The Grand Duchy of Luxembourg and the Republic of Estonia
Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with
respect to taxes on income and on capital, have agreed as follows:
Article 1
PERSONS COVERED
This Convention shall apply to persons who are residents of one or both of the Contracting States.
Article 2
TAXES COVERED
1. This Convention shall apply to taxes on income and on capital imposed on behalf of a Contracting State or of its
local authorities, irrespective of the manner in which they are levied.
2. 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.
3. The existing taxes to which the Convention shall apply are in particular:
a) in the case of Estonia, the income tax;
b) in the case of Luxembourg:
(i) the income tax on individuals (l’impôt sur le revenu des personnes physiques);
(ii) the corporation tax (l’impôt sur le revenu des collectivités);
(iii) the capital tax (l’impôt sur la fortune); and
(iv) the communal trade tax (l’impôt commercial communal).
4. The Convention shall apply also to any identical or substantially similar taxes that are imposed after the date
of signature of the Convention in addition to, or in place of, the existing taxes. The competent authorities of the
Contracting States shall notify each other of any significant changes that have been made in their relevant taxation laws.
Article 3
GENERAL DEFINITIONS
1. For the purposes of this Convention, unless the context otherwise requires:
a) the term “Estonia” means the Republic of Estonia and, when used in the geographical sense, the territory of
Estonia and any other area adjacent to the territorial waters of Estonia within which, under the laws of Estonia
and in accordance with international law, the rights of Estonia may be exercised with respect to the sea bed
and its sub-soil and their natural resources;
b) the term “Luxembourg” means the Grand Duchy of Luxembourg and, when used in a geographical sense,
means the territory of the Grand Duchy of Luxembourg;
c) the terms “a Contracting State” and “the other Contracting State” mean Estonia or Luxembourg as the
context requires;
d) the term “person” includes an individual, a company and any other body of persons;
e) the term “company” means any legal person or any entity that is treated as a legal person for tax purposes;
f) the term “enterprise” applies to the carrying on of any business;
g) 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;
h) the term “international traffic” means any transport by a ship, aircraft or road vehicle operated by an
enterprise of a Contracting State, except when the ship, aircraft or road vehicle is operated solely between
places in the other Contracting State;
i) the term “business” includes the performance of professional services and of other activities of an independent
character;
j) the term “competent authority” means:
(i) in the case of Estonia, the Minister of Finance or his authorised representative; and
(ii) in the case of Luxembourg, the Minister of Finance or his authorised representative;
k) the term “national”, in relation to a Contracting State, means:
(i) any individual possessing the nationality or citizenship of that Contracting State; and
(ii) any legal person, partnership or association deriving its status as such from the laws in force in that
Contracting State.
2. As regards the application of the Convention at any time by a Contracting State, any term not defined therein
shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for
the purposes of the taxes to which the Convention applies. Any meaning under the applicable tax laws of that State
prevails over a meaning given to the term under other laws of that State.
Article 4
RESIDENT
1. For the purposes of this Convention, 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 management, place of
incorporation or any other criterion of a similar nature, and also includes that State and any local authority thereof, as
well as a collective investment vehicle established in that State. This term, however, does not include any person who
is liable to tax in that State in respect only of income from sources in that State or capital situated therein.
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 has not 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.
3. Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both
Contracting States, the competent authorities of the Contracting States shall settle the question by mutual agreement.
Article 5
PERMANENT ESTABLISHMENT
1. For the purposes of this Convention, the term “permanent establishment” means a fixed place of business through
which the business of an enterprise is wholly or partly carried on.
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, a quarry or any other place of extraction of natural resources.
3. A building site or construction, installation or dredging project constitutes a permanent establishment only if it
lasts more than 12 months.
4. Notwithstanding the preceding paragraphs, the furnishing of services by an enterprise of a Contracting State in
the other Contracting State constitutes a permanent establishment, but only if the activities of the enterprise continue
within that other State for a period or periods aggregating more than 183 days in any twelve month period.
5. 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 subparagraphs
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.
6. Notwithstanding the provisions of paragraphs 1 and 2, where a person – other than an agent of an independent
status to whom paragraph 7 applies – is acting on behalf of an enterprise and has, and habitually exercises, in a
Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed
to have a permanent establishment in that 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 5 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.
7. An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it
carries on business in that 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.
8. 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 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 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, any rights of claim in respect of immovable property, 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.
4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise.
Article 7
BUSINESS PROFITS
1. The profits of an enterprise of a Contracting State shall be taxable only in that 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 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. Insofar 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 the preceding paragraphs, 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 Convention, then
the provisions of those Articles shall not be affected by the provisions of this Article.
Article 8
International transport
1. The profits of an enterprise of a Contracting State from the operation of ships, aircraft or road vehicles in
international traffic shall be taxable only in that State.
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.
2. Where a Contracting State includes in the profits of an enterprise of that State – and taxes accordingly – profits
on which an enterprise of the other Contracting State has been charged to tax in that other 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 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 Convention 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 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) 0 per cent of the gross amount of the dividends if the beneficial owner is a company which holds directly at
least 10 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.
3. 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 rights which is subjected to the same taxation treatment as income
from shares by the laws of the State of which the company making the distribution is a resident, and the investor’s share
of the profit of an enterprise, paid proportionally to his capital investment, as well as interest and payments on bonds
where, in addition to the fixed rate of interest, a supplementary interest, varying according to the distributed profits,
is granted.
4. 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 and the holding in respect of which the dividends are
paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply.
5. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting
State, that other 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 State or insofar as the holding in respect of which the dividends are paid is effectively
connected with a permanent establishment situated in that other 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 such other State.
Article 11
INTEREST
1. Interest arising in a Contracting State and beneficially owned by a resident of the other Contracting State shall be
taxable only in that other State.
2. 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. However, the term “interest” shall not include income referred to in Article 10.
Penalty charges for late payment shall not be regarded as interest for the purpose of this Article.
3. The provisions of paragraph 1 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 and the debt-claim in respect of which the interest is paid is effectively connected with
such permanent establishment. In such case the provisions of Article 7 shall apply.
4. Interest shall be deemed to arise in a Contracting State when the payer is a resident of that 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 in connection with which the indebtedness on which the interest is paid was incurred,
and such interest is borne by such permanent establishment, then such interest shall be deemed to arise in the State in
which the permanent establishment is situated.
5. Where, by reason of a special relationship between the payer 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 Convention.
Article 12
Royalties
1. Royalties arising in a Contracting State and beneficially owned by a resident of the other Contracting State shall
be taxable only in that other State.
2. The term “royalties” as used in this Article means 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, any patent,
trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or
scientific experience.
3. The provisions of paragraph 1 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, and the right or property in respect of which the royalties are paid is effectively
connected with such permanent establishment. In such case the provisions of Article 7 shall apply.
4. Royalties shall be deemed to arise in a Contracting State when the payer is a resident of that 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 in connection with which the liability to pay the royalties was incurred, and such
royalties are borne by such permanent establishment, then such royalties shall be deemed to arise in the State in which
the permanent establishment is situated.
5. Where, by reason of a special relationship between the payer 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 Convention.
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, including such gains from the alienation
of such a permanent establishment (alone or with the whole enterprise), may he taxed in that other State.
3. Gains derived by an enterprise of a Contracting State operating ships, aircraft or road vehicles in international
traffic from the alienation of ships, aircraft or road vehicles operated in international traffic or movable property
pertaining to the operation of such ships, aircraft or road vehicles, shall be taxable only in that State.
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. However, this paragraph does not apply to gains derived from the alienation of shares quoted on a
stock exchange of a member state of the Organisation for Economic Co-operation and Development or the European
Economic Area or any other stock exchange as may be agreed between the competent authorities of the Contracting
States.
5. Gains from the alienation of any property, other than that referred to in the preceding paragraphs shall be taxable
only in the Contracting State of which the alienator is a resident.
Article 14
INCOME FROM EMPLOYMENT
1. Subject to the provisions of Articles 15, 17 and 18, 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 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 a Contracting State in
respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if
all the following conditions are met:
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 calendar year concerned, and
b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and
c) the remuneration is not borne by a permanent establishment which the employer has in the other State.
3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment
exercised aboard a ship, aircraft or road vehicle operated in international traffic by an enterprise of a Contracting State,
may be taxed in that State.
Article 15
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 or any other similar organ of a company which is a resident of the other Contracting State
may be taxed in that other State.
Article 16
ARTISTES AND SPORTSMEN
1. Notwithstanding the provisions of Articles 7 and 14, 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 a sportsman, from his
personal activities as such exercised in the other Contracting State, may be taxed in that other State.
2. Where income in respect of personal activities exercised by an entertainer or a sportsman in his capacity as such
accrues not to the entertainer or sportsman himself but to another person, that income may, notwithstanding the
provisions of Articles 7 and 14, be taxed in the Contracting State in which the activities of the entertainer or sportsman
are exercised.
3. The provisions of paragraphs 1 and 2 shall not apply to income derived from activities exercised in a Contracting
State by an entertainer or a sportsman if the visit to that State is mainly supported by public funds of one or both of
the Contracting States or local authorities thereof. In such case, the income shall be taxable only in the Contracting
State of which the entertainer or sportsman is a resident.
Article 17
PENSIONS
Pensions and other similar payments arising in a Contracting State and paid to a resident of the other Contracting
State shall be taxable only in the first-mentioned State.
Article 18
GOVERNMENT SERVICE
1. Salaries, wages and other similar remuneration paid by a Contracting State or a local authority thereof to an
individual in respect of services rendered to that State or authority shall be taxable only in that State.
However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State
if the services are rendered in that State and the individual is a resident of that State and has fulfilled one of the following
conditions:
a) he is a national of that State; or
b) he did not become a resident of that State solely for the purpose of rendering the services.
2. The provisions of Articles 14, 15 and 16 shall apply to salaries, wages and other similar remuneration in respect
of services rendered in connection with a business carried on by a Contracting State or a local authority thereof.
Article 19
STUDENTS
Payments which a student or business apprentice 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 or training receives for the purpose of his maintenance, education or training shall not be taxed in that State,
provided that such payments arise from sources outside that State.
Article 20
OTHER INCOME
1. Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of
this Convention 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 recipient of such income, being a resident of a Contracting State, carries on business
in the other Contracting State through a permanent establishment situated therein and the right or property in respect
of which the income is paid is effectively connected with such permanent establishment. In such case the provisions of
Article 7 shall apply.
Article 21
CAPITAL
1. Capital represented by immovable property referred to in Article 6, owned by a resident of a Contracting State
and situated in the other Contracting State, may be taxed in that other State.
2. Capital represented by 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 may be taxed in that other State.
3. Capital represented by ships, aircraft and road vehicles operated in international traffic by an enterprise of a
Contracting State and by movable property pertaining to the operation of such ships, aircraft and road vehicles, shall
be taxable only in that State.
4. All other elements of capital of a resident of a Contracting State shall be taxable only in that State.
Article 22
ELIMINATION OF DOUBLE TAXATION
1. In the case of a resident of Estonia, double taxation shall be avoided as follows:
a) where a resident of Estonia derives income or owns capital which, in accordance with the provisions of this
Convention, has been taxed in Luxembourg, Estonia shall, subject to the provisions of sub-paragraphs b) and
c) exempt such income or capital from tax;
b) where a resident of Estonia derives income which in accordance with the provisions of sub-paragraph b) of
paragraph 2 of Article 10 may be taxed in Luxembourg, Estonia shall allow as a deduction from the tax on the
income of that resident an amount equal to the tax paid in Luxembourg. Such deduction shall not, however,
exceed the part of the tax, as computed before the deduction is given, which is attributable to such items of
income derived from Luxembourg;
c) where in accordance with any provision of the Convention income derived or capital owned by a resident
of Estonia is exempt from tax in Estonia, Estonia may nevertheless, in calculating the amount of tax on the
remaining income or capital of such resident, take into account the exempted income or capital.
2. Subject to the provisions of the law of Luxembourg regarding the elimination of double taxation which shall not
affect the general principle hereof, double taxation shall be eliminated as follows:
a) where a resident of Luxembourg derives income or owns capital which, in accordance with the provisions
of this Convention, may be taxed in Estonia, Luxembourg shall, subject to the provisions of sub-paragraphs
b) and c), exempt such income or capital from tax, but may, in order to calculate the amount of tax on the
remaining income or capital of the resident, apply the same rates of tax as if the income or capital had not
been exempted;
b) where a resident of Luxembourg derives income which, in accordance with the provisions of Articles 10 and
16 may be taxed in Estonia, Luxembourg shall allow as a deduction from the income tax on individuals or
from the corporation tax of that resident an amount equal to the tax paid in Estonia. Such deduction shall
not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable to
such items of income derived from Estonia;
c) the provisions of sub-paragraph a) shall not apply to income derived or capital owned by a resident of
Luxembourg where Estonia applies the provisions of this Convention to exempt such income or capital from
tax or applies the provisions of paragraph 2 of Article 10 to such income.
Article 23
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 State in the same circumstances, in particular with respect to residence, are or may be
subjected.
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 State than the taxation levied on enterprises of that
other State carrying on the same activities.
3. Except where the provisions of paragraph 1 of Article 9, paragraph 5 of Article 11, or paragraph 5 of Article 12,
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. Similarly, any debts of an enterprise
of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable
capital of such enterprise, be deductible under the same conditions as if they had been contracted 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 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 State are or may be subjected.
5. The provisions of this Article 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.
6. The provisions of this Article shall, notwithstanding the provisions of Article 2, apply to taxes of every kind and
description.
Article 24
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 Convention, he may, irrespective of the remedies provided
by the domestic law of those 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 23, to that of 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 Convention.
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 the Convention. 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 the Convention. They may also consult together
for the elimination of double taxation in cases not provided for in the Convention.
4. The competent authorities of the Contracting States may communicate with each other directly, including
through a joint commission consisting of themselves or their representatives, for the purpose of reaching an agreement
in the sense of the preceding paragraphs.
5. Where,
a) under paragraph 1, a person has presented a case to the competent authority of a Contracting State on the
basis that the actions of one or both of the Contracting States have resulted for that person in taxation not
in accordance with the provisions of this Convention, and
b) the competent authorities are unable to reach an agreement to resolve that case pursuant to paragraph 2
within two years from the presentation of the case to the competent authority of the other Contracting State,
any unsolved issues arising from the case shall be submitted to arbitration if the person so requests. These unresolved
issues shall not, however, be submitted to arbitration if a decision on these issues has already been rendered by a court
or administrative tribunal of either State. Unless a person directly affected by the case does not accept the mutual
agreement that implements the arbitration decision, that decision shall be binding on both Contracting States and shall
be implemented notwithstanding any time limits in the domestic laws of these States. The competent authorities of the
Contracting States shall by mutual agreement settle the mode of application of this paragraph.
Article 25
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 Convention 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 local authorities, insofar as
the taxation thereunder is not contrary to the Convention. 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, 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. Notwithstanding the foregoing, information received
by a Contracting State may be used for other purposes when such information may be used for such other purposes
under the laws of both States and the competent authority of the supplying State authorises such use.
3. In no case shall the provisions of paragraphs 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 (ordre public).
4. 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 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.
5. In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to decline to supply
information upon request 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 26
MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS
Nothing in this Convention shall affect the fiscal privileges of members of diplomatic missions or consular posts
under the general rules of international law or under the provisions of special agreements.
Article 27
ENTRY INTO FORCE
1. The Contracting States shall notify each other of the completion of the procedures required by its law for
the bringing into force of this Convention. The Convention shall enter into force on the date of the later of these
notifications.
2. The provisions of the Convention shall have effect:
a) in respect of taxes withheld at source, on income derived on or after the first day of January next following
the year in which the Convention enters into force;
b) in respect of other taxes on income and on capital, on taxes chargeable for any taxable year beginning on or
after the first day of January next following the year in which the Convention enters into force.
3. The Convention between the Government of the Republic of Estonia and the Government of the Grand
Duchy of Luxembourg for the avoidance of double taxation and the prevention of fiscal evasion with respect
to taxes on income and on capital signed in Tallinn on May 23, 2006, shall cease to have effect from the date
on which this Convention becomes effective in accordance with paragraph 2 of this Article.
Article 28
TERMINATION
1. This Convention shall remain in force until terminated by a Contracting State. Either Contracting State may
terminate the Convention by giving to the other Contracting State written notice not later than the 30th June of any
calendar year from the fifth year following that in which the Convention entered into force.
2. In such event, the Convention shall cease to have effect:
a) in respect of taxes withheld at source, on income derived on or after the first day of January next following
the year in which the notice is given;
b) in respect of other taxes on income and on capital, on taxes chargeable for any taxable year beginning on or
after the first day of January next following the year in which the notice is given.
IN WITNESS WHEREOF the undersigned, being duly authorised thereto by their respective Governments, have
signed this Convention.
DONE in duplicate at Brussels on this 7th day of July 2014, in the English language.
PROTOCOL
At the moment of the signing of the Convention between the Grand Duchy of Luxembourg and the Republic of
Estonia for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and
on capital, both sides have agreed upon the following provisions, which shall form an integral part of the Convention:
I. With reference to Article 4:
A collective investment vehicle which is established in a Contracting State shall be considered as a resident of
the Contracting State in which it is established and as the beneficial owner of the income it receives.
For purposes of paragraph 1 of Article 4, the term “collective investment vehicle” means:
a) in the case of Estonia, any pool of assets (common fund) established or company founded for collective
investment on the basis of Investment Fund Act, and
b) in the case of Luxembourg,
(i) an investment company with variable capital (société d’investissement à capital variable);
(ii) an investment company with fixed capital (société d’investissement à capital fixe);
(iii) an investment company in risk capital (société d’investissement en capital à risque);
(iv) a collective investment fund (fonds commun de placement),
as well as any other collective investment vehicle established in either Contracting State which the competent
authorities of the Contracting States agree to regard as a collective investment vehicle for purposes of this
paragraph.
II. With reference to Article 25:
The competent authority of the requesting State shall provide the following information to the competent
authority of the requested State when making a request for information under the Convention to demonstrate
the foreseeable relevance of the information to the request:
a) the identity of the person under examination or investigation;
b) a statement of the information sought including its nature and the form in which the requesting State wishes
to receive the information from the requested State;
c) the tax purpose for which the information is sought;
d) grounds for believing that the information requested is held in the requested State or is in the possession or
control of a person within the jurisdiction of the requested State;
e) to the extent known the name and address of any person believed to be in possession of the requested
information;
f) a statement that the requesting State has pursued all means available in its own territory to obtain the
information, except those that would give rise to disproportionate difficulties.
IN WITNESS WHEREOF the undersigned, being duly authorised thereto by their respective Governments, have
signed this Protocol.
DONE in duplicate at Brussels on this 7th day of July 2014, in the English language.
Read also:
Regulated or
Unregulated 