2. Table (Tarasenko/Schindler)

DTT Austria/Ukraine

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

Entry into force

20 May 1999

Effective Date

1 January 2000

Art 4 Resident

Art 4 of this Convention corresponds to Art 4 of the OECD-MC.

Art 5 Permanent establishment

Art 5 of this Convention corresponds to Art 5 of the OECD-MC.

Art 6 Income from immovable property

Art 6 para 4 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 independent personal services.

Art 7 Business profits

Art 7 of this Convention corresponds to Art 7 of the OECD-MC.
In addition, Art 7 para 8 of this Convention includes profits derived by any partner from his participation in a partnership and, in the case of Austria, from a participation in a „silent partnership“ (Stille Gesellschaft) created under Austrian law.

Art 8 International transport

Art 8 para 1 of this Convention – in addition to Art 8 para 1 of the OECD-MC – includes profits derived from the operation of boats in international traffic, but Art 8 of this Convention does not include a provision concerning profits derived from the operating of boats engaged in inland waterways transport or provisions concerning the place of effective management aboard a ship or boat.
Art 8 para 2 of this Convention also includes a description of what profits from the operating of ships or aircraft in international traffic shall mean.

Art 10 Dividends

In contrast to the OECD-MC, Art 10 para 2 lit a 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 5 per cent of the gross amount of the dividends if the beneficial owner is a company (other than a partner

ship) which holds directly at least 10 per cent of the capital of the company paying the dividends and in all other cases, the withholding tax shall not exceed 10 per cent of the gross amount of the dividends.

Art 11 Interest

Art 11 para 2, in contrast to the OECD-MC, provides that interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but the withholding tax shall not exceed 2 per cent of the gross amount of the interest paid in connection with the sale on credit of any industrial, commercial or scientific equipment or in connection with the sale or rendering on credit of any merchandise or service by one enterprise to another enterprise or on any loan of whatever kind granted by a bank or any other financial institution. In all other cases, the withholding tax shall not exceed 5 per cent of the gross amount of the interest.
In addition, Art 11 para 5 states that interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State.
Furthermore, Art 11 para 7 of this Convention stipulates that notwithstanding the provisions of para 2 of this Article, interest shall be exempt from withholding tax if it is received and really held by a Government or its political subdivision or any agency or with the help of this Government or subdivision.
In addition, Art 11 para 8 states that notwithstanding the provisions of Article 7 and para 2 of this Article, interest arising in a Contracting State may be exempt if it was paid in respect of a loan granted, guaranteed or insured, or in respect of any other debt-claim or credit guaranteed or insured on behalf of the other Contracting State by its authorized organ.

Art 12 Royalties

Art 12 of this Convention, in contrast to the OECD-MC, contains a special provision stipulating that royalties may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the recipient is the beneficial owner of the royalties, the withholding tax shall not exceed 5 per cent of the gross amount of the royalties for the use of,

or the right to use, any copyright of literary or artistic work including cinematograph films and films or tapes used for radio or television broadcasting and shall be exempt from withholding tax for the use of, or the right to use, any copyright of scientific work, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience.
In addition, Art 12 para 7 states that royalties shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State.

Art 13 Capital gains

Art 13 of this Convention contains a special provision concerning gains from the alienation of shares of a company deriving their value or the greater part of their value directly or indirectly from immovable property or a contribution in a partnership, the assets of which consist principally of immovable property or of shares referred to in the first point.

Art 14 Independent personal services

This Convention still includes an Art 14 (which is deleted in the OECD-MC) stipulating that income derived from professional services or other activities of an independent 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 Art 15 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 17 Artistes and sportsmen

Art 17 para 3 of this Convention, in contrast to the OECD-MC, provides that income mentioned in this Article shall be exempt from tax in the Contracting State in which the activity of the entertainer or sportsman is exercised, provided that this activity is substantially financed from the public funds of both States, or is carried on under a culture cooperation agreement between both Contracting States.

Art 21 Other income

Art 21 of this Convention – in accordance with Art 21 of the OECD-MC – states that income not dealt with in the other articles of the Convention shall be taxable only in the State of residence.

Art 23 Elimination of double taxation

Art 23 of this Convention stipulates that double taxation shall be avoided in Austria by the exemption method with progression and in Ukraine by the credit method.

Art 26 Exchange of information

According to Art 26, the competent authorities of the Contracting States shall exchange information concerning taxes covered by the Convention insofar as the taxation arising thereunder is not contrary to the Agreement.