Double Taxation Avoidance Agreement between Germany and Sri Lanka

The Federal Republic of Germany and the Democratic Socialist Republic of Sri Lanka have entered into an agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital.

Personal Scope

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

Taxes Covered

The taxes which are the subject of this Convention are:

In the Federal Republic of Germany:

The income tax
The corporation tax
The capital tax and
The trade tax (hereinafter referred to as "German tax");

In the Democratic Socialist Republic of Sri Lanka:

The income tax and
The wealth tax

(hereinafter referred to as "Sri Lanka tax").

Interest

Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. However, such interest may be taxed in the Contracting State in which it arises, and according to the law of that State; but if the recipient is the beneficial owner of the interest the tax so charged shall, provided that the interest is taxable in the other Contracting State, not exceed:

In the case of the Federal Republic of Germany, 10 per cent of the gross amount of the interest and
In the case of Sri Lanka, 10 per cent of the gross amount of interest paid in respect of any debt-claim, bond, debenture or other security arising from money received from abroad after the coming into force of this Convention.

Royalties

Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

However, such royalties may be taxed in the Contracting State in which they arise and according to the law of that State, but if the recipient is the beneficial owner of the royalty the tax so charged shall not exceed:

In the case of the Federal Republic of Germany, 10 per cent of the gross amount of the royalties and
In the case of Sri Lanka, 10 per cent of the gross amount of any royalty paid in respect of any contract entered into after the coming into force of the Convention.

Last Updated on: 19-05-2010