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China - Denmark Tax Treaty

AGREEMENT BETWEEN

THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE KINGDOM OF DENMARK FOR THE AVOIDANCE OF DOUBLE TAXATION AND

THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

The Government of the People’s Republic of China and the Government
of the Kingdom of Denmark,

Desiring to conclude an Agreement for the avoidance of double
taxation and the prevention of fiscal evasion with respect to taxes on income,

Have agreed as follows:

ARTICLE 1 PERSONAL SCOPE

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

ARTICLE 2 TAXES COVERED

  1. This Agreement shall apply to taxes on income imposed on behalf of a Contracting State or of its political subdivisions or of its local authorities,
    irrespective of the manner in which they are levied.

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

  3. The existing taxes to which the Agreement shall apply are:

a) In the People’s Repubic of China:

(i) the individual income tax;

(ii) the enterprise income tax; (hereinafter referred to as “Chinese tax” );

b) In the Kingdom of Denmark:

(i) the income tax to the State (indkomstskatten til staten);

(ii) the income tax to the municipalities (den kommunale indkomstskat); (hereinafter referred to as “Danish tax” ).

  1. This Agreement shall apply also to any identical or substantially
    similar taxes which are imposed after the date of signature of this Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall

notify each other of any substantial changes which have been made in their respective taxation laws within a reasonable period of time after such changes.

ARTICLE 3 GENERAL DEFINITIONS

  1. For the purposes of this Agreement, unless the context otherwise requires:

a) the terms “a Contracting State” and “the other Contracting State” mean the People’s Republic of China or the Kingdom of Denmark as the context requires;

b) the term “China” means the People’s Republic of China, when used in a geographical sense, means all the territory of the People’s Republic
of China, including its territorial sea, in which the laws relating to Chinese tax apply, and any area beyond its territorial sea, within which the People’s Republic of China has sovereign rights of exploration for and exploitation of resources of the seabed and its sub-soil and superjacent water resources in accordance with international law;

c) the term “Denmark” means the Kingdom of Denmark including any area outside the territorial sea of Denmark which in accordance
with international law has been or may hereafter be designated under Danish laws as an area within which Denmark may exercise sovereign rights for the purpose of exploring and exploiting the natural resources of the seabed or its subsoil and the superjacent waters and with regard to other activities for the economic exploration and exploitation of the area; the term does not comprise the Faroe Islands and Greenland;

d) the term “person” includes an individual, a company and any other body of persons;

e) the term “company” means any body corporate or any entity
which is treated as a body corporate for tax purposes;

f) the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident
of the other Contracting State;

g) the term “nationals” means all individuals possessing the
nationality of either Contracting State and all juridical persons created or organized under the laws of that Contracting State and any organizations without juridical personality treated for the purposes of tax as juridical
persons created or organized under the laws of that Contracting State;

h) the term “international traffic” means any transport by a
ship or aircraft operated by an enterprise which has its place of effective management in a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;

i) the term “competent authority” means:

(i) in China: The State Administration of Taxation or its authorized representative;

(ii) in Denmark: the Minister for Taxation or his
authorised representative.

  1. As regards the application of the Agreement at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has at that time under the law of that State for the purposes
    of the taxes to which the Agreement applies, any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State.

ARTICLE 4 RESIDENT

  1. For the purposes of this Agreement, the term “resident of a
    Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of incorporation, place of management or any
    other criterion of a similar nature, and also includes that State and any political subdivision or local authority thereof. This term, however, does not include any
    person who is liable to tax in that State in respect only of income or capital gains from sources in that State.

  2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:

a) he shall be deemed to be a resident only of the State in
which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his personal and economic relations are closer (centre of vital interests);

b) if the State in which he has his centre of vital
interests cannot be determined, or if he does not have a permanent home available to him in either State, he shall be deemed to be a resident only of the State in which he has an habitual abode;

c) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national;

d) if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by
mutual agreement.

  1. Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident only of the State in which its place of effective management is situated.

ARTICLE 5 PERMANENT ESTABLISHMENT

  1. For the purposes of this Agreement, the term “permanent establishment”
    means a fixed place of businese through which the business of an enterprise is wholly or partly carried on.

  2. The term “permanent establishment” includes especially:

a) a place of management;

b) a branch;

c) an office;

d) a factory;

e) a workshop, and

f) a mine, an oil or gas well, quarry or any other place of extraction of natural resources.

  1. The term “permanent establishment” also includes:

a) a building site, a construction, assembly or
installation project, or supervisory activities in connection therewith, but only where such
site, project or activities continue for a period of more than twelve months;

b) an installation, drilling rig or ship used for the exploration or exploitation of natural resources, but only if so used for a period of more than twelve months; and

c) the furnishing of services, including consultancy services, by an enterprise through employees or other personnel engaged by the enterprise for such purpose, but only if activities of that nature continue (for the
same or a connected project) within a Contracting State for a period or periods aggregating more than 183 days in any twelve month period commencing or ending in the fiscal year concerned.

  1. Notwithstanding the preceding provisions of this Article, the term
    “permanent establishment” shall be deemed not to include:

a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;

b) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of storage, display or delivery;

c) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of processing by another enterprise;

d) the maintenance of a fixed place of business solely for
the purpose of purchasing goods or merchandise or of collecting information, for the enterprise;

e) the maintenance of a fixed place of business solely for
the purpose of carrying on, for the enterprise, any other activity of a preparatory
or auxiliary character;

f) the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (e) provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.

  1. Notwithstanding the provisions of paragraphs 1 and 2, where a person–other than an agent of an independent status to whom paragraph 6 applies–is
    acting in a Contracting State on behalf of an enterprise of the other Contracting State
    and has, and habitually exercises an authority to conclude contracts in the
    name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that Contracting State in respect of any activities which that person
    undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph.

  2. 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 Contracting State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, he will not be considered an
    agent of an independent status within the meaning of this paragraph if it is
    shown that the transactions between the agent and the enterprise were not made under
    arm’s-length conditions.

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

ARTICLE 6

INCOME FROM IMMOVABLE PROPERTY

  1. Income derived by a resident of a Contracting State from
    immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other Contracting State.

  2. The term “immovable property” shall have the meaning which it has under the law 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 and aircraft shall not be regarded as immovable property.

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

  2. The provisions of paragraphs 1 and 3 shall also apply to the
    income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.

ARTICLE 7 BUSINESS PROFITS

  1. The profits of an enterprise of a Contracting State shall be
    taxable only in that Contracting State unless the enterprise carries on business in the
    other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed
    in the other Contracting State but only so much of them as is attributable to
    that permanent establishment.

  2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that
    permanent establishment the profits 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 with the enterprise of
    which it is a permanent establishment.

  3. In determining the profits of a permanent establishment, there shall be
    allowed as deductions expenses which are incurred for the purposes of
    the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere.

  4. In so far as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an
    apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be
    taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article.

  5. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

  6. For the purposes of paragraphs 1 to 5, the profits to be attributed to the permanent establishment shall be determined by the same method year by year
    unless there is good and sufficient reason to the contrary.

  7. Where profits include items of income which are dealt with
    separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article.

ARTICLE 8

SHIPPING AND AIR TRANSPORT

  1. Profits from the operation of ships or aircraft in international
    traffic shall be taxable only in the Contracting State in which the place of effective
    management of the enterprise is situated.

  2. For the purposes of this Article, profits from the operation of ships or aircraft in international traffic include:

a) profits from the rental on a bare boat basis of ships or aircraft; and

b) profits from the use, maintenance or rental of containers
(including trailers and related equipment for the transport of containers) used for the transport of goods or merchandise;

where such rental or such use, maintenance or rental, as the case may be, is incidental to the operation of ships or aircraft in international traffic.

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

  2. The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.

ARTICLE 9 ASSOCIATED ENTERPRISES

  1. Where

a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or

b) the same persons participate directly or indirectly in the
management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State,

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 not so accrued, may be included in the profits of that
enterprise and taxed accordingly.

  1. Where a Contracting State includes in the profits of an
    enterprise of that Contracting State—and taxes accordingly—profits on which an enterprise of the other Contracting State has been charged to tax in that other Contracting
    State and the profits so included are profits which would have accrued to the
    enterprise of the first-mentioned State if the conditions made between the two
    enterprises had been those which would have been made between independent enterprises, then that other Contracting State shall make an appropriate adjustment to the amount
    of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Agreement and the competent
    authorities of the Contracting States shall if necessary consult each other.

ARTICLE 10 DIVIDENDS

  1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other Contracting State.

  2. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed:

a) 5 per cent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 25
per cent of the capital of the company paying the dividends;

b) 10 per cent of the gross amount of the dividends in all other cases.

This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

  1. The term “dividends” as used in this Article means income from shares or other rights, not being debt-claims, participating in profits, as well as
    income from other corporate rights which is subjected to the same taxation treatment as
    income from shares by the laws of the Contracting State of which the company
    making the distribution is a resident.

  2. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on
    business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other Contracting State independent personal services from a fixed base situated therein, and the
    holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.

  3. Where a company which is a resident of a Contracting State
    derives profits or income from the other Contracting State, that other Contracting State may not impose any tax on the dividends paid by the company, except insofar as such dividends are

paid to a resident of that other Contracting State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other Contracting State, nor
subject the company’s undistributed profits to a tax on the company’s undistributed profits
even if the dividends paid or the undistributed profits consist wholly or partly
of profits or income arising in that other Contracting State.

  1. The provision of this Article shall not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the shares or other rights in respect of which the dividend is paid to take
    advantage of this Article by means of that creation or assignment.

ARTICLE 11 INTEREST

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

  2. However, such interest may also be taxed in the Contracting State in which it arises, and according to the laws of that Contracting State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the interest. The competent
    authorities of the Contracting States shall by mutual agreement settle the mode of
    application of this limitation.

  3. Notwithstanding the provisions of paragraph 2, interest arising in
    a Contracting State and derived by the Government of the other Contracting State
    or a political subdivision or a local authority thereof, the Central Bank of that
    other Contracting State or any agency of that Government, or by any other resident of that other Contracting State with respect to debt-claims of that resident which
    are financed, guaranteed or insured by the Government of that other Contracting State or a political subdivision or a local authority thereof, the Central Bank of that
    other Contracting State or any agency of that Government, shall be exempt
    from tax in the first-mentioned Contracting State.

  4. The term “interest” as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage, and whether or not
    carrying a right to participate in the debtor’s profits, and in particular income from government securities and income from bonds or debentures, including premiums and prizes
    attaching to such securities, bonds or debentures.

Penalty charges for late payment shall not be regarded as interest for the purpose of this Article.

  1. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on
    business in the other Contracting State in which the interest arises, through a permanent
    establishment situated therein, or performs in that other Contracting State
    independent personal services from a fixed base situated therin, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed

base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.

  1. Interest shall be deemed to arise in a Contracting State when
    the payer of interest is the Government of that Contracting State, a political
    subdivision or a local authority or a resident of that Contracting State. Where, however, the
    person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in
    connection with which the indebtedness on which the interest is paid was incurred,
    and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the Contracting State in which
    the permanent establishment or fixed base is situated.

  2. Where, by reason of a special relationship between the payer of interest and the beneficial owner or between both of them and some other person, the amount of the interest, 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 beneficial
    owner in the absence of such relationship, the provisions of this Article shall
    apply only to the last-mentioned amount. In such case, the excess part of the payments
    shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.

  3. The provision of this Article shall not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or
    assignment of the debt-claim in respect of which the interest is paid to take advantage of this Article by means of that creation or assignment.

ARTICLE 12 ROYALTIES

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

  2. However, such royalties may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the
    beneficial owner of the royalties is a resident of the other Contracting State, the tax so
    charged shall not exceed:

a) in the case of royalties referred to in sub-paragraph a) of paragraph 3, 10 per cent of the gross amount of the royalties; and

b) in the case of royalties referred to in sub-paragraph b) of paragraph 3, 10 per cent of the adjusted amount of the royalties. For the purpose of this sub-paragraph “the adjusted amount” means 70 per cent of the gross amount of the royalties.

The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of these limitations.

  1. The term “royalties” as used in this Article means:

a) payments of any kind received as a consideration for the
use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, or films or tapes for radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for information (know-how) concerning industrial, commercial or scientific experience; and

b) payments of any kind received as a consideration for the
use of, or the right to use, industrial, commercial, or scientific equipment.

  1. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on
    business in the other Contracting State in which the royalties arise, through a permanent
    establishment situated therein, or performs in that other Contracting State
    independent personal services from a fixed base situated therein, and the right or
    property in respect of which the royalties are paid is effectively connected with
    such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.

  2. Royalties shall be deemed to arise in a Contracting State when
    the payer of royalties is the Government of that Contracting State or a political
    subdivision or a local authority thereof or a resident of that Contracting State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment or fixed base, then such royalties shall be
    deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated.

  3. Where, by reason of a special relationship between the payer of royalties and the beneficial owner or between both of them and some other person, the amount of the royalties, 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 beneficial owner in the absence of such relationship, the provisions
    of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.

  4. The provisions of this Article shall not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or
    assignment of the right in respect of which the royalties are paid to take advantage of
    this Article by means of that creation or assignment.

ARTICLE 13 CAPITAL GAINS

  1. Gains derived by a resident of a Contracting State from the
    alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.

  2. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining
    to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains
    from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such a fixed base, may be taxed in that other State.

  3. Gains derived by an enterprise from the alienation of ships or aircraft operated in international traffic by the enterprise, or of containers used in international traffic, or of movable property pertaining to the operation or use of such
    ships, aircraft or containers, shall be taxable only in the State in which the
    place of effective management of the enterprise is situated.

  4. Gains derived by a resident of a Contracting State from the
    alienation of shares deriving more than 50 per cent of their value directly or indirectly from immovable property situated in the other Contracting State may be taxed in that other State.

  5. Gains derived by a resident of a Contracting State from the alienation of shares in a company which is a resident of the other Contracting State may be taxed in that other State if the recipient of the gain, at any time during the 12 month period preceding such alienation, had a participation, directly or indirectly, of at least 25 per cent in the capital of that company.

  6. Gains from the alienation of any property, other than that referred to in paragraphs 1 to 5, shall be taxable only in the Contracting State of which
    the alienator is a resident.

ARTICLE 14 INDEPENDENT PERSONAL SERVICES

  1. Income derived by a resident of a Contracting State in respect
    of professional services or other activities of an independent character shall be taxable only in that Contracting State except in one of the following circumstances, when such income may also be taxed in the other Contracting State:

a) if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; in that case,
only so much of the income as is attributable to that fixed base may be taxed in that other Contracting State;

b) if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the aggregate 183 days in any twelve month period commencing or ending in the fiscal year concerned; in that
case, only so much of the income as is derived from his activities performed in that other State may be taxed in that other State.

  1. The term “professional services” includes, especially, independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.

ARTICLE 15 DEPENDENT PERSONAL SERVICES

  1. Subject to the provisions of Articles 16, 18 and 19, salaries,
    wages and other similar remuneration derived by a resident of a Contracting State in
    respect of an employment shall be taxable only in that Contracting 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 Contracting State.

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

a) the recipient is present in the other State for a period
or periods not exceeding in the aggregate 183 days in any twelve month
period commencing or ending in the fiscal year concerned; and

b) the remuneration is paid by, or on behalf of, an employer
who is not a resident of that other Contracting State, and

c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in that other Contracting State.

  1. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic may be taxed in the Contracting State in which the place
    of effective management of the enterprise is situated.

ARTICLE 16 DIRECTORS' FEES

Directors’ fees and other similar payments derived by a resident of
a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other Contracting State.

ARTICLE 17 ARTISTES AND ATHLETES

  1. Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion
    picture, radio or television artiste, or a musician, or as an athlete, from his personal activities as such exercised in the other Contracting State, may be taxed in that other Contracting State.

  2. Where income in respect of personal activities exercised by an
    entertainer or an athlete in his capacity as such, accrues not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and

15, be taxed in the Contracting State in which the activities of
the entertainer or athlete are exercised.

  1. Notwithstanding the provisions of paragraphs 1 and 2, income
    derived by entertainers or athletes who are residents of a Contracting State
    from the activities exercised in the other Contracting State under a plan of cultural exchange between the Governments of both Contracting States, shall be exempted from tax
    in other Contracting State.

ARTICLE 18

PENSIONS AND SOCIAL SECURITY PAYMENTS

  1. Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a Contracting State in
    consideration of past employment shall be taxable only in that Contracting State.

  2. Notwithstanding the provisions of paragraph 1, pensions paid and
    other similar payments made under a public welfare scheme of the social security
    system by the Government of a Contracting State or a political subdivision or a
    local authority thereof shall be taxable only in that Contracting State.

  3. Notwithstanding the provisions of paragraph 1 of this Article, pensions and other similar remuneration arising in a Contracting State and paid to a resident of the other Contracting State, whether in consideration of past employment or not, may be taxed in the first-mentioned Contracting State where:

a) contributions paid by the beneficiary to the pension scheme were deducted from the beneficiary's taxable income in the first-mentioned Contracting State under the law of that State; or

b) contributions paid by an employer to the pension scheme were not taxable income for the beneficiary in the first-mentioned Contracting State under the law of that State.

  1. The term “beneficiary” as used in this Article is an individual who is entitled to receive payments from the pension scheme.

ARTICLE 19

REMUNERATION AND PENSIONS IN RESPECT OF GOVERNMENT SERVICE

  1. a) Remuneration, other than a pension, paid by the Government of a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that Government of that Contracting State or a local authority thereof, in the discharge of functions of a governmental nature shall be taxable only in that Contracting State.

b) However, such remuneration shall be taxable only in the other
Contracting State if the services are rendered in that other Contracting State
and the individual is a resident of that other Contracting State who:

(i) is a national of that other Contracting State; or

(ii) did not become a resident of that other Contracting State solely
for the purpose of rendering the services.

  1. a) Any pension paid by, or out of funds created by the
    Government of a Contracting State or a political subdivision or a local authority thereof
    to an individual in respect of services rendered to the Government
    of that Contracting State or a political subdivision or a local authority thereof shall be taxable only in that Contracting State.

b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that other Contracting State.

  1. The provisions of Articles 15, 16, 17 and 18 shall apply to
    remuneration and pensions in respect of services rendered in connection with a business carried on by the Government of a Contracting State or a political subdivision or a local
    authority thereof.

ARTICLE 20 STUDENTS

Payments which a student who is or was immediately before visiting a
Contracting State a resident of the other Contracting State and who is
present in the first-mentioned State solely for the purpose of his education receives for the purpose of his maintenance or education shall not be taxed in that
State, provided that such payments arise from sources outside that State.

ARTICLE 21 OTHER INCOME

  1. Items of income beneficially owned by a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Agreement
    shall be taxable only in that State.

  2. The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the beneficial owner of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such case the
    provisions of Article 7 or Article 14, as the case may be, shall apply.

  3. Where, by reason of a special relationship between the resident
    referred to in paragraph 1 and some other person, or between both of them and some third person, the amount of the income referred to in that paragraph exceeds the amount (if any) which would have been agreed upon between them in the absence of
    such a relationship, the provisions of this Article shall apply only to the
    last-mentioned

amount. In such a case, the excess part of the income shall remain taxable according to the laws of each Contracting State, due regard being had to the other applicable provisions of this Agreement.

  1. The provisions of this Article shall not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or
    assignment of the rights in respect of which the income is paid to take advantage of
    this Article by means of that creation or assignment.

ARTICLE 22

METHODS FOR ELIMINATION OF DOUBLE TAXATION

  1. In China, in accordance with the provisions of the law of China,
    double taxation shall be eliminated as follows:

a) Where a resident of China derives income from Denmark, the amount of tax on that income payable in Denmark in accordance with the provisions of this Agreement may be credited against the Chinese tax imposed on that resident. The amount of the credit, however, shall not exceed the amount of
the Chinese tax on that income computed in accordance with the taxation laws and regulations of China.

b) Where the income derived from Denmark is dividend paid by a
company which is a resident of Denmark to a company which is a resident of China and which owns not less than 20 per cent of the shares of the
company paying the dividend, the credit shall take into account the tax paid to Denmark by the company paying the dividend in respect of its income.

  1. In Denmark, double taxation shall be avoided as follows:

a) Subject to the provisions of sub-paragraph c), where a resident of Denmark derives income which, in accordance with the provisions of this Agreement, may be taxed in China, Denmark shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in China;

b) Such deduction shall not, however, ex ceed that part of the income tax, as computed before the deduction is given, which is at tributable to
the income which may be taxed in China;

c) Where a resident of Denmark derives income which, in accordance with the provisions of this Agreement, shall be taxable only in China, Denmark may include this income in the tax base, but shall allow as a deduction from the income tax that part of the income tax which is attributable to the
income derived from China.

ARTICLE 23 MISCELLANEOUS RULE

Nothing in this Agreement shall prejudice the right of each Contracting State to apply its domestic laws and measures concerning the prevention of tax
evasion and

avoidance, whether or not described as such, insofar as they do not
give rise to taxation contrary to this Agreement.

ARTICLE 24

NON-DISCRIMINATION

  1. 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 Contracting State in the same circumstances are or may be
    subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States.

  2. The taxation on 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 Contracting State than the taxation levied on enterprises
    of that other Contracting State carrying on the same activities. This provision
    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.

  3. Except where the provisions of paragraph 1 of Article 9,
    paragraphs 7 or 8 of Article 11, paragraphs 6 or 7 of Article 12 or paragraphs 3 or 4 of Article 21 apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State.

  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 the first-mentioned Contracting State are or may be subjected.

  5. The provisions of this Article shall, notwithstanding the provisions
    of Article 2, apply to taxes of every kind.

ARTICLE 25

MUTUAL AGREEMENT PROCEDURE

  1. Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Agreement, he may, irrespective of the remedies provided by the
    domestic law of those Contracting States, present his case to the competent
    authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 of Article 24, to the Contracting State of which he is a national. The case must be presented within three years from the first notification of the
    action resulting in taxation not in accordance with the provisions of the Agreement.

  2. The competent authority shall endeavour, if the objection appears
    to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other
    Contracting State, with a view to the avoidance of taxation which is not in accordance with this Agreement. Any agreement reached shall be implemented notwithstanding
    any time limits in the domestic law of the Contracting States.

  3. The competent 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 Agreement. They may also consult together for the elimination of double taxation in cases not provided for in this Agreement.

  4. The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of paragraphs 2 and 3. When it seems advisable for the purpose of reaching an
    agreement the competent authorities of the Contracting States may meet together
    for an oral exchange of opinions.

ARTICLE 26 EXCHANGE OF INFORMATION

  1. The competent authorities of the Contracting States shall
    exchange such information as is foreseeably relevant for carrying out the
    provisions of this Agreement or to the administration or enforcement of the domestic laws
    concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their political subdivisions or local authorities, insofar as the
    taxation thereunder is not contrary to the Agreement, in particular, to prevent fraud and
    to facilitate the administration of statutory provisions against legal avoidance. The
    exchange of information is not restricted by Articles 1 and 2.

  2. Any information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities
    (including courts and administrative bodies) concerned with the assessment or
    collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes referred to in paragraph 1, or the oversight of the above. Such persons or authorities shall use the information only for such purposes. They may
    disclose the information in public court proceedings or in judicial decisions.

  3. In no case shall the provisions of paragraph 1 and 2 be construed so as to impose on a Contracting State the obligation:

a) to carry out administrative measures at variance with
the laws and administrative practice of that or of the other Contracting State;

b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other
Contracting State;

c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information the disclosure of which would be contrary to public policy.

  1. If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall use its information gathering measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 of this Article but in no case shall such limitations be construed to permit a Contracting State to decline to supply
    information solely because it has no domestic interest in such information.

  2. In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.

ARTICLE 27

DIPLOMATIC AGENTS AND CONSULAR OFFICERS

Nothing in this Agreement shall affect the fiscal privileges of
diplomatic agents or consular officers under the general rules of international law or under the
provisions of special agreements.

ARTICLE 28 ENTRY INTO FORCE

  1. The Governments of the Contracting States shall notify each other through diplomatic channels that they have completed the internal legal procedures necessary for the entry into force of this Agreement.

  2. This Agreement shall enter into force on the thirtieth day upon the receipt of the latter notification referred to in paragraph 1 and its provisions shall have effect in both Contracting States:

a) in respect of taxes withheld at source, on income derived on or
after the first day of January in the calendar year next following the year in which the Agreement enters into force;

b) in respect of other taxes on income, for taxes chargeable for any
tax year beginning on or after the first day of January in the calendar year next following the year in which the Agreement enters into force.

  1. The Agreement between the Government of the People’s Republic of China and the Government of the Kingdom of Denmark for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, signed at
    Beijing on March 26ᵗʰ 1986, shall cease to have effect with respect to taxes to which this Agreement applies in accordance with paragraph 2 of this Article.

ARTICLE 29 TERMINATION

This Agreement shall remain in force until terminated by a
Contracting State. Either Contracting State may terminate the Agreement at any time
after 5 years from the date on which the Agreement enters into force, by giving a notice of termination through diplomatic channels at least six months in advance.

In such event, the Agreement shall cease to have effect:

a) in respect of taxes withheld at the source on or after
the first day of January next following the date of termination specified in the notice
of termination;

b) in respect of other taxes for any taxable year beginning on or after the first day of January next following the date of termination specified in
the notice of termination.

IN WITNESS WHEREOF the undersigned, duly authorized thereto by
their respective Governments, have signed this Agreement.

DONE in duplicate at on the day of
, , each in the Chinese, Danish and English languages, all texts being equally authentic, except in the case of doubt, when the English text shall prevail.

For the Government For the Government

of the People’s Republic of China of the Kingdom of Denmark

PROTOCOL

At the moment of signing the Agreement between the Government of the
People’s Republic of China and the Government of the Kingdom of Denmark
for the Avoidance of Double Taxation and the Prevention of Fiscal evasion with Respect to Taxes on Income, the undersigned have agreed that the following
provisions shall form an integral part of the Agreement.

  1. When applying the Agreement with respect to the air transport
    consortium, Scandinavian Airlines System (SAS), the provisions of paragraph 1 of Article 8 and paragraph 3 of Article 13 shall apply only to such part of its profits or capital gains as corresponds to the participation held in that consortium by the
    Danish partner of Scandinavian Airlines System (SAS).

  2. With respect to Article 11, the term “Central Bank” refers to the People’s Bank of China and the National Bank of Denmark, and the term “any agency of that Government” refers to:

a) in China:

(i) the China Development Bank;

(ii) the Agricultural Development Bank of China;

(iii) the Export-Import Bank of China;

(iv) the National Council for Social Security Fund;

(v) the China Export & Credit Insurance Corporation;

(vi) China Investment Corporation, and

(vii) any institution wholly owned by the Government of China as may be agreed from time to time between the competent authorities of the Contracting States;

b) in Denmark:

(i) Industrialisation Fund for Developing Countries (IFU)

(ii) Danish Export Credit Fund (EKF)

(iii) Danish Fund for Growth (Vaekstfonden)

(iv) any institution wholly owned by the Government of Denmark as may be agreed from time to time between the competent authorities of the Contracting States.

IN WITNESS whereof the undersigned, duly authorised thereto, have
signed this Protocol.

DONE in duplicate at on the day of
, , each in the Chinese, Danish and English languages, all texts being equally authentic, except in the case of doubt, when the English text shall prevail.

For the Government For the Government

of the People’s Republic of China of the Kingdom of Denmark

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