CONVENTION

between the Grand Duchy of Luxembourg and the Republic of Macedonia for the avoidance of double taxation and the prevention of Fiscal Evasion with respect to Taxes on Income and on Capital and the Protocol thereto, signed in Brussels on 15 May 2012

 

The Government of the Grand Duchy of Luxembourg and the Government of the Republic of Macedonia, desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital, 

Have agreed as follows:

Article 1

Persons Covered

This Convention shall apply to persons who are residents of one or both of the 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 its local authorities, irrespective of the system of taxation. State or its local authorities, irrespective of the system of collection.

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

3. The existing taxes to which the Convention applies include:

(a) in Macedonia:

(1) the personal income tax;

(2) the tax on profits

(3) the property tax;

(hereinafter referred to as “Macedonian tax”);

(b) in Luxembourg

1) the personal income tax;

2. the tax on the income of communities
3. the tax on wealth

(4) the municipal business tax;

(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 The competent authorities of the Contracting States shall inform each other of any significant changes in their tax laws.

 

Article 3

General Definitions

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

(a) the terms “a Contracting State” and “the other Contracting State” mean, as the context requires, Macedonia or Luxembourg, as the context requires;

(b) the term “Macedonia” means the territory of the Republic of Macedonia, and when used in a geographical sense, means its lands, the waters of its inland lakes and the lowlands thereof which are subject to its judicial authority or to which its sovereign rights authority or to which its sovereign rights are applicable for the purpose of exploration, exploitation, conservation and conservation and management of natural resources, in accordance with internal judicial authority and international law

(c) “Luxembourg” means the Grand Duchy of Luxembourg and, when used in a geographical sense, means the territory of the Grand Duchy of Luxembourg;

(d) “national” means:

(i) any natural person who is a national of a Contracting State;

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

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

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

(g) the terms “activity”, in relation to an enterprise, and “business” include the exercise of professions or other activities of an independent nature

(h) the term “enterprise” applies to the carrying on of any business or activity

(i) 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 a resident of the other Contracting State;

(j) the term “international traffic” means any transport by a ship or aircraft operated by an enterprise whose place of effective management is in a Contracting State, except where the ship or aircraft is not operated by a resident of the other Contracting State

(k) the term “competent authority” means:

(i) in relation to Macedonia, the Ministry of Finance or its authorize representative;

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

2. For the purposes of the application of the Convention at any time by a Contracting State, any term not defined therein shall, unless the defined therein shall, unless the context otherwise requires, have the meaning which it has at that time under the law of that State concerning the taxes to which it relates. of that State in relation to the taxes to which the Convention applies, the meaning of such term or expression under  the meaning given to that term under the tax law of that State shall prevail over the meaning given to it under other laws of that State.

Article 4

Resident

1. For the purposes of this Convention, the term “resident of a Contracting State” means any person who under the laws of that State is liable to tax in that State by reason of his domicile, residence, place of registration, place of management or any other criterion of a similar nature and shall also apply to that State and to all its State and all local authorities thereof. However, this term does not include persons who are not taxable in that State only on income from sources in that State or on capital situated therein.

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

(a) he shall be deemed to be a resident only of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his personal and economic relations are closer (center of of vital interests);

(b) if the State in which such person has his centre of vital interests cannot be determined, or if he has no permanent home in any of the States, he shall be deemed to be a resident only of the State in which he has a the State in which he has an habitual abode;

(c) if such person is ordinarily present in both States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national

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

3. By reason of the provisions of paragraph 1 a person other than an individual is a resident of both States, he shall be deemed to be a resident only of the State in which his place of effective management is situated.

 

Article 5

Permanent Establishment

1. For the purposes of this Convention, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

2. The term “permanent establishment” includes in particular:

(a) a place of management,

(b) a branch office

(c) an office,

(d) a factory,

(e) a workshop, and

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

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

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

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

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

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

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

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

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

5. Notwithstanding the provisions of paragraphs 1 and 2, where a person – other than an agent with independent status to whom paragraph 6 applies – is to whom paragraph 6 applies – acts on behalf of an enterprise and has in a Contracting State powers which he habitually exercises therein has, and habitually exercises, an authority in a Contracting State to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 and which, if exercised through a fixed place of business, would not make it possible to regard such a place of business as a permanent establishment under to be considered a permanent establishment under the provisions of that paragraph.

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

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 carrying on business in that other State (whether through a permanent establishment or otherwise) shall not (whether through a permanent establishment or not) shall not of itself constitute either 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.

2. The term “immovable property” shall have the meaning which it has under the law of the Contracting State in which the property concerned is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry rights to which the provisions of private law respecting landed property, the usufruct of immovable property and rights to payments for rights to variable or fixed payments for the exploitation or concession of the exploitation of mineral deposits, springs and mineral deposits, springs and other natural resources; ships, boats and aircraft are not considered to be ships, boats and aircraft are not considered as real estate.

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

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

 

Article 7

Business Profits

1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business in such a manner, the profits of the enterprise may be taxed in the other State, but only to the extent that they are 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 in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent the profits which it might be expected to make if it were a separate enterprise engaged in the same or similar activities carrying on the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.

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

4. If it is customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the permanent establishment, then the profits of the permanent establishment shall be attributed to that permanent establishment. on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall prevent that 2 shall not prevent that Contracting State from determining the taxable profits according to the customary apportionment; the method of apportionment The method of apportionment adopted shall, however, be such that the result 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 or merchandise for the enterprise.

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

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

 

Article 8

Maritime, Inland and Air Navigation

1. 1. Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

2. Profits from the operation of inland waterway vessels shall be taxable only in the Contracting State in which 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 vessel, that place of effective management shall be deemed to be in the Contracting State in which the enterprise is situated. ship, that place of business shall be deemed to be in the Contracting State in which the home port of that ship is situated or, in the absence of such a home port, in which the place of business of the enterprise is situated. ship or vessel is located, or if there is no home port, in the Contracting State of which the operator of the ship or vessel is a resident.

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

Article 9

Associated enterprises

1. Where

(a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and of an enterprise of the other Contracting State, and in either case the two enterprises are connected in their commercial or financial relations by agreed or imposed conditions which are conditions agreed upon or imposed which differ from those which would be agreed upon between independent enterprises, profits which, but for those conditions, would have accrued to one of the enterprises, but in fact did not because of those conditions, may be such conditions, may be included in the profits of that enterprise and taxed accordingly.

2. Where a Contracting State includes in the profits of an enterprise of that State – and taxes accordingly – profits on which an enterprise of the profits on which an enterprise of the other Contracting State has been taxed in that other State, and the profits so included are

included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions agreed upon between between the two enterprises had been those which would have been agreed upon between independent enterprises, the other State shall make an appropriate adjustment to the amount of tax imposed therein on such profits. In determining such adjustment, due regard shall be given to the other provisions of this Convention and, if necessary, the competent authorities of the Contracting States shall consult each other.

 

Article 10

Dividends

1. Dividends paid by a company that 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 the tax so charged shall not exceed

(a) 5 percent of the gross amount of the dividends, if the beneficial owner is a company (other than a partnership) that owns directly at least 25 percent of the capital of the company paying the dividends;

(b) 15 percent of the gross amount of the dividends, in all other cases. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. Dividends.

3. The term “dividends” as used in this article means income from shares or other beneficial interests shares, with the exception of debt claims, as well as income from other shares which is subject to the same tax regime as income from shares the income from shares by the legislation of the State of which the distributing company is a resident, and in the case of Luxembourg profit shares received by the lessor as a result of his investment in a commercial, industrial, mining or craft enterprise by the lessor of funds remunerated in proportion to the profit as well as arrears and interest on bonds when a right is granted for these securities to the attribution, besides the fixed interest, of an additional interest varying according to the amount of the distributed profit.

4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State carries on business in the other Contracting State of which the company paying the dividends is a resident through business activity through a permanent establishment situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment. dividends are effectively connected with it. In such a case, the provisions of Article 7 shall apply.

5. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State,that other State may not impose any tax on dividends paid by the company, except to the extent that such dividends are paid to a resident of the other State. 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 is effectively connected with a permanent establishment situated in that other State, or impose any tax in respect of such dividends the taxation of undistributed profits, on the undistributed profits of the company, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in that other State.

 

Article 11

Interest

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.

2. The term “interest” as used in this Article means income from debt-claims of every kind,  whether or not secured by mortgage and whether or not carrying a right to participate in the debtor’s profits, and in particular, income from public funds and bonds, including premiums and prizes attached to such securities. However, the term “interest” does not include income referred to in Article 10. Penalties for late payment shall not be considered as interest within the meaning of this article.

3. The provisions of paragraph 1 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises through a permanent establishment situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment. In such a case, the provisions of Article 7 shall apply.
4. Where, by reason of a special relationship between the debtor and the beneficial owner or between both of them and with third parties, the amount of interest, taking into account the claim for which it is paid, exceeds that which would have been agreed by the debtor and the beneficial owner, exceeds the amount that would have been agreed upon by the debtor and the beneficial owner in the absence of such relationship, the provisions of this article shall apply only to the latter amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

 

Article 12

Royalties

1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, such royalties may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the beneficial owner of the royalties is a resident of that State, the royalties may be taxed in that State. of that State, but if the beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed 5 percent of the amount of the royalties. shall not exceed 5 percent of the gross amount of the royalties.

3. The term “royalties” as used in this Article means remuneration of any kind paid for the use of or the right to use the use of, or the right to use, any copyright of literary, artistic or scientific work, including films or tapes used for radio or television, a patent, a trademark, a design patent, a design patent design, plan, secret formula or process, and for information concerning experience gained in the information relating to industrial, commercial or scientific experience.

4. The provisions of paragraphs 1 and 2 shall not apply where the beneficial owner of the royalties, being a resident of a of a Contracting State carries on business in the other Contracting State in which the royalties arise through a permanent through a permanent establishment situated therein, and the right or property in respect of which the royalties are paid is effectively connected with effectively connected therewith. In such case, the provisions of Article 7 shall apply.

5. Royalties shall be deemed to arise in a Contracting State when the payer is that State 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 in connection with which the obligation the payment of the royalties was incurred and which bears the expense of such royalties, such royalties shall be deemed to arise in the such royalties shall be deemed to arise in the Contracting State in which the permanent establishment is situated.

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

 

Article 13

Capital Gains

1. Gains derived by a resident of a Contracting State from the alienation of real property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.

2. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has

enterprise of a Contracting State has in the other Contracting State, including such gains from the alienation of that permanent establishment (alone or with the whole enterprise) may be taxed in that other State.

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

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

 

Article 14

Income from Employment

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

2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of 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 any twelve month period commencing or ending in the calendar year concerned, and

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

(c) the remuneration is not borne by a permanent establishment that the employer has in the other State.

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

 

Article 15

Directors’ Fees

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

 

Article 16

Artists and Athletes

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

2. Where income in respect of activities exercised by an entertainer or a sportsman personally and in that capacity is attributed not to the entertainer or sportsman himself but to another person, such income may be taxed, notwithstanding the provisions of Articles 7 and 14, such income may be taxed in the Contracting State in which the activities of the entertainer or sports person are carried on.

3. Notwithstanding the provisions of paragraphs 1 and 2, income derived by a resident of a Contracting State from his personal activities as an entertainer or as an athlete shall be taxable only in that State if the activities are performed in the other Contracting State as part of a cultural or sporting exchange program agreed upon between the two Contracting States.

 

Article 17

Pensions

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

2. Notwithstanding the provisions of paragraph 1 and subject to the provisions of paragraph 2 of  Article 18 received by an individual who is a resident of a Contracting State under the social security laws of the other State may be taxed in that State.

 

Article 18

Public Offices

(a) Salaries, wages and other similar remuneration paid by a Contracting State or a local authority thereof to an individual in respect of services rendered to that State or authority shall be taxable only in that State.

(b) However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who:

(i) is a national of that State; or

(ii) did not become a resident of that State solely for the purpose of rendering the services.

(a) Notwithstanding the provisions of paragraph 1, pensions and other similar remuneration paid by a Contracting State or a local authority thereof, either directly or out of funds constituted by them, to an individual, shall be deemed to be paid to the individual. to an individual in respect of services rendered to that State or local authority shall be taxable only in that State.

(b) However, such pensions and other similar remuneration shall be taxable only in the other Contracting State if the individual is a resident of that State and is a national of that State.

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

 

Article 19

Students

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

 

Article 20

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 not be taxed 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, if the recipient of such income, being a resident of a Contracting State, carries on business in the other State. A Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, and situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment. In such case, the provisions of Article 7 shall apply.

 

Article 21

Assets

1. Capital represented by immovable property referred to in Article 6 owned by a resident of a Contracting State and situated in the other Contracting State may be taxed in that other State.

2. Capital represented by movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State if a Contracting State has in the other Contracting State may be taxed in that other State.

3. Capital represented by ships and aircraft operated in international traffic, by inland navigation vessels and by movable property pertaining to the operation of such ships, aircraft or vessels shall be taxable only in the The taxable income of a company shall be taxed only in the Contracting State in which its place of effective management is situated.

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

 

Article 22

Elimination of Double Taxation

(a) Where a resident of Macedonia derives income or possesses capital which, in accordance with the provisions of this Convention, may be taxed in Luxembourg, Macedonia shall allow the resident of Macedonia the right to deduct from the income or capital tax which he or she receives in Luxembourg the amount of the tax which he or she receives in Luxembourg:

– from the tax which it levies on the income of that resident, a deduction in an amount equal to the tax on the income tax paid in Luxembourg;

– on the tax it levies on the capital of this resident, a deduction of an amount equal to the tax paid in Luxembourg.

In either case, however, this deduction may not exceed the fraction of the income tax or wealth tax paid in calculated before deduction, corresponding to the income or wealth taxable in Luxembourg, as the case may be.

(b) Where, in accordance with any provision of the Convention, income derived or capital owned by a resident of Macedonia is exempt from tax in Macedonia, Macedonia may nevertheless nevertheless, in calculating the amount of tax on the remaining income or capital of that resident, take into account the exempted income or the exempted income or assets.

2. Subject to the provisions of Luxembourg law concerning the elimination of double taxation which principle, double taxation shall be avoided as follows:

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

(b) Where a resident of Luxembourg receives items of income which, in accordance with the provisions of Articles 10, 12, and 16, may be taxed in Macedonia, Luxembourg shall pay the tax on the income of the personal income tax or the corporate income tax of such resident, a deduction in an amount equal to the tax paid in Macedonia. equal to the tax paid in Macedonia. This deduction may not, however, exceed the fraction of the tax, calculated before deduction, corresponding to such items of income received from Macedonia.

(c) The provisions of subparagraph (a) shall not apply to income received or capital owned by a resident of Luxembourg, where Macedonia applies the provisions of this Convention to exempt such income or to exempt such income or capital from tax or applies the provisions of paragraph 2 of Article 10 or 12 to such income.

 

Article 23

Non-discrimination

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

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

3. 3. Unless the provisions of paragraph 1 of Article 9, paragraph 4 of Article 11 or paragraph 6 of Article 12 are applicable Article 12, paragraph 6, shall apply, interest, royalties and other expenses paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, in determining the taxable profits of that enterprise, be deductible under the same conditions as if they had been paid to a resident of the other State. 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 capital of that enterprise, be deductible under the same conditions as if they had been contracted to a resident of the first-mentioned State. a resident of the first-mentioned State.

4. Enterprises of a Contracting State, the capital of which is wholly or partly, directly or indirectly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subject in the first-mentioned State to any tax or duty thereon to any taxation or any requirement connected therewith which is other or more burdensome than those to which other similar enterprises of the first-mentioned State are or may be subjected. other similar enterprises of the first-mentioned State.

5. The provisions of this Article shall apply to taxes covered by this Convention.

 

Article 24

Mutual Agreement Procedure

1. Where a person considers that the actions of one or both of the Contracting States result or will result in taxation not in accordance with the provisions of this Convention, that person may, notwithstanding any remedy provided by the domestic law of those States, he may submit his case to the competent authority of the Contracting State of which it is a resident or, if its case comes under paragraph 1 of Article 23, to that of the Contracting State of which it is a national. The case must be submitted within three years after the first notification of the measure that results in taxation not in accordance with the provisions of this Convention.

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

3. The competent authorities of the Contracting States shall endeavor by mutual agreement to resolve any difficulties or doubts or to resolve any doubts as to the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention.

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

 

Article 25

Exchange of Information

1. The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant for carrying out the provisions of this Convention or for the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States or their local authorities, insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Articles 1 and 2.

2. Information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes mentioned in paragraph 1. 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 to State the obligation

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

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

(c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy.

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

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

 

Article 26

Members of Diplomatic Missions and Consular Posts

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

 

Article 27

Entry into force

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

2. The Convention shall apply

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

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

 

Article 28

Denunciation

1. This Convention shall remain in force until terminated by one of the Contracting States. Each Contracting State may denounce the Convention through diplomatic channels with a minimum of six months written notice before the end of each calendar year beginning after a period of five years from the date on which this Convention entered into force.

2. This Convention shall cease to have effect

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

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

 

IN WITNESS WHEREOF, the undersigned, duly authorized to that effect, have executed this Agreement

DONE in duplicate at Brussels, this 15th day of May 2012, in the English, French and Macedonian languages, all three texts being equally authentic.