TREASURY DEPARTMENT TECHNICAL EXPLANATION OF THE CONVENTION AND PROTOCOL BETWEEN THE UNITED STATES OF AMERICA AND THE FEDERAL REPUBLIC OF GERMANY(六)
颁布时间:1989-08-29
TREASURY DEPARTMENT TECHNICAL EXPLANATION OF THE CONVENTION AND PROTOCOL
BETWEEN THE UNITED STATES OF AMERICA AND THE FEDERAL REPUBLIC OF GERMANY
FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME AND CAPITAL AND TO CERTAIN OTHER TAXES(六)
Paragraph 2 seeks to prevent this type of abuse while at the same time
protecting the taxpayers' rights to the benefits of the Convention when
there is a legitimate employee-employer relationship between the performer
and the person providing his services. Under paragraph 2, when the income
accrues to a person other than the performer, and the performer (or
persons related to him) participate, directly or indirectly, in the
profits of that other person, the income may be taxed in the Contracting
State where the performer's services are exercised, without regard to the
provisions of the Convention concerning business profits (Article 7) or
independent personal services (Article 14). Thus, even if the "employer
has no permanent establishment or fixed base in the host country, its
income may be subject to tax there under the provisions of paragraph 2.
Taxation under paragraph 2 is on the person providing the services of the
entertainer or athlete. This paragraph does not affect the rules of
paragraph 1, which apply to the entertainer or athlete himself. To the
extent of salary payments to the performer, which are treated under
paragraph 1, the income taxable by virtue of paragraph 2 to the person
providing his services is reduced.
For purposes of paragraph 2, income is deemed to accrue to another
person (i.e., the person providing the services of the entertainer or
athlete) if that other person has control over, or the right to receive,
gross income in respect of the services of the entertainer or athlete.
Direct or indirect participation in the profits of a person may include,
but is not limited to, the accrual or receipt of deferred remuneration,
bonuses, fees, dividends, partnership income or other income or
distributions.
The paragraph 2 override of the protection of Articles 7 (Business
Profits) and 14 (Independent Personal Services) does not apply if it is
established that neither the entertainer or athlete, nor any persons
related to the entertainer or athlete, participate directly or indirectly
in the profits of the person providing the services of the entertainer or
athlete. Thus, for example, if a circus owned by a U.S. corporation
performs in Cologne, the German promoters of the performance pay the
circus, which, in turn, pays salaries to the clowns. The circus has no
permanent establishment in Germany. Since the clowns do not participate in
the profits of the circus, but merely receive their salaries out of the
circus' gross receipts, the circus is protected by Article 7 and its
income is not subject to German tax. Whether the salaries of the clowns
are subject to German tax depends on whether they exceed the $20,000
threshold in paragraph 1. This exception for non-abusive cases to the
paragraph 2 override of the Articles 7 and 14 protection of persons
providing the services of entertainers and athletes is not found in the
OECD Model. The policy reflected in this exception is, however, consistent
with the stated intent of Article 17 of that Model, as indicated in its
Commentaries. The Commentaries to Article 17 state that paragraph 2 is
intended to counteract certain tax avoidance devices, in which income is
diverted from the performer to another person in order to minimize the
total tax on the remuneration. It is, therefore, consistent not to apply
these rules in non-abusive cases.
Paragraph 3 of the Article is not found in the U.S. or OECD Models. It
was introduced at the suggestion of Germany. It provides an exception to
the rules in paragraphs 1 and 2 in the case of a visit to a Contracting
State by an entertainer or athlete who is a resident of the other
Contracting State, if the visit is substantially supported, directly
or indirectly, by the public funds of his State of residence or of a
political subdivision or local authority of that State. In the
circumstances described, only the Contracting State of residence of
the entertainer or athlete may tax his income from the performances so
supported in the other State.
This Article is subject to the provisions of the saving clause of
subparagraph (a) of Paragraph 1 of the Protocol. Thus, if an entertainer
or athlete who is resident in Germany is a citizen of the United States,
the United States may tax all of his income from performances in the
United States without regard to the provisions of this Article, subject,
however, to the special foreign tax credit provisions of paragraph 3 of
Article 23 (Relief from Double Taxation).
The 1954 Convention contains no special rules for the taxation of the
income of entertainers and athletes. Such income is subject to the general
rules for the taxation of personal service income.
ARTICLE 18
Pensions, Annuities, Alimony and Child Support
This Article deals with the taxation of private (i.e., non-government)
pensions and annuities, alimony payments and child support payments.
Paragraph 1 provides that private pensions and other similar
remuneration derived and beneficially owned by a resident of a Contracting
State in consideration of past employment are taxable only in the State of
residence of the recipient. This rule applies to both periodic and
lump-sum payments. Treatment of such pensions under the 1954 Convention is
essentially the same as under this Convention. The rules of this Article
do not apply to items of income which are dealt within Article 19
(Government Service; Social Security), including pensions in respect
of government service, or as compensation for injury or damage sustained
in hostilities, and social security benefits.
Under paragraph 2, annuities (other than those annuities which are
dealt within Article 19 (Government Service; Social Security)) which are
derived and beneficially owned by a resident of a Contracting State are
taxable only in that State. An annuity, as the term is used in this
paragraph, means a stated sum paid periodically at stated times during a
specified number of years, under an obligation to make the payment in
return for adequate and full consideration (other than for services
rendered). Annuities are similarly treated under the 1954 Convention.
Paragraphs 1 and 2 of Article 18 are subject to the saving clause of
subparagraph (a) of Paragraph 1 of the Protocol.
Paragraphs 3 and 4 deal with alimony and child support payments. The
provisions of the two paragraphs differ, in some respects, from the
comparable provisions in the U.S. Model, in order to be able to mesh more
completely the provisions of U.S. and German law regarding the treatment
of such payments. Paragraph 3 deals only with those alimony payments which
are deductible to the payor. Under the paragraph, alimony paid by a
resident of a Contracting State, to the extent it is deductible by that
resident, to a resident of the other Contracting State is taxable only in
the State of residence of the recipient. Paragraph 4 deals with
nondeductible alimony and periodic payments for the support of a minor
child. These types of payments by a resident of a Contracting State to a
resident of the other Contracting State are taxable only in the State of
residence of the payor.
Both alimony, under paragraph 3, and nondeductible alimony and child
support payments, under paragraph 4, are defined as periodic payments made
pursuant to a written separation agreement or a decree of divorce,
separate maintenance, or compulsory support. In addition, for a payment to
be treated as "alimony" for purposes of this Article, it must be taxable
to the recipient under the laws or his State of residence.
Under U.S. law, alimony is generally deductible to the payor and
taxable in the hands of the recipient. Such payments made by U.S.
residents, therefore, fall within the terms of paragraph 3, and are
taxable only in Germany. German law provides for deductibility of the
first DM 18,000 of alimony payments annually, if the payment is to a
person subject to unlimited tax liability in Germany. To the extent
alimony is deducted by the payor, it is taxable under German law to the
recipient. German alimony payments, to the extent they exceed DM 18,000,
are not deductible to the payor and the recipient is not subject to German
tax. Thus, some alimony paid by German residents fall under paragraph 3
and some falls under paragraph 4.
Since, under German law, the first DM 18,000 of alimony is deductible
to the payor only if the payee is subject to unlimited German tax
liability, no alimony payments to a U.S. resident are deductible under
German law. Paragraph 16 of the Protocol provides that for purposes of
paragraph 3 of the Article, if a German resident pays alimony to a U.S.
resident, the payor shall be allowed a deduction for German tax purposes
to the same extent that a deduction would be allowed if the payment were
made to a person who is subject to unlimited tax liability in Germany.
The saving clause of subparagraph (a) of Paragraph 1 of the Protocol
does not apply to paragraphs 3 and 4. The benefits of these paragraphs,
therefore, are not overridden by any contrary provisions of the Code.
Thus, if, for example, a U.S. citizen who is a resident in Germany
receives an alimony payment from a U.S. resident, that payment is exempt
from U.S. tax under paragraph 3 of the Article, notwithstanding the
existence of a tax liability under the Code.
ARTICLE 19
Government Service; Social Security
Subparagraphs (a) and (b) of paragraph 1 deal with the taxation of
government compensation and pensions (other than social security pensions,
which are dealt within paragraph 2). Subparagraph (a) provides that wages,
salaries, and similar compensation and pensions paid by the United States
or by its states or political subdivisions to any individual are
exempt from German tax unless the payee is a German national. Under
subparagraph (b), such payments by Germany, or by its Laender (i.e.,
states) or by municipalities or by a public pension fund of such
governments to any individual are exempt from U.S. tax unless the payee is
a U.S.citizen or a green card holder. Subparagraph (d) of paragraph 1
specifies that the term "pensions" includes annuities paid to retired
civilian government employees.
These provisions differ in several respects from those in the U.S. and
OECD Models.Most significantly, unlike the provisions in those Models,
Article 19 of the Convention does not exclude payments in respect of
services rendered in connection with a business carried on by the
governmental entity paying the compensation or pension. It is not the
policy of the German Government for governmental entities to engage in
business activities. The provisions of Article 19 are identical to those
in the 1954 Convention. Under that Convention there have been no cases of
benefits being claimed under the government services provisions for
services of a business nature.
Subparagraph (c) of paragraph 1 contains a provision proposed by
Germany. It is identical to a provision in the 1954 Convention. The
subparagraph provides that amounts paid by a Contracting State or by a
juridical person organized under the public laws of that State which
are compensation for injury or damage sustained as a result of hostilities
or political persecution are exempt from tax in the other Contracting
State. Although the subparagraph is drafted reciprocally, it is intended
to provide U.S. exemption for German war reparation payments.
Paragraph 2 deals with the taxation of social security benefits and
similar public pensions. This includes the benefits paid under the social
security legislation of both Contracting States and certain U.S. Railroad
Retirement benefits. It does not include pensions for government service,
which are dealt within paragraph 1. Under paragraph 2, such benefits paid
by a Contracting State to a resident of the other Contracting State are
taxable only in the State of residence of the recipient. In applying its
tax, the State of residence will treat the benefit as though it were a
benefit paid to a resident under its own social security system. Thus, for
example, if a U.S. resident receives a German social security benefit, he
would include only one half of the benefit or such other portion as he
would if the benefit had been a U.S. social security or railroad
retirement benefit. The treatment of social security benefits in the
Convention differs from that in the U.S. Model, under which the source
State retains a taxing right.
Subparagraph 1(c) and paragraph 2 of this Article are exceptions to
the saving clause of subparagraph (a) of Paragraph 1 of the Protocol (as
indicated in sub-subparagraph (b)(aa) of that Paragraph). Thus, a U.S.
citizen or resident who receives German reparations payments would
not be subject to any U.S. tax on that payment, regardless of whether he
would be taxable under the Code. Similarly, a U.S. citizen who is resident
in Germany and receives U.S. social security benefits would be exempt from
U.S. tax on those benefits. The saving clause does not apply to the
benefits conferred by subparagraphs (a) and (b) of paragraph 1 of the
Article (as provided in sub-subparagraph (b)(bb)) of Paragraph 1 of the
Protocol) with respect to a resident of the United States who is neither a
U.S. citizen nor a green card holder. Thus, for example, if a German
Government employee is temporarily present in the United States for his
employment, and is present in the United States for a sufficient time
under an appropriate visa to become a resident of the United States under
the Code, but does not acquire immigrant status in the United States,
he would not be subject to U.S. tax on his German Government salary. If,
however, he acquires immigrant status, he would be subject to U.S. tax,
notwithstanding the provisions of Article 19.
ARTICLE 20
Visiting Professors and Teachers; Students and Trainees
Paragraph 1 of the Article deals with visiting professors and
teachers. Paragraphs 2 through 5 deal with students, apprentices and
trainees. Paragraph 1 provides that if a professor or teacher who is, and
remains, a resident of one Contracting State visits the other Contracting
State for a period not exceeding two years for the purpose of teaching or
carrying out advanced study or research at certain categories of
institutions, he will be exempt from tax in the State which he is visiting
(the "host State") on his compensation for such teaching, study or
research. The host State exemption will apply if the teaching, study or
research is carried on at an accredited university, college, school or
other educational institution, or at a public research institution or
other institution engaged in research for the public benefit. The term
"public research institution" is intended to cover such institutions as
the National Institutes of Health in the United States.
For the exemption to apply to income from research, the research must
be undertaken in the public interest, and not primarily for the private
benefit of a specific person or persons. A person is not entitled to the
benefits of this paragraph if he has, during the immediately preceding
period, enjoyed the benefits of paragraphs 2, 3 or 4 of this Article as a
student, apprentice or trainee. If, however, following the period in which
a person claimed student benefits under paragraphs 2, 3, or 4, that
person resumes residence and physical presence in his original home
State before returning to the host State as a teacher or researcher, he
may claim the benefits of paragraph 1. As clarified in Paragraph 18 of the
Protocol, unless the competent authorities agree otherwise, if a professor
or teacher remains in the host country for more than the specified two
year period, he may be subject to tax in that State, under its law, for
the entire period or his presence.
There is no provision in the U.S. or OECD Models dealing with
professors or teachers. It is not standard U.S. treaty policy to provide
benefits to visiting teachers by treaty. When, however, the treaty partner
wishes to include such a provision, the United States will frequently
agree, particularly, as in this case, when an existing Convention with
that partner contains a similar provision (see Article XII of the 1954
Convention).
Paragraph 2 deals with payments, other than compensation for personal
services, received by a student or business apprentice. If a student or
business apprentice is present in the host State for the purpose of his
full-time education or training, and he was a resident of the other
Contracting State immediately before his visit, he will be exempt
from tax in the host State on payments (other than compensation for
personal services) arising from sources, or remitted from, outside the
host State, which are for the purpose of the student's or trainee's
maintenance, education or training.
Article XIII of the 1954 Convention and Article 20 of the OECD Model
contain similar provisions. Both of these, however, refer to a student who
is present "solely" for purposes of his education or training. The
Convention refers, instead, to one who visits for the purpose of his
"full-time education or training". This change in language from the 1954
Convention is intended to clarify that even if the student engages in
other activities in the host State, such as part-time employment (and
might therefore be regarded as not present solely for his education), he
remains eligible for the benefits of the Article as long as lie is a
full-time student or apprentice.
Paragraph 17 of the Protocol relates to paragraph 2 of the Article. It
clarifies that payments from public funds of a Contracting State or from
scholarship organizations endowed with such public funds will be treated
as arising from sources outside the other Contracting State for purposes
of the exemption provided in paragraph 2, when that other State is the
host State. Under Paragraph 17 of the Protocol, such payments will also be
considered to arise in full from sources outside the host State when
payments are made under programs jointly funded by organizations of both
Contracting States, so long as more than 50 percent of the combined funds
is provided from the public funds of the Contracting State which is not
the host State, or by a scholarship organization endowed with such funds.
Paragraph 3 of the Article provides that when a person visits a
Contracting State, and that person is, or was immediately before the
visit, a resident of the other Contracting State, he will not be taxed in
the host State on payments (other than compensation for personal services)
which he receives as a grant, allowance or award from a non-profit
religious, charitable, scientific, literary, or educational private
organization, including those organized in the host State, or a comparable
public institution. This exemption applies regardless of the residence of
the institution making the grant or award. This provision is broader in
scope than the provisions of the student and scholar articles of most U.S.
treaties. It is intended to apply, for example, to persons such as
authors, composers, dramatists, etc. whose visits and work are funded by
such grants, even though the recipients may not be engaged in formal study
or research. This provision is essentially the same as paragraph 3 of
Article XIII of the 1954 Convention.
Paragraph 4 provides that persons covered by paragraphs 2 and 3 (i.e.,
qualified students and business apprentices and recipients of certain
grants, allowances or awards) who remain in the host country for a period
not exceeding 4 years will be exempt from host country tax on income from
dependent personal services not in excess of $5,000 (or its equivalent in
Deutsche Mark) per taxable year. The exemption applies only if the
services are performed solely for the purposes of supplementing the funds
otherwise available for the person's maintenance, education or training.
The $5,000 exemption applies in addition to, and not in lieu of, any
allowances (e.g., personal exemptions and standard deductions) available
to the person under the internal laws of the Contracting States. If the
amount earned exceeds $5,000 per annum, only the excess is taxable. Under
the provisions of Paragraph 18 of the Protocol, if the stay in the host
State exceeds four years, the person may be subject to tax there for the
entire period, unless the competent authorities agree otherwise. The
exemption provision of paragraph 4 does not apply to income from the
performance of independent personal services.
Paragraph 5 deals with a resident of a Contracting State who is an
employee of an enterprise of that State or of an organization described in
paragraph 3, who is temporarily present in the other Contracting State for
a period not exceeding one year for the sole purpose of acquiring
technical, professional or business experience from a person other than
his employer.
Such resident will be exempt from tax by the host State on
compensation for services, wherever performed, which is remitted from
outside that State and paid by such organization or institution
if the compensation does not exceed $10,000. Unlike the exemption provided
in paragraph 4, this exemption does not apply at all if the compensation
exceeds $10,000. By virtue of the exception to the saving clause in
sub-subparagraph (b)(bb) of Paragraph 1 of the Protocol, the saving clause
does not apply with respect to a person entitled to U.S. benefits under
the provisions of this Article if that person is neither a U.S. citizen
nor has immigrant status in the United States. Thus, for example, a German
resident who visits the United States as a student or professor and
becomes a U.S. resident according to the Code, would continue to be exempt
from U.S. tax in accordance with this Article so long as he is not a U.S.
citizen and does not acquire immigrant status in the United States. The
saving clause does apply to U.S. citizens and immigrants.