for the avoidance of double taxation and the prevention of fiscal evasion 

Article 1
1.This Convention shall apply to individuals and legal entities, who are residents, within the meaning of Article 2, of the Republic of Austria or of the Grand Duchy of Luxembourg or of both Contracting States.

2.This Convention shall apply to taxes on income and on capital, imposed on behalf of each Contracting State, of its Lands

("Länder"), of its municipalities, or of groups of municipalities (including surcharges on these taxes), irrespective of the manner in which they are levied.

3.There shall be regarded as taxes on income and on capital all taxes imposed on total income, on total capital, or on elements of income or of capital, including taxes on gains from the alienation of movable or immovable property as well as taxes on capital appreciation.

4.The existing taxes to which this Convention shall apply, are:

5.This Convention shall also apply to any identical or substantially similar taxes which are subsequently imposed in addition to, or in place of, the existing taxes. At the end of each year, the competent tax authorities of both Contracting States shall notify to each other any changes which have been made in their respective taxation laws.

6.In this Convention the term "competent tax authorities" means, in the case of the Republic of Austria, the Federal Ministry of Finance, and in the case of the Grand Duchy of Luxembourg, the Minister of Finance or his authorized representative.

Article 2
1.Where a resident of one of the Contracting States receives items of income not expressly mentioned in this Convention, the said income shall be taxable only in that Contracting State.

2.For the purposes of this Convention, the term "resident of a Contracting State" means any individual who, under the law of that Contracting State, is liable to taxation therein by reason of his domicile or residence, and any legal entity, which under the law of that Contracting State, is liable to taxation therein by reason of its legal seat or place of effective management.

3.Where by reason of the provisions of paragraph 2 an individual is a resident of both Contracting States, then the domicile shall be determined in accordance with the following rules:

4.Where by reason of the provisions of paragraph 2 a legal entity has its residence in both Contracting States, then it shall be deemed for the purpose of this Convention to be a resident of the Contracting State in which its place of effective management is situated. The same rule shall apply to partnerships (Personengesellschaften) and other associations of persons which are not legal entities under the national laws by which they are governed.

Article 3
1.Where a resident of one of the Contracting States derives income from immovable property situated in the other State, the said income shall be taxable in the latter State.

2.The term "immovable property" shall be defined in accordance with the laws of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships, boats and aircraft shall not be regarded as immovable property.

3.The provisions of paragraph 1 shall apply to income derived from the direct use, letting or use in any other form of immovable property. They shall likewise apply to gains from the alienation of immovable property.

4.The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an industrial or commercial enterprise and to income from immovable property used for the performance of professional services.

Article 4
1.Where a resident of one of the Contracting States derives profits from an industrial or commercial enterprise whose activities extend to the territory of the other Contracting State, the said profits shall be taxable by the latter State only in so far as they are attributable to a permanent establishment of the enterprise situated therein.

2.The provisions of paragraph 1 shall also apply to income from participations or silent participations (offene oder stille Beteiligungen) in a corporate enterprise, with the exception of participations in the form of shares, mining shares (Kuxen), "jouissance" rights, profit-sharing bonds, similar securities or of rights in cooperative societies and private limited companies (Gesellschaften mit beschränkter Haftung).

3.The provisions of paragraphs 1 and 2 apply to the profits derived from the direct exploitation as well as to income derived from the letting, leasing or any other way of exploiting the industrial or commercial enterprise, and also for profits or gains from the total or partial alienation of the enterprise, of a separate part of the enterprise or of assets which have pertained to the enterprise.

4.Those profits shall be attributed to the permanent establishment which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently.

5.The profits derived from the activities of a permanent establishment shall as a general rule be determined on the basis of the balance sheet of the establishment. In this connection, account shall be taken of all expenditure attributable to the permanent establishment, including a portion of the general executive and administrative expenses of the enterprise; artificial shifting of profits, however, shall be excluded; especially shall the stipulating of interest of royalty payments between permanent establishments of the same enterprise be disregarded.

6.In special cases the profits may be determined by apportioning the total profit of the enterprise. With respect to insurance enterprises, the base used in such cases may be the ratio between the gross premium income of the establishment and the total gross premium income of the enterprise. The competent tax authorities of both Contracting States shall, at the earliest possible date, consult each other to determine in which cases such an apportionment of income is recommendable.

7.The provisions of paragraph 1 shall be applied mutatis mutandis to business tax, levied on a base other than the commercial profit.

Article 5
1.The term "permanent establishment" means a fixed place of business in which the business of the enterprise is wholly or partly carried on.

2.The term "permanent establishment" shall include especially:

3.The term "permanent establishment" shall not be deemed to include:

4.The fact that a person is acting in a Contracting State on behalf of an enterprise of the other Contracting State -- other than an agent of an independent status within the meaning of paragraph 5 -- shall constitute a permanent establishment in the first-mentioned State, if the person has, and habitually exercises in that State, an authority to conclude contracts in the name of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise.

5.An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, where such persons are acting in the ordinary course of their business.

6.The fact that a legal entity which is a resident of a Contracting State controls or is controlled by a legal entity which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute for either legal entity a permanent establishment of the other.

7.An insurance enterprise of one of the Contracting States shall be deemed to set up a permanent establishment in the other Contracting State, if it receives premiums in the other State through an agent -- other than an agent within the meaning of paragraph 5 -- or insures risks in the said territory through such an agent.

Article 6
Where

and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but by reason of those conditions, have no so accrued, may be included in the profits of that enterprise and taxed accordingly.

Article 7
1.Where a resident of one of the Contracting States derives profits from the operation of ships or aircraft in international traffic, the said profits shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

2.Where a resident of a Contracting State derives profits from the operation of boats engaged in inland waterways transport, the said profits shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

3.If the place of effective management of a maritime shipping enterprise or of an inland shipping enterprise is aboard a ship or boat, then it shall be deemed to be situated in the Contracting State, in which the home harbour of the ship or boat is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship or boat is a resident.

4.The provisions of paragraph 1 shall also apply if a shipping enterprise or an air transport enterprise, resident in one of the Contracting States, has an agency for the acquisition of transport of persons or of goods in the other Contracting State. This provision, however, shall apply only to activities directly connected with operation of ships or aircraft of the enterprise or with its feeder services.

5.The provisions of paragraphs 1 and 4 shall also apply to participations of shipping or aircraft enterprises in a pool or a joint venture (Betriebsgemeinschaft).

6.The provisions of this Article shall apply mutatis mutandis to the business tax, levied on a base other than profits.

Article 8
Where a resident of one of the Contracting States derives gains from the alienation of a participation in a company which is a resident of the other Contracting State, the said gains shall be taxable in the former State.

Where these gains are realized through a permanent establishment in the other Contracting State, the said gains shall be taxable only in that other State.

Article 9
1.Where a resident of one of the Contracting States receives income from the other Contracting State in the form of royalties, the said income shall be taxable only in the former State.

2.Royalties, within the meaning of paragraph 1, paid by a company resident in one of the Contracting States to a resident of the other Contracting State, holding more than 50% of the paid-in capital of the paying company, may, contrary to the provisions of paragraph 1, be taxed in the first-mentioned contracting State; the tax may, however, not exceed 10% of the gross amount of royalties paid. On application of the recipient of the royalties, this tax shall be credited by the other Contracting State against the tax imposed by that State on this income.

3.The term "royalties" as used in this Article means payments of any kind received as consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience.

4.Gains from the alienation of any rights or property mentioned in paragraph 3 shall be taxable only in the Contracting State of which the alienator is a resident.

5.The provisions of paragraphs 1, 2 and 4 shall not apply if the recipient of the royalties, or the gains, being a resident of one of the Contracting States has in the other Contracting State in which the royalties arise a permanent establishment with which the right or property giving rise to the royalties is effectively connected. In such a case, the provisions of Article 4 shall apply.

6.Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the royalties paid, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the Contracting States' own laws, due regard being had to the other provisions of this Convention.

Article 10
1.Where a resident of one of the Contracting States receives dividends from a company which is a resident of the other Contracting State, such income shall be taxable in the Contracting State of which the recipient is a resident.

2.However, the Contracting State of which the company paying the dividends is a resident has the right to tax such dividends according to its own law, but the rate of the tax which it charges may not exceed:

3.On application of the recipient of the dividends, the tax which, by virtue of paragraph 2, is levied by the Contracting State of which the company paying the dividends is a resident, shall be credited by the other Contracting State against the tax on income applied by that State to these dividends.

4.Dividends, paid by a company resident in one of the Contracting States to a company resident in the other Contracting State, shall be excluded from the tax base in that other State, but only in so far as such dividends would be excluded from the tax base by virtue of the national tax laws in case both companies would have had their residence in that State. In this case the provisions of paragraph 3 do not apply. Such exemption from taxation shall apply only in accordance with the conditions provided for by domestic law for the prevention of tax evasion in respect of tax exemption of shares in profits from participations in foreign companies; it shall not apply when the company paying the dividends is exempt from taxation in its State of residence.

5.Paragraph 2 does not limit the right of the Contracting State, where the company paying the dividends has its residence, to collect the tax on those dividends by deduction at source at the full rate. Where the tax is collected at source it shall be refunded upon application, to the extent that it exceeds the tax rates laid down in paragraph 2. The application for refund must be submitted to the competent authorities of the State of residence within two years after the expiry of the calendar year in which the dividends fell due.

6.The competent tax authorities of both Contracting States will agree upon the measures necessary to effect the refund of the taxes collected at source from dividends, in particular where it concerns the form of the required certificates and applications, the nature of the proofs to be submitted as well as the measures to be taken against abusive claims for a tax relief. In no case shall either of the Contracting States be obliged to carry out administrative measures at variance with its legal provisions.

7.With respect to claims which are, by virtue of paragraph 2, allowed to members of a diplomatic or consular mission, as well as to international organizations, their organs and officials, the following shall apply:

8.Where the recipient of the income is already entitled to total exemption of taxes collected by deduction at source according to the national tax laws of the taxing State, the relief will not be subject to the provisions of paragraph 5 but to the provisions in the national tax law of the State mentioned.

9.Paragraph 2 shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

10.The term "dividends" as used in this Article means income from shares, "jouissance" shares or "jouissance" rights, mining shares (Kuxen), founders' shares or other rights participating in profits, as well as income from other corporate rights assimilated to income from shares by the taxation law of the State of which the company making the distribution is a resident. Income from loans or participations as a silent partner shall not be considered as dividend.

11.The provisions of the preceding paragraphs shall not apply if the recipient of the dividends, being a resident of one of the Contracting States, has in the other Contracting State, of which the company paying the dividends in a resident, a permanent establishment with which the holding by virtue of which the dividends are paid is effectively connected. In such a case, the provisions of Article 4 shall apply.

Article 11
1.Where a resident of one of the Contracting States receives interest from the other Contracting State, the said interest shall be taxable only in the Contracting State of which the recipient is a resident.

2.The provisions of Article 10, paragraphs 5 through 8 shall apply mutatis mutandis.

3.The term "interest" as used in this Article means income from Government securities, bonds or debentures, whether or not secured by mortgage and whether or not carrying a right to participate in profits, and debt-claims of every kind as well as all other income assimilated to income from money lent by the taxation law of the State in which the income arises. Income from participations as silent partner is not considered as interest.

4.The provisions of paragraph 1 shall not apply if the recipient of the interest, being a resident of one of the Contracting States, has in the other Contracting State in which the interest arises a permanent establishment with which the debt-claim from which the interest arises is effectively connected. In such a case, the provisions of Article 4 shall apply.

5.Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the interest paid, having regard to the debt claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each Contracting State, due regard being had to the other provisions of this Convention.

Article 12
1.Where a resident of one of the Contracting States derives income from professional services or other independent activities of a similar character, the said income shall only be taxable in that State, unless he has for the purpose of these activities a fixed base regularly available to him in the other Contracting State. If he has such a fixed base, this income may be taxed in that other Contracting State, but only to the extent that this income is attributable to that fixed base.

2.The term "professional services" includes, especially independent scientific, artistic, literary, educational or teaching activities as well as the independent activities of physicians, lawyers, architects, engineers, accountants and patent lawyers.

Article 13
1.Where an individual, who is a resident of one of the Contracting States, receives from a legal entity, which is a resident of the other Contracting State, directors' fees or similar payments as a member of the Board of Directors, or as a non-managing member of similar boards, then the said fees shall be taxable in that other State.

2.The provisions of paragraph 1 shall apply only to fees received as consideration for a supervisory activity.

Income received as consideration for other activities shall be subject to the provisions of Articles 12 or 14.

Article 14
1.Where a resident of one of the Contracting States derives income in the form of salaries, wages and similar remuneration from employment, the said income shall, subject to the provisions of Articles 16 and 17, be taxable only in that State, unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

2.Notwithstanding the provisions of paragraph 1 remuneration derived by a resident of one of the Contracting States in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State, if:

3.Notwithstanding the preceding provisions of this Article, remuneration in respect of an employment exercised aboard a ship or aircraft in international traffic, or aboard a boat engaged in inland waterways transport, may be taxed in the Contracting State in which the place of effective management of the enterprise is situated.

4.Paragraph 1 does not apply to students at a university, technical school or similar establishment in one of the Contracting States, who for a consideration, are employed by an enterprise in the other Contracting State in order to gain practical experience, for a period not longer than 183 days in any calendar year.

Article 15
Notwithstanding the provisions of Article 12 and Article 14, paragraph 2, income derived by public entertainers such as theatre, motion picture, radio or television artists, musicians and athletes resident in one of the Contracting States from their personal activities as such in the other Contracting State, may only be taxed in the Contracting State in which the activity is performed.

Article 16
Where a resident of one of the Contracting States receives income in the form of pensions and similar remuneration paid in consideration of past employment the said income shall, subject to the provisions of Article 17 paragraph 1, be taxable only in the Contracting State of which the recipient is a resident.

Article 17
1.Where a resident of one of the Contracting States receives income in the form of salaries, wages, or similar remuneration or in the form of a retirement, widow's or orphan's pension in respect of present or past services which is paid by the other State, or by the Lands (Länder), municipalities or groups of municipalities or by other bodies incorporated under the public law of the other State, the said income shall, notwithstanding the provisions of Articles 14 and 16 be taxable by that other State. The same provisions shall also apply in respect of allowances paid under the statutory social insurance scheme of that other State.

2.With regard to remuneration or pensions for services rendered in connection with trade or business carried out by either of the Contracting States or by its political subdivisions or by some body incorporated under public law, mentioned in paragraph 1, the provisions of the Articles 14 and 16 shall apply.

3.Whether such a body is incorporated under public law shall be determined according to the laws of the State where it is established.

Article 18
Payments which a student or business apprentice, who is a resident of a Contracting State and who is present in the other Contracting State solely for the purpose of his education or training, receives for the purpose of his maintenance, education or training shall not be taxed in that other State, provided that such payments are made to him from sources outside that other State.

Article 19
1.The capital of a resident of one of the Contracting States shall be taxable in that Contracting State which has the right to tax the income therefrom, in respect of:

2.All other elements of capital of a resident of one of the Contracting States shall be taxable in that State.

3.Shares in a company resident in one of the Contracting States, owned by a company which is a resident of the other Contracting State shall be excluded from the taxable base in that other State, but only insofar as such shares would be excluded from the taxable base by virtue of the national tax laws, if both companies would have had their residence in that State. Such exemption from taxation shall not apply when there is no obligation, for reasons mentioned in the last sentence of paragraph 4 of Article 10, to exempt the dividends from taxation.

Article 20
1.Income and capital, which under the provisions of this Convention are taxable in one of the Contracting States, shall not even by withholding of tax at source, be taxable in the other Contracting State. The foregoing shall be without prejudice to the provisions of Articles 9, 10 and 11.

2.Notwithstanding the provisions of paragraph 1 this Convention does not limit the right of each Contracting State to calculate the taxes imposed on residents with respect to items of income or capital which, according to the provisions of this Convention, are taxable in that State, at effective rates applicable to the taxpayer's aggregate income or capital.

Article 21
Nothing in this Convention shall affect any claims to additional exemptions to which members of diplomatic or consular missions may be entitled under the general rules of international law or under the provisions of special agreements. Where, owing to such additional exemptions, income and capital are not taxable in the receiving State, the right to taxation shall be reserved to the sending State.

Article 22
1.The nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected.

2.The term "nationals" means:

3.The taxation of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities.

This provisions shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.

4.Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned State are or may be subjected.

5.The term "taxation" means, for the purpose of this Article, taxes covered by this Convention.

Article 23
1.Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this Convention, he may, notwithstanding the remedies provided by the national laws of those States, present his case to the competent tax authority of the Contracting State of which he is a resident.

2.The competent tax authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve the case by mutual agreement with the competent tax authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with the Convention.

3.The competent tax authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of this Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention.

4.The competent tax authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs.

When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent tax authorities of the Contracting States.

Article 24
1.The competent tax authorities of both Contracting States shall exchange such information as is necessary for the carrying out of this Convention and in particular, for preventing tax evasion. The competent tax authorities, however, are not obliged to supply information which cannot be given on the basis of data in the possession of the taxation authorities but would necessitate special inquiries. Any information so exchanged shall be treated as secret but may be disclosed to any persons or authorities statutorily concerned with the assessment or collection of the taxes which are the subject of this Convention. Such persons and authorities shall be under the same obligations as the competent tax authorities.

2.In no case shall the provisions of paragraph 1 be so construed as to impose on one of the Contracting States the obligation:

3.No information shall be exchanged which would disclose any industrial, commercial or professional secret.

Article 25
As regards the application of this Convention by either of the Contracting States, any term not otherwise defined in this Convention shall, unless the context otherwise requires, have the meaning which it has under the laws in force of that Contracting State relating to the taxes which are the subject of this Convention.

Article 26
1.This Convention shall not apply to holding companies within the meaning of the special Luxembourg laws (currently the Acts of July 31, 1929 and December 27, 1937). Neither shall it apply to income, derived from such holding companies by a resident of Austria or to shares in such companies, belonging to such a person.

2.This Convention shall not apply to non-recurrent taxes on capital or on capital appreciation.

3.Both Contracting States intend to conclude a specific Convention for the rendering of assistance in assessing and collecting the taxes which are subject to this Convention.

Article 27
This Convention shall be ratified and the instruments of ratification shall be exchanged at Vienna as soon as possible; it shall enter into force upon the exchange of the instruments of ratification.

Article 28
Upon the exchange of the instruments of ratification the provisions of this Convention shall have effect for any tax year beginning on or after January 1, 1961.

Article 29
This Convention shall remain in force until renounced by one of the Contracting States. Either Contracting State may renounce the Convention by giving notice of termination at least six months before the end of any calendar year. In such event, the Convention shall apply for the last time to taxes levied for the period up to December 31 of the year in which the renunciation took place.

In witness whereof the Plenipotentiaries of both the Contracting States have signed this Convention and have affixed thereto their seals.

Done at Luxembourg, in duplicate, the 18th day of October 1962.

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