property, are regarded as taxes on income and on capital. or real estate, taxes on the total amount of wages paid by companies, as well as taxes on capital gains.

3. The current taxes to which the Convention applies are in particular:

a) in the Grand Duchy of Luxembourg:

(i) personal income tax;
(ii) corporate income tax;
(iii) wealth tax; and
(iv) municipal business tax;
(hereinafter referred to as “Luxembourg tax”);

b) in Barbados:

(i) income tax (including tax on income from premiums);
(ii) corporate income tax (including branch profit tax); and
(iii) the tax on petroleum mining activities;
(hereinafter referred to as “Barbados tax”).

4. The Convention also applies to taxes of an identical or similar nature which are established after the date of signature of the Convention and which are added to or replace existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes made to their tax laws.

Article 3 General definitions

1.For the purposes of this Convention, unless the context requires a different interpretation:

a) the term “Luxembourg” designates the Grand Duchy of Luxembourg and, when used in a geographical sense, it designates the territory of the Grand Duchy of Luxembourg;
b) the term “Barbados” means the island of Barbados and its territorial waters, including any area beyond its territorial waters which under international law and the laws of Barbados is considered to be an area over which the rights of the Barbados can be exercised with regard to the seabed and the subsoil and their natural resources;
c) the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes;
d) the expression “competent authority” means:

(i) in Luxembourg, the Minister of Finance or his authorized representative;
(ii) in Barbados, the Minister responsible for Finance or his authorized representative;

e) the expressions “a Contracting State” and “the other Contracting State” mean, as the context requires, the Grand Duchy of Luxembourg or Barbados;
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;
g) the expression “international traffic” means any transport effected by a ship or aircraft operated by an enterprise the place of effective management of which is situated in a Contracting State, except when the ship or aircraft is operated only between points located in the other Contracting State;
h) the term “person” includes an individual, a company and any other body of persons;
i) the term “national”, in relation to a Contracting State, means:

(i) any natural person who has the nationality or citizenship of that Contracting State; and
(ii) any legal person, partnership or association constituted in accordance with the legislation in force in that Contracting State.

2.For the application of the Convention at a given time by a Contracting State, any term or expression which is not defined therein has, unless the context requires a different interpretation, the meaning assigned to it at that time by law. of that State concerning the taxes to which the Convention applies, the meaning attributed to this term or expression by the fiscal law of that State prevailing over the meaning attributed to it by other branches of the law of that State.

Article 4 Resident

1. For the purposes of this Convention, the expression “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 his domicile, his residence, place of management or any other criterion of a similar nature and also applies to that State and to all its local communities. However, this expression does not include persons who are subject to tax in that State only on income from sources situated in that State or on capital situated there.

2. Where, in accordance with the provisions of paragraph 1, a natural person is a resident of both Contracting States, his situation shall be settled as follows:
a) this person is considered to be a resident only of the State in which he has a permanent home; if he has a permanent home in both states, he is considered a resident only of the state with which his personal and economic ties are closest (center of vital interests);
b) if the State in which that person has the center of his vital interests cannot be determined, or if he does not have a permanent home in any of the States, he shall be regarded as a resident only of the State where she stays in the usual way;
c) if this person is habitually resident in the two States or if he does not habitually reside in either of them, he shall be considered as a resident only of the State of which he is a national;
d) if this person has the nationality of both States or if he does not have the nationality of either of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

3.Where, in accordance with the provisions of paragraph 1, a person other than an individual is a resident of both Contracting States, it shall be deemed to be a resident only of the State in which its place of effective management is situated.

Article 5 Permanent establishment

1. For the purposes of this Convention, the expression “permanent establishment” means a fixed place of business through which an enterprise carries out all or part of its activity.
2.The term “permanent establishment” includes especially:

a) a seat of management;
b) branch;
c) a desk;
d) factory;
e) a workshop, and
f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources.

3. A construction or assembly site, or a drilling installation or installation or a vessel used for the exploration or exploitation of natural resources, constitutes a permanent establishment only if its duration exceeds six months.

4.Notwithstanding the preceding provisions of this article, it is considered that there is no “permanent establishment” if:

a) facilities are used for the sole purpose of storing, displaying or delivering goods belonging to the company;
b) goods belonging to the company are stored for the sole purpose of storage, display or delivery;
c) goods belonging to the company are stored for the sole purpose of processing by another company;
d) a fixed place of business is used for the sole purpose of purchasing goods or gathering information, for the business;
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;
f) a fixed place of business is used solely for the purposes of the cumulative exercise of the activities mentioned in subparagraphs a) to e), provided that the overall activity of the fixed place of business resulting from this combination keeps a preparatory or auxiliary character.

5. Notwithstanding the provisions of paragraphs 1 and 2, where a person – other than an agent enjoying an independent status to which paragraph 6 applies – acts on behalf of an enterprise and has powers in a Contracting State which ” it usually exercises there allowing it to conclude contracts on behalf of the enterprise, this enterprise is considered as having a permanent establishment in that State for all the activities that this person carries out for the enterprise, unless the activities of this person are limited to those mentioned in paragraph 4 and which, if they were carried on through a fixed place of business, would not allow that place to be considered as a permanent establishment under the provisions of that paragraph.
6. A company is not considered to have a permanent establishment in a Contracting State by the sole fact that it carries out its activity there through a broker, a commissionaire general or any other agent enjoying a status. independent, provided that these persons act within the ordinary framework of their activity.

7. 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 there (whether through a permanent establishment or not) is not in itself sufficient to make any one of these companies 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.

2. The expression “immovable property” has the meaning assigned to it by the law of the Contracting State in which the property in question is situated. The expression includes in all cases the accessories, the dead or alive livestock of agricultural and forestry operations, the rights to which the provisions of private law concerning land ownership, the usufruct of immovable property and the rights to variable payments apply. or fixed for the exploitation or concession of the exploitation of mineral deposits, sources and other natural resources; ships, boats and aircraft are not considered real property.

3. The provisions of paragraph 1 apply to income derived from the direct exploitation, rental or leasing, as well as from any other form of exploitation of immovable property.

4. The provisions of paragraphs 1 and 3 also apply to income from immovable property of a business as well as to income from immovable property used for the exercise of an independent profession.

Article 7 Business profits

1. The profits of an enterprise of a Contracting State may be taxed only in that State, unless the enterprise carries on its activity in the other Contracting State through a permanent establishment situated there. If the enterprise carries on business in such a manner, the profits of the enterprise may be taxed in the other State, but only to the extent that they are attributable to that permanent establishment.

2. Notwithstanding the provisions of paragraph 1, where an enterprise of a Contracting State which has a permanent establishment in the other Contracting State carries on in that other State business activities identical or similar to those carried on through that permanent establishment, then to prevent abuse, profits from such activities are attributable to the permanent establishment, unless the enterprise demonstrates that such activities could not reasonably have been undertaken by the permanent establishment.

3. Subject to the provisions of paragraph 4, where an enterprise of a Contracting State carries on its activity in the other Contracting State through a permanent establishment situated therein, it shall be charged, in each Contracting State, to this permanent establishment the profits that it could have made if it had set up a separate enterprise carrying out identical or similar activities under identical or similar conditions and dealing in complete independence with the enterprise of which it constitutes a permanent establishment.

4. To determine the profits of a permanent establishment, expenses incurred for the purposes pursued by this permanent establishment are allowed as deduction, including management expenses and general administrative expenses thus incurred, either in the State in which the said establishment is located. permanent establishment or elsewhere.

5. While it is customary in a Contracting State to determine the profits attributable to a permanent establishment on the basis of an allocation of the total profits of the enterprise among its various parts, nothing in paragraph 3 prevents this Contracting State to determine the taxable profits according to the distribution in use; the distribution method adopted must, however, be such that the result obtained complies with the principles contained in this article.

6. No profit is attributed to a permanent establishment simply because it has purchased goods for the business.

7. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment are determined each year using the same method, unless there are valid and sufficient reasons for proceeding otherwise.

8. Where profits include items of income treated 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, in international traffic, of ships or aircraft are taxable only in the Contracting State where the place of effective management of the enterprise is situated.

2. Profits from the operation of vessels used for inland navigation are taxable only in the Contracting State where 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, this place of business shall be deemed to be situated in the Contracting State in which the home port of that ship is located. or of that vessel, or if there is no home port, in the Contracting State of which the operator of the vessel or vessel is a resident.

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

Article 9 Associated enterprises

1. When
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 that, in either case, the two companies are, in their commercial or financial relations, bound by conditions agreed or imposed, which differ from those which would be agreed between independent companies, the profits which, without these conditions, would have been fulfilled by one of the undertakings, but could not in fact be fulfilled because of these conditions, can be included in the profits of that undertaking 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 so included are profits which would have been realized by the enterprise of the first State if the conditions agreed between the two enterprises had been those which would have been agreed between independent enterprises, the other State makes an appropriate adjustment of the amount of tax therein. been levied on these profits. In determining this adjustment, account shall be taken of the other provisions of this Convention and, if necessary, 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 a 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 thus established may not exceed:
a) 0 percent of the gross amount of the dividends, if the beneficial owner is a company (other than a partnership) that directly owns at least 10 percent of the capital of the company paying the dividends for an uninterrupted period of at least 12 months preceding the decision to distribute the dividends;
b) 15 per cent of the gross amount of the dividends, in all other cases.

This paragraph does not affect the taxation of the company in respect of the profits out of which the dividends are paid.

3. The term “dividends” used in this article means income from shares, shares or profit-sharing certificates, mine shares, founder’s shares or other beneficiary shares with the exception of claims, as well as income from other shares. social security subject to the same tax regime as income from shares by the legislation of the State of which the distributing company is a resident, and in the case of Luxembourg the profit shares affected, due to its investment in a commercial enterprise , industrial, mining or artisanal, by the financial backer remunerated in proportion to the profit as well as the arrears and interest on bonds when a right to allotment is granted for these securities, apart from the fixed interest, d ‘additional interest varying according to the amount of profit distributed.

4. The provisions of paragraphs 1 and 2 do not apply where the beneficial owner of the dividends, resident in a Contracting State, exercises in the other Contracting State of which the company paying the dividends is a resident, either an industrial activity or business through a permanent establishment located there, or an independent profession through a fixed base located there and that the dividend-generating participation is actually attached to it. In this case, the provisions of article 7 or article 14, as the case may be, 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 levy any tax on the dividends paid by the company, except to the extent that such dividends are paid to a resident of that other State or to the extent that the dividend-generating participation is effectively attached to a permanent establishment or to a fixed base situated in that other State, nor to levy any tax, in respect of the taxation of profits undistributed, out of the undistributed profits of the company, even if the dividends paid or the undistributed profits consist wholly or in part of profits or income deriving from that other State.

6. Where a company which is a resident of a Contracting State having a permanent establishment in the other Contracting State, withdraws profits or income from that permanent establishment, the other Contracting State may not levy any tax on any transfer or transaction. assimilated to a transfer of these profits or income, and carried out by this permanent establishment for the benefit of the company which is a resident of the first Contracting State.

Article 11 Interest

1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed only in that other State, if that resident is the beneficial owner thereof.

2. The term “interest” used in this article designates income from debts of any kind, whether or not accompanied by mortgage guarantees or a profit-sharing clause of the debtor, and in particular income from public funds and loan obligations. , including the bonuses and prizes attached to these securities. However, the term “interest” does not include the income referred to in article 10. Penalties for late payment are not considered as interest within the meaning of this article.

3. The provisions of paragraph 1 shall not apply where the beneficial owner of the interest, resident in a Contracting State, exercises in the other Contracting State from which the interest arises, either an industrial or commercial activity through the intermediary of a permanent establishment located there, or an independent profession by means of a fixed base located there, and that the interest-generating claim is actually attached to it. In this case, the provisions of article 7 or article 14, as the case may be, shall apply.

4. When, by reason of special relations existing between the debtor and the beneficial owner or that both have with third parties, the amount of interest, taking into account the claim for which they are paid, exceeds that of which agreed between the debtor and the beneficial owner in the absence of such a relationship, the provisions of this article only apply to the latter amount. In this case, the excess part of the payments remains taxable according to the legislation of each Contracting State and taking into account the other provisions of this Convention.

Article 12 Royalties

1. Royalties arising in a Contracting State and the beneficial owner of which is a resident of the other Contracting State may be taxed only in that other State.

2. The term “royalties” used in this article, means the remuneration of any kind paid for the use or the concession of the use of a copyright in a literary, artistic or scientific work, including cinematographic films. , discs or tapes for radio or television, a patent, a trade mark, a design or a model, a plan, a formula or a secret process, as well as for the use or concession of the use of industrial, commercial or scientific equipment and for information relating to experience acquired in the industrial, commercial or scientific field.

3. The provisions of paragraph 1 shall not apply where the beneficial owner of the royalties, resident in a Contracting State, exercises in the other Contracting State from which the royalties originate, either an industrial or commercial activity through the intermediary of a permanent establishment located there, or an independent profession by means of a fixed base located there, and that the right or the property generating the royalties is actually attached to it. In this case, the provisions of article 7 or article 14, as the case may be, shall apply.

4. When, by reason of special relations existing between the debtor and the beneficial owner or that both have with third parties, the amount of the royalties, taking into account the service for which they are paid, exceeds that of which agreed between the debtor and the beneficial owner in the absence of such a relationship, the provisions of this article only apply to the latter amount. In this case, the excess part of the payments remains taxable according to the legislation of each Contracting State and taking into account the other provisions of this Convention.

Article 13 Capital gains

1. Gains which a resident of a Contracting State derives 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 which form part of the assets of a permanent establishment which an enterprise of one Contracting State has in the other Contracting State, or from movable property which belongs to a fixed base of which a resident of a Contracting State has in the other Contracting State for the exercise of an independent profession, including such gains arising from the alienation of this permanent establishment (alone or with the whole enterprise) or of this fixed base, are taxable in that other State.

3. Gains from the alienation of ships or aircraft operated in international traffic, ships used for inland navigation or movable property assigned to the operation of such ships, aircraft or boats, are taxable only in the Contracting State where the place of effective management of the company is located.

4. Gains from the alienation of any property other than that referred to in paragraphs 1, 2 and 3, may be taxed only in the Contracting State of which the transferor is a resident.

Article 14 Independent professions

1. Income which a resident of a Contracting State derives from a liberal profession or other activities of an independent character may be taxed only in that State. However, such income may also be taxed in the other Contracting State in the following cases:

a) if that resident usually has a fixed base in the other Contracting State for the pursuit of his activities; in this case, only the portion of the income which is attributable to the said fixed base may be taxed in that other Contracting State; Where
b) if his stay in the other Contracting State is for a period or periods totaling 183 days or more during any twelve month period beginning or ending in the fiscal year in question; in this case, only the fraction of the income which is derived from such activities carried on in the other Contracting State during such period or periods may be taxed in that other State.

2. 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 15 Dependent professions

1. Subject to the provisions of Articles 16, 18, 19 and 21, wages, salaries and other similar remuneration which a resident of a Contracting State receives in respect of paid employment shall be taxable only in that State, unless the employment is not 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 the provisions of paragraph 1, remuneration which a resident of a Contracting State receives in respect of paid employment exercised in the other Contracting State may be taxed only in the first State if:
a) the beneficiary stays in the other State for a period or periods not exceeding in the aggregate 183 days during any twelve month period beginning or ending in the fiscal 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
a) the cost of remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.

3. Notwithstanding the foregoing provisions of this article, remuneration received for salaried employment carried out on board a ship, an aircraft or a road vehicle operated in international traffic, or on board a vessel used for inland navigation, are taxable in the Contracting State where the place of effective management of the company is located.

Article 16 Directors’ fees

Directors’ fees, attendance fees and other similar remuneration that a resident of a Contracting State receives in his capacity as a member of the board of directors or supervisory board of a company which is a resident of the other Contracting State, are taxable. in that other state.

Article 17
Artists and sportsmen

1. Notwithstanding the provisions of Articles 7, 14 and 15, the income which a resident of a Contracting State derives from his personal activities carried on in the other Contracting State as a performing artist, such as a theater artist, of cinema, radio or television, or as a musician, or as an athlete, are taxable in that other State.

2. When the income from activities that an entertainer or an athlete exercises personally and in this capacity, are attributed not to the artist or to the athlete himself, but to another person, this income is taxable, notwithstanding the provisions of Articles 7, 14 and 15, in the Contracting State where the activities of the artist or sportsman are carried out.

3. The provisions of paragraphs 1 and 2 do not apply to income received from activities carried on in a Contracting State by performing artists or sportsmen when the stay in that State is financed mainly by public funds of the other Contracting State. or one of its local communities. In this case, the income is taxable only in the State of which the entertainer or the sportsman is a resident.

Article 18 Pensions

1. Subject to the provisions of paragraph 2 of article 19, pensions and other similar remuneration paid to a resident of a Contracting State in respect of previous employment shall be taxable only in that State.

2. Notwithstanding the provisions of paragraph 1, pensions and other sums paid under the social security legislation of a Contracting State may be taxed only in that State.

3. Notwithstanding the provisions of 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 not be taxable in the other Contracting State if such payments arise from contributions, allowances or insurance premiums paid to a supplementary pension scheme by the beneficiary or on his behalf, or from contributions made by the employer to an internal scheme, and if these contributions, allowances, insurance premiums or endowments were actually subject to tax in the first Contracting State.

 

Article 19 Public functions

1.
a) Salaries, wages and other similar remuneration paid by a Contracting State or one of its local authorities to a natural person, for services rendered to that State or to that authority, are 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 if the individual is a resident of that State who:

(i) has the nationality of that State, or
(ii) did not become a resident of that State for the sole purpose of rendering the services.

2.
a) Notwithstanding the provisions of paragraph 1, pensions and other similar remuneration paid by a Contracting State or one of its local authorities, either directly or by deduction from funds which they have established, to a natural person, in respect of services rendered to that State or to that community are 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 holds its nationality.

3. The provisions of Articles 15, 16, 17 and 18 apply to wages, salaries, pensions and other similar remuneration paid for services rendered in the course of an industrial or commercial activity exercised by a Contracting State or one of the of its local communities.

Article 20 Students

The sums that a student, trainee or apprentice who is, or who was, immediately before going to a Contracting State, a resident of the other Contracting State, and who stays in the first State for the sole purpose of continuing his studies or training, received to cover the costs of maintenance, studies or training are not taxable in that State, provided they come from sources outside that State.

Article 21 Professors and teachers

1. A natural person who was a resident of a Contracting State immediately before traveling to the other Contracting State, and who at the invitation of a school, university, or other similar educational institution without profit-making, remains in that other State for a period not exceeding two years from the date of his first arrival in that other State, in order to teach or to carry out research there, or both, in such educational institutions, is exempt from taxes in that other State on the remuneration received for such teaching or research.

2. The provisions of paragraph 1 of this article shall not apply to remuneration received for teaching or carrying out research if such teaching or research is undertaken not in the public interest but mainly for the private benefit of a specific person or of determined people.

Article 22 Other income

1. Items of income of a resident of a Contracting State, wherever they arise, which are not dealt with in the preceding articles of this Convention, shall be taxable only in that State.
2. The provisions of paragraph 1 do not apply to income other than income from immovable property as defined in paragraph 2 of article 6, when the beneficiary of such income, resident of a Contracting State, exercises in the other Contracting State, either an industrial or commercial activity through the intermediary of a permanent establishment situated there, or an independent profession by means of a fixed base situated there, and that the law or the good income generator is actually attached to it. In this case, the provisions of article 7 or article 14, as the case may be, shall apply.

Article 23 Fortune

1. The fortune constituted by immovable property referred to in Article 6, owned by a resident of a Contracting State and which is situated in the other Contracting State, may be taxed in that other State.
2. The fortune constituted by movable property which forms part of the assets of a permanent establishment that an enterprise of a Contracting State has in the other Contracting State or by movable property which belongs to a fixed base of which a resident of A Contracting State has in the other Contracting State for the exercise of an independent profession, is taxable in that other State.
3. The fortune constituted by ships and aircraft operated in international traffic, by ships used for inland navigation as well as by movable property assigned to the operation of these ships, aircraft or boats, is taxable only in the State contracting party where the place of effective management of the company is located.

4. All other elements of the capital of a resident of a Contracting State are taxable only in that State.

 

Article 24 Elimination of double taxation

1. With regard to Luxembourg, subject to the provisions of Luxembourg law concerning the elimination of double taxation which do not affect its general principle, double taxation is eliminated as follows:
a) where a resident of Luxembourg receives income or possesses capital which, in accordance with the provisions of this Convention, is taxable in Barbados, Luxembourg shall exempt such income or capital from tax, subject to the provisions of sub-paragraphs b) and c), but may, in order to calculate the amount of tax on the remainder of the resident’s income or capital, apply the same tax rates as if the income or capital had not been exempt;
b) when a resident of Luxembourg receives items of income which, in accordance with the provisions of Articles 10 and 17, are taxable in Barbados, Luxembourg grants on personal income tax or on corporate income tax from that resident, a deduction in an amount equal to the tax paid in Barbados. This deduction may not, however, exceed the fraction of the tax, calculated before deduction, corresponding to these items of income received from Barbados;
c) the provisions of sub-paragraph a) shall not apply to income received or to capital possessed by a resident of Luxembourg, where Barbados applies the provisions of this Convention to exempt such income or capital from tax or applies the provisions of paragraph 2 of Article 10 to this income.

(2). In the case of Barbados, subject to the provisions of the laws of Barbados relating to the deduction of Barbados tax from foreign tax due, which do not affect the general principle thereof, double taxation is eliminated as follows:
a) the tax due, under Luxembourg law and in accordance with the Convention, directly or by withholding, on profits or income from Luxembourg sources (excluding, in the case of a dividend, the tax due to the title to the profits used for the payment of the dividend) is deductible from any Barbadian tax calculated on the basis of the same profits or income on which Luxembourg tax is calculated;
b) however, the deduction may in no case exceed the fraction of the tax, calculated before deduction, corresponding to the income which is taxable in Luxembourg.

Article 25
Non-discrimination

1. Nationals of a Contracting State shall not be subject in the other Contracting State to any taxation or obligation relating thereto which is different or heavier than those to which nationals of that other State who are in the same State are or may be subject. situation, in particular with regard to the residence. This provision also applies, notwithstanding the provisions of Article 1, to persons who are not residents of a Contracting State or of both Contracting States.

2. The taxation of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State is not established in that other State in a less favorable manner than the taxation of enterprises of that other State. who carry out the same activity. This provision may not be interpreted as obliging a Contracting State to grant to residents of the other Contracting State the personal deductions, allowances and tax reductions according to the situation or the family responsibilities which it grants to its own residents. .

3. Unless the provisions of paragraph 1 of article 9, paragraph 4 of article 11 or paragraph 4 of article 12 apply, interest, royalties and other expenses paid by an enterprise of a State contracting to a resident of the other Contracting State, are deductible, for the determination of the taxable profits of this enterprise, under the same conditions as if they had been paid to a resident of the first State. Likewise, the debts of an enterprise of a Contracting State towards a resident of the other Contracting State are deductible, for the determination of the taxable fortune of this enterprise, under the same conditions as if they had been contracted towards a resident. of the first state.

4. Companies of a Contracting State, the capital of which is wholly or in part, directly or indirectly, owned or controlled by one or more residents of the other Contracting State, are not subject in the first State to any taxation or obligation therein. relative, which is different or heavier than those to which the other similar enterprises of the first State are or may be subject.

5. The provisions of this article apply to the taxes covered by this Convention.

 

Article 26 Mutual agreement procedure

1. Where a person considers that the measures taken by a Contracting State or by both Contracting States result or will result for him or her in taxation not in accordance with the provisions of this Convention, he may, independently of the remedies provided for by the internal law of those States, submit her case to the competent authority of the Contracting State of which she is a resident or, if her case falls under paragraph 1 of Article 25, to that of the Contracting State of which she is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Convention.

2. The competent authority shall endeavor, if the complaint appears to it to be justified and if it is not itself able to find a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, for the avoidance of taxation which is not in accordance with the Convention. The agreement is applied regardless of the time limits provided for by the internal law of the Contracting States.

3. The competent authorities of the Contracting States shall endeavor, by mutual agreement, to resolve any difficulties or to dispel any doubts which may arise in 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 with each other directly, including within a joint commission composed of these authorities or their representatives, with a view to reaching an agreement as indicated in the preceding paragraphs.

Article 27 Exchange of information

1. The competent authorities of the Contracting States shall exchange information likely to be relevant for the application of the provisions of this Convention or for the administration or application of the domestic legislation relating to taxes of any kind or name levied on behalf of the Contracting States or their local authorities insofar as the taxation provided for 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 kept secret in the same manner as information obtained under the domestic law of that State and shall only be communicated to persons or authorities (including courts and administrative bodies ) concerned by the establishment or collection of the taxes mentioned in paragraph 1, by the proceedings or prosecutions relating to these taxes, by the decisions on appeals relating to these taxes, or by the control of the foregoing. These persons or authorities only use this information for these purposes. They may reveal this information in public court hearings or in judgments.

3. The provisions of paragraphs 1 and 2 may in no case be interpreted as imposing on a Contracting State the obligation:
a) to take administrative measures at variance with its laws and administrative practice or that of the other Contracting State;
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;
c) to provide information which would reveal a trade secret, industrial, professional or a trade process or information the communication of which would be contrary to public order.

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

5. Under no circumstances may the provisions of paragraph 3 be interpreted as allowing a Contracting State to refuse to provide information on request solely because it is held by a bank, another financial institution, an agent or a person acting in as an agent or trustee or because this information relates to a person’s property rights.

Article 28 Members of diplomatic missions and consular posts

The provisions of this Convention are without prejudice to the fiscal privileges enjoyed by members of diplomatic missions or consular posts by virtue either of the general rules of international law or of the provisions of special agreements.

Article 29 Entry into force

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

2. The Convention will be applicable:
a) in respect of taxes withheld at source, to income derived on or after 1 st 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 taxes on capital, for taxes chargeable for any tax year beginning on or after 1 st January in the calendar year immediately following the year in which the Convention will come into force.

Article 30 Denunciation

1. This Convention shall remain in force until it has been denounced 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 beginning after the expiration of a period of five years from the date of its entry into force.

2.The Convention will cease to be applicable:
a) in respect of taxes withheld at source, to income derived on or after 1 st January in the calendar year immediately following the year in which the notice is given;
b) in respect of other taxes on income and taxes on capital, for taxes chargeable for any year of assessment beginning on or after 1 st January in the calendar year immediately following the year in which the notice given.

IN WITNESS WHEREOF the undersigned, being duly authorized thereto by their respective Governments, have signed this Convention.
Done in duplicate in London on 1 st December 2009 in English and French languages, both texts being equally authentic.