2. Table (Schindler/Twardosz/Strunz/Békés)

DTT Austria/Hungary

DTT Austria/Hungary vs OECD-MC
Income and Capital Tax Treaty (2008)

Entry into force

9 February 1976

Effective Date

1 January 1976

Art 4 Fiscal domicile

Art 4 of this Convention does not contain any special provisions in contrast to the OECD-MC.

Art 5 Permanent establishment

Art 5 para 2 lit g of this Convention foresees that a building site, a construction or assembly project constitutes a permanent establishment only if it lasts more than two years.
Furthermore, Art 5 para 3 of this Convention does not contain the provision that the term „permanent establishment“ shall not include 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 and the maintenance of a fixed place of business solely for any combination of activities mentioned provided that the overall activity is of a preparatory or auxiliary character.
In addition, Art 5 para 3 lit e foresees that a fixed place of business that is maintained 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, shall not be deemed to be a „permanent establishment“.

Art 6 Income from immovable property

Art 6 para 4 of this Convention stipulates that the provisions of para 1 and para 3 of this Article – in contrast to the OECD-MC – shall also apply to income from immovable property used for the performance of professional services.

Art 7 Business profits

Art 7 of this Convention corresponds to Art 7 of the OECD-MC, but does not include provisions concerning the method of apportionment and the method of determination. In addition, Art 7 para 6 of this Convention includes profits derived by a silent partner from his participation.

Art 8 Shipping and air transport

Basically, Art 8 of this Convention corresponds to Art 8 OECD-MC.

Art 8 para 3 of this Convention does not include a provision concerning the place of effective management aboard a ship or boat, but it does include a special provision in cases the enterprise has an agency in the other State for the transportation of goods or persons.

Art 9 Associated enterprises

Art 9 does not contain – compared to the OECD-MC – the provision concerning an appropriate adjustment of the taxes charged in both States.

Art 10 Dividends

In contrast to the OECD-MC, Art 10 para 2 of this Convention states that dividends may be taxed in the Contracting State of which the legal entity paying the dividends is a resident and according to the laws of that State, but the withholding tax shall not exceed 10 per cent of the gross amount of the dividends. In contrast to the OECD-MC, this Convention does not foresee that dividends shall be taxed with different tax rates depending on the amount of shares in the capital of the company.

Art 11 Interest

In contrast to the OECD-MC, Art 11 of this Convention does not foresee that interest may also be taxed in the Contracting State in which it arises.

Art 12 Royalties

Corresponding to the OECD-MC, Art 12 of this Convention does not foresee that royalties may also be taxed in the Contracting State in which it arises.

Art 13 Capital gains

Art 13 of this Convention does not contain a special provision concerning gains from the alienation of shares of a company, the property of which consists directly or indirectly principally of immovable property.

Art 14 Independent personal services

This Convention still includes an Art 14 (which is deleted in the OECD-MC) stating that income derived from professional activities or other independent activities of a similar character shall be taxable only in the state of residence, except if the earner has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities (and this only applies to the income that is attributable to the fixed base).

Art 15 Dependent personal services

Art 15 of this Convention corresponds to the OECD-MC.

Art 16 Directors' fees

Art 16 of this Convention corresponds to Art 16 of the OECD-MC, including special provisions concerning directors' fees.

Art 19 Students and apprentices

Art 19 of this Convention does not contain a special provision concerning individuals who are teaching or carrying out research.

Art 20 Income not expressly mentioned

Art 20 of this Convention – corresponding to Art 21 of the OECD-MC – states that income which is not expressly mentioned in the other articles of the Convention shall be taxable only in the state of residence.

Art 22 Elimination of double taxation

According to Art 22 of this Convention, double taxation shall be avoided by the exemption method with progression.

Art 25 Exchange of information

Art 25 of this Convention stipulates that the competent authorities of the Contracting States shall exchange such information as is necessary for carrying out this Convention.