DENMARK - UGANDA INCOME TAX TREATY (2000)

DENMARK – UGANDA INCOME TAX TREATY (2000)
Date of Conclusion: 14 January 2000.
Entry into Force: 8 May 2001.
Effective Date: 1 January 2002 (see Article 31).
CONVENTION BETWEEN THE KINGDOM OF DENMARK AND THE REPUBLIC OF UGANDA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME 
 

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This Convention shall apply to persons who are residents of one or both of the Contracting States. 
 

1.  This Convention shall apply to taxes on income imposed on behalf of a Contracting State or of its political subdivisions or local authorities, irrespective of the manner in which they are levied.

2.  There shall be regarded as taxes on income all taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property, taxes on the total amounts of wages or salaries paid by enterprises as well as taxes on capital appreciation.

3.  The existing taxes to which the Convention shall apply are:
(a)  in Denmark:

(i)  the income tax to the State (indkomstskatten til staten);
(ii)  the income tax to the municipalities (den kommunale indkomstskat);
(iii)  the income tax to the county municipalities (den amtskommunale indkomstskat);
(iv)  taxes imposed under the Hydrocarbon Tax Act (skatter i henhold til kulbrinteskatteloven); 

(hereinafter referred to as “Danish tax”);
(b)  in Uganda:
—  the income tax
(hereinafter referred to as “Ugandan tax”).

4.  The Convention shall apply also to any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of the Convention in addition to, or in place of, its existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes which have been made in their respective laws.

1.  For the purposes of this Convention, unless the context otherwise requires:
(a)  the terms “a Contracting State” and “the other Contracting State” mean Denmark or Uganda as the context requires;
(b)  the term “Denmark” means the Kingdom of Denmark including any area outside the territorial sea of Denmark which in accordance with international law has been or may hereafter be designated under Danish laws as an area within which Denmark may exercise sovereign rights with respect to the exploration and exploitation of the natural resources of the sea-bed or its subsoil and the superjacent waters and with respect to other activities for the exploration and economic exploitation of the area; the term does not comprise the Faroe Islands and Greenland;
(c)  the term “Uganda” means the Republic of Uganda;
(d)  the term “person” includes an individual, a company, a partnership and any other body of persons;
(e)  the term “company” means any body corporate or any entity that is treated as a body corporate for tax purposes;
(f)  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;
(g)  the term “international traffic” means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;
(h)  the term “competent authority” means:
(i)  in Denmark: the Minister for Taxation or his authorized representative;
(ii)  in Uganda: the Minister of Finance or his authorized representative;

(i) the term “national” means:
(i)  any individual possessing the nationality of a Contracting State;
(ii)  any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State.

2.  As regards the application of the Convention at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Convention applies, any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State.

 

1.  For the purposes of this Convention, 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 management or any other criterion of a similar nature, and also includes that State and any political subdivision or local authority thereof. This term, however, does not include any person who is liable to tax in that State in respect only of income from sources in that State.

2.  Where by reason of the provisions of paragraph l an 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 only 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 only 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 only 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 only 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 l a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident only of the State in which its place of effective management is situated.

1.  For the purposes of this Convention, 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;
(f)  any premises used as a sales outlet or for receiving or soliciting orders;
(g)  a warehouse in relation to a person whose business is the provision of storage facilitiesfor others;
(h)  a mine, an oil or gas well, a quarry or any other place of extraction of natural resources;
(i)  an installation or structure used for the exploitation of natural resources.

3.  A building site, a construction, assembly or installation project or a supervisory or consultancy activity connected therewith constitutes a permanent establishment only if such site, project or activity lasts for a period of more than six months.

4.  Notwithstanding the preceding provisions of this Article, the term “permanent establishment” shall be deemed not to include:
(a)  the use of facilities solely for the purpose of storage or display 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 or display;
(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 l 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 habitually 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.

1.  Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) 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 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 l shall apply to income derived from the direct use, letting, or use in any other form of immovable property.
4.  The provisions of paragraphs l 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.

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.  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 Contracting State in which the permanent establishment is situated or elsewhere. However, no such deduction shall be allowed in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission, for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the permanent establishment.

Likewise, no account shall be taken, in the determination of the profits of a permanent establishment, of amounts charged (otherwise than towards reimbursement of actual expenses), by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patent or other rights, or by way of commission for the specific services performed or for management, or except in the case of a banking enterprise, by way of interest on moneys lent to the head office of the enterprise or any
of its other offices.

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 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 Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.

1.  Profits derived by an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State.

2.  Profits derived by an enterprise of a Contracting State from the use, maintenance or rental of containers (including trailers, barges and related equipment for the transport of containers) used for the transport of goods or merchandise in international traffic shall be taxable only in that State.

3.  The provisions of paragraph l shall also apply to profits from the participation in a pool, a joint business or an international operating agency.

4.  With respect to profits derived by the Danish, Norwegian and Swedish air transport consortium the Scandinavian Airlines System (SAS), the provisions of paragraphs 1, 2 and 3 shall apply only to such proportion of the profits as corresponds to the participation held in that consortium by SAS Danmark A/S, the Danish partner of Scandinavian Airlines System.

1.  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.

2.  Where a Contracting State includes in the profits of an enterprise of that State — and taxes accordingly — profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Convention and the competent authorities of the Contracting States shall if necessary consult each other.

1.  Dividends paid by a company which is a resident of a Contacting 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 beneficial owner of the dividends is a resident of the other Contracting State the tax so charged shall not exceed:
(a)  10 per cent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 25 per cent of the capital of the company paying the dividends;
(b)  15 per cent of the gross amount of the dividends in all other cases.

This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

3.  Where dividends arising in a Contracting State are derived and beneficially owned by the Government of the other Contracting State, such dividends shall be taxable only in that other State.
For the purposes of this paragraph, the term “Government of the other Contracting State” shall include:

(a)  in the case of Denmark:
—  the State of Denmark, a political subdivision, a local authority or statutory body thereof;
—  the Central Bank of Denmark (Danmarks Nationalbank);
—  any national agency (including a financial institution) owned or controlled by the Government of Denmark.

(b)  in the case of Uganda:
(i)  a local authority 

(ii)the Central Bank of Uganda;
(iii)  the National Social Security Fund; and
(iv)  a statutory body or any institution wholly or mainly owned by the Government of Uganda as may be agreed from time to time between the competent authorities of the Contracting States.

4.  The term “dividends” as used in this Article means income from shares, “jouissance” shares or “jouissance” rights, mining shares, founders’ shares or other rights, not being debtclaims, 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.

5.  The provisions of paragraphs l and 2 shall not apply if the beneficial owner of the dividends, 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 15, as the case may be, shall apply.

6.  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 the company’s undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.

7.  Where a Contracting State has levied the tax at source in excess of the amount of tax chargeable under the provisions of this Convention, application for the refund of the excess amount must be lodged with the competent authority of that State within a period of three years after the expiration of the calendar year in which the tax was levied. The refund shall be given within a six month period from the date on which the application was submitted to the competent authority. The six month period may be extended if the Contracting States agree that the necessary documentation has not been presented to the competent authority of the first-mentioned State.

1.  Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State if such resident is the beneficial owner of the interest.

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 beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the interest.

3.  Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempt from tax in that State if it is derived and beneficially owned by the Government of the other Contracting State. For the purposes of this paragraph, the term “Government of the other Contracting State” shall include:
(a)  in the case of Denmark:
(i)  the State of Denmark, a political subdivision, a local authority or statutory body thereof;
(ii)  the Central Bank of Denmark (Danmarks Nationalbank);
(iii)  any national agency or any other agency (including a financial institution) owned or controlled by the Government of Denmark;
(b)  in the case of Uganda:
(i)  a local authority;
(ii)  the Central Bank of Uganda;
(iii)  the National Social Security Fund; and
(iv)  a statutory body or any institution wholly or mainly owned by the Government of Uganda as may be agreed from time to time between the competent authorities of the Contracting States.

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 purposes of this Article.

5.  The provisions of paragraphs 1 and 2 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 15, as the case may be, shall apply.

6.  Interest shall be deemed to arise in a Contracting State when the payer is 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 that 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 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 remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

1.  Royalties arising in a Contracting State and beneficially owned by 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 beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent 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, artistic or scientific work including cinematograph films, and films, tapes or discs for radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience.

4.  The provisions of paragraph l and 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 15, as the case may be, shall apply.

5. Royalties shall be deemed to arise in a Contracting State when the payer is a resident of that 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 with which the right or property in respect of which the royalties are paid is effectively connected, and such royalties are borne by such permanent establishment or fixed base, then such royalties shall be deemed to arise in the 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 remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

1.  Administration and management fees 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 administration and management fees may also be taxed in the Contracting State in which they arise, and according to the laws of that State, but if the beneficial owner of the administration and management fees is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the administration and management fees.

3.  The term “administration and management fees” as used in this Article means payments of any kind to any person, other than to an employee of the person making the payment, in consideration for any services of an administrative or managerial nature, if such services make available administrative or managerial knowledge, experience, skills or know-how, but only to the extent that the services are performed on a regular basis or for a period of more than six months.

4.  A resident of a Contracting State who is liable to tax in the other Contracting State under the provisions of this Article may elect for any taxable year to compute the tax on such payments on a net basis under such terms as the competent authorities of the Contracting States may agree, as if such income were attributable to a permanent establishment in that other State.

5.  If any convention or agreement for the avoidance of double taxation, or protocol thereto, or any other international arrangement concluded after the date of signing of this Convention between Uganda and a third state being a member of the Organisation for Economic Co-operation and Development (OECD) provides for a rate of taxation (including a nil rate) on the gross amount of administration and management fees which is lower than the rate provided for under this Article, then the same lower rate shall apply under this Convention and have effect from the latter of the dates of which this Convention or the relevant convention, agreement or protocol between Uganda and a third state becomes effective.

6.  The provisions of paragraph l and 2 shall not apply if the beneficial owner of the administration and management fees, being a resident of a Contracting State, carries on business in the other Contracting State in which the administration and management fees arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the administration and management fees are effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 15, as the case may be, shall apply.

7.  Administration and management fees shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the administration and management fees, 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 administration and management fees was incurred, and such administration and management fees are borne by that permanent establishment or fixed base, then such administration and management fees shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated.

8.  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 administration and management fees 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 remain taxable according
to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

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 fixed base, may be taxed in that other State.

3.  Gains derived by an enterprise of a Contracting State from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft shall be taxable only in that State.

4.  Gains derived by an enterprise of a Contracting State from the alienation of containers (including trailers, barges and related equipment for the transport of containers) used for the transport of goods and merchandise in international traffic shall be taxable only in that State, except insofar as those containers or trailers and related equipment are used for transport solely between places within the other Contracting State.

5.  Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3 and 4 shall be taxable only in the Contracting State of which the alienator is a resident.

6.  With respect to gains derived by the Danish, Norwegian and Swedish air transport consortium — the Scandinavian Airlines System (SAS) –, the provisions of paragraph 3 shall apply only to such proportion of the gains as corresponds to the participation held in that consortium by SAS Danmark A/S, the Danish partner of Scandinavian Airlines System.

7.  Where a person who is a resident of a Contracting State becomes a resident of the other Contracting State, and the first-mentioned Contracting State taxes deemed capital gains on property of that person at the time of change of residence, then — in the case of subsequent alienation of such property — capital gains on such property as derived up to the time of change of residence shall not be taxed in the other Contracting State.

1.  Income derived by an individual who is 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 if:
(a)  the individual is present in the other State for a period or periods exceeding in the aggregate 183 days in any period of twelve months commencing or ending in the fiscal year concerned; or
(b)  the individual has a fixed base regularly available to him in that other State for the purpose of performing his activities; but only so much thereof as is attributable to services performed 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, economists and accountants.

1.  Subject to the provisions of Articles 17, 19 and 20, 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 l, 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 any twelve month period commencing or ending in  the fiscal year concerned, and
(b)  the remuneration is paid by, or on behalf of, an employer who is a resident of the first mentioned State, and whose activity does not consist of the hiring out  of labour; 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 by an enterprise of a Contracting State, may be taxed in that State.

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 or of a similar organ of a company which is a resident of the other Contracting State may be taxed in that other State.

1.  Notwithstanding the provisions of Articles 15 and 16, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsperson, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State.

2.  Where income in respect of personal activities exercised by an entertainer or a sportsperson in his capacity as such accrues not to the entertainer or sportsperson himself but to another person, that income may, notwithstanding the provisions of Articles 7, 15 and 16, be taxed in the Contracting State in which the activities of the entertainer or sportsperson are exercised.

3.  The provisions of paragraphs 1 and 2 shall not apply to income derived from activities performed in a Contracting State by artistes or sportspersons if the visit to that State is wholly or mainly supported by public funds of one or both of the Contracting States or political subdivisions or local authorities thereof. In such case, the income is taxable only in the Contracting State in which the artiste or the sportsperson is a resident.

1.  Payments received by an individual, being a resident of a Contracting State, under the social security legislation of the other Contracting State, or under any other scheme out of funds created by that other State or a political subdivision or a local authority thereof, may be taxed in that other State.

2.  Subject to the provisions of paragraph 1 of this Article and paragraph 2 of Article 20, pensions and other similar remuneration arising in a Contracting State and paid to a resident of the other Contracting State, whether in consideration of past employment or not, shall be taxable only in the other Contracting State, unless: 

(i)  contributions paid by the beneficiary to the pension scheme were deducted from the beneficiary’s taxable income in the first-mentioned Contracting State under the law of that
State; or
(ii)  contributions paid by an employer were not taxable income for the beneficiary in the first mentioned Contracting State under the law of that State.

In such case, the pensions may be taxed in the first-mentioned Contracting State.

3.  Pensions shall be deemed to arise in a Contracting State if paid by a pension fund or other similar institution providing pension schemes in which individuals may participate in order to secure retirement benefits, when such institution is established, recognized for tax purposes and controlled in accordance with the laws of that State.

4.  For the purposes of this Article, the pension schemes referred to in paragraph 3 shall include:
—  in the case of Denmark: pension schemes falling under Section I of the Act on Taxation of Pension Schemes (pensionsbeskatningsloven);
—  in the case of Uganda: pension schemes falling under the pension laws.

1.  (a) Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

(b)  However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who:
(i)  is a national of that State; or
(ii)  did not become a resident of that State solely for the purpose of rendering the services.

2.  (a) Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.
(b)  However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.

3.  The provisions of Articles 16, 17, 18 and 19 shall apply to salaries, wages and other similar remuneration, and to pensions, in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof.

Payments which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first mentioned State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State.

1.  Notwithstanding the provisions of Articles 5 and 15, a resident of a Contracting State who carries on activities in connection with preliminary surveys, exploration or extraction of hydrocarbons situated in the other Contracting State shall be deemed to be carrying on in respect of such activities a business in that other State through a permanent establishment or to be performing independent personal services from a fixed base situated therein.

2.  The provisions of paragraph 1 shall not apply where the activities are carried on for a period or periods not exceeding 30 days in the aggregate in any twelve month period. However, for the purpose of this paragraph, activities carried on by an enterprise associated with another enterprise within the meaning of Article 9 shall be deemed to be carried on by the enterprise with which it is associated if the activities in question are substantially the same as those carried on by the last-mentioned enterprise.

1.  Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Convention shall be taxable only in that State.

2.  However, any such income derived by a resident of a Contracting State from sources in the other Contracting State may also be taxed in that other State.

3.  The provisions of paragraph l shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State 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 income is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 15, as the case may be, shall apply.

Double taxation shall be avoided as follows:

1.  In Denmark:
(a)  subject to the provisions of subparagraph (c), where a resident of Denmark derives income which, in accordance with the provisions of this Convention, may be taxed in Uganda, Denmark shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Uganda;
(b)  such deduction in either case shall not, however, exceed that part of the income tax, as computed before the deduction is given, which is attributable to the income which may be taxed in Uganda;
(c)  where a resident of Denmark derives income which, in accordance with the provisions of this Convention shall be taxable only in Uganda, Denmark may include this income in the tax base, but shall allow as a deduction from the income tax that part of the income tax, which is attributable to the income derived from Uganda.

2.  In Uganda:
—  Where a resident of Uganda derives income which, in accordance with the provisions of this Convention, may be taxed in Denmark, Uganda shall allow as a deduction from the tax on the income of that resident an amount equal to the Danish tax paid. Such deduction shall not, however, exceed that part of the income tax as computed before the deduction is given, which is attributable, as the case may be, to the income which may be taxed in Denmark.

1.  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, in particular with respect to residence, are or may be subjected. This provision shall, notwithstanding the provisions of Article l, also apply to persons who are not residents of one or both of the Contracting States.

2.  Stateless persons who are residents of a Contracting State shall not be subjected in either 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 the State concerned in the same circumstances, in particular with respect to residence, are or may be subjected.

3.  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. However, branch profits tax levied on income repatriated by a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be regarded as being contrary to the provisions of this paragraph. The tax so charged, however, shall not exceed 10 per cent of the repatriated income. 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 which it grants to its own residents.

4.  If any convention or agreement for the avoidance of double taxation, or protocol thereto, or any other international arrangement concluded after the date of signing of this Convention between Uganda and a third state being a member of the Organisation for Economic Co-operation and Development (OECD) provides for rules of taxation of permanent establishments which are more favourable than those provided for under this Article, then the same rules shall apply under this Convention and have effect from the latter of the dates of which this Convention or the relevant convention, agreement or protocol between Uganda and a third state becomes effective.

5.  Except where the provisions of paragraph l of Article 9, paragraph 7 of Article 11, paragraph 6 of Article 12 or paragraph 6 of Article 13, apply, interest, royalties, administration and management fees and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State.

6.  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 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 the first-mentioned State are or may be subjected.

7.  The provisions of this Article shall, notwithstanding the provisions of Article 2, apply to taxes to which this Convention applies.

1.  Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 of Article 25 to that of the Contracting State of which he is a national. The case must
be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Convention.

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 a satisfactory 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 which is not in accordance with the Convention. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States.

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 the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention.

4.  The competent authorities of the Contracting States may communicate with each other directly, including through a joint commission consisting of themselves or their representatives, for the purpose of reaching an agreement in the sense of the preceding paragraphs.

1.  The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Article l. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the Convention. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions.

2.  In no case shall the provisions of paragraph l be construed so as to impose on a Contracting State the obligation:
(a)  to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;
(b)  to supply information which is 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 (ordre public).

1.  The Contracting States undertake to lend assistance to each other in the collection of the taxes owed by a taxpayer to the extent that the amount thereof has been finally determined according to the laws of the Contracting State making the request for assistance.

2.  In the case of a request by a Contracting State for the collection of taxes which has been accepted for collection by the other Contracting State, such taxes shall be collected by that other State to the extent permitted by its domestic law.

3.  Claims which are the subject of requests for assistance shall not have priority over taxes owing in the Contracting State rendering assistance and the provisions of paragraph 1 of Article 27 shall also apply to any information which, by virtue of this Article, is supplied to the competent authority of a Contracting State.

4.  Any request for collection by a Contracting State shall be accompanied by such certificate as is required by the laws of that State to establish that the taxes owed by the taxpayer have been finally determined.

5.  Where the tax claim of a Contracting State has not been finally determined by reason of it being subject to appeal or other proceedings, that State may, in order to protect its revenues, request the other Contracting State to take such interim measures for conservancy on its behalf as are available to the other State under the laws of that other State. If such request is accepted by the other State, such interim measures shall be taken by that other State to the extent permitted by its domestic law.

6.  A request under paragraphs 4 or 5 shall only be made by a Contracting State to the extent that sufficient property of the taxpayer owing the taxes is not available in that State for recovery of the taxes owed.

7.  The Contracting State in which tax is recovered in accordance with the provisions of this Article shall forthwith remit to the Contracting State on behalf of which the tax was collected the amount so recovered minus, where appropriate, the amount of the extraordinary costs referred to in sub-paragraph (b) of paragraph 8.

8.  It is understood that, unless otherwise agreed by the competent authorities of both Contracting States, 

(a)  ordinary costs incurred by a Contracting State in providing assistance shall be borne by that State,

(b)  extraordinary costs incurred by a Contracting State in providing assistance shall be borne by the other State and shall be payable regardless of the amount collected on its behalf by the first-mentioned State.

As soon as a Contracting State anticipates that extraordinary costs may be incurred, it shall so advise the other Contracting State and indicate the estimated amount of such costs. The competent authorities of the Contracting States may settle the mode of application of this paragraph.

9.  In this Article, the term “taxes” means the taxes covered by Article 2 of this Convention and includes any interest and penalties relating thereto.

 

Nothing in this Convention shall affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements.

1.  This Convention may be extended, either in its entirety or with any necessary modifications, to any part of the territory of the Contracting States which is specifically excluded from the application of the Convention or, to any State or territory for whose international relations Denmark or Uganda is responsible, which imposes taxes substantially similar in character to those to which the Convention applies. Any such extension shall take effect from such date and subject to such modifications and conditions, including conditions as to termination, as may be specified and agreed between the Contracting States in notes to be exchanged through diplomatic channels or in any other manner in accordance with their constitutional procedures.

2.  Unless otherwise agreed by both Contracting States, the termination of the Convention by one of them under Article 32 shall also terminate, in the manner provided for in that Article, the application of the Convention to any part of the territory of the Contracting States or to any State or territory to which it has been extended under this Article.

1.  The Government of a Contracting State shall notify the other of the completion of the procedures required by its law for the bringing into force of this Convention. The Convention shall enter into force on the date of receipt of the latter of these notifications.

2.  The Convention shall have effect:
(a)  with regard to taxes withheld at source, in respect of amounts paid or credited on or after the first day of January next following the date upon which the Convention enters into force; and
(b)  with regard to other taxes, in respect of income years beginning on or after the first day of January next following the date upon which the Convention enters into force.

1.  This Convention shall remain in force indefinitely, but either of the Contracting States may terminate the Convention through diplomatic channels, by giving to the other Contracting State written notice of termination not later than the 30th day of June of any calendar year, starting five years after the year in which the Convention entered into force.

2.  In such event, the Convention shall cease to have effect:
(a)  with regard to taxes withheld at source, in respect of amounts paid or credited after the end of the calendar year in which such notice is given; and
(b)  with regard to other taxes, in respect of income years beginning after the end of the calendar year in which such notice is given.

In witness whereof the undersigned, duly authorized thereto by their respective Governments, have signed this Convention.

Done in duplicate at Kampala this 14th day of January 2000, in the English language.

to the Convention between the Kingdom of Denmark and the Republic of Uganda for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income.

At the signing of the Convention concluded today between the Kingdom of Denmark and the Republic of Uganda for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income the undersigned have agreed upon the following additional provisions which shall form an integral part of the Convention.

1.  With reference to subparagraph (d) of paragraph 1 of Article 3:

It is noted that neither under Danish law nor under Ugandan law is a partnership treated as a body corporate for tax purposes. It is understood that the status of partnerships under civil law of the Contracting States shall have no implication on the application of the Convention.

2.  With reference to subparagraph (f) of paragraph 2 of Article 5:

It is understood that such premises must be of a sufficient degree of permanence and that an enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State if the activities are limited to those mentioned in paragraphs 4 and 6 of that Article.

3.  With reference to paragraph 2 of Article 10:

The competent authorities of the Contracting States shall by mutual agreement settle any administrative questions on the application of the limits provided for in that paragraph.

In witness whereof the undersigned, duly authorized thereto by their respective Governments, have signed this Protocol.

Done in duplicate at Kampala this 14th day of January 2000, in the English language.

 
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