- 1
- Subject to the provisions of paragraph 2 of Article 9, pensions and other similar remuneration paid to a resident of a Contracting Party, as well as annuities paid to a resident of a Contracting Party, shall be taxable only in that Party. Any pension and other payment paid out under the provisions of a social security system of a Contracting Party to a resident of the other Contracting Party shall be taxable only in that other Party.
- 2
- Notwithstanding the provisions of paragraph 1, a pension or other similar remuneration, annuity, or any pension and other payment paid out under the provisions of a social security system of a Contracting Party, may also be taxed in the Contracting Party from which it is derived, in accordance with the laws of that Party:
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- a)insofar as the entitlement to this pension or other similar remuneration or annuity is exempt from tax in the Contracting Party from which it is derived, or the contributions associated with the pension or other similar remuneration or annuity made to the pension scheme or insurance company were deducted in the past when calculating taxable income in that Party or qualified for other tax relief in that Party; and
- b)insofar as this pension or other similar remuneration or annuity or this pension or other payment paid out under the provisions of a social security system of a Contracting Party is not taxed in the Contracting Party of which the recipient thereof is a resident at the generally applicable rate for income derived from employment, or less than 90 per cent of the gross amount of the pension or other similar remuneration or annuity or payment is taxed; and
- c)if the total gross amount of the pensions and other similar remuneration and annuities, and any pension and other payment paid out under the provisions of a social security system of a Contracting Party, that according to subparagraphs a) and b) may be taxed in the Contracting Party from which it is derived exceeds in any calendar year the sum of 10.000 Euro or the equivalent amount in the other Party.
- 3
- Notwithstanding the provisions of paragraphs 1 and 2, if this pension or other similar remuneration is not periodic in nature, is paid in the other Contracting Party and is paid out before the date on which the pension commences, or if a lump sum payment is made in lieu of the right to an annuity before the date on which the annuity commences, the payment or this lump sum may also be taxed in the Contracting Party from which it is derived.
- 4
- A pension or other similar remuneration or annuity is deemed to be derived from a Contracting Party insofar as the contributions or payments associated with the pension or other similar remuneration or annuity, or the entitlements received from them qualified for tax relief in that Contracting Party. The transfer of a pension from a pension fund or an insurance company in a Contracting Party to a pension fund or an insurance company in another Party shall not restrict in any way the taxing rights of the first-mentioned Party under this Article.
- 5
- The competent authorities of the Contracting Parties shall by mutual agreement settle the mode of application of paragraph 2. They shall also decide what details the resident of a Contracting Party must submit for the purpose of the proper application of the Agreement in the other Contracting Party, in particular so that it can be established whether the conditions referred to in subparagraphs a), b) and c) of paragraph 2 have been met.
- 6
- The term “annuity” means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time under an obligation to make the payments in return for adequate and full consideration in money or money’s worth.
- 7
- Whether and to what extent a pension or similar remuneration falls under this Article or under Article 18, is determined by the nature of the services rendered, as private or governmental, during which the entitlement to that part of the pension or similar remuneration was built up.
