The German Bundesministerium der Finanzen (German Ministry of Finance) has issued a press release announcing that on August 29, 2016 the Federal Republic of Germany and Turkmenistan signed an Agreement for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital (Hereafter: the new DTA).
Although the new DTA has been signed, it has not entered into force yet. For the new DTA to enter into force, the respective ratification procedures have to have been finalized in both countries.
When entering into force the new DTA will replace the existing Agreement between the Federal Republic of Germany and the Union of Soviet Socialist Republics for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital, which was signed on November 24, 1981.
The German Ministry of Finance has published the DTA in three different languages. It has published the DTA in the German, Turkmen and Russian languages.
You are used to us discussing a selection of provisions included in a DTA. Due to the languages in which the new DTA is available below we will only discuss a very limited selection of provisions as included in the new DTA.
Dividends
If the beneficial owner of the dividends is a resident of the other Contracting State, Article 10, Paragraph 2 of the DTA (“Dividends”) maximizes the withholding tax a Source State is allowed to withhold over dividends to:
a) 5 per cent of the gross amount of the dividends, if the beneficial owner of the dividends is a company (not being a partnership) which directly owns at least 25% of the capital of the company making the dividend distribution.
b) 15 per cent of the gross amount of the dividends in all other cases.
Interest
If the beneficial owner of the interest is a resident of the other Contracting Party, Article 11, Paragraph 2 of the DTA (“Interest”) maximizes the withholding tax a Source State is allowed to withhold over such interest to 10 per cent of the gross amount of the interest.
Royalties
If the beneficial owner of the royalties is a resident of the other Contracting Party, Article 12, Paragraph 2 of the DTA (“Royalties”) maximizes the withholding tax a Source State is allowed to withhold over such royalties to 10 per cent of the gross amount of the royalties.
Other
Furthermore the DTA contains provisions regarding a Mutual Agreement Procedure (Article 25), regarding the Exchange of Information (Article 26) and regarding the Assistance in the Collection of Taxes (Article 27).
Click here to be forwarded to the German version of the text of the new DTA as available on the website of the German Ministry of Finance.
Click here to be forwarded to the Russian version of text of the new DTA as available on the website of the German Ministry of Finance.
Click here to be forwarded to the Turkmen text of the new DTA as available on the website of the German Ministry of Finance.
Are you looking for other DTAs? Then check our section DTAs & TIEAs, a very efficient way to locate numerous DTAs.
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