ARTICLE XII (Compensation for Personal Services) 　　(1) Compensation for labor or personal services (other than fees of directors of corporations) performed in the United States during the taxable year by a resident of Luxembourg shall be exempt from tax by the United States if he is temporarily present in the United States for a period or periods not exceeding a total of 180 days during the taxable year and the compensation- 　　(a) is received for labor or personal services performed as an employee of a resident or corporation of Luxembourg, or of a permanent establishment within Luxembourg of a United States enterprise, and the burden of such compensation is borne by such resident, corporation, or establishment; or 　　(b) does not exceed $3,000. 　　(2) The exemption of paragraph (1) shall apply, mutatis mutandis, to tax by Luxembourg upon the compensation for labor or personal services performed in Luxembourg during the taxable year by a resident of the United States. 　　(3) Compensation for labor or personal services (other than fees of directors of corporations) performed in the United States (whether or not put to use in Luxembourg) by a resident of the United States shall be exempt from tax by Luxembourg. 　　(4) The exemption of paragraph (3) shall apply, mutatis mutandis, to tax by the United States upon compensation for labor or personal services performed in Luxembourg. ARTICLE XIII (Teachers and Research) 　　(1) A resident of one of the Contracting States who, at the invitation of a university, college, school, or other recognized educational institution situated in the other Contracting State, is temporarily present in the other State solely for the purpose of teaching, or engaging in research, or both, at that educational institution shall, for a period not exceeding two years from the date of his arrival in the other State, be exempt from tax by the other State on his remuneration for such teaching or research. 　　(2) No exemption shall be granted under this Article with respect to any remuneration for research carried on for the benefit of any person other than the educational institution which extended the invitation referred to in paragraph (1). ARTICLE XIV (Students and Business Apprentices) 　　(1) A resident of one of the Contracting States who is temporarily present in the other Contracting State solely- 　　(a) as a student at a university, college, school, or other recognized educational institution situated in the other State, or 　　(b) as a business apprentice for a period not exceeding one year, or 　　(c) as the recipient of a grant, allowance, or award which is for the primary purpose of study or research from a religious, charitable, scientific, literary, or educational organization, shall be exempt from tax by the other State with respect to his remuneration from abroad for employment or remittances from abroad for the purposes of his maintenance, education, or training. 　　(2) A resident of one of the Contracting States who is temporarily present in the other Contracting State for a period not exceeding one year, as an employee of, or under contract with, an enterprise of the former State or an organization of the former State referred to in paragraph (1)(c), solely to acquire technical, professional, or business experience from a person other than that enterprise or organization shall be exempt from tax by the other State with respect to his remuneration for that period (including remuneration, if any, from an employer abroad), in an amount not in excess of $5,000 or its equivalent in Luxembourg currency. 　　(3) A resident of one of the Contracting States who is temporarily present in the other Contracting State for a period not exceeding one year solely for the purpose of training, research, or study, under arrangements with the Government of the other State, shall be exempt from tax by the other State with respect to his remuneration for services directly related to such training, research, or study (including remuneration from his employer abroad) in an amount not in excess of $10,000 or its equivalent in Luxembourg currency. 　　(4) An individual who qualifies for exemption under more than one provision of the preceding paragraphs of this Article, or under one of the preceding paragraphs and Article XII or Article XIII shall be entitled to claim the exemption most favorable to him. ARTICLE XV (Holding Companies) 　　The present Convention shall not apply to the income of any holding company entitled to any special tax benefit under Luxembourg Law of July 31, 1929, and Decree Law of December 27, 1937, or under any similar law subsequently enacted, or to any income derived from such companies by any shareholder thereof. In the event that substantially similar benefits are granted to other corporations under any law enacted by Luxembourg after the date of signature of the present Convention, the provisions of the present Convention shall not apply to the income of any such corporation or to any income derived from such corporation by any shareholder thereof. The expression "substantially similar benefits" shall be deemed not to include tax reduction or exemption granted to any corporation in respect of dividends derived from another corporation, 25 percent or more of the stock of which is owned by the recipient corporation. ARTICLE XVI (Avoidance of Double Taxation) 　　(1) It is agreed that double taxation of income shall be avoided in the following manner: 　　(a) The United States, in determining the income tax of individuals who are citizens or residents of the United States or of its corporations may, regardless of any other provision of the present Convention, include in the basis upon which such tax is imposed all items of income taxable under the revenue laws of the United States as if the present Convention had not come into effect. The United States shall, however, deduct from its tax so calculated the amount of the Luxembourg income taxes specified in paragraph (1)(b)(i) of Article I. Except as otherwise provided in the present Convention, the amount of Luxembourg tax thus to be deducted shall be determined in accordance with the revenue laws of the United States. It is agreed that by virtue of the provisions of subparagraph (b) of this paragraph Luxembourg satisfies the similar credit requirement prescribed by section 901(b) (3), Internal Revenue Code of 1954. 　　(b) Luxembourg, in determining the income taxes and the tax on fees of directors of corporations in the case of its residents or of corporations having their business management or seat in Luxembourg, may, regardless of any other provision of the present Convention, include in the basis upon which such taxes are imposed all items of income taxable under the tax laws of Luxembourg as if the present Convention had not come into effect. Luxembourg shall, however, deduct from its taxes so calculated the amount of the income tax of the United States upon income from sources therein, but the amount so to be deducted shall not exceed that proportion of such taxes of Luxembourg which the income from sources within the United States and taxable by Luxembourg bears to the entire income subject to the taxes of Luxembourg. 　　(c) This paragraph shall not be construed to deny the benefits conferred by Articles XI 　　(1) and XX (3) of the present Convention. 　　(2) Luxembourg, in determining the following taxes of its residents or of corporations having their business management or seat in Luxembourg, shall exclude from the basis upon which such taxes are imposed- 　　(a) in the case of the communal land tax, any real property situated in the United States; 　　(b) in the case of the communal tax on commercial profits and invested capital, the profits and capital of a permanent establishment situated in the United States; and 　　(c) in the case of the wealth tax, 　　(i) any real property situated in the United States and all accessories appertaining thereto, 　　(ii) all debts (other than bonds) secured by real property situated in the United States, 　　(iii) the invested capital of a permanent establishment situated in the United States and not appertaining to a maritime shipping or air transport undertaking, and 　　(iv) the invested capital of a maritime shipping or air transport undertaking, but only in that proportion which the income of such undertaking from sources within the United States bears to its entire income,provided, however, that Luxembourg reserves the right, in the determination of the rate of its wealth tax, to take into account all items excluded from the tax base pursuant to this subparagraph. 　　(3) Luxembourg, in determining the wealth tax and the communal taxes on invested capital and lands of citizens, residents, or corporations of the United States, shall not tax the property of such persons consisting of- 　　(a) real property and all accessories appertaining thereto, 　　(b) debts secured by mortgages on real property, and 　　(c) any property used by commercial or industrial enterprises, including maritime shipping or air transport enterprises, unless it is entitled under other provisions of the present Convention to tax the income derived from such property. ARTICLE XVII (Source Rules) 　　For the purpose of the present Convention- 　　(a) Industrial or commercial profits attributable to a permanent establishment which an enterprise of one of the Contracting States has in the other Contacting State shall be treated as income from sources within such other State. 　　(b) Gains, profits, and income (other than profits described in subparagraph (a)) from the purchase and sale of personal property shall be treated as income from sources within the Contracting State in which the property is sold. 　　(c) Gains, profits, and income derived by a taxpayer from the sale in one of the Contracting States of goods produced in the other Contracting State by such taxpayer shall, to the extent not otherwise allocable under other provisions of the present Convention, be treated as derived in part from the State in which produced and in part from the State in which sold. 　　(d) Income which is exempt from tax by one of the Contracting States pursuant to Article V of the present Convention shall be treated as income from sources within the other Contracting State. 　　(e) Income from real property, including gains derived from the sale or exchange of such property and interest on debts (other than bonds) secured by mortgages on real property, and royalties in respect of the operation of mines, quarries, or other natural resources shall be treated as income from sources within the Contracting State in which such real property, mines, quarries, or other natural resources are situated. 　　(f) Royalties, rentals, and similar payments for the use, or for the privilege of using, in one of the Contracting States of copyrights, artistic or scientific works, patents, designs, plans, secret processes or formulae, trademarks, motion picture films, films or tapes for radio or television broadcasting, or other like property or rights, or industrial, commercial, or scientific equipment, knowledge, experience, skill, or know-how shall be treated as income from sources within that State. 　　(g) Interest (exclusive of interest on debts, other than bonds, secured by mortgages on real property) paid by one of the Contracting States, including any political subdivision thereof, or by a resident, corporation, or enterprise of one of the Contracting States shall be treated as income from sources within that State. 　　(h) Dividends paid by a corporation of one of the Contracting States shall be treated as income from sources within that State. 　　(i) Compensation for labor or personal services, including compensation or remuneration from the practice of the liberal professions or from public entertainment but not including fees described in subparagraph (j), shall be treated as income from sources within the Contracting State where the labor or personal services are performed. 　　(j) Directors' fees paid by a corporation of one of the Contracting States shall be treated as income from sources within that State. ARTICLE XVIII (Exchange of Information and Mutual Collection) 　　(1) The competent authorities of the Contracting States shall exchange such information, being information available under the respective taxation laws of the Contracting States, as is necessary for carrying out the provisions of the present Convention or for the prevention of fraud or the like in relation to the taxes which are the subject of the present Convention. Any information so exchanged shall be treated as secret and shall not be disclosed to any persons other than those concerned with the assessment and collection of the taxes which are the subject of the present Convention. No information shall be exchanged which would disclose any trade, business, industrial, or professional secret, or any trade process. 　　(2) Each of the Contracting States may collect such taxes imposed by the other Contracting State as though such taxes were the taxes of the former State as will ensure that any exemption or reduced rate of tax granted under the present Convention by the other State shall not be enjoyed by persons not entitled to such benefits. 　　(3) In no case shall the provisions of this Article be construed so as to impose upon either of the Contracting States the obligation to carry out administrative measures at variance with the regulations and practice of either Contracting State or which would be contrary to its sovereignty, security, or public policy or to supply particulars which are not procurable under its own legislation or that of the State making application. ARTICLE XIX (Referral to the Competent Authorities) 　　(1) Where a taxpayer shows proof that the action of the tax authorities of the Contracting States has resulted, or will result, in double taxation contrary to the provisions of the present Convention, he shall be entitled to present his case to the State of which he is a citizen or a resident, or, if the taxpayer is a corporation of one of the Contracting States, to that State. Should the taxpayer's claim be deemed worthy of consideration, the competent authority of the State to which the claim is made shall endeavor to come to an agreement with the competent authority of the other State with a view to avoidance of the double taxation. 　　(2) For the settlement of difficulties or doubts in the interpretation or application of the present Convention or in respect of its relation to Conventions of the Contracting States with third States the competent authorities of the Contracting States shall endeavor to reach a mutual agreement as quickly as possible. ARTICLE XX (Miscellaneous Rules of Application) 　　(1) The provisions of the present Convention shall not be construed to restrict in any manner the right of diplomatic or consular officers to additional exemptions now enjoyed or which may hereafter be granted to such officers. 　　(2) The provisions of the present Convention shall not be construed to restrict in any manner any exclusion, exemption, deduction, credit, or other allowance now or hereafter accorded 　　(a) by the laws of one of the Contracting States in the determination of the tax imposed by that State or 　　(b) by any other agreement between the Contracting States. 　　(3) The citizens of one of the Contracting States shall not, while residents of the other Contracting State, be subject therein to other or more burdensome taxes than are the citizens of such other State who are residents of its territory. The term "citizens", as used in this Article, includes all juridical persons, partnerships, and associations created or organized under the laws in force in the respective Contracting States. In this Article the word "taxes" means taxes of every kind or description, whether national, State, communal, or municipal. 　　(4) The provisions of the law of Luxembourg granting a carryover of losses to taxpayers domiciled therein shall apply with respect to the taxation of a permanent establishment, which is maintained in Luxembourg by a resident or corporation of the United States, under the same conditions and in the same manner as in the case of taxpayers who are domiciled in Luxembourg. ARTICLE XXI (Agreement of the Competent Authorities) 　　(1) The competent authorities of the two Contracting States may prescribe regulations necessary to carry into effect the present Convention within the respective States. 　　(2) The competent authorities of the two Contracting States may communicate with each other directly for the purpose of giving effect to the provisions of the present Convention. ARTICLE XXII (Entry into Force; Termination) 　　(1) The present Convention shall be ratified and the instruments of ratification shall be exchanged at Luxembourg as soon as possible. It shall have effect for taxable years beginning on or after the first day of January of the calendar year in which such exchange takes place. 　　(2) The present Convention shall continue effective for a period of five years, beginning with the calendar year in which the exchange of the instruments of ratification takes place and indefinitely after that period, but may be terminated by either of the Contracting States at the end of the five-year period or at any time thereafter, provided that at least six months' prior notice of termination has been given; and, in such event, the present Convention shall cease to be effective for taxable years beginning on or after the first day of January next following the expiration of the six-month period. 　　DONE in duplicate, in the English and French languages, at Washington, the two texts having equal authenticity, this 18th day of December, 1962. For the President of the United States of America: Dean Rusk For Her Royal Highness the Grand Duchess of Luxembourg G. Heisbourg 　　WHEREAS the Senate of the United States of America, by their resolution of July 29, 1964, twothirds of the Senators present concurring therein, did advise and consent to the ratification of the aforesaid convention; 　　WHEREAS the aforesaid convention was duly ratified by the President of the United States of America on August 5, 1964, in pursuance of the aforesaid advice and consent of the Senate, and was duly ratified on the part of the Grand Duchy of Luxembourg; 　　WHEREAS it is provided in Article XXII of the aforesaid convention that instruments of ratification shall be exchanged at Luxembourg and that the said convention shall have effect for taxable years beginning on or after the first day of January of the calendar year in which such exchange takes place; 　　AND WHEREAS the respective instruments of ratification of the aforesaid convention were duly exchanged at Luxembourg on December 22, 1964 by the respective Plenipotentiaries of the United States of America and the Grand Duchy of Luxembourg; 　　NOW, THEREFORE, be it known that I, Lyndon B. Johnson, President of the United States of America, do hereby proclaim and make public the aforesaid convention of December 18, 1962 to the end that the said convention and each and every article and clause thereof may be observed and fulfilled with good faith by the United States of America and by the citizens of the United States of America and all other persons subject to the jurisdiction thereof. 　　IN TESTIMONY WHEREOF, I have hereunto set my hand and caused the Seal of the United States of America to be affixed. 　　DONE at the city of Washington this thirtieth day of December in the year of our Lord one thousand nine hundred sixty-four and of the Independence of the United States of America the one hundred eighty-ninth. By the President: LYNDON B. JOHNSON DEAN RUSK Secretary of State