Law On The Conclusion Of Double Taxation Treaty Between Denmark And Israel

Original Language Title: Lov om indgåelse af dobbeltbeskatningsoverenskomst mellem Danmark og Israel

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Read the untranslated law here: https://www.retsinformation.dk/Forms/R0710.aspx?id=128520

Overview (table of contents) Annex 1 The full text of the Law on the conclusion of double taxation treaty between Denmark and Israel

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 9. September 2009 between the Government of the Kingdom of Denmark and the Government of the State of Israel 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 is included as annex 1 to this Act.

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

(3). The agreement between the Government of the Kingdom of Denmark and the Government of the State of Israel for the avoidance of double taxation and the prevention of fiscal evasion with respect to income tax and wealth tax, signed on 27. June 1966 repealed and its provisions shall cease to have effect in accordance with the provisions of article 29, paragraph 3, of the agreement referred to in paragraph 1.

§ 2. Persons as the 9. September 2009 was a resident of Israel, and which at this time received pensions, social security benefits and similar payments, which may be taxed in Denmark pursuant to article 17 of the agreement referred to in article 1, paragraph 1 shall be exempt from taxation in Denmark of the amounts concerned, if these amounts pursuant to article 17 or article 21 of the Convention referred to in article 1, paragraph 3, could be taxed only in Israel.

(2). Exemption from taxation referred to in paragraph 1 shall lapse if the person ceases to be a resident of Israel, or if the pensions, social security benefits and similar payments referred to in paragraph 1, shall come to an end. However, this does not apply if the right to a benefit shall cease and be replaced by the right of another performance in the immediate extension.

(3). There can not later be granted the relief referred to in paragraph 1, if the exemption is cancelled in accordance with paragraph 2.

§ 3. The law shall enter into force on the 1. December 2009.

§ 4. The law does not apply to the Faroe Islands and Greenland.
Given at Amalienborg Palace, 20. November 2009 Under Our Royal hand and Seal MARGRETHE r./Kristian Jensen Annex 1

AGREEMENT

BETWEEN THE GOVERNMENT OF THE KINGDOM OF DENMARK AND THE GOVERNMENT OF THE STATE OF ISRAEL FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO INCOME TAXES

The Government of the Kingdom of Denmark and the Government of the State of Israel,

who want to enter into an agreement for the 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 subdivisions or local authorities, irrespective of how they are levied.

2. 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, taxes assessed the total payroll that is paid by enterprises, 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 ' the Danish tax ').




(b)) in Israel:

I) income taxes and corporate taxes (including taxes on capital gains), and

II) tax on gains from the disposal of property under the law on taxation of real estate,



(hereinafter referred to as ' Israeli tax ').

4. The agreement also applies to the taxes of the same or substantially the same nature, which after the date of signature of the agreement is printed in addition to, or instead 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, the following terms in this agreement have the meaning specified below:




(a)) the terms "a Contracting State" and "the other Contracting State '' means Denmark or Israel, depending on the 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 ' Israel ' means the State Israel and includes in the geographical sense, the area in which the Government of the State of Israel has the right to tax, including its territorial waters and the sea areas adjacent to territorial farvandets external border, as well as their seabed and subsoil, over which the State of Israel in accordance with the laws of the State of Israel and international law shall exercise sovereignty or other rights and jurisdiction.

(d)) the term ' person ' includes an individual, a corporation, a Fund 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 term ' undertaking ' is used on any kind of professional activity.

g) 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.

(h) the term "international traffic") means any transport by ship or aircraft used by an undertaking which has its real managerial seat in a Contracting State, except where the ship or aircraft are used exclusively between places in the other Contracting State.

in) the term ' competent authority ' means:

in) in Denmark: Skatteministeren or his authorized delegate,

II) in Israel: the Minister of finance or his authorised representative.

(j)), the term ' citizen ' means:

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

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

k) whereas the term ' economic activities ' shall include the exercise of free professions and of other activities of an independent character.



2. when a Contracting State-application of the agreement at any time, any term not defined therein, unless otherwise follows from the context, 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, company registration, management's seat or any other criterion of a similar nature, and also includes that State and any political subdivision or the corresponding 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. A legal person who is domiciled in a Contracting State in accordance with the legislation of that State, and which is generally exempt from tax in this State, shall for the purposes of this Agreement shall be deemed to be a resident of that Contracting State.

3. If a natural person in accordance with the provisions of paragraph 1 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 where he usually 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.




4. If a non-physical person in accordance with the provisions of paragraph 1 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 or 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 12 months. Business carried on 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.

4. 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 undertaking,

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 undertaking,

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.



5. If a person who is not an independent representative as referred to in paragraph 6, 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 paragraphs 1 and 2 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 4, 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.

6. 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.

7. 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 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 ' real estate ' has the same meaning as it has in the law of the Contracting State in which the property in question is situated. The term includes, in all cases, accessory to immovable property, crew and props 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, boats and aircraft shall not be regarded as immovable property.

3. the provisions of paragraph 1 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 shall also apply to the income from immovable property belonging to an undertaking.

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 entails the other, 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 can deductions for 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 shall prevent this Contracting State in employing 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, 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

Profit from international traffic

1. Profits from operations of ships or aircraft in international traffic can only be taxed in the Contracting State in which the operator's real leadership has its seat.

2. If a company has its real leadership seat on board a ship or a boat, be considered management's seat to be located in the Contracting State in which the ship's home port is situated, or, if there is no such home harbour, in the Contracting State in which the operator of the ship is a resident.

3. for the purposes of this article, the following are covered by profits from operations of ships or aircraft in international traffic:




(a) the rental of ships or profit from) aircraft with crew (' time ' or ' voyage ').

b) profit for rental of ships or aircraft without crew (' bareboat ') if the rental income has a close connection to the profits made from the operation of ships or aircraft in international traffic.



4. Profit by use, making available or lease of containers (including trailers, barges and similar equipment for the transport of containers) used for the transport of goods in international traffic, may be taxed in the Contracting State in which the operator's real leadership has its seat.

5. the provisions of paragraphs 1 to 4 shall also apply to profits from the participation in a pool, a business community or an international operating agency.

6. If enterprises from different countries have joined forces to drive ships or aircraft in international traffic through a Business Consortium, the provisions of this article shall apply only to that part of the profits as corresponds to the share in the Consortium, which is owned by an enterprise of a Contracting State.

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 (other than a partnership) which directly or indirectly owns at least 10 per cent of the capital of the company paying the dividends, and this proportion is owned in an uninterrupted period of at least one year before the period for which the proceeds are distributed.

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) 0% of the gross amount of the dividends if the beneficial owner is an institution or similar institution providing pension schemes which natural persons can join in order to secure retirement benefits when such a pension fund or other similar institution is created, fiscally recognized and controlled in accordance with the law of that other State.

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, "jouissance" shares or "jouissance" rights, 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 , is a resident.

4. the provisions of paragraphs 1 and 2 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, and the holding in respect of which the payment of the proceeds, directly connected with such permanent establishment. In such a case, the provisions of article 7 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 be taxed in that other State.

2. (a) However, such interest may also be taxed in the Contracting State from which they are derived, and in accordance with the legislation of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax imposed must not exceed 5 per cent of the gross amount of the rivals '.

(b) A person who is domiciled in a Contracting State, instead of the tax that would be imposed in accordance with point (a), choose to be taxed by its interest income, as if this interest income was income from business activities and should be taxed in accordance with article 7. The Contracting States competent authorities may establish reasonable rules regarding recruitment and reporting of taxable income. Each of the competent authorities may also establish procedures to ensure that a person who acquires the interest income, presenting such books and accounting material, which is necessary in order to be able to employ the correct tax amount.

3. Notwithstanding the provisions of paragraphs 1 and 2, the interest resulting from a Contracting State shall be exempt from taxation in that State, if they are paid:

to a pension fund, which is domiciled in another Contracting State,

for a person who is resident in the other Contracting State relating to corporate bonds, which are traded on a stock exchange in the first-mentioned State and which is issued by a company which is a resident of this State,

to the Government of the other Contracting State, a political subdivision or local relevant authority or the central bank, in respect of any type of loan, debt-claim or credit that is granted by such bodies,

in the case of a loan, a debt-claim or credit that are guaranteed or secured by an institution which has the task of ensure or finance international trade transactions, and as fully owned by the other Contracting State.

4. 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.

5. the provisions of paragraphs 1 and 2 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, and the debt-claim, which underlie any unpaid interest, directly connected with such permanent establishment. In such a case, the provisions of article 7 shall apply.

6. Interest shall be deemed to arise from a Contracting State, when they are paid by a person who is domiciled in this State. If the person paying the interest, whether he is domiciled in a Contracting State or not, has a permanent establishment in a Contracting State, in connection with which the debt-to-GDP ratio, of which the interest is paid, was founded, and such interest shall be the responsibility of such a permanent establishment However, such interest shall be deemed to come from the State in which the permanent establishment is situated.

7. 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 that case, the excess amount is 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 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 and the right or property in respect of which the royalties are paid for directly connected with such permanent establishment. In such a case, the provisions of article 7 shall 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 that case, the excess amount is 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, including profits from the sale of such a permanent establishment (separately or together with the whole enterprise), may be taxed in that other State.

3. Profit on 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 the Contracting State in which the operator's real leadership has its seat.

4. Profit on the sale of containers (including trailers, barges and similar equipment for the transport of containers) used for the transport of goods in international traffic, may be taxed in the Contracting State in which the operator's real leadership has its seat.

5. Profit as a person who is domiciled in a Contracting State, acquired through the sale of shares, with a value of more than 50 per cent of which is derived directly or indirectly from immovable property situated in the other Contracting State, may be taxed in that other State.

6. Profit on the sale of all assets other than those referred to in paragraphs 1, 2, 3, 4 and 5 can only be taxed in the Contracting State of which the alienator is a resident, provided that this person is the beneficial owner of such capital gains.

7. If enterprises from different countries have joined forces to drive ships or aircraft in international traffic through a Business Consortium, the provisions of paragraph 3 shall apply only to that part of the profits as corresponds to the share in the Consortium, which is owned by an enterprise of a Contracting State.

8. If a person who is domiciled in a Contracting State, are domiciled in another Contracting State, and the first-mentioned Contracting State taxing unrealised capital gains on this person's property at the time when the person will be resident in the other Contracting State, the capital gains arising from before the time when the person was domiciled in another Contracting State , not be taxed in that other Contracting State upon later sale of such assets.

Article 14

Income from personal work in the employment relationship

1. subject to the provisions of articles 15, 17 and 18 causes 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, 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 not a resident of the other 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 in which the operator's real leadership has its seat.

Article 15

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 16

Artists and athletes

1. Notwithstanding the provisions of articles 7 and 14, 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 and 14, 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 shall not apply to income acquired by activities in a Contracting State by artistes or sportsmen if the visit to that State is supported wholly or mainly by one or both of the Contracting States or political subdivisions or local relevant authorities or by an institution which is recognized by one or both of the Contracting States as a nonprofit institution.

Article 17

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. except where the provisions of paragraph 1 of this article and in article 18, paragraph 2, second, can result in 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 :

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

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 are 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 18

Public office

1. a) Gage, wages and other similar remuneration, other than pensions, paid by a Contracting State or a political subdivision or local relevant authority to a natural person for carrying out duties for that 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 political subdivision or local relevant 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) However, such 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 14, 15, 16 and 17 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 political subdivision or local relevant authority.

Article 19

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, not taxed in that State, provided that such amounts arise from sources outside that State.

Article 20

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 shall not apply to income, other than income from immovable property as defined in article 6, paragraph 2, 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 and the right or property in respect of which the income is paid to the , directly connected with such permanent establishment. In such a case, the provisions of article 7 shall apply.

Article 21

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 Israel, Denmark – unless the provisions of subparagraph (c)) results in second – reduce the person's tax on income by an amount equal to the income tax, which is paid in Israel.

This deduction may 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 Israel.

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

2. In Israel:

If a person who is a resident of Israel, acquire income, which according to the provisions of this agreement may be taxed in Denmark, Israel (subject to Israel's legislation relating to facilitation for foreign taxes, which must not affect the general principle contained in this paragraph) reduce that person's income tax by an amount equal to the income tax paid in Denmark.

This deduction may 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.

Article 22

Non-discrimination

1. Nationals of a Contracting State shall not be subjected in the other Contracting State 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.

2. 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.

3. Except where the provisions of article 9, paragraph 1, article 11, paragraph 7, article 12, paragraph 4, or 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 tax deductible under the same conditions as if they had been paid to a person who is a resident of the first-mentioned State.

4. 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, not in the former State shall be subject to any taxation or 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.

5. Nothing in this article can be interpreted in such a way that it obliges a Contracting Party to allow persons not resident in that State, the personal tax concessions, concessions and reductions, as it provides for persons who are resident within its own territory or to its nationals.

6. the provisions of this article shall apply to the taxes referred to in article 2 of this agreement.

Article 23

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 terms 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 22, 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 terms 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 set in the Contracting States ' internal legislation.

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 Commission consisting of themselves or their representatives, with a view to the conclusion of an agreement in accordance with the preceding paragraphs.

5. If




(a)) a person pursuant to paragraph 1 has been brought before a Court of a Contracting State competent authority as a result of the actions taken by one or both of the Contracting States has resulted in taxation which is not in accordance with the terms of this agreement, and

(b)), the competent authorities are unable to reach agreement on solving this matter in accordance with the provisions laid down in paragraph 2 within two years from the date on which the matter is brought before the competent authority of the other Contracting State,



all unresolved issues, which concern this matter, be subject to arbitration, if the person requesting this. Unresolved issues must not, however, be subject to arbitration, if the decision on these issues has already been taken by a court or a final administrative authority in one of the two States. Unless a person who is directly affected by the matter, did not accept the reciprocal agreement, which implements the arbitration award, is this decision binding on both Contracting States and shall be implemented notwithstanding any time limits that apply after these States ' internal legislation. The competent authorities of the Contracting States shall by mutual agreement determine the detailed rules for the application of this paragraph.

6. Paragraph 5 shall apply from the date on which a similar piece (arbitration) in a Convention for the avoidance of double taxation between Denmark and a third country shall take effect.

Article 24

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 covered by the agreement and imposed on behalf of the Contracting States or their political subdivisions or local authorities, insofar as such taxation is not contrary to the agreement. The exchange of information is not restricted by article 1.


2. All information received by a Contracting State in accordance with paragraph 1 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 taxes of every kind and description. 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 paragraphs 1 and 2 may in no case be interpreted as imposing an obligation on a State party:











(a))





to perform administrative acts contrary to this or the other Contracting State legislation and administrative practice,







(b))





to perform administrative acts contrary to this or the other Contracting State legislation and administrative practice,







(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 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 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 institution, the representative or person who acts as authorized or as trustee, or because the information relates to the ownership of a person.

Article 25

Assistance for the recovery of taxes

1. The Contracting States shall afford each other assistance in the recovery of tax claims. This assistance is not restricted by articles 1 and 2. The competent authorities of the Contracting States may by mutual agreement establish detailed rules for the application of this article.

2. the term ' tax requirements ' means an amount owed in this article concerning taxes of every kind and description imposed on behalf of the Contracting States or their political subdivisions or local authorities, so long as such taxation is not contrary to this agreement or other legal instrument, which the Contracting States are participants in, as well as interest, administrative penalties and costs in connection with the recovery and securing of such amount.

3. When a Contracting State tax requirements can be recovered in accordance with the legislation of that State, and the person who owes the amount, not in accordance with the legislation of that State may make objections to the recovery at this time, this tax requirements on request from the competent authority of that State is recognized by the competent authority of the other State for the purpose of recovery. The tax claim to be recovered by that other State in accordance with the rules after this second State law applies to the recovery of tax claims, as if that tax demands were that other State tax requirements.

4. When a Contracting State tax requirements are of such a nature that this State in accordance with its legislation, take measures to ensure the recovery of the claim, this tax requirements at the request of the competent authority of that State is recognized by the competent authority of the other Contracting State for the purpose of implementation of such measures. That other State shall take measures with a view to ensuring tax obligation in accordance with the provisions of this law, other State as if the relevant tax requirements was that other State tax requirements, regardless of whether the tax requirement at the time of the measures implemented, cannot be recovered in the first-mentioned State, and whether the person who owes the amount, can make objections to the recovery.

5. A tax demand, which is recognized by a State party in accordance with paragraph 3 or 4 shall, notwithstanding the provisions referred to in paragraph 3 and 4 are not in this State shall be subject to the time limits or be given any preference, which may apply to a tax claim in accordance with the legislation of that State because of the nature of the claim. In addition, a tax requirements, which are recognised by a Contracting State in accordance with paragraph 3 and 4, not in that State, have any priority that may apply for this tax claims after the other Contracting State.

6. Proceedings with respect to the existence or validity of a Contracting State tax requirements, or with respect to the amount, can not be brought before the courts or administrative authorities of the other Contracting State.

7. If a tax requirements at a time after the submission of a request by a Contracting State in accordance with paragraph 3 or 4, and before the second Contracting State has recovered and transferred it to the former State tax requirements concerned, ceases to be




(a)) in respect of a request in accordance with paragraph 3, a tax requirements in the first-mentioned State, which can be recovered in accordance with the legislation of that State, and in which the person who owes the amount, at that time under the law of this State cannot object to the collection, or

(b)) in respect of a request in accordance with paragraph 4, a tax claim in the former State, where that State after its legislation can take measures in order to ensure recovery,



the competent authority of the first-mentioned State shall immediately inform the competent authority of the other State, and after the second State election to the former State either put the request on hold or withdraw it.

8. the provisions 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 implement measures which would be contrary to the general interests (ordre public),

(c)) to provide assistance, if the other Contracting State has not undertaken all reasonable measures for the recovery of tax assurance requirement, as, respectively, can be implemented after this State legislation or administrative practice,

(d)) to provide assistance in cases where the administrative burden for this State is clearly not commensurate with the advantage as the second Contracting State will achieve.



9. This article shall enter into force on the date on which an agreement between Israel and a third country, which contains a similar provision (assistance for the recovery of taxes) enters into force.

Article 26

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 27

Limitation of contractual benefits

1. Notwithstanding the provisions of other articles of this agreement, a person who is domiciled in a Contracting State, does not achieve the benefits in the form of reductions or exemptions from taxes, as the agreement prescribes, in the other Contracting State, if the main purpose or one of the main objectives of an operation or an action made by such person or a person associated with such a person was to obtain benefits under the agreement.

2. The agreement shall not prevent a Contracting State from applying its domestic legislation relating to tax evasion and tax avoidance.

Article 28

Territorial extension

1. This agreement, either in its entirety or mutatis mutandis extended to any part of the territory, which are specifically excluded from the scope of the agreement, or to any State or any territory for whose international relations Denmark is responsible, and which imposes taxes of similar nature as those covered by the agreement. Any such extension shall take effect from the date and subject to such modifications and conditions, including conditions relating to termination, as may be specified and agreed between the Contracting States in notes to be exchanged through diplomatic channels or other means in accordance with their respective constitutional rules.


2. Unless the Contracting Parties agree otherwise, include the termination of the agreement by one of them under article 30 also, in the same manner as set out in that article, the application of the agreement on those parts of the territory of Denmark or the States or territories with which it has been extended under this article.

Article 29

Date of entry into force of

1. The Contracting States shall give each other through diplomatic channels in writing that the conditions provided for in their legislation on the entry into force of this agreement have been fulfilled.

2. The agreement shall enter into force on the date of the last of the notifications referred to in paragraph 1 and its provisions have effect in respect of taxes for the income year immediately following the year in which the agreement enters into force, and for the following year.

3. The agreement between the Government of the Kingdom of Denmark and the Government of the State of Israel for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and wealth tax, signed on 27. June 1966, shall cease to have effect for any type of tax with effect from the date on which this Agreement shall take effect for such withholding tax in accordance with paragraph 1 and 2 of this article and shall be lifted on the last of these dates.

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 under the direction of termination at least six months before the expiry of a calendar year. In that event, the agreement shall cease to have effect in respect of taxes for the income year, which immediately follows the year in which the notice of termination is given, and for the following year.

In witness whereof the undersigned, duly authorised thereto by their respective Governments, have signed this agreement.

Done in duplicate at Copenhagen on 9. September 2009, which corresponds to the 20. Eardf 5769 in the Hebrew calendar, in Hebrew, Danish and English. In the event of a discrepancy between the English text of the agreement provisions is crucial.

For the Government of the Kingdom of Denmark

Kristian Jensen

For the Government of the State of Israel

Arthur Avnon

PROTOCOL

At the time of signature of the agreement between the Government of the Kingdom of Denmark and the Government of the State of Israel for the avoidance of double taxation and the prevention of fiscal evasion with respect to income taxes is the Government of the Kingdom of Denmark and the Government of the State of Israel agreed that the following provisions shall form an integral part of the agreement:

1. In respect of articles 6 and 10

There is consensus that article 6 and article 10 shall not apply to income, as a person who is resident in Denmark, receive from a real estate investment fund [REIT] (Real Estate Investment Trust pursuant to article 64A3 of the Israeli income tax regulation), which is native to Israel.

2. For the purposes of article 13, paragraph 8

There is consensus that if the competent authorities by mutual agreement trying to decide the issue of the amount of the capital gain, which can be attributed to one of the Contracting States in connection with the transfer of tax assessed, consideration must be given to such factors as a reasonable market value for the assets on the day when the event that triggered the transfer tax, joined.

3. Tax relief

It is a condition that a person who is domiciled in a Contracting State, can obtain relief from the tax authorities of the other Contracting State, to the presentation of a certificate of residence, issued and signed by the tax authorities of the first Contracting State.