AGREEMENT 

BETWEEN THE GRAND DUCHY OF LUXEMBOURG AND THE REPUBLIC OF TAJIKISTAN FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL  

 

The Grand Duchy of Luxembourg and  the Republic of Tajikistan 

Desiring to develop and to strengthen economic, scientific, technical and cultural cooperation between both  States and to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital, 

Have agreed as follows: 

Article 1 

Persons covered 

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

 

Article 2 

Taxes covered 

1. This Agreement shall apply to taxes on income and on capital imposed on behalf of a Contracting  State or of its administrative-territorial subdivisions or local authorities, irrespective of the manner in which  they are levied. 

 

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

 

3. The existing taxes to which the Agreement shall apply are in particular: 

a) in the Republic of Tajikistan: 

(i) surtax on the physical persons (tax on the income of the physical persons); 

(ii) the tax on the profit of the legal persons; 

(iii) the tax on immovable property; 

(hereinafter referred to as ,, Tajik tax”); 

b) in the Grand Duchy of Luxembourg: 

(i) the income tax on individuals (limpét sur le revenu des personnes physiques); 

(ii) the corporation tax (l’impét sur le revenu des collectivités); 

(iii) the capital tax (I’impd6t sur la fortune); and 

(iv) the communal trade tax (l’imp6t commercial communal); 

(hereinafter referred to as “Luxembourg tax’). 

 

4. The Agreement shall apply also to any identical or substantially similar taxes that are imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes that have been made in their taxation laws. 

 

Article 3 

General definitions 

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

a) the term, Tajikistan” means the Republic of Tajikistan and, when used in the geographical sense, includes its territory, inland waters, and the air space above them over which the Republic of Tajikistan  may exercise its sovereign rights and jurisdiction, including the rights on an exploration of subsoil and  natural resources, in accordance with international law and where the laws of the Republic of Tajikistan  apply; 

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

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

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

e) the term “company” means anybody corporate or any entity that is treated as a body corporate for tax purposes; 

f) the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;

g) the term “international traffic” means any transport by a ship, aircraft, road or railway vehicle operated  by an enterprise of a Contracting State, except when the ship, aircraft, road or railway vehicle is operated solely between places in the other Contracting State; 

h) the term “competent authority” means:

 (i) in Tajikistan, the Ministry of Finance or its authorized representative; 

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

i) the term “national” means: 

(i) any individual possessing the nationality of a Contracting State; 

(ii) any legal person, partnership or association deriving its status as such  from the laws in force in a Contracting State. 

 

2. As regards the application of the Agreement at any time by a Contracting State, any term not  defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Agreement applies, any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State. 

Article 4 

Resident 

1. For the purposes of this Agreement, the term “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature, and also includes that State and any administrative-territorial subdivision or a local authority thereof. This term, however, does not include any person who is liable to tax in that State in respect only of income from sources in that State or capital situated therein. 
   Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting  States, then his 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 his personal and economic relations are closer (center of vital interests); 

 

b) if the State in which he has his center of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident only of the State in which he has a habitual abode for more than 182 days; 

c) if he has a habitual abode in both States or in neither of them, he shal! be deemed to be a resident only of the State of which he is a national; 

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

 

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

 

Article 5 

Permanent establishment 

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

 

2. The term “permanent establishment” includes especially: 

a. a place of management; 

b. a branch; 

c. an office; 

d. a factory; 

e. a workshop, and 

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

 

3. A building site or construction or installation project constitutes a permanent establishment only if it lasts more than 12 months. 

 

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

a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise; 

b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery; 

c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; 

d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or  merchandise or of collecting information, for the enterprise; 

e) the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character;

f) the maintenance of a fixed place of business solely for any combination of activities mentioned in subparagraphs a) to e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character

 

5. Notwithstanding the provisions of paragraphs 1 and 2, where a person – other than an agent of an independent status to whom paragraph 6 applies – is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an 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 any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under 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 which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other. 

 

Article 6 

Income from immovable property 

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

 

2. The term “immovable property” shall have the meaning which it has under the law of the  Contracting State in which the property in question is situated. The term shall, in any case, include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships and aircraft shall not be regarded as immovable property. 

 

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

 

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

 

Article 7 

Business profits 

1. Profits of an enterprise of a Contracting State shall be taxable only in that State unless the  enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment. 

 

2. Subject to 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 the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment. 

 

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

 

4. Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary; the method .of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article. 

 

5. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. 

 

6. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent  establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary. 

 

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

 

Article 8 

Shipping, inland waterways transport, 

road, railway and air transport 

1. Profits of an enterprise of a Contracting State from the operation of ships, aircraft, road or railway vehicles in international traffic or boats engaged in inland waterways transport shall be taxable only in that Contracting State. 

 

2. If the place of effective management of a shipping enterprise or of an inland waterways transport enterprise is aboard a ship or boat, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship or boat is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship or boat is a resident. 

 

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

Article 9 

Associated enterprises 

1. 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 conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. 

 

2. Where a Contracting State includes in the profits of an enterprise of that State -and taxes  accordingly – profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Agreement, and the competent authorities of the Contracting States shall if necessary consult each other. 

Article 10 

Dividends 

1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. 

 

2. However, such dividends may also be taxed in the Contracting State of which the company  paying the dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed 15 percent of the gross amount of the dividends. Notwithstanding the preceding provisions of this paragraph, dividends shall not be taxed in the Contracting State of which the company paying the dividends is a resident if the beneficial owner of the dividends is a company which is a resident of the other Contracting State and which holds, for an uninterrupted period of at least 12 months, shares representing directly at least 10 percent of the capital of  the company paying the dividends. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. 

 

3. The term “dividends” as used in this Article means income from shares, “jouissance” shares or “jouissance” rights, mining shares, founders’ shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident, and in the case of Luxembourg the investor’s share of the profit in a commercial, industrial, mining or craft undertaking, paid proportionally to the profits and by virtue of his capital outlay, as well as interest and payments on bonds, where, over and above the fixed rate of interest, a right of assignment is granted for supplementary interest varying according to the retained earnings. 

 

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 a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. 

 

5. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company’s undistributed profits to a tax on the company’s undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.  

Article 11 

Interest 

1. Interest 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 interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 12 percent of the gross amount of the interest. 

 

3. Notwithstanding the provisions of paragraph 2, interest referred to in paragraph 1 shall be taxable only in the Contracting State of which the recipient is a resident if the beneficial owner of the interest is a resident of that State, and:  

a) is that State, the central bank, the national bank, an administrative-territorial subdivision or local authority thereof; 

b) if the interest is paid by the State in which the interest arises or by an administrative-territorial subdivision, local authority or statutory body thereof; 

c) if the interest is paid in respect of a loan, debt-claim or credit that is owed to, or made, provided, guaranteed or insured by, that State or an administrative-territorial subdivision, local authority or export financing agency thereof, 

d) is a financial institution or a collective investment vehicle. 

 

4. The term “interest” as used in this Article means income from debt-claims of every kind, whether or not secured by the mortgage and whether or not carrying a right to participate in the debtor’s profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. However, the term “interest” shall not include income referred to in Article 10. Penalty charges for late payment shall not be regarded as interest for the purposes of this Article. 

 

5. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personnel services from _a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.

 

6. Interest shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a_ fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 

 

7. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned 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 Agreement. 

 

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 the other Contracting State, the tax so charged shall not exceed 10 percent of the gross amount of the royalties. 

 

3. The term “royalties? as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, and films or recordings for radio or television broadcasting, any patent, trademark, design or model, plan, secret formula or process, or for information concerning the industrial, commercial or scientific experience. 

 

4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. 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 a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment or fixed base, then such royalties shall be deemed to arise in the 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 between both of them and some other person, the amount of the royalties, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned 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 Agreement.  

 

Article 13 

Capital gains 

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

 

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

 

3. Gains derived by an enterprise of a Contracting State from the alienation of ships, aircraft, road or railway vehicles operated in international traffic, or boats engaged in inland waterways transport or movable property pertaining to the operation of such ships, aircraft, road or railway vehicles or boats, shall be taxable only in that Contracting State. 

 

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 alienator is a resident.
   

Article 14 

Independent personal services 

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

 

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

 

Article 15 

Dependent personal services 

1. Subject to the provisions of Articles 16, 18, and 19, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State. 

 

2. Notwithstanding 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 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 or a fixed base which the employer has in the other State. 

 

3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship, aircraft, road or railway vehicle operated in international traffic, or aboard a boat engaged in inland waterways transport, by an enterprise of a Contracting State may be taxable in that State. 

 

Article 16 

Directors’ fees 

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

 

Article 17 

Artistes and sportsmen 

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

 

2. Where income in respect of personal activities exercised by an entertainer or a sportsman in his capacity as such accrues not to the entertainer or sportsman himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or sportsman are exercised. 

 

3. The provisions of paragraphs 1 and 2 shall not apply to income derived from activities performed in a Contracting State by entertainers or sportsmen if the visit to that State is wholly or mainly supported by public funds of one or both of the Contracting States or administrative-territorial subdivisions or local authorities thereof. In such case, the income is taxable only in the Contracting State in which the entertainer or sportsman is a resident. 

 

Article 18 

Pensions 

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

 

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

 

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

 

Article 19 

Government service 

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

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

(i) is a national of that State; or 

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

 

2.a) Notwithstanding the provisions of paragraph 1, pensions and other similar remuneration paid by, or out of funds created by, a Contracting State or an administrative-territorial subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.  

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

 

3. The provisions of Articles 15, 16, 17 and 18 shall apply to salaries, wages, pensions and other similar remuneration, in respect of services rendered in connection with a business carried on by a Contracting State or an administrative-territorial subdivision or a local authority thereof. 

Article 20 

Students 

Payments which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State. 

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 Agreement 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, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein or performs in that other State independent personnel services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. 

Article 22 

Capital 

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

 

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

 

3. Capital represented by ships, aircraft, road or railway vehicles operated in international traffic and by boats engaged in inland waterways transport by an enterprise of a Contracting State and by movable property pertaining to the operation of such means of transportation, shall be taxable only in that State. 

 

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

 

Article 23 

Elimination of double taxation 

1. In Tajikistan double taxation shall be eliminated as follows: 

Where a resident of Tajikistan derives income or owns capital which, in accordance with the provisions of this Agreement, may be taxed in Luxembourg, Tajikistan shall allow: 

(i) as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Luxembourg; 

(ii) as a deduction from the tax on the capital of that resident, an amount equal to the capital tax paid in Luxembourg. Such deduction, in either case, shall not, however, exceed that part of the income tax or capital tax, as computed before the deduction is given, which is attributable, as the case may be, to the income or the capital which may be taxed in Luxembourg. Where in accordance with any provision of the Agreement income derived or capital owned by a resident of Tajikistan is exempt from tax in Tajikistan, Tajikistan may nevertheless, in calculating the amount of tax on the remaining income or capital of such resident, take into account the exempted income or capital. 

 

2. Subject to the provisions of the law of Luxembourg regarding the elimination of double taxation which shall not affect the general principle hereof, double taxation shall be eliminated as follows: 

a) | Where a resident of Luxembourg derives income or owns capital which, in accordance with the provisions of this Agreement, may be taxed in Tajikistan, Luxembourg shall, subject to the provisions of sub-paragraphs b) and c), exempt such income or capital from tax, but may, in order to calculate the amount of tax on the remaining income or capital of the resident, apply the same rates of tax as if the income or capital had not been exempted. 

b) Where a resident of Luxembourg derives income which, in accordance with the provisions of Articles 10, 11, 12 and 17 may be taxed in Tajikistan, Luxembourg shall allow as a deduction from the income tax on individuals or from the corporation tax of that resident an amount equal to the tax paid in Tajikistan. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable to such items of income derived from Tajikistan. 

c) The provisions of subparagraph a) shall not apply to income derived or capital owned by a resident of Luxembourg where Tajikistan applies the provisions of this Agreement to exempt such income or Capital from tax or applies the provisions of paragraph 2 of Article 10, 11 or 12 to such income. 

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 the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States. 

 

2. Stateless persons who are residents of a Contracting State shall not be subjected in either Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of the State concerned in the same circumstances, in particular with respect to residence, are or may be subjected. 

 

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

 

4. Except where the provisions of paragraph 1 of Article 9, paragraph 7 of Article 11, or paragraph 6 of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first mentioned State. Similarly, any debts of an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable capital of such enterprise, be deductible under the same conditions as if they had been contracted to a resident of the first-mentioned State. 

 

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

 

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

 

Article 25 

Mutual agreement procedure 

1. Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Agreement he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 of Article 24, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Agreement. 

 

2. The competent authority shall endeavour, 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 the avoidance of taxation which is not in accordance with the Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States. 

 

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

 

4. The competent authorities of the Contracting States may communicate with each other directly, including through a joint commission consisting of themselves or their representatives, for the purpose of reaching an agreement in the sense of the preceding paragraphs. 

Article 26 

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 Agreement or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their administrative-territorial subdivisions or local authorities, insofar as the taxation thereunder is not contrary to the Agreement. The exchange of information is not restricted by Articles 1 and 2. 

 

2. Any information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to the taxes referred to in paragraph 1, or the oversight of the above. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. 

 

3. In no case shall the provisions of paragraphs 1 and 2 be construed so as to impose on a Contracting State the obligation: 

a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State; 

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

c) to 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 use its information gathering measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 but in no case shall such limitations be construed to permit a Contracting State to decline to supply information solely because it has no domestic interest in such information. 

 

5. In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to decline to supply information upon request solely because the information is held by a bank, other financial institution, interests in nominee a person. or person acting in an agency or a fiduciary capacity or because it relates to an ownership interest in a person.

 

 Article 27 

Members of diplomatic missions and consular posts 

Nothing in this Agreement shall affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements. 

 

Article 28 

Entry into force 

1. The Contracting States shall notify each other in writing through diplomatic channels that the procedures required by its law for the entry into force of this Agreement have been satisfied. The Agreement shall enter into force on the date of receipt of the last notification. 

 

2. The Agreement shall have effect: 

a) in respect of taxes withheld at source, to income derived on or after 1 January of the calendar year next following the year in which the Agreement enters into force; 

b) in respect of other taxes on income, and taxes on capital, to taxes chargeable for any taxable year beginning on or after 1 January of the calendar year next following the year in which the  Agreement enters into force. 

 

Article 29 

Termination 

1. This Agreement shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Agreement, through diplomatic channels, by giving notice of termination at least six months before the end of any calendar year beginning after the expiration of a period of five years from the date of its entry into force. 

 

2. The Agreement shall cease to have effect: 

a) in respect of taxes withheld at source, to income derived on or after 1 January of the calendar year next following the year in which the notice is given; 

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

 

IN WITNESS WHEREOF the undersigned, being duly authorized thereto, have signed this Agreement;  

 

Done in duplicate in the French, Tajik and English languages, all texts being equally authentic. In the case of any divergence between the texts, the English text shall prevail.

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