AGREEMENT OF 9TH MAY, 1974

Germany

Agreement between the Federal Republic of Germany and the Republic of Cyprus for the avoidance of double taxation with respect to taxes on income and capital. 
The Federal Republic of Germany and the Republic of Cyprus, 
Desiring to conclude an Agreement for the avoidance of double taxation with respect to taxes on income and capital, 
Have 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 each Contracting State or of its Lander, political subdivisions or local authorities, 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 this Agreement shall apply are, in particular: 
(a)	in the Federal Republic of Germany: 
the Einkommensteuer (income tax) including 
the Erganzungsabgabe (surcharge) thereon, 
the Korperschaftsteuer (corporation tax) including 
the Erganzungsabgabe (surcharge) thereon, 
the Vermogensteuer (capital tax), and 
the Gewerbesteuer (trade tax) 
(hereinafter referred to as "German tax"); 
(b)	in Cyprus: 
the income tax (hereinafter referred to as "Cyprus tax"). 
(4)	This Agreement shall also apply to any identical or substantially similar taxes which are subsequently imposed in addition to, or in place of, the existing taxes. 
(5)	The provisions of this Agreement in respect of taxation of income or capital shall likewise apply to the German trade tax, computed on a basis other than income or capital. 

Article 3 
General Definitions 
(1)	In this Agreement, unless the context otherwise requires: 
(a)	the term "Federal Republic of Germany", when used in a geographical sense, means the territory in which the Basic Law for the Federal Republic of Germany is in force, as well as any area adjacent to the territorial waters of the Federal Republic of Germany designated, in accordance with international law as related to the rights which the Federal Republic of Germany may exercise with respect to the sea bed and sub-soil and their natural resources, as domestic area for tax purposes; 
(b)	the term "Cyprus" when used in a geographical sense, means the territory of Cyprus as well as any area adjacent to the territorial waters of Cyprus designated in accordance with international law as related to the rights which Cyprus may exercise with respect to the sea bed and sub-soil and their natural resources, as domestic area for tax purposes; 
(c)	the terms "a Contracting State" and "the other Contracting State" mean the Federal Republic of Germany or Cyprus, as the context requires; 
(d)	the term "person" includes an individual, a company and any body of persons treated as an entity for tax purposes; 
(e)	the term "company" means any body corporate or any entity, which is treated as a body corporate for tax purposes; 
(f)	the terms "resident of a Contracting State" and "resident of the other Contracting State" mean a person who is a resident of the Federal Republic of Germany or a person who is a resident of Cyprus, as the context requires; 
(g)	the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; 
(h)	the term "national" means: 
(aa) 	in respect of the Federal Republic of Germany any German in the meaning of Article 116, paragraph 1, of the Basic Law for the Federal Republic of Germany and any legal person, partnership and association deriving its status as such from the law in force in the Federal Republic of Germany; 
(bb) 	in respect of Cyprus any national of Cyprus and any legal person, partnership and association deriving its status as such from the law in force in Cyprus; 
(i)	the term "competent authority" means in the case of the Federal Republic of Germany the Federal Minister of Finance, and in the case of Cyprus the Minister of Finance. 
(2)	As regards the application of this Agreement by a Contracting State any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State relating to the taxes which are the subject of this Agreement. 

Article 4 
Fiscal Domicile 
(1)	For the purposes of this Agreement, the term "resident of a Contracting State" means any person who, under the law of that State, is liable to taxation therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. 
(2)	Where by reason of the provisions of paragraph (1) an individual is a resident of both Contracting States, then this case shall be determined in accordance with the following rules: 
(a)	He shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him. If he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closest (centre of vital interests); 
(b)	If the Contracting 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 Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode; 
(c)	If he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national; 
(d)	If he is a national of both Contracting 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 Contracting State in which its place of effective management is situated. 

Article 5 
Permanent Establishment 
(1)	For the purposes of this Agreement the term "permanent establishment" means a fixed place of business in which the business of the enterprise is wholly or partly carried on. 
(2)	The term "permanent establishment" shall include especially: 
(a)	a place of management; 
(b)	a branch; 
(c)	an office; 
(d)	a factory; 
(e)	a workshop; 
(f)	a mine, quarry or other place of extraction of natural resources; 
(g)	a building site or construction or assembly project which exists for more than six months. 
(3)	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 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 for collecting information, for the enterprise; 
(e)	the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or for similar activities which have a preparatory or auxiliary character, for the enterprise. 
(4)	A person acting in a Contracting State on behalf of an enterprise of the other Contracting State - other than an agent of an independent status to whom paragraph (5) applies - shall be deemed to be a permanent establishment in the first-mentioned State if he has, and habitually exercises in that State, an authority to conclude contracts in the name of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise. 
(5)	An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, where such persons are acting in the ordinary course of their business. 
(6)	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 make either company a permanent establishment of the other. 

Article 6 
Immovable Property 
(1)	Income from immovable property may be taxed in the Contracting State in which such property is situated. 
(2)	The term "immovable property" shall be defined in accordance with the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture 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, 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, letting, 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 professional services. 

Article 7 
Business Profits 
(1)	The profits of an enterprise of a Contracting State shall be taxable only in that 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)	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 the determination of 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 laid down 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 the preceding paragraphs, 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 separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article. 

Article 8 
Ships And Aircraft 
(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 effective management of the enterprise is situated. 
(2)	The provisions of paragraph (1) shall likewise apply in respect of participations in pools, in a joint business or in an international operations agency of any kind by enterprises engaged in the operation of ships or aircraft in international traffic. 
(3)	Notwithstanding the foregoing provisions profits from the operation of ships in international traffic derived by a company or partnership which is a resident of Cyprus more than 25 per cent of the capital of which is owned, directly or indirectly, by persons who are not residents of Cyprus, may be taxed in the Federal Republic of Germany if the company of partnership does not prove that the Cyprus tax appropriate to such income is equal to the Cyprus tax which would have been appropriate to such income if the Cyprus tax were computed without regard to any provision identical or similar to the provisions of The Merchant Shipping (Taxing Provisions) Law as in force at the signing of this Agreement. 
(4)	If the place of effective management 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. 

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 to a resident of the other Contracting State may be taxed in that other State. 
(2)	However, such dividends may be taxed in the Contracting State of which the company paying the dividends is a resident, and according to the law of that State, but the tax so charges shall not exceed: 
(a)	per cent of the gross amount of the dividends if the recipient is a company (excluding partnerships) which owns directly at least 25 per cent of the capital of the company paying the dividends; 
(b)	in all other cases, 15 per cent of the gross amount of the dividends. 
(3)	Notwithstanding the provisions of paragraph (2) German tax on dividends paid to a company being a resident of Cyprus by a company being a resident of the Federal Republic of Germany, at least 25 per cent of the capital of which is owned directly or indirectly by the former company itself, or by it together with other persons controlling it or being under common control with it, shall not exceed 27 per cent of the gross amount of such dividends as long as the rate of German corporation tax on distributed profits is lower than that on undistributed profits and the difference between those two rates is 15 percentage points or more. 
(4)	Notwithstanding the provisions of paragraph (2), as long as Cyprus does not impose a tax on dividends in addition to the tax chargeable on the profits or income of a company, dividends paid by a company which is a resident of Cyprus to a resident of the Federal Republic of Germany shall be exempt from any tax in Cyprus which may be chargeable on dividends in addition to the tax chargeable on the profits or income of the company. 
(5)	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 assimilated to income from shares by the taxation law of the State of which the company making the distribution is a resident, and income derived by a sleeping partner from his participation as such and distributions on certificates of an investment-trust. 
(6)	The provisions of paragraphs (1) to (4) shall not apply if the recipient of the dividends, being a resident of a Contracting State, has in the other Contracting State, of which the company paying the dividends is a resident, a permanent establishment with which the holding by virtue of which the dividends are paid is effectively connected. In such a case, the provisions of Article 7 shall apply. 
(7)	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 to persons who are not residents of that other State, or 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 derived from a Contracting State by a resident of the other Contracting State may be taxed in that other State. 
(2)	However, such interest may be taxed in the Contracting State from which it is derived, and according to the law of that State, but the tax so charged shall not exceed 10 per cent of the gross amount of such interest. 
(3)	Notwithstanding the provisions of paragraph (2), 
(a)	interest derived from the Federal Republic of Germany and paid to the Cyprus Government or the Central Bank of Cyprus shall be exempt from German tax; 
(b)	interest derived from Cyprus and paid to the German Government, the Deutsche Bundesbank, the Kreditanstalt fur Wiederaufbau or the Deutsche Gesellschaft fur wirtschaftliche Zusammenarbeit (Entwicklungsgesellschaft) shall be exempt from Cyprus tax. The competent authorities of the Contracting States shall determine by mutual agreement any other governmental institution to which this paragraph shall apply. 
(4)	The term "interest" as used in this Article means income from Government securities, bonds or debentures, whether or not secured by mortgage and whether or not carrying a right to participate in profits, and debt-claims of every kind as well as all other income assimilated to income from money lent by the taxation law of the State from which the income is derived. 
(5)	The provisions of paragraphs (1) and (2) shall not apply if the recipient of the interest, being a resident of a Contracting State, has in the other Contracting State in which the interest arises a permanent establishment with which the debt-claim from which the interest arises is effectively connected. In such a case, the provisions of Article 7 shall apply. 
(6)	Interest shall be deemed to be derived from a Contracting State when the payer is that State itself, a Land, a political subdivision or a local authority thereof 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 in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment, then such interest shall be deemed to be derived from the Contracting State in which the permanent establishment is situated. 
(7)	Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the interest paid, 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 recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each Contracting State, due regard being had to the other provisions of this Agreement. 

Article 12 
Royalties 
(1)	Royalties derived from a Contracting State by a resident of the other Contracting State shall be taxable only in that other State. 
(2)	Notwithstanding the provisions of paragraph (1) royalties received as consideration for the use of, or the right to use, cinematograph films including films and video tapes for television may be taxed in, and according to the law of, the Contracting State from which they are derived, but the tax so charged shall not exceed 5 per cent of the gross amount of such 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, artistic or scientific work including cinematograph films or tapes for television or broadcasting, 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 recipient of the royalties, being a resident of a Contracting State, has in the other Contracting State in which the royalties arise a permanent establishment with which the right or property giving rise to the royalties is effectively connected. In such a case, the provisions of Article 7 shall apply. 
(5)	Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the royalties paid, 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 recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each Contracting State, due regard being had to other provisions of this Agreement. 

Article 13 
Capital Gains 
(1)	Gains from the alienation of immovable property, as defined in paragraph (2) of Article 6, may be taxed in the Contracting State in which such property is situated. 
(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 professional services, including such gains from the alienation of such a permanent establishment (alone or together with the whole enterprise) or of such a fixed base, may be taxed in the other State. However, gains from the alienation of movable property of the kind referred to in paragraph (3) of Article 22 shall be taxable only in the Contracting State in which such movable property is taxable according to the said Article. 
(3)	Gains from the alienation of shares of a company which is a resident of a Contracting State may be taxed in that State. 
(4)	Gains from the alienation of any property other than those mentioned in paragraphs (1) to (3) shall be taxable only in the Contracting State of which the alienator is a resident. 

Article 14 
Independent Personal Services 
(1)	Income derived by a resident of a Contracting State in respect of professional services or other independent activities of a similar character shall be taxable only in that State unless he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities. If he has such a fixed base, the income may be taxed in the other Contracting State but only so much of it as is attributable to that fixed base. 
(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 and 19, 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 in respect of an employment exercised aboard a ship or aircraft in international traffic, may be taxed in the Contracting State in which the place of effective management of the enterprise is situated. 

Article 16 
Directors' Fees 
Directors' fees and 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. 

Article 17 
Artists And Athletes 
Notwithstanding the provisions of Articles 14 and 15, income derived by public entertainers, such as theatre, motion picture, radio or television artists, and musicians, and by athletes, from their personal activities as such may be taxed in the Contracting State in which these activities are exercised. 

Article 18 
Public Funds 
(1)	Subject to the provisions of Article 19, remuneration paid by, or out of funds created by a Contracting State, a Land, a political subdivision or a local authority thereof to any individual in respect of an employment shall be taxable only in that State. If, however, the employment is exercised in the other Contracting State by a national of that State not being a national of the first-mentioned State, the remuneration shall be taxable only in that other State. 
(2)	The provisions of Articles 15, 16 and 17 shall apply to remuneration in respect of an employment in connection with any business carried on by a Contracting State, a Land, a political subdivision or a local authority thereof for the purpose of profits. 
(3)	The provisions of paragraph (1) shall likewise apply in respect of remuneration paid, under a development assistance programme of a Contracting State, a Land, a political subdivision or a local authority thereof, out of funds exclusively supplied by that State, those Lander, political subdivisions or local authorities thereof, to a specialist or volunteer seconded to the other Contracting State with the consent of that other State. 

Article 19 
Pensions 
Pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State. 

Article 20 
Teachers, Students And Trainees 
(1)	Remuneration which a professor or teacher who is, or immediately before was, a resident of a Contracting State and who visits the other Contracting State for a period not exceeding two years for the purpose of carrying out advanced study or research or for teaching at a university, college, school or other educational institution receives for such work shall not be taxed in that other State, provided that such remuneration is derived by him from outside that other State. 
(2)	An individual who was a resident of a Contracting State immediately before visiting the other Contracting State and is temporarily present in that other State solely as a student at a university, college, school or other similar educational institution in that other State or as a business apprentice (including in the case of the Federal Republic of Germany a Volontar or a Praktikant) shall, from the date of his first arrival in that other State in connection with that visit, be exempt from tax in that other State 
(a)	on all remittances from abroad for purposes of his maintenance, education or training; and 
(b)	for a period not exceeding in the aggregate four years, on any remuneration not exceeding 6,000 DM or the equivalent in Cyprus currency for the calendar year for personal services rendered in that other Contracting State with a view to supplementing the resources available to him for such purposes. 
(3)	An individual who was a resident of a Contracting State immediately before visiting the other Contracting State and is temporarily present in that other State solely for the purpose of study, research or training as a recipient of a grant, allowance or award from a scientific, educational, religious or charitable organization or under a technical assistance programme entered into by the Government of a Contracting State shall, from the date of his first arrival in that other State in connection with that visit, be exempt from tax in that other State 
(a)	on the amount of such grant, allowance or award; and 
(b)	on all remittances from abroad for the purposes of his maintenance, education or training. 

Article 21 
Income Not Expressly Mentioned 
Items of income of a resident of a Contracting State, which are not expressly mentioned in the foregoing Articles of this Agreement shall be taxable only in that State. 

Article 22 
Capital 
(1)	Capital represented by immovable property, as defined in paragraph (2) of Article 6, may be taxed in the Contracting State in which such property is situated. 
(2)	Capital represented by movable property forming part of the business property of a permanent establishment of an enterprise, or by movable property pertaining to a fixed base used for the performance of professional services, may be taxed in the Contracting State in which the permanent establishment or fixed base is situated. 
(3)	Ships and aircraft operated in international traffic and movable property pertaining to the operation of such ships and aircraft, shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. If, however, the income of the operation of ships in international traffic derived by a company or partnership which is a resident of Cyprus may be taxed in the Federal Republic of Germany according to paragraph (3) of Article 8, the ships so operated and movable property pertaining to the operation of such ships may be taxed in the Federal Republic of Germany. 
(4)	All other elements of capital of a resident of a Contracting State shall be taxable only in that State. 

Article 23 
Relief From Double Taxation 
(1)	Tax shall be determined in the case of a resident of the Federal Republic of Germany as follows: 
(a)	Unless the provisions of sub-paragraph (b) apply, there shall be excluded from the basis upon which German tax is imposed, any item of income derived from Cyprus and any item of capital situated within Cyprus, which, according to this Agreement, may be taxed in Cyprus. In the determination of its rate of tax applicable to any item of income or capital not so excluded, the Federal Republic of Germany, however, will take into account the items of income and capital so excluded. In the case of income from dividends the foregoing provisions shall apply only to such dividends as are paid to a company being a resident of the Federal Republic of Germany by a company being a resident of Cyprus if at least 25 per cent of the capital of the Cyprus company is owned directly by the German company. There shall also be excluded from the basis upon which German tax is imposed any shareholding, the dividends of which, if paid, would be excluded from the basis upon which tax is imposed according to the immediately foregoing sentence. 
(b)	Subject to the provisions of German tax law regarding credit for foreign tax, there shall be allowed as a credit against German income and corporation tax, including the surcharge thereon, payable in respect of the following items of income derived from Cyprus the Cyprus tax paid under the laws of Cyprus and in accordance with this Agreement on: 
(aa) 	dividends to which sub-paragraph (a) does not apply; 
(bb) 	interest to which paragraph (2) of Article 11 applies; 
(cc) 	royalties to which paragraph (2) of Article 12 applies; 
(dd) 	gains to which paragraph (3) of Article 13 applies; 
(ee) 	remuneration to which Article 16 applies; 
(ff) 	income to which Article 17 applies; 
The credit shall not, however, exceed that part of the German tax, as computed before the credit is given, which is appropriate to such items of income. 
(c)	For purposes of credit referred to in sub-paragraph (b), 
(aa) 	where for the purpose of promoting economic development in Cyprus, dividends are exempt from any tax in Cyprus in addition to the tax chargeable on the profits or income of the company, or are taxed in Cyprus at a rate lower than 15 per cent of the gross amount of such dividends, the amount of Cyprus tax shall be deemed to be 15 per cent of the gross amount of such dividends; 
(bb) 	where the rate of Cyprus tax on interest to which paragraph (2) of Article 11 applies is reduced below 10 per cent of the gross amount of such interest by virtue of special incentive measures designed to promote economic development in Cyprus, the amount of Cyprus tax shall be deemed to be 10 per cent of the gross amount of such interest. 
(2)	Tax shall be determined in the case of a resident of Cyprus as follows: 
(a)	Subject to the provisions of Cyprus tax law regarding credit for foreign tax, there shall be allowed as a credit against Cyprus tax payable in respect of any item of income derived from, and any item of capital situated within, the Federal Republic of Germany, the German tax paid under the laws of the Federal Republic of Germany, and in accordance with this Agreement. The credit shall not, however, exceed that part of the Cyprus tax as computed before the credit is given, which is appropriate to such items of income or capital. 
(b)	Where such income is a dividend paid by a company which is a resident of the Federal Republic of Germany to a company which is a resident of Cyprus and which owns directly at least 25 per cent of the capital of the German company, the credit shall take into account (in addition to any German tax on dividends) the German corporation tax payable in respect of its profits by the company paying the dividends. 

Article 24 
Non-discrimination 
(1)	The nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. 
(2)	The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. 
This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities or any other personal circumstances which it grants to its own residents. 
(3)	Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned State are or may be subjected. 
(4)	In this Article the term "taxation" means taxes of every kind and description. 

Article 25 
Mutual Agreement Procedure 
(1)	Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this Agreement, he may, notwithstanding the remedies provided by the national laws of those States, present his case to the competent authority of the Contracting State of which he is a resident. 
(2)	The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with this Agreement. 
(3)	The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of this Agreement. They may also consult together for the elimination of double taxation in cases not provided for in this Agreement. 
(4)	The competent authorities of the Contracting States may communicate with each other directly for the purpose of applying the provisions of this Agreement. 

Article 26 
Exchange Of Information 
(1)	The competent authorities of the Contracting States shall exchange such information as is necessary for the carrying out of this Agreement. Any information so exchanged shall be treated as secret and shall not be disclosed to any persons, authorities or courts other than those concerned with the assessment or collection of the taxes which are the subject of this Agreement, or the determination of appeals or the prosecution of offences in relation thereto. 
(2)	In no case shall the provisions of paragraph (1) be construed so as to impose on one of the Contracting States the obligation: 
(a)	to carry out administrative measures at variance with the laws or the administrative practice of that or of the other Contracting State; 
(b)	to supply particulars which are not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; 
(c)	to supply information which would disclose any trade, business, industrial, commercial, or professional secret or trade process, or information, the disclosure of which would be contrary to public policy. 

Article 27 
Diplomatic And Consular Privileges 
(1)	Nothing in this Agreement shall affect diplomatic or consular privileges under the general rules of international law or under the provisions of special agreements. 
(2)	Insofar as, due to such privileges granted to a person under the general rules of international law or under the provisions of special international agreements, income or capital are not subject to tax in the receiving State, the right to tax shall be reserved to the sending State. 
(3)	For the purposes of this Agreement, persons who are members of a diplomatic or consular mission of a Contracting State in the other Contracting State or in a third State, as well as persons connected with such persons, and who are nationals of the sending State, shall be deemed to be residents of the sending State if they are subjected therein to the same obligations in respect of taxes on income and capital as are residents of that State. 

Article 28 
Land Berlin 
This Agreement shall also apply to Land Berlin, provided that the Government of the Federal Republic of Germany has not made a contrary declaration to the Government of Cyprus within three months from the date of entry into force of this Agreement. 

Article 29 
Entry Into Force 
(1)	This Agreement shall be ratified and the instruments of ratification shall be exchanged at Bonn as soon as possible. 
(2)	This Agreement shall enter into force on the day after the date of exchange of the instruments of ratification and shall have effect: 
(a)	in the Federal Republic of Germany in respect of taxes which are levied for any assessment period beginning on or after January 1, 1970; 
(b)	in Cyprus in respect of taxes which are levied on any income which has accrued on or after January 1, 1970; 
(c)	in both Contracting States in respect of taxes withheld at source on dividends, interest and royalties paid after December 31, 1969. 

Article 30 
Termination 
This Agreement shall continue in effect indefinitely but either of the Contracting States may, on or before the thirtieth day of June in any calendar year beginning after the expiration of a period of five years from the date of its entry into force, give to the other Contracting State, through diplomatic channels, written notice of termination and, in such event, this Agreement shall cease to be effective: 
(a)	in the Federal Republic of Germany in respect of taxes which are levied for any assessment period following that in which the notice of termination is given; 
(b)	in Cyprus in respect of taxes which are levied on any income which has accrued on or after January 1 of the year following that in which the notice of termination is given; 
(c)	in both Contracting States in respect of taxes withheld at source on dividends, interest and royalties paid after December 31 of the year in which the notice of termination is given.