CONVENTION

between Luxembourg and Finland for the avoidance of double taxation with respect to

taxes on income and on capital.

  The Government of Luxembourg and the Government of Finland, Desiring to conclude a Convention for the avoidance of double taxation with Respect to Taxes on Income and on Capital. have agreed as follows:

Article 1

PERSONS COVERED

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

  2.The following shall be considered to be taxes on income and on capital: taxes on total income, on total capital income, on total capital, or on elements of income or capital, including taxes on gains from the alienation of movable or immovable property, taxes on the property, taxes on the total amount of wages paid by enterprises, as well as taxes on and taxes on capital gains.  

3. The existing taxes to which the Convention shall apply are:

(a) for Finland:

(i) the State income and wealth tax (tulo-ja varallisuusvero) ;

(ii) the municipal tax (kunnallisvero )

(iii) the church tax (kirkollisvero) ;

(iv) the tax on the wages of seafarers (merimies vero); and

(v) withholding tax on non-resident income (lähdevero);

(hereinafter referred to as “Finnish tax”);

(b) for Luxembourg:

(i) the personal income tax ;

(ii) the tax on the income of communities ;

(iii) the special tax on directors’ fees

(iv) wealth tax;

(v) the municipal business tax; and

(vi) the communal tax on total wages and salaries;

(hereinafter referred to as “Luxembourg tax”).

 

4. The Convention shall also apply 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. The competent authorities of the Contracting States shall notify each other of any substantial changes which may be made in their respective taxation laws.

Article 3

GENERAL DEFINITIONS

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

(a) the term “Finland” means the Republic of Finland and, when used in a geographical sense, means the territory of the Republic of Finland and any area adjacent to the territorial waters of the Republic of Finland over which of the Republic of Finland and in accordance with international law, the rights of the in conformity with international law, the rights of Finland with respect and exploitation of the natural resources of the seabed and its subsoil; (b) “Luxembourg” means the Grand Duchy of Luxembourg and, when used in a geographical sense, means the territory of the Grand Duchy of Luxembourg; (c) the term “person” includes natural persons, companies and all other groups of personnel (d) the term “company” means any legal person or entity that is treated as a legal person for tax purposes (e) 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 (f) the term “national” means any individual who is a national of a Contracting State and any legal person, partnership and association organized in accordance with the laws in force in a Contracting State; (g) the term “international traffic” means any transport by a ship or aircraft operated by an enterprise the place of effective management of which is situated in a Contracting State, except where the ship or aircraft is operated only between points in the other Contracting State; (h) the term “competent authority” means :

(i) in the case of Finland, the Ministry of Finance or its authorized representative; and

(ii) in the case of Luxembourg, the Minister of Finance or his authorized representative.

 

2. For the purposes of the application of the Convention by a Contracting State, any term not defined therein shall have the meaning which it has under the law of that State concerning the taxes to which Convention applies, unless the context otherwise requires.

Article 4

DOMICILE FOR TAX PURPOSES

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 his domicile, residence, place of management or any other criterion of a similar nature. An undivided estate of a deceased person the taxpayer is a resident of Finland, if the deceased was, by virtue of the preceding sentence or the provisions of paragraph 2, a resident of Finland The term “resident of Finland” means a person who was resident in Finland at the time of his death under the preceding sentence or under the provisions of paragraph 2. However, the term “resident of a Contracting State” does not include persons who are subject to tax in that State in respect only of income from sources in that sources in that State or on capital situated therein.

 

2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, his status shall be determined as follows

(a) such person shall be deemed to be a resident of the State in which he has a permanent home available to him personal and economic ties are closer (center of vital interests); (b) if the State in which the person’s centre of vital interests is situated cannot be determined, or if the person does not have a permanent home in either State, the person shall be deemed to be a resident of the State in which the person has an habitually staying ; (c) if such person has a habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national; d) if such person is a national of both States or of neither of them, the competent authorities 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 of the a resident 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 part of its business.

 

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, and

(f) a mine, quarry or another place of extraction of natural resources. resources.

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

 

4. Notwithstanding the foregoing provisions of this Article, there shall be deemed not to be a “permanent establishment” if :

(a) use is made of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise (b) goods belonging to the business are stored solely for the purpose of storage, display or delivery; (c) goods belonging to the enterprise are stored solely for processing by another enterprise; (d) a fixed place of business is used solely for the purpose of purchasing goods or assembling 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 combined activities referred to in subparagraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from such combination remains preparatory or auxiliary.  

5. Notwithstanding the provisions of paragraphs 1 and 2, where a person other than an independent status to whom paragraph 6 applies is acting on behalf of an enterprise and has an enterprise and has, and habitually exercises in a Contracting State, authority to enter into the person is acting on behalf of an enterprise and has, in a Contracting State, the customary authority 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 all activities which that person undertakes for the enterprise unless the activities of that activities of such person are limited to those mentioned in paragraph 4 which paragraph 4 and which, if exercised through a fixed place of business, would not fixed place of business, would not make it possible to regard such 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 State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in 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 a resident of the other Contracting State or which carries on business in 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 of itself to make any such company a permanent establishment of the other.

Article 6

INCOME FROM REAL 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.

(a) The term “immovable property” shall, subject to the provisions of the provisions of subparagraphs (b) and (c), the term “immovable property” shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. (b) The term “real property” shall in any event include fixtures and fittings, livestock and rights to variable or fixed payments for the exploitation or concession of the exploitation of mineral deposits, springs and other natural resources. c) Ships and aircraft are not considered real property.

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

 

4. Where the ownership of shares or other securities in a company entitles the owner of such shares or to the enjoyment of real estate held by the company, the income from such shares or property held by  company, the income from the direct operation, rental or leasing, or any other form of exploitation of such a right of enjoyment is taxable in The taxable income from the use or enjoyment of immovable property held by the company may be taxed in the Contracting State in which the immovable property is situated.

 

5. The provisions of paragraphs 1 and 3 shall also apply to income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.

 

6. The provisions of paragraph 4 shall also apply to income from a right of use referred to in that right of use referred to in the said paragraph 4 and belonging to an enterprise, as well as to income from such a right of use for the purpose of performing independent personal services.

Article 7

PROFITS OF UNDERTAKINGS

1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the State, unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. 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. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment shall be attributed in each Contracting State to that permanent establishment the profits which it might be expected to make if it were a separate enterprise engaged in separate enterprise engaged in the same or similar activities under the same or similar conditions and the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it permanent establishment.

 

3. In determining the profits of a permanent establishment, there shall be allowed as a deduction expenses incurred for the purposes of that permanent establishment, including the expenses of management and general administrative expenses incurred, either in the State in which the permanent establishment is situated or elsewhere.

 

4. If it is customary in a Contracting State to determine the profits attributable to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various between its various parts, nothing in paragraph 2 shall prevent that Contracting State from determining the taxable profits according to the customary allocation. The method of apportionment adopted shall, however, be such that the result obtained is in accordance with the principles contained in this Article.

 

5. No profit shall be attributed to a permanent establishment by reason of its having merely purchased goods for the enterprise.

 

6. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined annually by the same method unless there are good and sufficient grounds to proceed otherwise.

 

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

 

Article 8

SEA 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 the enterprise is situated.

 

2. If the place of effective management of a shipping enterprise is on board a ship, that place of effective management shall be deemed to be If the place of effective management of a shipping enterprise is on board a ship, that place of effective management shall be deemed to be in the Contracting State in which the port of the ship is situated of the ship, or, if there is no home port, in the Contracting State of which the operator of the ship is a resident.

 

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

Article 9

ASSOCIATED ENTERPRISES

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 an enterprise of the other Contracting State,  and in either case the two enterprises are, in their commercial or financial relations, bound by or financial relations, are bound by conditions agreed upon or imposed which differ from those which agreed upon or imposed, which differ from those which would be agreed upon between independent enterprises, the profits which, but for those conditions, would have been made by the other enterprise. conditions, the profits which would have accrued to one of the enterprises but which could not in fact have accrued because of conditions may be included in the profits of that enterprise and taxed accordingly.

Article 10

DIVIDENDS

1. Dividends paid by a company that is a resident of a Contracting State to a resident of the other residents 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 company paying the dividends is a resident, and according to the laws of that State, but if the dividends is the beneficial owner thereof, the tax so charged shall not exceed :

(a) 5 percent of the gross amount of the dividends if the beneficial owner is a corporation (other than a partnership) that owns directly or indirectly at least 25 percent of the capital of the corporation 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 out of which the dividends are paid.  

3. The term “dividends” as used in this section means income from shares or other profit shares, with the exception of debt claims, as well as income from other corporate units which is subject to the same tax treatment as income from shares under the laws of the State of which the distributing company is a resident.

 

4. The provisions of paragraphs 1 and 2 shall not apply where the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other of which the company paying the dividends is a resident, carries on business in the other Contracting business activity through a permanent establishment situated therein, or performs independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with it. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

 

5. Where a company that is a resident of a Contracting State derives profits or income from the other Contracting State, the company shall be deemed to have an income of the other Contracting State, that other State may not impose 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 holding in respect of which the dividends are paid dividends is effectively connected with a permanent establishment or a fixed base situated in that other  State, nor impose any tax on the undistributed profits by way of taxation on distributed profits, even if the dividends paid or the undistributed profits consist of 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 paid to a resident of the other Contracting State shall be taxable only in that other State if such resident is the beneficial owner.

 

2. The term “interest” as used in this Article means income from debt-claims of any kind, whether or not secured by a mortgage or by any provision for participation in the of the debtor, including income from government securities and income from bonds or debentures bonds, including premiums and prizes attached thereto. The penalties for late payment shall not be considered as interest within the meaning of this of this section.

 

3. The provisions of paragraph 1 shall not apply where the beneficial owner of the interest, being a resident of a interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in the other Contracting State by means of a fixed base situated therein, and the debt-claim in respect of which the interest is effectively connected with it. In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

 

4. Where, by reason of a special relationship between the debtor and the beneficial owner or where both beneficiary or between both of them and third parties, the amount of interest, taking into account interest, taking into account the claim for which it is paid, exceeds that which would have been 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 and having regard to the other provisions of this Convention.

Article 12

ROYALTIES

1. Subject to the provisions of paragraph 2, royalties arising in a Contracting State and paid to a resident of the State and paid to a resident of the other Contracting State may be taxed in that other State, if such resident is the beneficial owner thereof.

 

2. Royalties referred to in subparagraphs (b) and (c) of paragraph 3 may also be (b) and (c) of paragraph 3 may also be taxed in the Contracting State in which they arise and according to the laws of that State, but, if the person the royalties referred to in subparagraphs (b) and (c) of paragraph 3 may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the person receiving the royalties is the beneficial owner thereof, the tax so charged shall not exceed 5 percent of the amount of the royalties paragraph 3 shall also be taxable in the Contracting State in which they arise and according to the laws of that State, but if the person who receives the royalties is the beneficial owner thereof, the tax so charged shall not exceed 5 percent of the gross amount of the royalties. The competent authorities of the authorities of the Contracting States shall by mutual agreement settle the mode of the application of this limitation.

 

3. The term “royalties” as used in this Article means remuneration of any kind paid

(a) for the use of, or the right to use, any copyright in any literary, artistic or scientific work, including motion pictures and films or tapes for television or radio broadcasts; (b) for the use of, or the right to use, any patent, trademark, design or model, secret plan, formula or (c) information relating to industrial, commercial or scientific experience.  

4. The provisions of paragraphs 1 and 2 shall not apply where the royalties, being a resident of a Contracting State, carries on business in the other State in which the royalties arise, carries on business in that other State through a business activity through a permanent establishment situated therein, or independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with it. In such case, the provisions of In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

 

5. Royalties shall be deemed to arise in a Contracting State when the payer is that State itself, a the debtor is that State itself, a public authority, a local authority or a resident of that State. However, where the payer of the royalties, whether or not a resident of a resident of a Contracting State, has in a Contracting State a permanent establishment, or fixed base, in respect of which the contract giving rise to the payment of the royalties was made and which the royalties are borne, such royalties shall be deemed to arise in the State in which the arising in the State in which the permanent establishment or fixed base is situated.

 

6. Where, by reason of a special relationship between the payer and the beneficial owner or where both beneficiary or between both of them and third persons, the amount of the royalties, taking into service for which they are paid exceeds the amount that would have been agreed upon by 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 and having regard 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 paragraph 2 of Article 6 and situated in the other Contracting State may be taxed in that other State.

 

2. Gains derived by a resident of a Contracting State from the alienation of shares or referred to in paragraph 4 of Article 6 may be taxed in the Contracting State in which the of the company is situated.

 

3. Gains from the alienation of movable property forming part of the business property of a establishment which an enterprise of a Contracting State has in the other Contracting State, or property that belongs to a fixed base of which a resident of a Contracting State is a member of a Contracting State is available in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such permanent establishment (alone or with the whole enterprise) or fixed base, may be taxed in that other State.

  (4) Gains from the alienation of ships or aircraft operated in international traffic or of movable property used in the operation of such ships or aircraft shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.  

5. Gains from the alienation of any property other than that referred to in the preceding paragraphs of this Article shall be taxable only in the Contracting State of which the transferor is a resident.

 

Article 14

INDEPENDENT PERSONAL SERVICES

1. Income derived by a resident of a Contracting State in respect of professional services or activities of an independent character shall be taxable only in that State unless the resident unless that resident has a fixed base regularly available to him in the other Contracting State for the purpose of a fixed base for the purpose of performing his activities. If he has such a fixed base, the income may be taxed in the other State but only to the extent that it is attributable to that fixed base.

 

2. The term “professional services” includes in particular independent activities of a scientific, literary, artistic, educational or teaching nature, as well as the activities of doctors, lawyers, engineers, architects, dentists and accountants.

 

Article 15

DEPENDENT PROFESSIONS

1. Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of a similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is exercised in that State, remuneration received in respect thereof may be taxed in that other 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 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 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 or a fixed base which the employer has in the other State.  

3. Notwithstanding the preceding provisions of this Article, remuneration received in respect of an employment exercised aboard a ship or aircraft operated in international traffic may be taxed in the Contracting State in which the place of effective management of the enterprise is situated.

Article 16

TANTIEMES

Directors’ fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the a resident of a Contracting State in his capacity as a member of the board of directors or of a supervisory board or of any other similar body of a company which is a resident of the other Contracting State may be taxed in that other State.  

Article 17

ARTISTS AND SPORTSMEN

1. Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State from his personal activities as an entertainer, such as a performer, in the other Contracting as an entertainer, such as a theater, motion picture, radio or television artiste, or a musician, or as an athlete, may be taxed in that other State.

 

2. Where income from activities which an entertainer or athlete 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 the provisions of Articles 7, 14 and 15, in the Contracting State in which the activities of the the activities of the artist or athlete are carried on.

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 past employment shall be employment shall be taxable only in that State.

 

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

Article 19

PUBLIC OFFICES

(a) Remuneration, other than a pension, paid by a Contracting State or a public institution or a local authority thereof to an individual in respect of services rendered to that State or to that institution or local authority shall be taxable only in that State. (b) However, such remuneration shall be taxable only in the Contracting State of which the individual is a resident if the services are rendered in that State and the individual :

(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. Pensions paid by a Contracting State or a public institution or local authority thereof local authorities, either directly or out of funds established by them, to an individual in respect of services rendered to that State or institution or local to that institution or local authority shall be taxable only in that State.

 

3. The provisions of Articles 15, 16 and 18 shall apply to remuneration and pensions paid in respect of services rendered in connection with a business carried on by a business carried on by a Contracting State or a public institution thereof or a local authority thereof. one of its local authorities.

Article 20

STUDENTS

1. 1. Amounts which a student or trainee in the commercial, industrial, technical, agricultural or forestry sectors technical, agricultural or forestry sector who is, or was immediately before going to a Contracting State, a resident of the other Contracting State and who is present in the

the first-mentioned State solely for the purpose of furthering his education or training, shall receive for the maintenance, education or training shall not be taxable in that State, provided that such remuneration provided that such income is derived from sources outside that State.  

2. A student at a university or other institution of higher learning in a Contracting State or an apprentice in the commercial, industrial, technical, agricultural or forestry sectors, who is or was, immediately before going to the other Contracting State, a resident of the first-mentioned State and who is staying in the other Contracting State for a period or periods not exceeding in the aggregate 183 days in the calendar year concerned, shall not be taxable in that other Contracting State in respect of remuneration received for services rendered in that State, provided that the services are in connection with his education or training and the remuneration constitutes the necessary resources to meet his maintenance expenses.

 

Article 21

OTHER INCOME

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

 

2. The provisions of paragraph 1 shall not apply to income other than income from immovable 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 other Contracting State, carries on business in that other State by way of through a permanent establishment situated therein, or performing independent personal services from a fixed through a permanent establishment situated therein, or performing independent personal services from a fixed base situated therein, and the right or property is effectively connected with it. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply.

 

Article 22

FORTUNE

1. Capital constituted by immovable property referred to in paragraph 2 of Article 6 owned by a resident of a Contracting State and situated in the other Contracting State shall be deemed to be capital. resident of a Contracting State and situated in the other Contracting State may be taxed in that other State.

 

2. Capital represented by shares or other corporate units referred to in paragraph 4 of Article 6 owned by a resident of a Contracting State may be taxed in the Contracting State in which the real property held by the company is situated.

 

3. Capital represented by movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, or by movable property pertaining to a fixed base available to a resident of a Contracting State has in the other Contracting State for the purpose of performing independent personal services, may be taxed in that other State.

 

4. Capital represented by ships and aircraft operated in international traffic as well as movable property pertaining to the operation of such ships or aircraft shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

 

5. All other elements of the capital of a resident of a Contracting State shall be taxable only in that State.

 

Article 23

ELIMINATION OF DOUBLE TAXATION

1. In Finland, double taxation shall be avoided as follows

(a) Where a resident of Finland derives income or capital which, in accordance with the provisions of this Convention, may be taxed in Luxembourg, Finland shall, subject to the provisions of subparagraph b)

(i) a deduction from the tax it levies on the income of that person of an amount equal to the income tax paid in Luxembourg;

(ii) from the tax it levies on the wealth of such a person, a deduction equal to the wealth tax paid in Luxembourg. In either case, however, such deduction may not exceed the fraction of income tax or wealth tax, calculated before deduction, corresponding, as the case may be, to the income or wealth taxable in Luxembourg.

(b) notwithstanding any other provision of this Convention, an individual who is a resident of Luxembourg and who, under the tax laws of Finland shall also be considered, for the purposes of the Finnish taxes referred to in Article shall be taxable in Finland. Finland shall, however, deduct, in accordance with the provisions of subparagraph (a), from the Finnish tax Finland shall, however, deduct from the Finnish tax any tax paid in Luxembourg on income or capital. The provisions of this subparagraph shall apply only to individuals who are nationals of the taxpayer shall not be liable for any tax paid in Luxembourg on income or capital of Luxembourg, for the year in which these individuals left Finland and for the three Finland and for the three subsequent years. c) Dividends paid by a company which is a resident of Luxembourg to a company which is a company that is a resident of Finland and that directly controls at least 10 percent of the voting rights in the company paying the dividends are exempt from Finnish of the voting rights in the company paying the dividends are exempt from Finnish tax. (d) Where, under any provision of the Convention, income derived or capital owned by a resident of Finland is exempt from tax in Finland, Finland may nevertheless take into account, in calculating the amount of the tax on the remaining income or capital of that resident, the exempted income or capital.

2. In Luxembourg double taxation shall be avoided as follows

(a) Where a resident of Luxembourg derives income or owns capital which, in accordance with the provisions of this Convention, may be taxed in Finland, Luxembourg shall exempt such income or capital from tax, subject to the provisions of subparagraphs (b) and (c). (b) Where a resident of Luxembourg receives items of income which, in accordance with the provisions of Articles 10 and 12, maybe taxed in Finland, Luxembourg shall allow a deduction from the tax it levies on the income of that resident of an amount deduction from the tax it levies on the income of that resident in an amount equal to the tax paid in Finland. This deduction may not, however, exceed the fraction of the tax, calculated before deduction, corresponding to (c) Where, in accordance with any provision of the Convention, income derived or capital owned by a resident of Luxembourg is exempt from tax in Luxembourg, Luxembourg may nevertheless, in calculating the amount of tax on the remaining income or capital of such resident, take into account the exempted income or wealth.  

Article 24

NON-DISCRIMINATION

1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than those to which nationals of that other State in the same situation are or may be subject. in the same situation. This provision shall also apply, notwithstanding the provisions of the provisions of Article 1 to persons who are not residents of one or both of the Contracting State or of both Contracting States.

 

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

 

3. Unless the provisions of Article 9, paragraph 4 of Article 11 or paragraph 6 of Article 12 paragraph 6 of Article 12 are applicable, interest, royalties and other expenses paid by an expenses paid by an enterprise of a Contracting State to a resident of the other Contracting State shall be deductible in determining the taxable profits of that enterprise under the same conditions as if they had been paid to a resident of  the first-mentioned State. Similarly, debts of an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable 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 by one or more residents of the other Contracting  State, shall not be subjected in the first-mentioned State to any tax or duty thereon or more burdensome than those to which 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.

 

Article 25

AMICABLE PROCEDURE

1. [The first sentence of paragraph 1 of Article 25 of this Convention is replaced by the first sentence of  paragraph 1 of Article 16 of the MI] [Where a person believes that the [Where a person believes that the actions of one or both Contracting  States result or will result for that person in taxation not in accordance with the provisions of Convention, he may, irrespective of the remedies provided by the domestic law of those the domestic law of those States, submit its case to the competent authority of the Contracting of which it is a resident or, if its case comes under paragraph 1 of Article 24, to that of the Contracting State of which he is a national].

The case must be submitted within three years of the first notification of the measure that measure which results in taxation not in accordance with the provisions of the Convention.  

2. The competent authority shall endeavour, if the complaint appears to it to be well-founded and if it is not to resolve the case by mutual agreement with the competent authority of the other by mutual agreement with the competent authority of the other Contracting State, with a view to to avoid taxation not in accordance with the Convention.

 

3. The competent authorities of the Contracting States shall endeavor by mutual agreement to resolve any difficulties or to resolve any difficulties or doubts arising as to the interpretation or application of the interpretation or application of the Convention. They may also consult together with a view to eliminating double taxation in cases not provided for in the Convention. In particular, they may consult with a view to reaching an agreement on the allocation of income in cases referred to in Article 9.

 

4. In the event that the competent authorities reach such agreement, the Contracting States shall tax the income and grant refunds or credits in accordance with such agreement. in accordance with such agreement. It shall be applied irrespective of the time limits provided by the domestic law of the contracting states.

 

5. The competent authorities of the Contracting States may communicate directly with each other with a view to authorities of the Contracting States may communicate directly with each other with a view to reaching an agreement as described in the preceding paragraphs above. If oral exchanges of views are deemed to facilitate such agreement, such exchanges may be exchange of views may take place in a Commission composed of representatives of the representatives of the competent authorities of the contracting States.

Article 26

EXCHANGE OF INFORMATION

1. The competent authorities of the Contracting States shall exchange such information as is that is foreseeably relevant to the application of the provisions of this Convention or to the administration or enforcement of the domestic laws concerning taxes taxes of every kind and description imposed on behalf of the Contracting States or their local authorities to the extent that the taxation thereunder is The exchange of information shall not be 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 secret in the same manner as information obtained under the domestic laws of that State and shall not be law of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of the assessment or collection of the taxes referred to in paragraph 1, in proceedings or prosecutions in respect of such taxes, 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.

 

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

(a) to carry out administrative measures at variance with its own laws and administrative practice or with those of the other Contracting State (b) to furnish information which is not obtainable under the laws or administrative practice of that or of the other Contracting State (c) to supply information that 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 use the powers at its disposal to obtain the requested information, even if it does not need the information for its own tax purposes. The obligation in the preceding sentence is subject to the limitations in paragraph 3 unless such limitations would prevent a Contracting State from providing State from communicating information solely because it has no interest in the information for its own tax purposes. of no domestic interest to it.

 

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

Article 27

ASSISTANCE IN THE COLLECTION OF TAXES

1. The Contracting States undertake to assist each other for the purpose of taxes referred to in Article 2, including advances, supplements and additions to such taxes, interest, costs and non-criminal fines related to such taxes.

 

2. At the request of a Contracting State, the other Contracting State shall, in accordance with

(a) the taxpayer’s taxable income shall be paid to the tax authorities of the other Contracting State in accordance with the law or administrative practice (b) the other Contracting State shall, at the request of a Contracting State, in accordance with the legal provisions or administrative practice applicable to the collection of its own taxes, ensure the collection of the tax claims referred to in paragraph 1, provided that such tax claims are finally due. Such tax claims shall not be considered preferential in the requested State and that State shall not be obliged to apply means of enforcement which are not permitted by the legal provisions or administrative practice of the requesting State.  

3. The Contracting State making recovery under the provisions of paragraph 2 shall be liable to the requesting State for the amounts so recovered.

 

4. With respect to tax claims referred to in paragraph 1 that are the subject of an appeal, a State may, in order to safeguard its rights, request the other Contracting State to take such State to take such precautionary measures as may be available under the law of that other State.The provisions of the second sentence of paragraph 2 shall apply mutatis mutandis to such measures.

  (5) The provisions of paragraph 1 of Article 26 shall also apply to any information brought to the attention of the requested State in pursuance of this Article.  

6. The competent authorities of the Contracting States shall regulate by mutual agreement the manner in which this Article shall be applied.

Article 28

DIPLOMATIC AGENTS AND CONSULAR OFFICERS

The provisions of this Convention shall not affect the fiscal privileges of diplomatic agents or consular officers diplomatic agents or consular officers under either the general rules of international law of nations or under the provisions of special agreements.  

Article 29

EXCLUSION OF CERTAIN COMPANIES

This Convention shall not apply to holding companies within the meaning of the special Luxembourg legislation currently governed by the law of 31st July 1929 and the Grand-Ducal decree of 17th December 1938 It also does not apply to income derived by a resident of Finland  from such companies or to shares or other equity securities of such companies owned by that person.

Section 30

ENTRY INTO FORCE

 

1. The Governments of the Contracting States shall notify each other that the constitutional constitutional requirements for the entry into force of this Convention have been fulfilled.

 

2. This Convention shall enter into force thirty days after the date of the last of the notifications of the last of the notifications referred to in paragraph 1 and its provisions shall have effect :

(a) with respect to taxes withheld at source on income allocated on or after January 1, 1980 ; (b) with respect to other taxes on income and capital for taxes imposed for any taxable year beginning on or after the first day of January 1980.

Section 31

DENUNCIATION

This Convention shall remain in force until terminated by a Contracting State. Contracting State. Each Contracting State may denounce the Convention through diplomatic channels with a minimum of six months notice before the end of each subsequent calendar year beginning after the expiration of five years from the date of its entry into force. In such case the Convention shall cease to have effect:

(a) in respect of taxes withheld at source on income allocated on or after the first day of January in the calendar year immediately following that in which the termination occurs; and

(b) in respect of other income and capital taxes for taxes levied for any taxable year beginning on or after the first day of January of the calendar year immediately following the year of termination.