Law On The Conclusion Of Double Taxation Agreement Between Denmark And Georgia

Original Language Title: Lov om indgåelse af dobbeltbeskatningsaftale mellem Danmark og Georgien

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Read the untranslated law here: https://www.retsinformation.dk/Forms/R0710.aspx?id=117612

Overview (table of contents) Annex 1

Translation of the full text of the Law on the conclusion of double taxation agreement between Denmark and Georgia

WE, MARGRETHE the SECOND, by the grace of God Queen of Denmark, do indeed:

The Danish Parliament has adopted and we know Our consent confirmed the following law:

§ 1. Agreement of 10. October 2007 between the Government of the Kingdom of Denmark and the Government of Georgia for the avoidance of double taxation and prevention of tax evasion with respect to income taxes, may be accepted on Denmark's behalf. The agreement with associated protocol is included as annex 1 to this Act.

(2). The agreement enters into force and is applicable in Denmark in accordance with the provisions of article 29 of the agreement.

§ 2. The law shall enter into force on the 1. July 2008.

§ 3. The law does not apply to the Faroe Islands and Greenland.
Given at Christiansborg Palace, on 17 March. June 2008 MARGRETHE r./Kristian Jensen Annex 1 Translation

AGREEMENT

BETWEEN

THE GOVERNMENT OF THE KINGDOM OF DENMARK AND

THE GOVERNMENT OF GEORGIA

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF TAX EVASION

IN THE CASE OF INCOME TAXES

The Government of the Kingdom of Denmark and the Government of Georgia,

who want to promote and strengthen the economic, cultural and scientific relations by concluding an agreement for avoidance of double taxation and the prevention of fiscal evasion with respect to income taxes,

have agreed upon the following:

Article 1

Persons covered by the agreement

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

Article 2

Taxes covered by the agreement

1. This agreement shall apply to taxes on income, which is printed on behalf of a Contracting State or of its political-administrative subdivisions or local authorities, irrespective of how they are levied.

2. As to be regarded as taxes on income all taxes imposed on all income or part of income, including taxes on profits from the sale of movable or immovable property, as well as taxes on capital appreciation.

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




(a)) in Denmark:





in the income tax rate for the State)

II) the municipal income tax







(hereinafter referred to as "Danish tax").




(b)) in Georgia:





in) tax on profit;

II) the income tax;







(hereinafter referred to as ' Georgian tax ').

4. This agreement shall also apply to taxes identical or substantially similar to that after the date of signature of the agreement is printed as a supplement to, or in place of the existing taxes. The competent authorities of the Contracting States shall notify each other of important changes which have been made in their taxation laws.

Article 3

Common definitions

1. Unless otherwise stated in the context of this agreement, the following terms have the following meaning:




(a)) the terms "a Contracting State" and "the other Contracting State '' means Denmark or Georgia, depending on context;

(b)) the term ' Denmark ' means the Kingdom of Denmark including any area outside the territorial sea of Denmark which in accordance with international law and according to Danish law is or later may be designated as an area within which Denmark may exercise sovereign rights with respect to the exploration and exploitation of natural deposits on the seabed or its subsoil and the overlying waters and with regard to other activities for the purpose of exploration and economic exploitation of the area. The term does not include the Faroe Islands and Greenland;

c) whereas the term ' Georgia ' means the area within Georgia's State borders, including land, internal waters and territorial sea and air space above, within which area Georgia exercises sovereignty, as well as the contiguous zone, the exclusive economic zone and the continental shelf, which is adjacent to the territorial sea within which Georgia can exercise sovereign rights in accordance with international law;

(d)) the term ' person ' includes an individual, a company and any other Association of persons;

(e)), the term ' company ' means any legal person or any entity for tax purposes is treated as a legal person;

f) the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise operated by a person who is domiciled in a Contracting State and an enterprise operated by a person who is resident in the other Contracting State;

g the term "international traffic") means any transport by ship or aircraft used by an enterprise of a Contracting State, except where the ship or aircraft are used exclusively between places in the other Contracting State;

(h)), the term ' competent authority ' means:





in) in Denmark:







Skatteministeren or his authorized delegate;




II) in Georgia:



The Ministry of finance or its authorised delegate;




in) the term ' citizen ' means:





in) any natural person who has the nationality of a Contracting State;

II) any legal person or association, which is made up by virtue of the legislation in force in a Contracting State;







2. when a Contracting State-application of the agreement at any time, any term not defined therein, unless otherwise follows from the context to be attributed to the importance, as it has at this point in the legislation of that State concerning the taxes to which the agreement applies, any meaning in the tax laws used in this State, must precede the importance , this expression may be assigned elsewhere in the legislation of that State.

Article 4

Tax home

1. In this agreement the term ' means a person who is domiciled in a Contracting State ' shall mean any person who, under the law of that State, is liable to tax by reason of place of residence, domicile, seat of management or any other criterion of a similar nature, and also includes that State and any related political-administrative subdivision or local authority. This term does not, however, a person who is liable to tax in that State only of income from sources in that State.

2. If a natural person in accordance with the provisions of paragraph 1 of this article is a resident of both Contracting States, his status shall be determined according to the following rules:




a) he shall be deemed to be a resident only of the State in which he has a permanent home at his disposal. If he has a permanent home available in both States, he shall be deemed to be a resident of the State, with which he has the strongest personal and economic relations (at the Centre of his life interests);

(b)) if it cannot be determined, in which State he has at the Centre of his life interests, or if he has not a permanent home available in any of the States, he shall be deemed to be a resident only of the State in which he habitually resides;

c) if he has usually stay in both States, or if he does not have such stay in any of them, he shall be deemed to be a resident only of the State in which he is a national;

d) if he is a national of both States, or if he is not a national of any of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.



3. If a non-physical person in accordance with the provisions of paragraph 1 of this article is a resident of both Contracting States, it shall be deemed to be a resident only of the State in which its real leadership has its seat.

Article 5

Permanent establishment

1. In this agreement the term ' permanent establishment ' means a fixed place of business through which the business of an enterprise wholly or partly carried on.

2. The term "permanent establishment" includes especially:




(a)) a location from which an undertaking is managed;

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 where natural deposits are mined.



3. A building site or construction or Assembly work constitutes a permanent establishment only if it lasts more than 6 months.

4. An installation, a drilling rig or ship used for the exploration of natural resources, constitutes a permanent establishment only if it lasts for more than 6 months. Activities carried out by an enterprise associated with another enterprise shall be regarded as carried on by the enterprise with which it is associated if the activities in question:




(a)) is essentially the same as that carried on by the latter undertaking, and

(b)) are involved in the same project or the same operation,



unless those activities carried on at the same time. For the purposes of this paragraph, entities considered to be connected, when the same persons directly or indirectly share in the management of, control over, or the capital of those undertakings.


5. Notwithstanding the preceding provisions of this article, the term ' permanent establishment ' shall not be deemed to include:




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

(b)) the maintenance of a stock in trade related undertaking solely for the purpose of storage, display or extradition;

(c)) the maintenance of a stock in trade solely for the purpose of undertaking processing associated with another undertaking;

d) the maintenance of a fixed place of business solely for the purpose of making the procurement of any goods or collect information for the enterprise;

e) the maintenance of a fixed place of business solely for the purpose of exercising any other business of the preparatory or remedial nature of the enterprise;

f) the maintenance of a fixed place of business solely for the performance of any combination of the in subparagraph (a))-e) activity referred to the permanent establishment, provided that the entire business as a result of this combination is of a preparatory or remedial nature.



6. If a person who is not such an independent representative as referred to in paragraph 7 of this article, acting on behalf of an enterprise of a Contracting State and that person has and habitually exercises a power of attorney to conclude agreements in the operator's name, this undertaking notwithstanding the provisions of paragraph 1 and 2 of this article shall be deemed to have a permanent establishment in that State with regard to any business which that person undertakes for the enterprise, unless that person's business is limited to such undertaking, as referred to in paragraph 5 of this article, and which, if it was exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of this paragraph.

7. An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it operates the business in that State through a broker, Commission agent or any other independent representative, provided that such persons are acting within the scope of their normal professional activities.

8. the fact that a company which is resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which operates business in that other State (whether through a permanent establishment or otherwise), shall not of itself cause that one company is considered a permanent establishment of the other.

Article 6

Income of real estate

1. Income as a person who is domiciled in a Contracting State, the acquirer of the immovable property (including income from agriculture or forestry) situated in the other Contracting State, may be taxed in that other State.

2. the term ' property ' must be attributed to the importance it has in the law of the Contracting State in which the property in question is situated. The term shall in any case include accessory to immovable property, the crew and the implements used in agriculture and forestry, rights to which the provisions of civil law relating to immovable property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the use of, or the right to exploit, mineral deposits, sources and other natural occurrences. Ships and aircraft shall not be regarded as immovable property.

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

4. the provisions of paragraphs 1 and 3 of this article shall also apply to the income from immovable property belonging to an undertaking and on income from immovable property used for the performance of free professions.

Article 7

Profits from business activities

1. Profit, as acquired by an enterprise of a Contracting State shall be taxable only in that State unless the enterprise operates professional activities in the other Contracting State through a permanent establishment situated there. If the undertaking operates the aforementioned business activities, can the operator's profit is taxed in the other State, but only the part thereof as is attributable to that permanent establishment.

2. where an enterprise of a Contracting State operates business in the other Contracting State through a permanent establishment situated there, which, unless the provisions of paragraph 3 of this article causes second, in each Contracting State be attributed to that permanent establishment the profits which it might be expected to achieve, if it had been a free and independent undertaking was engaged in the same or similar activities under the same or similar conditions and which under completely free relationship did business with the entity, if it is a permanent establishment.

3. for the appointment of a permanent establishment profits shall be allowed to deduct the costs incurred for the permanent establishment, including general expenses incurred for management and administration, whether the costs are incurred in the State in which the permanent establishment is situated or elsewhere.

4. If it has been customary in a Contracting State to employ the profits attributable to a permanent establishment on the basis of an apportionment of the total profits of the undertaking between its various departments, nothing in paragraph 2 of this article to prevent this State party to employ the taxable profit on the basis of such customs duties. The chosen allocation method must, however, be such that the result is in accordance with the principles laid down in this article.

5. No profits shall be attributed to a permanent establishment, simply because this permanent establishment has made procurement of products for the enterprise.

6. for the purposes of the preceding paragraphs of this article, the profits attributable to the permanent establishment, employed by the same method year by year unless there is good and sufficient reason to use a different approach.

7. where profits include the incomes referred to separately in other articles of this agreement, the provisions of the other articles are not affected by the provisions of this article.

Article 8

Shipping and aviation

1. Profits acquired by an enterprise of a Contracting State by operation of ships or aircraft in international traffic may be taxed in that State.

2. the provisions of paragraph 1 of this article shall also apply to profits from the participation in a pool, a business community or an international operating agency.

Article 9

Associated enterprises

1. If




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

(b)) the same persons participate directly or indirectly in the management of, control over, or capital of an enterprise of a Contracting State, as well as an undertaking in the other Contracting State,



and that in some of these cases between the two undertakings has been agreed or laid down conditions relating to their commercial or financial relations which differ from the terms, which would have been agreed between independent enterprises, then any profits which, if these conditions had not been available, would be accrued in one of these entities, but which, by reason of these terms are not squarely within this be included for this enterprise profit and taxed accordingly.

2. If a State party to an enterprise in this State include profit and taxes accordingly-profits on which an enterprise of the other Contracting State has been taxed in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions that are spoken between the two undertakings , had been the same, which would have been agreed between independent enterprises, then that other State shall make an appropriate adjustment of the tax amount calculated that of profit. 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

Yield

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

2. However, Such dividends may also be taxed in the Contracting State in which the company that payor, a resident, and according to the legislation of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax does not exceed pålignede as follows:




a) 0% of the gross amount of the dividends if the beneficial owner is a company, which directly or indirectly owns at least 50 per cent of the capital of the company paying the dividends and has invested more than two million euros, or the equivalent in Danish or Georgian currency, in the capital of the company that payor;


b) 0% of the gross amount of the dividends if the beneficial owner is the other Contracting State or that State central bank or by any public authority or public institution (including a financial institution) owned or controlled by the Government of that other State;

c) 5 per cent of the gross amount of the dividends if the beneficial owner is a company, which directly or indirectly owns at least 10 per cent of the capital of the company paying the dividends and has invested more than EUR 100,000 or the equivalent in Danish or Georgian currency, in the capital of the company that payor;

d) 10 per cent of the gross amount of the dividends in all other cases.



The competent authorities of the Contracting States shall by mutual agreement determine the detailed rules for the implementation of these restrictions.

This paragraph shall not affect access to tax the profits of the company, of which the dividend is paid.

3. The term "dividends" as used in this article means income from shares, mining shares, founder shares or other rights, not being debt-claims, and which give a right to share in profits, as well as income from other corporate rights which is subject to the same taxation treatment as income from shares under the laws of the State of which the company making the distribution is a resident.

4. the provisions of paragraph 1 and 2 of this article shall not apply if the beneficial owner of dividends, which is domiciled in a Contracting State operates the business activities in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or profession freely through a driver there set fixed location and the shareholding, which are the basis for the disbursement of the proceeds , directly connected with such permanent establishment or fixed location. In such a case, the provisions of article 7 and article 14 shall apply.

5. where a company which is domiciled in a Contracting State, acquires profits or income from the other Contracting State, that other State may not impose on any tax on the dividends paid by the company, unless the proceeds shall be paid to a person who is a resident of that other State, or unless the shareholding, which are the basis for the disbursement of the proceeds, directly connected with a permanent establishment situated in that other State, or make the company's non-distributed profits of a tax on the company's non-distributed profits, even if the dividends paid or the non-distributed profit consists wholly or partly of profits or income arising from that other State.

Article 11

Interest rates

1. Interest generated from a Contracting State and paid to a person who is resident in the other Contracting State, may, if the person concerned is rivals ' rightful owner, only be taxed in that other State.

2. The term "interest" means income from debt-claims in this article of any kind, whether they are secured by a mortgage on immovable property or not, and whether they have a right to a share in the debtor's profits or not, and in particular income from bills and income from bonds or the promissory notes, including agiobeløb and gains associated with such debt securities , bonds or the promissory notes.

3. the provisions of paragraph 1 of this article shall not apply if the rivals ' rightful owner who is domiciled in a Contracting State, operates the business activities in the other Contracting State in which the interest arises, through a permanent establishment situated therein or carries on business in that other State free from a fixed location, and the located there claim that underlie any unpaid interest , directly connected with such permanent establishment or fixed location. In such a case, the provisions of article 7 or article 14 of this agreement apply.

4. If a special connection between the person who pays interest, and the beneficial owner or between these and a third person has resulted in interest rates seen in relation to the debt-claim for which it is paid, exceeds the amount which would have been agreed between the payer and the beneficial owner, if such a connection had not been available, the provisions of this article shall apply only to the last-mentioned amount. In such a case, the excess amount can be taxed in accordance with the legislation of each of the Contracting States, with due regard to the other provisions of this agreement.

Article 12

Royalties

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

2. The term "royalties" 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, any patent, trade mark, design or model, plan, secret formula or method of production, or for information concerning industrial, commercial or scientific experience.

3. the provisions of paragraph 1 of this article shall not apply if the beneficial owner, that is the amount of the royalty domiciled in a Contracting State operates the business activities in the other Contracting State in which the royalty amount arises, through a permanent establishment situated therein or carries on business in that other State free from a fixed location, and the located there right or property which are the basis for the paid royalties , directly connected with such permanent establishment or fixed location. In such a case, the provisions of article 7 or article 14 of this agreement apply.

4. If a special connection between the paying royalties, and the beneficial owner or between these and a third person has caused the royalty amount seen in relation to the use, right or information for which it is paid, exceeds the amount which would have been agreed between the payer and the beneficial owner, if such a connection had not been available, the provisions of this article shall apply only to the last-mentioned amount. In such a case, the excess amount can be taxed in accordance with the legislation of each of the Contracting States, with due regard to the other provisions of this agreement.

Article 13

Capital gains

1. the net profit, as a person who is domiciled in a Contracting State, acquired through the sale of immovable property referred to in article 6 and situated in the other Contracting State, may be taxed in that other State.

2. Profits from the sale of movable property forming part of the business assets of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, or through the sale of movable property belonging to a fixed location, such as a person who is domiciled in a Contracting State, have available for the pursuit of free profession in another Contracting State , including profits from the sale of such a permanent establishment (separately or together with the whole enterprise) or of such a fixed location, may be taxed in that other State.

3. Profits acquired by an enterprise of a Contracting State through the sale of ships and aircraft, which are used in international traffic, or movable property, which is linked to the operation of such ships or aircraft, can only be taxed in that State.

4. Profit on the sale of all assets other than those referred to in paragraphs 1, 2 and 3 of this article can only be taxed in the Contracting State of which the alienator is a resident.

Article 14

Free professions

1. Income from free professions or by other work of original character acquired by a person who is domiciled in a Contracting State shall be taxable only in that State unless he has a fixed location, which is constantly available to him in the other Contracting State for the purpose of carrying on of his business. If he has such a fixed location, income is taxed in the other State, but only to the extent that it can be attributed to this fixed place.

2. The term "free business" includes especially independent scientific, literary and artistic activities and educational and teaching activities as well as self-employment as a doctor, lawyer, engineer, architect, dentist and Auditor.

Article 15

Personal work in the employment relationship

1. subject to the provisions of articles 16, 18 and 19 of this agreement leads to second, gage, wages and other similar remuneration, which is acquired by a person who is domiciled in a Contracting State for personal work, only be taxed in that State, unless the work is performed in the other Contracting State. Is the work performed there, can the remuneration obtained therefor, be taxed in that other State.

2. Notwithstanding the provisions of paragraph 1 of this article, remuneration, which is acquired by a person who is domiciled in a Contracting State for personal work performed in the other Contracting State, only subject to taxation in the first-mentioned State, if:




a) beneficiary staying in the other State in one or several periods which together do not exceed 183 days in a 12-month period commencing or ending in the fiscal year concerned, and

(b) the remuneration is paid by, or on behalf of) an employer who is a resident of the first-mentioned State, and


(c)) the royalty is not for a permanent establishment which the employer has in the other State.



3. Notwithstanding the preceding provisions of this article, remuneration for personal work, which is carried out on board a ship or an aircraft used in international traffic by an enterprise of a Contracting State, be taxed in the State.

Article 16

Directors ' fees

Directors ' fees and other similar remuneration, which is acquired by a person who is domiciled in 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

Artists and athletes

1. Notwithstanding the provisions of articles 7, 14 and 15 of this agreement income, which can be acquired by a person who is domiciled in a Contracting State, as performer, such as theater, film, radio or television artist, or a musician, or as a sportsman, by personally practised as such in the other Contracting State, be taxed in that other State.

2. If income from personal activities in the capacity of performing artist or sportsperson, not accruing to the artist or athlete himself, but another person, that income may, notwithstanding the provisions of articles 7, 14 and 15 of this agreement, be taxed in the Contracting State in which the artist's or sport's company is exercised.

3. the provisions of paragraph 1 and 2 of this article shall not apply to income acquired by activities in a Contracting State by artistes or sportsmen if the visit to that State is financed by public funds of one or both of the Contracting States or political-administrative subdivisions or local authorities. In such cases, income is taxable only in the Contracting State in which the artist or sportsman or woman is resident.

Article 18

Pensions, social security benefits and similar payments

1. Payments made by an individual who is domiciled in a Contracting State receives for the social security legislation of the other Contracting State or by any other arrangement from funds provided by that other State or a political subdivision or local relevant authority, may be taxed in that other State.

2. Unless the provisions paragraph 1 of this article and article 19, paragraph 2, of this agreement leads to second, pensions and other similar remuneration derived by a Contracting State and paid to a person who is resident in the other Contracting State, whether this is done for past services or not, only be taxed in that other State. Pensions and other similar remuneration may, however, be taxed in the first-mentioned Contracting State if :




a) contributions paid by the consignee to the pension scheme were deducted from the recipient's taxable income in the first-mentioned Contracting State in accordance with the legislation of that State; or

b) contributions paid by an employer was not taxable income to the recipient in the first-mentioned State under the legislation of that State.



3. Pensions must be considered to come from a Contracting State, if they are paid by a pension fund or other similar institution providing pension schemes which natural persons can join in order to secure retirement benefits when such a pension fund or other equivalent institution is created, fiscally recognized and controlled in accordance with the laws of this State.

Article 19

Public office









1.





a)





Gage, wages and other similar remuneration, other than pensions, paid by a Contracting State or a related political-administrative subdivision or local authority to a natural person for the performance of the duties of this State, or subdivision or authority may be taxed in that State.





 



(b))





How to gage, payroll or other similar remuneration may however only be taxed in the other Contracting State if the duties are performed in this State, and that is a person resident in that State, that:





 

 



(i)





is a national of that State; or





 

 



(ii)





was not a resident of that State solely for the purpose of conducting duties.







2.





(a))





Any pension, paid by a Contracting State or a related political-administrative subdivision or local authority, or from funds provided by these to a natural person for carrying out duties for that State or subdivision or authority may be taxed in that State.





 



(b))





Such a pension can only be taxed in the other Contracting State if the recipient is a resident of, and a national of this State.









3. The provisions of articles 15, 16, 17, and 18 shall apply to salaries, wages and other similar gage, and on pensions paid for the performance of duties in connection with business activities operated by a Contracting State or a related political-administrative subdivision or local authority.

Article 20

Professors, teachers and scientific researchers

1. A professor, teacher or researcher who for a period not exceeding 6 months, visits a Contracting State for the purpose of teaching or research at a university or other equivalent institution in this State and who immediately before that visit was a resident of the other Contracting State shall not be taxed in the first-mentioned State, the remuneration for such teaching or research provided that such remuneration are taxed in the other Contracting State. This paragraph shall apply only for a period not exceeding 6 months from the date of the person's first visit in a Contracting State with such purpose and shall not apply to persons who are nationals of that State.

2. the provisions of this article shall only apply to income from research, when the person performs research in the public interest and not primarily for the benefit of private interests.

Article 21

Students

Amount that a student or apprentice who is, or immediately before visiting a Contracting State, was a resident of the other Contracting State and who is staying in the first-mentioned State exclusively in the study or educational purposes, with a view to receive his subsistence, study or training, shall not be taxed in that State, provided that such amounts arise from sources outside that State.

Article 22

Other income

1. Incomes acquired by a person who is domiciled in a Contracting State and which are not dealt with in the foregoing articles of this agreement, can, no matter from where they come, only be taxed in that State.

2. the provisions of paragraph 1 of this article shall not apply to income, other than income from immovable property as defined in article 6, paragraph 2, of this agreement, if it is in a Contracting State a resident recipient of such income driver business in the other Contracting State through a permanent establishment situated therein or exercise freely professions from a fixed location located there , and the right or property in respect of which the income is paid, the directly connected with such permanent establishment or fixed location. In such a case, the provisions of article 7 or article 14 of this agreement apply.

3. the provisions of this article shall not apply to the taxation of gains that individuals receive from games and lotteries.

Article 23

The Elimination of double taxation

Double taxation shall be avoided as follows:

1. In Denmark:

If a person who is resident in Denmark, acquires income which, in accordance with the provisions of this agreement, may be taxed in Georgia, Denmark – unless the provisions of subparagraph (c)) in this paragraph results in second – reduce the person's tax on income by an amount equal to the income tax, which is paid in Georgia.

This deduction shall not, however, exceed that part of the income tax, as computed before the deduction is given, which is attributable to the income which may be taxed in Georgia.

If a person who is resident in Denmark, acquires income which, in accordance with the provisions of this agreement may be taxed only in Georgia, Denmark may include this income in may, the tax base, but must reduce income taxes with the part attributable to the income derived from Georgia.

2. In Georgia:





(a)) When a person who is a resident of Georgia, acquires income which, in accordance with the provisions of this agreement, may be taxed in Denmark, Georgia must reduce that person's tax on income by an amount equal to the income tax, which is paid in Denmark. This deduction shall not, however, exceed that part of the income tax, as computed before the deduction is given, which is attributable to the income which may be taxed in Denmark.

(b)) When a person who is a resident of Georgia, acquires income, which according to the provisions of this Agreement shall be exempt from tax in Georgia, Georgia still must take the exempted income into account for the calculation of the tax on the person's other income.



Article 24

Non-discrimination

1. Nationals of a Contracting State shall, in another Contracting State could not be subject to any taxation or related requirements that are different or more burdensome than the taxation and connected requirements to which nationals of that other State under the same conditions, in particular with regard to the seat, is or may be subject. Notwithstanding the provisions of article 1 of this agreement, this provision shall 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 in any of the Contracting States could be subject to any taxation or related requirements that are different or more burdensome than the taxation and connected requirements to which nationals of the State in question under the same circumstances, in particular with regard to the home, is or may be subject.

3. the taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, shall not be less advantageous in that other State than the taxation of undertakings of that other State in pursuit of the same company. This provision shall not be interpreted as binding a Contracting State to grant to individuals who are resident in the other Contracting State, the personal tax concessions, concessions and reductions, as the resulting from marital or dependent family admits persons resident within its own territory.

4. Except where the provisions of article 9, paragraph 1, article 11, paragraph 4, or article 12, paragraph 4, of this Agreement shall apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a person who is resident in the other Contracting State, by the employment of such an undertaking taxable profit be deductible under the same conditions as if they had been paid to a person who is a resident of the first-mentioned State.

5. Enterprises of a Contracting State, whose capital wholly or partly owned or controlled, directly or indirectly, by one or more persons who are resident in the other Contracting State, shall not in the first-mentioned State to any taxation or could be subject to related requirements that are different or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subject.

6. Notwithstanding the provisions of article 2 of this agreement, the provisions of this article apply to taxes of every kind and description.

Article 25

The procedure for the conclusion of reciprocal agreements

1. where a person considers that the actions taken by one or both of the Contracting States for him makes it or will result in taxation not in accordance with the provisions of this agreement, he may, irrespective of the remedies that may be required by those States ' internal law may refer his case to the competent authority of the Contracting State of which he is a resident or If his case is covered by article 24, paragraph 1, of the competent authority of the Contracting State of which he is a national. The proceedings must be instituted within three years from the day on which there is given him the first notification of the action resulting in taxation not in accordance with the provisions of this agreement.

2. The competent authority should, if the objection appears to it to be justified and if it is not itself able to reach a reasonable solution, seek to resolve the case by mutual agreement with the competent authority of the other Contracting State for the purpose of avoiding taxation, which is not in accordance with this agreement. Any agreement must be implemented without regard to the time limits provided for in the domestic law of Contracting States.

3. The competent authorities of the Contracting States must apply by mutual agreement to solve difficulties or doubts that might arise concerning the interpretation or application of this agreement. They can also negotiate on the avoidance of double taxation in cases not provided for in the agreement.

4. The competent authorities of the Contracting States may enter into direct connection with each other, including through a joint com mis sion consisting of themselves or their representatives, with a view to the conclusion of an agreement in accordance with the preceding paragraphs.

Article 26

The exchange of information

1. The competent authorities of the Contracting States shall exchange such information as is likely to be of importance for the implementation of the provisions of this agreement or to the administration or enforcement of the domestic law of the Contracting States concerning taxes of any nature or description imposed on behalf of the Contracting States, or their political-administrative subdivisions or local authorities, insofar as such taxation is not contrary to the agreement. The exchange of information is not restricted by articles 1 and 2 of this agreement.

2. All information received by a Contracting State in accordance with paragraph 1 of this article, shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be granted only to persons or authorities (including courts and administrative authorities) involved in the equation, collecting, collection, enforcement or prosecution in respect of, or appeal decisions in relation to the taxes referred to in paragraph 1 of this article, or by the supervisory tasks in connection therewith. Such persons or authorities shall use the information only for the purposes mentioned. They can notify the information under the public legal proceedings or in judicial decisions.

3. the provisions of paragraph 1 and 2 of this article may in no case be interpreted as imposing an obligation on a State party:




(a)) to carry out administrative acts contrary to this or the other Contracting State legislation and administrative practice,

b) to supply information which is not obtainable under this or that of the other Contracting State legislation or general management practices,




c) to supply information which would disclose any commercial, business, industrial, commercial or professional secret or method of production, or information whose disclosure would be contrary to the general interests (ordre public).





4. If a State party requesting information in accordance with this article, the other Contracting State must implement measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation under the preceding sentence is subject to the limitations of paragraph 3 of this article, but in no case does such restrictions it is possible for a State party to refrain from providing information on the sole ground that this State does not even have any fiscal interest in such information.

5. In no case shall the provisions of paragraph 3 of this article, be interpreted as meaning that they make it possible for a Contracting State to decline to supply information solely because the information must be obtained from a bank, other financial in sti tu tion, representative or person acting as authorized or as trustee, or because the information relates to the ownership of 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 offices shall enjoy, in accordance with the General rules of international law or special agreements.

Article 28

Protocol and amendments

1. The attached Protocol shall form an integral part of this agreement.

2. Changes and additions to this agreement can be made in the form of protocols, which shall form an integral part of this agreement. Such protocols shall enter into force on the same conditions as those which apply in accordance with article 29 of this agreement.

Article 29

Date of entry into force of

1. The Contracting States shall give each other through diplomatic channels notifying, that the conditions laid down in their national laws for the entry into force of this agreement have been fulfilled.


2. This agreement shall enter into force on the first day of the third month after the month in which the last notification from the Contracting States on the fulfilment of the legal procedures necessary for the entry into force of the agreement, is received. This agreement shall have effect in respect of taxes for any fiscal year, which begins on 1 January. January or later in the calendar year that follows the year in which the agreement enters into force.

Article 30

Termination

This agreement shall remain in force until terminated by a Contracting State. Each of the Contracting States may denounce the agreement after the expiration of a period of five years from the date of entry into force of the agreement, through diplomatic channels, by giving the other Contracting State written notice of termination at least six months before the expiry of a calendar year. In this case, this Agreement shall cease to have effect in respect of taxes for any fiscal year, which begins on 1 January. January or later in the calendar year that follows the year in which the notice of termination is given.

In witness whereof the undersigned, duly authorised thereto, have signed this agreement.

Done in duplicate at Copenhagen on 10. October 2007 in English.

For the Government of the Kingdom of Denmark

Kristian Jensen

For the Government of Georgia

Gela Bezhuashvili

PROTOCOL

to

AGREEMENT

BETWEEN

THE GOVERNMENT OF THE KINGDOM OF DENMARK AND

THE GOVERNMENT OF GEORGIA

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF TAX EVASION

IN THE CASE OF INCOME TAXES

At the time of signature of the Agreement between the Government of the Kingdom of Denmark and the Government of Georgia for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, the undersigned have agreed that the following provisions shall form an integral part of the agreement:

1. Interpretation of the agreement

It is a common understanding that the provisions of the agreement, which have been designed in accordance with the corresponding provisions o the OECD model for dobbeltbeskatningsaftaleer with respect to taxes on income and on capital, generally must be attributed to the importance, as reflected in the OECD commentary to the model. This common understanding does not apply with respect to




(a)) the Contracting States reservations or observations in relation to the OECD-model or the commentaries thereto,

b) aberrant interpretation, as the competent authorities may agree on, after the agreement has entered into force.



The OECD comments – as these may be modified from time to time – constitute an interpretation as provided for in the Vienna Convention of 23. May 1969 on the law of treaties.

2. With regard to article 2, paragraph 3, point (b))

It notes that in accordance with the provisions of the Georgian tax legislation to be paid wealth tax in Georgia.

3. With regard to article 3, paragraph 1, point (e))

It is a common understanding that the term "undertaking" should be interpreted to mean that the term means any legal person or any entity for tax purposes is treated as a legal person, where such a legal person or other entity engaged in an economic activity.

4. Concerning article 4

It is common understanding that a legal person who is established in Denmark in accordance with the legislation of Denmark with the purpose to provide pensions and other similar services available to natural persons, and which is generally exempt from tax in Denmark, shall be deemed to be resident in Denmark for the purpose of this agreement.

5. With regard to article 8

It is a common understanding that the profits from the operation of ships and aircraft in international traffic include profits from letting on bareboat-conditions of ships or aircraft, or income from the use or rental of containers (including trailers, barges and similar equipment for the transport of containers), if such profit has close links with other profits from operations of ships or aircraft in international traffic.

6. With regard to article 8 and article 13

It is a common understanding regarding profits and capital gains, which are acquired by the Danish, Norwegian and Swedish air transport Consortium Scandinavian Airlines System (SAS), the provisions of article 8 and article 13 shall apply only to that part of the profits or capital gains equal to the share in the Consortium, owned by the Danish partner.

In witness whereof the undersigned, duly authorised thereto, have signed this Protocol.

Done in duplicate at Copenhagen on 10. October 2007 in English.

For the Government of the Kingdom of Denmark

Kristian Jensen

For the Government of Georgia

Gela Bezhuashvili