The Double Taxation Relief (Federal Republic of Germany) Order 2021

• Citation: S.I. 2021/634
• Sections: 6

Section 1 Citation

This Order may be cited as the Double Taxation Relief (Federal Republic of Germany) Order 2021.

Section 2 Double taxation arrangements to have effect

It is declared that—

(a) the arrangements specified in the Protocol set out in the Schedule to this Order, which further amend the arrangements set out in the Schedule to the Double Taxation Relief and International Tax Enforcement (Federal Republic of Germany) Order 2010 , have been made with the Government of the Federal Republic of Germany;

(b) those arrangements have been made with a view to affording relief from double taxation in relation to capital gains tax, corporation tax, income tax and taxes of a similar character imposed by the laws of the Federal Republic of Germany; and

(c) it is expedient that those arrangements should have effect.

Section 1

Paragraph 4A shall be inserted after paragraph 4 of Article 5 as follows:

(4A) Paragraph 4 shall not apply to a fixed place of business that is used or maintained by an enterprise if the same enterprise or a closely related enterprise carries on business activities at the same place or at another place in the same Contracting State and

(a) that place or other place constitutes a permanent establishment for the enterprise or the closely related enterprise under the provisions of this Article, or

(b) the overall activity resulting from the combination of the activities carried on by the two enterprises at the same place, or by the same enterprise or closely related enterprises at the two places, is not of a preparatory or auxiliary character,

provided that the business activities carried on by the two enterprises at the same place, or by the same enterprise or closely related enterprises at the two places, constitute complementary functions that are part of a cohesive business operation.

Section 1

This Protocol shall be ratified; the instruments of ratification shall be exchanged as soon as possible.

Section 2

Paragraph 8 shall be inserted after paragraph 7 of Article 5 as follows:

(8) For the purposes of this Article, a person or enterprise is closely related to an enterprise if, based on all the relevant facts and circumstances, one has control of the other or both are under the control of the same persons or enterprises. In any case, a person or enterprise shall be considered to be closely related to an enterprise if one possesses directly or indirectly more than 50 per cent of the beneficial interest in the other (or, in the case of a company, more than 50 per cent of the aggregate vote and value of the company’s shares or of the beneficial equity interest in the company) or if another person or enterprise possesses directly or indirectly more than 50 per cent of the beneficial interest (or, in the case of a company, more than 50 per cent of the aggregate vote and value of the company’s shares or of the beneficial equity interest in the company) in the person and the enterprise or in the two enterprises.

Section 2

This Protocol shall enter into force on the day of the exchange of the instruments of ratification. The Convention as amended by this Protocol shall thereupon have effect:

(a) in Germany:

(aa) in the case of taxes withheld at source, in respect of amounts paid on or after 1 January of the calendar year next following that in which this Protocol enters into force;

(bb) in the case of other taxes, in respect of taxes levied for periods beginning on or after 1 January of the calendar year next following that in which this Protocol enters into force;

(b) in the United Kingdom:

(aa) in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6 April in the calendar year next following that in which this Protocol enters into force;

(bb) in respect of corporation tax, for any financial year beginning on or after 1 April in the calendar year next following that in which this Protocol enters into force;

(cc) in respect of taxes withheld at source, to income derived on or after 1 January in the calendar year next following that in which this Protocol enters into force.

Done in duplicate at London on 12 th January 2021 in the English and German languages, both texts being equally authoritative.

Jesse Norman MP

For the

United Kingdom of Great Britain and Northern Ireland

Andreas Michaelis

For the

Federal Republic of Germany