An individual living aboard a ship without any real domicile in either of the States shall be deemed to be a resident of the State in which the ship has its home harbour.
It is understood that exploration and exploitation rights of the sea bed and its subsoil and their natural resources shall be regarded as immovable property situated in the one of the States the sea bed and subsoil of which they are related to, and that these rights shall be deemed to pertain to the property of a permanent establishment in that State. Furthermore, it is understood that the aforementioned rights include rights to interests in, or to benefits of, assets to be produced by such exploration or exploitation.
In respect of paragraphs 1 and 2 of Article 7, where an enterprise of one of the States sells goods or merchandise or carries on business in the other State through a permanent establishment situated therein, the profits of that permanent establishment shall not be determined on the basis of the total amount received by the enterprise, but shall be determined only on the basis of the remuneration which is attributable to the actual activity of the permanent establishment for such sales or business. Especially, in the case of contracts for the survey, supply, installation or construction of industrial, commercial or scientific equipment or premises, or of public works, when the enterprise has a permanent establishment, the profits of such permanent establishment shall not be determined on the basis of the total amount of the contract, but shall be determined only on the basis of that part of the contract which is effectively carried out by the permanent establishment in the State where the permanent establishment is situated. The profits related to that part of the contract which is carried out by the head office of the enterprise shall be taxable only in the State of which the enterprise is a resident.
It is understood that the provisions of paragraph 4 of Article 8 shall be interpreted in accordance with paragraph 9 and 10 of the Commentary on article 8 of the OECD Model Double Taxation Convention on Income and Capital 1977.
It is understood that notwithstanding the provisions of article 11, in case one of the States subjects the income from profit sharing bonds to a tax on dividends, article 10 is applicable to such income arising in that State.
Where tax has been levied at source in excess of the amount of tax chargeable under the provisions of Articles 10, 11 or 12, applications for the refund of the excess amount of tax have to be lodged with the competent authority of the State having levied the tax, within a period of three years after the expiration of the calendar year in which the tax has been levied.
In case Danish law is changed in such a way that Denmark can exercise a taxation right as laid down in paragraph 5 of Article 13 then at the request of Denmark, the provisions of paragraph 5 of Article 13 may be changed and replaced by the following text:
“5. The provisions of paragraph 4 shall not affect the right of each of the States to levy according to its own law a tax on gains from the alienation of shares or `jouissance' rights in a company, the capital of which is wholly or partly divided into shares and which is, under the laws of that State, a resident of that State, derived by an individual who is a resident of the other State and has been a resident of the first-mentioned State in the course of the last five years preceding the alienation of the shares or `jouissance' rights."
The request for such change shall be made through diplomatic channels, by giving notice to the Netherlands. The change shall enter into force on the thirtieth day after the date on which the Netherlands has received such notice, and its provisions shall thereupon have effect in respect of taxes on capital gains derived on or after the first of January in the calendar year immediately following the year in which the change entered into force.
It is understood that “bestuurder“ or “commissaris" of a Netherlands company means persons, who are nominated as such by the general meeting of shareholders or by any other competent body of such company and are charged with the general management of the company and the supervision thereof, respectively.
It is understood that the Netherlands and Denmark will enter into discussions to consider if an amendment of article 18 is needed in view of developments in the EC or the OECD relating to the question whether it is still appropriate to maintain the exclusive taxation right of the State of residence with respect to pensions and other similar remuneration paid to a resident of one of the States in consideration of past employment and any annuity as mentioned in paragraph 1 of article 18.
1 It is understood that for the computation of the reduction mentioned in paragraph 2 of Article 23, the items of capital referred to in paragraph 1 of Article 22 shall be taken into account for the value thereof reduced by the value of the debts secured by mortgage on that capital and the items of capital referred to in paragraph 2 of Article 22 shall be taken into account for the value thereof reduced by the value of the debts pertaining to the permanent establishment or fixed base.
2 It is understood that the terminology “the tax payable in respect of the profits out of which such dividends are paid", as mentioned in paragraph 5 sub-paragraph d) of Article 23, shall include any tax directly or indirectly suffered by the company paying the dividends on the profits or income out of which the dividends are paid.
It is understood that the term “offshore activities" includes activities carried out in an exploration or exploitation area which extends from a place offshore in that other State to the onshore territory of that State, provided the activities carried on onshore are incidental to the offshore activities.
IN WITNESS whereof the undersigned, duly authorised thereto, have signed this Protocol.
DONE at Copenhagen this 1st July, 1996, in duplicate, in the English language.
For the Government of the Kingdom of the Netherlands
(sd.) J. W. SEMEYNS DE VRIES VAN DOESBURGH
For the Government of the Kingdom of Denmark
(sd.) PETER LOFT