(Unofficial translation) 　　The People's Republic of China and the Federal Republic of Germany, 　　Desiring to further their economic relations and the avoid double taxation of income as well as to eliminate tax evasion 　　Have, following amicable negotiations by the representatives of each Government, agreed as follows: 　　Article 1 Personal Scope 　　This Agreement shall apply to persons who are residents of one or both of the Contracting States. 　　Article 2 Taxes Covered 　　1.This Agreement shall apply to taxes on income and on capital imposed on behalf of a Contracting State, irrespective of the manner in which they are levied. 　　2.There shall be regarded as taxes on income and on capital all taxes imposed on total income, on total capital, or on elements of income or of capital, including taxes on gains from the alienation of movable or immovable property, as well as taxes on capital appreciation. 　　3.The existing taxes to which the Agreement shall apply are: 　　(a)in the People's Republic of China: 　　(ⅰ)the individual income tax; 　　(ⅱ)the income tax concerning joint ventures with Chinese and foreign investment; 　　(ⅲ)the income tax concerning foreign enterprises; and 　　(ⅳ)the local income tax 　　(hereinafter referred to as "Chinese tax"); 　　(b)in the Federal republic of Germany: 　　(ⅰ)the individual income tax (die Einkommensteuer); 　　(ⅱ)the corporate income tax (die Korperschaftsteuer); 　　(ⅲ)the capital tax (die Vermogensteure); and 　　(ⅳ)the trade tax (die Gewerbesteuer) 　　(hereinafter referred to as "German tax"). 　　4.The Agreement shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes. Within reasonable periods of time, the competent authorities of the Contracting States shall notify each other of changes which have been made in their respective taxation laws. 　　Article 3 General Definitions 　　1.For the purposes of this Agreement, unless the context otherwise requires: 　　(a)the terms "a Contracting State" and "the other Contracting State" mean, as the context requires, the People's Republic of China or the Federal Republic of Germany, and when used in a geographical sense, the territory in which the tax laws of the relevant Contracting State are in force, including the territorial sea and areas beyond the territorial sea within which the relevant Contracting State may, in accordance with international law, exercise the right of exploration for and exploitation of the natural resources of the seabed and its subsoil; 　　(b)the term "person" includes an individual, a company and any other body of persons; 　　(c)the term "company" means any body corporate or any entity which is treated as a body corporate for tax purposes; 　　(d)the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively and enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; 　　(e)the term "national" means an individual who under the laws of a Contracting State possesses the nationality of that Contracting State, as well as a legal person, partnership and association deriving its status as such from the laws in force in a Contracting State; 　　(f)the term "international traffic" means any transport by a ship or aircraft operated by an enterprise which has its place of head office in a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; 　　(g)the term "competent authority" means in the case of the People's Republic of China the Ministry of Finance or its authorised representative and in the case of the Federal Republic of Germany the Federal Ministry of Finance. 　　2.As regards the application of the Agreement by a Contracting State any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the law of that State concerning the taxes to which the Agreement applies. 　　Article 4 Resident 　　1.For the purposes of this Agreement, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of head office or any other criterion of a similar nature. 　　2.Where by reason of the provisions of paragraph 1 and individual is a resident of both Contracting States, then his status shall be determined as follows: 　　(a)he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States; he shall be deemed to be a resident of the State with which his personal and economic relations are closer ( centre of vital interests); 　　(b)if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode; 　　(c)if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national; 　　(d)if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. 　　3.Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which its place of head office is situated. 　　Article 5 Permanent Establishment 　　1.For the purposes of this Agreement, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on. 　　2.The term "permanent establishment" includes especially: 　　(a)a place of management; 　　(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 of extraction of natural resources. 　　3.The term "permanent establishment" shall also include: 　　(a)a building site or assembly project or any supervising activities connected therewith, if the construction, assembly or supervising activities last for more than 6 months; 　　(b)the furnishing of services, including consultancy services, by an enterprise of a Contracting State through its employees or other personnel, when the activities in the other Contracting State (for the same or a connected project) continue for a period or periods aggregating more than 6 months within any 12-month period. 　　4.Notwithstanding paragraphs 1 to 3 of this Article, the term "permanent establishment" shall be deemed not to include: 　　(a)the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise; 　　(b)the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery; 　　(c)the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; 　　(d)the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise; 　　(e)the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character; 　　(f)the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character. 　　5.Notwithstanding the provisions of paragraphs 1 and 2, where a person--other than an agent of an independent status to whom paragraph 6 applies---is acting on behalf of an enterprise and has, and habitualy exercises in a Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph. 　　6.An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. 　　7.The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other. 　　Article 6 Income from Immovable Property 　　1.Income derived by a resident of a Contracting State from immovable property situated in the other Contracting State may be taxed in that other State. 　　2.The term "immovable property" shall have the meaning which it has under the law of the Contracting State in which the property is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agricultural and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships and aircraft shall not be regarded as immovable property. 　　3.The provisions of paragraph 1 shall apply to income derived from the direct use, letting, leasing, 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 of an enterprise and to income from immovable property used for the performance of independent personal services. 　　Article 7 Business Profits 　　1.The profits of an enterprise of a Contracting State shall be taxable only in tha State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment. 　　2.Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment. 　　3.In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere. 　　4.Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article. 　　5.No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. 　　6.For the purposes of paragraphs 1 to 5, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary. 　　7.Where profits include items of income which are dealt with in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article. 　　Article 8 Shipping and Air transport 　　1.Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of head office of the enterprise is situated. 　　2.If the place of head office of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship is a resident. 　　3.The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency. 　　Article 9 Associated Enterprises 　　Where 　　(a)an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or 　　(b)the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State; and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. 　　Article 10 Dividends 　　1.Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. 　　2.However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed 10% of the gross amount of the dividends. 　　This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. 　　3.The term "dividends" as used in this Article means income from shares, mining shares, founders' shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident. 　　4.The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. 　　5.Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profits to a tax on undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State. 　　Article 11 Interest 　　1.Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 　　2.However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State. But if the recipient is the beneficial owner of the interest the tax so charged shall not exceed 10% of the gross amount of the interest. 　　3.Notwithstanding the provisions of paragraph 2, interest 　　(a)derived from the Federal Republic of Germany is exempt from German tax, if paid: 　　(ⅰ)to the Government of the People's Republic of China; 　　(ⅱ)to the People's Bank of China, the Agricultural Bank of China, the People's Construction Bank of China, the Investment Bank of China or the Industrial and Commercial Bank of China; 　　(ⅲ)on a loan directly guaranteed or financed by the Bank of China or the Chinese International Trust and Investment Company; or 　　(ⅳ)to public credit institution of the Government of the People's Republic of China, if the competent authorities of both States have mutually agreed thereto; 　　(b)derived from the People's Republic of China is exempt from Chinese tax, if paid: 　　(ⅰ)to the Government of the Federal Republic of Germany; 　　(ⅱ)to the Deutsche Bundesbank, the Kredietanstalt fur Wiederaufbau or the Deutsche Finanzierungsgesellschaft fur Beteiligungen in Entwicklungslandern (the German Federal Bank, the Credit Institute for Reconstruction, or the German Finance Company for Investment in Developing Countries); 　　(ⅲ)on a loan, directly guaranteed or financed by Hermes; or 　　(ⅳ)to a public credit institution of the Federal Government, if the competent authorities of both States have agreed thereto. 　　4.The term "interest" as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article. 　　5.The provisions of paragraphs 1 to 3 shall not apply if the beneficial owner of the interest being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. 　　6.Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a local authority or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 　　7.Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence or such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. 　　Article 12 Royalties 　　1.Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 　　2.However, such royalties may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the recipient is the beneficial owner of the royalties, the tax so charged shall not exceed 10% of the gross amount of the royalties. 　　3.The term "royalties" as used 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, artisitic or scientific work including cinematograph films and films or tapes for broadcasting or television, any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial, or scientific equipment, or for information concerning industrial, commercial or scientific experience. 　　4.The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. 　　5.Royalties shall be deemed to arise in a Contracting State when the payer is the Government of that State itself, a local authority or a resident of that Contracting State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the obligation to pay the royalties was incurred, and those royalties are borne by that permanent establishment or fixed base, then such royalties shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated. 　　6.Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard begin had to the other provisions of this Agreement. 　　Article 13 Capital Gains 　　1.Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State. 　　2.Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a 　Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such a fixed base, may be taxed in that other State. 　　3.Gains from the alienation of ships or aircraft operated in international traffic, or movable property pertaining to the operation of such ships, aircraft or boats, shall be taxable only in the Contracting State in which the place of head office of the enterprise is situated. 　　4.Gains derived by a resident of a Contracting State from the alienation of any property other than that referred to in paragraphs 1 to 3 and which is situated in the other Contracting State, may be taxed in that other State. 　　Article 14 Independent Personal Services 　　1.Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State. However, such income may also be taxed in the other Contracting State: 　　(a)if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities but only so much of the income as is attributable to that fixed base; or 　　(b)if his stay in the other Contracting State is for a period or periods, in the aggregate, more than 183 days in the calendar year concerned, only so much of the income as is derived from the activities in that other State. 　　2.The term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants. 　　Article 15 Dependent Personal Services 　　1.subject to the provisions of Articles 16, 18, 19, 20 and 21, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State. 　　2.Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if: 　　(a)the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the calendar 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 remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. 　　3.Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic, may be taxed in the Contracting State in which the place of head office of the enterprise is Situated. 　　Article 16 Directors' Fees 　　Directors' fees and other similar payments derived by a resident of 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.