Chapter I
Scope of the Convention
Article 1
Personal scope
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 political subdivisions or 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, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.
3. The existing taxes to which the Convention shall apply are:
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(a)
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in the case of Luxembourg:
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1.
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the individual income tax (l’impôt sur le revenu des personnes physiques);
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2.
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the company tax (l’impôt sur le revenu des collectivités);
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3.
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the capital tax (l’impôt sur la fortune);
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4.
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the specific tax on directors’ fees (l’impôt spécial sur les tantièmes);
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5.
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the communal trade tax on business profits and capital (l’impôt commercial communal d’après les bénéfices et capital d’exploitation);
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6.
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the communal tax on the total amount of wages and salaries (l’impôt communal sur le total des salaires)
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(hereafter referred to as “Luxembourg tax”);
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(b)
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in the case of Morocco:
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1.
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the tax on professional profits and the investment reserve tax (l’impôt sur les bénéfices professionnels et la réserve d’investissements);
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2.
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the levy on public and private wages, remuneration, salaries, pensions and life annuities (le prélèvement sur les traitements publics et privés, les indemnités et émoluments, les salaires, les pensions et les rentes viagères);
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3.
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the urban tax (la taxe urbaine) and taxes related thereto;
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4.
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the agriculture tax (l’impôt agricole);
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5.
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the complementary tax on the total income of individuals (la contribution complémentaire sur le revenu global des personnes physiques);
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6.
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the tax on income from shares or corporate rights and assimilated income (la taxe sur les produits des actions ou parts sociales et revenus assimilés);
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7.
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the trade tax (l’impôt des patentes);
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8.
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the tax on income from immovable property (la taxe sur les profits immobiliers);
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9.
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the tax on land (la taxe sur les terrains non-bâtis)
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(hereinafter referred to as “Moroccan tax”).
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4. The Convention shall apply also to any identical or substantially similar taxes and to taxes on capital which are imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes. At the end of each year, the competent authorities of the Contracting States shall notify each other of changes which have been made in their respective taxation laws.
Chapter II
Definitions
Article 3
General definitions
1. For the purposes of this Convention, unless the context otherwise requires
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(a)
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(i)
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the term “Luxembourg”, used in a geographical sense, means the territory of the Grand-Duchy of Luxembourg;
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(ii)
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the term “Morocco” means the Kingdom of Morocco, and, if used in a geographical sense, means the territory of Morocco and the territory adjacent to the territorial waters of Morocco which is considered as national territory for tax purposes and where Morocco may, in accordance with international law, exercise its rights with respect to the seabed and subsoil and their natural resources (Continental Shelf);
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(b)
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the terms “a Contracting State” and “the other Contracting State” mean, as the context requires, Morocco or Luxembourg;
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(c)
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the term “person” includes an individual, a company, a partnership and any other body of persons;
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(d)
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the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes;
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(e)
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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;
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(f)
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the term “tax” means Moroccan tax or Luxembourg tax, as the context requires;
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(g)
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the term “nationals” means:
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(i)
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any individuals possessing the nationality of a Contracting State;
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(ii)
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any body corporate, partnership, and association established in accordance with the law in force in a Contracting State;
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(h)
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the expression “competent authority” means:
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(i)
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in the case of Luxembourg: the Minister of Finance or his duly authorised representative;
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(ii)
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in the case of Morocco: the Minister of Finance or his duly authorised representative.
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2. As regards the application of the Convention by a Contracting State any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the law of that State concerning the taxes to which the Convention applies.
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 or any other criterion of a similar nature.
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:
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(a)
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he shall be deemed to be a resident 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 of the State with which his personal and economic relations are closer (centre of vital interests);
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(b)
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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 of the State in which he has an habitual abode;
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(c)
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if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national;
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(d)
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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.
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3. 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 of the State in which its place of effective management is situated.
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.
2. The term “permanent establishment” includes especially:
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(a)
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a place of management;
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(b)
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a branch;
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(c)
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an office;
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(d)
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a factory;
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(e)
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a workshop;
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(f)
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a mine, an oil or gas well, a quarry or any other place of extraction of natural resources;
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(g)
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a building site or construction or installation project if it lasts more than six months.
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3. The term “permanent establishment” shall be deemed not to include:
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(a)
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the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;
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(b)
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the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;
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(c)
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the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;
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(d)
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the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise;
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(e)
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the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research, or for similar activities having a preparatory or auxiliary character for the enterprise.
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4. A person — other than an agent of an independent status to whom paragraph 5 applies — who acts in a Contracting State on behalf of an enterprise in the other Contracting State, shall be deemed to be a permanent establishment in the first-mentioned State, if he has and habitually exercises in that State an authority to conclude contracts in the name of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise.
5. An enterprise 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.
6. 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.
Chapter III
Taxation of income
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. For the purposes of this Convention, 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, 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 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 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 the determination of the profits of a permanent establishment which an enterprise of a Contracting State has in the other State, there shall be taken into account:
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–
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on the one hand, the effective charges and expenditure which are borne by the enterprise in the State in which the permanent establishment is situated and which are directly and especially incurred for the acquisition and conservation of such profits;
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–
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on the other hand, the real expenses borne by the effective management of the enterprise and justified by the services rendered to the permanent establishment.
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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. 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.
6. 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
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. Notwithstanding the provisions of paragraph 1 and Article 7, profits derived from the operation of ships or aircraft used principally to transport passengers or goods exclusively between places in a Contracting State may be taxed in that State.
3. The provisions of paragraphs 1 and 2 shall also apply to profits referred to in those paragraphs derived by an enterprise of a Contracting State from its participation in a pool, a joint business or in an international operating agency.
4. 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.
Article 9
Associated enterprises
Where
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(a)
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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
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(b)
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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,
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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.
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 the tax so charged shall not exceed:
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(a)
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10% of the gross amount of the dividends if the beneficial owner of the dividends is a company (other than a partnership) which holds directly at least 25% of the capital of the company paying the dividends;
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(b)
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15% of the gross amount of the dividends in all other cases.
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The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of these limitations.
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, “jouissance” shares or “jouissance” rights, mining shares, founders’ 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 State of which the company making the distribution is a resident.
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, has in the other Contracting State, of which the company paying the dividends is a resident, a permanent establishment, 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 to persons who are not residents of 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 paid to a resident of the other Contracting State may be taxed in that other State.
2. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but the tax so charged shall not exceed 10% 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. The term “interest” as used in this Article means income from government securities, bonds, whether or not secured by mortgage and whether or not carrying a right to participate in the profits and debt-claims of every kind, as well income assimilated to income from money lent by the taxation law of the State in which the income arises.
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, has in the other Contracting State in which the interest arises a permanent establishment, 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.
5. Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or 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.
6. 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 paid to a resident of the other Contracting State may be taxed in that other State.
2. However, such royalties may be taxed in the Contracting State in which they arise, and according to the law of that State, but the tax so charged may not exceed 10% of the gross amount of the royalties. The competent authorities shall by mutual agreement settle the mode of application of this limitation.
3. 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 the use of, or the right to use, industrial, commercial, or scientific equipment, or for information concerning industrial, commercial or scientific experience, as well as payments for technical and economic studies.
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, has in the other Contracting State in which the royalties arise a permanent establishment, 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.
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 from the alienation of immovable property may be taxed in the Contracting State where such property is situated.
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.
However, gains realised from the alienation of movable property referred to in paragraph 3 of Article 21 shall only be taxable in the Contracting State in which such property itself may be taxed under the provisions of that Article.
3. Gains from the alienation of any property other than that referred to in paragraphs 1 and 2 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 shall be taxable in that Contracting State. Subject to the provisions of paragraph 2, such income is exempt from tax in the other Contracting State.
2. Income derived by a resident of a Contracting State in respect of professional services may be taxed in the other Contracting State if:
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(a)
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this resident stays in the other Contracting State for a period or periods amounting to or exceeding in the aggregate 183 days in a fiscal year; or
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(b)
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he has a fixed base regularly available in that other Contracting State, but only so much of the income as is attributable to that fixed base.
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3. 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, 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:
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(a)
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the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the calendar year concerned; and
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(b)
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the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and
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(c)
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the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.
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3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State 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, attendance 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 supervisory board or similar board of a company which is a resident of the other Contracting State may be taxed in that other State.
Article 17
Artistes and athletes
1. Notwithstanding the provisions of Articles 7, 14 and 15:
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(a)
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income derived by entertainers, such as theatre, motion picture, radio or television artistes, and musicians, and by athletes, from their personal activities as such may be taxed in the Contracting State in which these activities are exercised;
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(b)
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the rule of sub-paragraph (a) also applies to income derived by operators or organisers of performances and entertainment of whatever nature as well as to income from activities exercised by any person contributing to the organisation or performances of entertainers or athletes.
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2. The provisions of paragraph 1 shall not apply to income from activities exercised in a Contracting State by non-profit organizations of the other Contracting State or by members of their personnel, unless these members act for their own account.
Article 18
Government services
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1.
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(a) Remuneration, other than a pension, paid by a Contracting State or a political or an administrative subdivision or a local authority thereof to any individual in respect of services rendered to that State or subdivision or local authority thereof shall be taxable only in that State.
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(b)
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However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the recipient is a resident of that Contracting State who did not become a resident of that State solely for the purpose of performing the services.
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2. The provisions of paragraph 1 shall not apply to remuneration in respect of services rendered in connection with a business carried on by a Contracting State or a political or an administrative subdivision or a local authority thereof.
Article 19
Students and business apprentices
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 Contracting State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State.
Article 20
Income not expressly mentioned
Items of income of a resident of a Contracting State which are not expressly mentioned in the foregoing Articles may be taxed in that Contracting State, it being understood that if these items of income are derived from sources in the other Contracting State, they may also be taxed in that other Contracting State.
Chapter IV
Taxation of capital
Article 21
Capital
1. Capital represented by immovable property may be taxed in the Contracting State where the property is situated.
2. Capital represented by movable property forming part of the business property of a permanent establishment of an enterprise or by movable property pertaining to a fixed base available for the purpose of performing independent personal services, may be taxed in the Contracting State in which the permanent establishment or fixed base is situated.
3. Capital represented by ships and aircraft operated in international traffic and by movable property pertaining to the operation of such ships and aircraft shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.
4. All other elements of capital of a resident of a Contracting State shall be taxable only in that State.
Chapter V
Methods for elimination of double taxation
Article 22
1. In the case of residents of Luxembourg, double taxation shall be avoided as follows:
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(a)
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Income derived from Morocco — except income referred to in (b) below — and items of capital situated in Morocco, which are taxable in that State in accordance with the foregoing Articles, are exempt from tax in Luxembourg. This exemption does not limit the right of Luxembourg, in determining the rate of Luxembourg tax, to take into account the income and elements of capital which are exempt.
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(b)
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In the case of income referred to in Articles 10, 11, 12 and 20 above, Luxembourg may, in accordance with the provisions of its domestic law, include such income in the basis of the taxes mentioned in Article 2, but it shall allow against the amount of the income tax relating to such income, and only to the extent of that amount, a deduction equal to the amount of taxes levied in Morocco.
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(c)
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Notwithstanding (b), dividends distributed by a stock corporation which is resident in Morocco and is subject in that State to a tax on corporate income to a corporation (société de capitaux) which is resident in Luxembourg and holds at least 25% of the capital of the first-mentioned corporation are subject to the provisions of (a). The above-mentioned shares or participation rights in the corporation in Morocco are, under the same conditions, exempt from the Luxembourg tax on capital.
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(d)
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For the purposes of the tax credit referred to in (b) above and as long as the dividends are exempt or taxed at a rate which is lower than the 15% referred to in paragraph 2(b) of Article 10 for the purpose of promoting the economic development of Morocco, the amount of Moroccan tax to be credited shall be 15% of the gross amount of such dividends.
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(e)
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For the purposes of the tax credit referred to in (b) above, and as long as interest is exempt or taxed at a lower rate than the rate mentioned in paragraph 2 of Article 11 for the purpose of the economic development of Morocco, the amount of Moroccan tax that may be credited shall be 10% of the gross amount of such interest.
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2. In the case of residents of Morocco, double taxation shall be avoided as follows:
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(a)
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Where a resident of Morocco derives income other than that referred to in sub-paragraph (b) below and which may be taxed in Luxembourg in accordance with the provisions of this Convention, Morocco shall exempt such income from tax but may in calculating the taxes on the remaining income of such resident apply the same rate which would have been applicable if the income in question had not been so exempted.
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(b)
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In the case of income referred to in Articles 10, 11, 12 and 20 above, Morocco may, in accordance with the provisions of its domestic law, include such income in the basis of the taxes referred to in Article 2, but it shall allow against the amount of the taxes on such income, and only to the extent of that amount, a deduction equal to the amount of the taxes levied by Luxembourg on that same income.
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Chapter VI
Special provisions
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 are or may be subjected.
2. Stateless persons who are residents of a Contracting State shall not be subjected in either 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 the State concerned in the same circumstances are or may be subjected.
3. 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.
4. No provision of this Article shall 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.
5. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned State are or may be subjected.
6. In this Article the term “taxes” means the taxes covered in this Convention.
Article 24
Mutual agreement procedure
1. Where a person of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case in writing and state his reasons to the competent authority of the Contracting State of which he is a resident. The case must be presented within two years from the first notification of the action resulting in taxation not in accordance with the provisions of the Convention.
2. The competent authority referred to in paragraph 1 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 not in accordance with the Convention.
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.
Article 25
Exchange of information
1. The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention. Any information received by a Contracting State shall be treated as secret and shall be disclosed only to persons or authorities involved in the assessment or collection of, or the enforcement of, the taxes covered by the Convention.
2. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation:
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(a)
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to carry out administrative measures at variance with the laws or the administrative practice of that or of the other Contracting State;
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(b)
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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;
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(c)
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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).
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Article 26
Assistance in collection
1. The Contracting States undertake to assist each other in the collection of the taxes referred to in this Convention, together with interest and additional amounts, but not fines and penalties which such taxes may bear.
2. The request drawn up for such purpose shall be accompanied by the documents required under the laws of the requesting State as evidence that the amounts to be collected are finally due.
3. On receipt of these documents, writs to pay shall be served and measures of recovery and collection shall be taken in the requested State in accordance with the laws relating to the recovery and collection of its own taxes. Writs for collection, in particular, shall be carried out in the manner provided in the laws of that State.
4. Tax claims shall not enjoy priority in the requested State.
5. With respect to tax claims which can be appealed against, the creditor State may, in order to protect its rights, request the other State to serve the taxpayer a warrant or precautionary collection. Appeals against the soundness of the complaints which were the motive of the notification may only be lodged with the competent court of the requesting State.
Article 27
Diplomatic agents and consular officers
1. Nothing in this Convention 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.
2. Notwithstanding Article 4 of this Convention, an individual who is a member of a diplomatic, consular or permanent mission of a Contracting State which is situated in the other Contracting State or in a third State shall be deemed for the purposes of this Convention to be a resident of the sending State if he is liable in the sending State to the same obligations in relation to tax on his total income and capital as are residents of that State.
3. This Convention shall not apply to International Organizations, to organs or officials thereof and to persons who are members of a diplomatic, consular or permanent mission of a third State, being present in a Contracting State and who are not liable in that State to the same obligations in relation to tax on their total income and capital as are residents of that State.
Article 28
1. The competent authorities of the Contracting States shall communicate directly with each other for the application of this Convention.
2. This Convention shall not apply to holding companies within the meaning of the special Luxembourg legislation, currently the Law of 31 July 1929 and the Decree-Law of 27 December 1937. Neither shall it apply to income which a resident of Morocco derives from such companies nor to shares or other rights in the capital of such companies belonging to such a person.
Chapter VII
Final provisions
Article 29
Entry into force
1. This Convention shall be ratified and the instruments of ratification shall be exchanged at Rabat as soon as possible.
2. The Convention shall enter into force upon the exchange of instruments of ratification and its provisions shall have effect:
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(a)
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in respect of taxes withheld at the source, to income paid or payable as of 1 January of the year in which the instruments of ratification are exchanged;
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(b)
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in respect of other taxes on income, to income of taxable periods ending on or after 1 January of the year in which the instruments of ratification are exchanged;
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(c)
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in respect of taxes on capital, to capital existing on 1 January of the year in which the instruments of ratification are exchanged.
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Article 30
Termination
This Convention shall remain in force indefinitely; but either of the Contracting States may, on or before 30 June in any calendar year beginning after the expiration of a period of five years as from the date of ratification of this Convention, give to the other Contracting State, through diplomatic channels, written notice of termination. In such event, the Convention shall apply for the last time:
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(a)
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in respect of taxes withheld at the source, to income paid or payable not later than 31 December of the year during which notice of termination is given;
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(b)
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in respect of other taxes on income, to income of taxable periods ending not later than 31 December of that year;
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(c)
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in respect of taxes on capital, to capital existing on 1 January of the year during which notice of termination is given.
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In witness whereof the undersigned, being duly authorised thereto, have signed this Convention.
Done at Luxembourg on 19 December 1980, in duplicate in the French and Arabic languages, each text being equally authentic.
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