Article 18A, it is understood that: — U.S. Income Tax Treaty

aa) The Federal Republic of Germany recognizes qualified plans specifically listed in

clause aa) of subparagraph a), other than Roth IRAs, as arrangements that correspond to

pension plans referred to under section 1 of the German law on employment-related

pensions ( Betriebsrentengesetz ). The Federal Republic of Germany shall provide the

corresponding relief under section 3 No. 63 of the Income Tax Act; and

bb) The United States recognizes arrangements under section 1 of the German law on

employment-related pensions ( Betriebsrentengesetz ) as arrangements that correspond to

pension plans referred to in clause aa) of subparagraph a) above.

WITH REFERENCE TO PARAGRAPH 2 OF ARTICLE 20 (VISITING PROFESSORS AND TEACHERS; STUDENTS AND TRAINEES).

Payments that are made out of public funds of a Contracting State or by a scholarship

organization endowed with such funds shall be considered to arise in full from sources

outside the other Contracting State. The preceding sentence shall also apply when such

payments are made under programs funded jointly by organizations of both Contracting

States if more than 50 percent of these funds are provided out of public funds of the first

mentioned State or by a scholarship organization endowed with such funds. The

competent authorities shall consult with each other to identify those scholarship programs

whose payments shall be treated as arising from sources outside a Contracting State

under the foregoing rules.

WITH REFERENCE TO PARAGRAPH 2 OF ARTICLE 21 (OTHER INCOME)

Where the recipient and the payor of a dividend are both residents of the Federal

Republic of Germany and the dividend is attributed to a permanent establishment that the

recipient of the dividend has in the United States, the Federal Republic of Germany may

tax such a dividend at the rates provided for in paragraphs 2 and 3 of Article 10

(Dividends). The United States shall give a credit for such tax according to the provisions

of Article 23 (Relief from Double Taxation).

WITH REFERENCE TO PARAGRAPH 1 OF ARTICLE 23 (RELIEF FROM DOUBLE TAXATION)

For purposes of paragraph 1 of Article 23, the "general principle hereof" means the

avoidance of double taxation by allowing a credit for taxes imposed on items of income

arising in the Federal Republic of Germany, as determined under the applicable United

States source rules, as modified by the Convention. While the details and limitations of

the credit pursuant to this paragraph may change as provisions of United States law

change, any such changes must preserve a credit for German taxes imposed with respect

to items of income that the Federal Republic of Germany may tax pursuant to the

Convention.

WITH REFERENCE TO PARAGRAPH 1 OF ARTICLE 24 (NONDISCRIMINATION)

Paragraph 1 of Article 24 does not obligate the United States to subject an individual who

is a German national not resident in the United States to the same taxing regime as that

applied to a citizen of the United States not resident in the United States.

WITH REFERENCE TO PARAGRAPH 4 OF ARTICLE 24 (NONDISCRIMINATION)

It is understood that paragraph 4 of Article 24 shall not be construed as obligating a

Contracting State to permit cross-border consolidation of income or similar benefits

between enterprises.

WITH REFERENCE TO PARAGRAPHS 5 AND 6 OF ARTICLE 25 (MUTUAL AGREEMENT PROCEDURE)

In respect of any case where the competent authorities have endeavored but are unable to

reach an agreement under Article 25 regarding the application of one or more of the

following Articles of the Convention: 4 (Residence) (but only insofar as it relates to the

residence of a natural person), 5 (Permanent Establishment), 7 (Business Profits), 9

(Associated Enterprises), 12 (Royalties), binding arbitration shall be used to determine

such application, unless the competent authorities agree that the particular case is not

suitable for determination by arbitration. In addition, the competent authorities may, on

an ad hoc basis, agree that binding arbitration shall be used in respect of any other matter

to which Article 25 applies. If an arbitration proceeding (the Proceeding) under paragraph

5 of Article 25 commences, the following rules and procedures will apply:

a) The Proceeding will be conducted in the manner prescribed by, and subject to the

requirements of, paragraphs 5 and 6 of Article 25 and these rules and procedures, as

modified or supplemented by any other rules and procedures agreed upon by the

competent authorities pursuant to subparagraph q) below.

b) The determination reached by an arbitration board in the Proceeding shall be

limited to a determination regarding the amount of income, expense or tax reportable to

the Contracting States.

c) Notwithstanding the initiation of the Proceeding, the competent authorities may

reach a mutual agreement to resolve a case and terminate the Proceeding.

Correspondingly, a concerned person may withdraw a request for the competent

authorities to engage in the Mutual Agreement Procedure (and thereby terminate the

Proceeding) at any time.

d) The requirements of subparagraph d) of paragraph 6 of Article 25 will be met

when the competent authorities have each received from each concerned person a

statement agreeing that the concerned person and each person acting on the concerned

person’s behalf will not disclose to any other person any information received during the

course of the Proceeding from either Contracting State or the Arbitration Board, other

than the determination of the Proceeding. A concerned person that has the legal authority

to bind any other concerned person(s) on this matter may do so in a comprehensive

statement.

e) Each Contracting State will have 60 days from the date on which the Proceeding

begins to send a written communication to the other Contracting State appointing one

member of the arbitration board. Within 60 days of the date on which the second such

communication is sent, the two members appointed by the Contracting States will appoint

a third member, who will serve as Chair of the board. If either Contracting State fails to

appoint a member, or if the members appointed by the Contracting States fail to agree

upon the third member in the manner prescribed by this paragraph, the remaining

member(s) will be appointed by the highest-ranking member of the Secretariat at the

Centre for Tax Policy and Administration of the Organisation for Economic Co-operation

and Development (OECD) who is not a citizen of either Contracting State, by written

notice to both Contracting States within 60 days of the date of such failure. The

competent authorities will develop a non-exclusive list of individuals with familiarity in

international tax matters who may potentially serve as the Chair of the board. In any case,

the Chair shall not be a citizen of either Contracting State.

f) The arbitration board may adopt any procedures necessary for the conduct of its

business, provided that the procedures are not inconsistent with any provision of Article

25 or the Protocol to the Convention.

g) Each of the Contracting States will be permitted to submit, within 90 days of the

appointment of the Chair of the arbitration board, a Proposed Resolution describing the

proposed disposition of the specific monetary amounts of income, expense or taxation at

issue in the case, and a supporting Position Paper, for consideration by the arbitration

board. Copies of the Proposed Resolution and supporting Position Paper shall be

provided by the board to the other Contracting State on the date on which the later of the

submissions is submitted to the board. In the event that only one Contracting State

submits a Proposed Resolution within the allotted time, then that Proposed Resolution

shall be deemed to be the determination of the board in that case and the Proceeding shall

be terminated. Each of the Contracting States may, if it so desires, submit a Reply

Submission to the board within 180 days of the appointment of its Chair, to address any

points raised by the Proposed Resolution or Position Paper submitted by the other

Contracting State. Additional information may be submitted to the arbitration board only

at its request, and copies of the board’s request and the Contracting State’s response shall

be provided to the other Contracting State on the date on which the request or the

response is submitted. Except for logistical matters such as those identified in

subparagraphs l), n) and o) below, all communications from the Contracting States to the

arbitration board, and vice versa, shall take place only through written communications

between the designated competent authorities and the Chair of the board.

h) The arbitration board will deliver a determination in writing to the Contracting

States within six months of the appointment of its Chair. The board will adopt as its

determination one of the Proposed Resolutions submitted by the Contracting States.

i) In making its determination, the arbitration board will apply, as necessary and in

descending order of priority:

aa) the provisions of the Convention;

bb) any agreed commentaries or explanations of the Contracting States

concerning the Convention;

cc) the laws of the Contracting States to the extent they are not inconsistent

with each other; and

dd) any OECD Commentary, Guidelines or Reports regarding relevant

analogous portions of the OECD Model Tax Convention.

j) The determination of the arbitration board in a particular case shall be binding on

the Contracting States. The determination of the board will not state a rationale. It will

have no precedential value.

k) As provided in subparagraph e) of paragraph 6 of Article 25, the determination of

an arbitration board shall constitute a resolution by mutual agreement under Article 25.

Each concerned person must, within 30 days of receiving the determination of the board

from the competent authority to which the case was first presented, advise that competent

authority whether that concerned person accepts the determination of the board. If any

concerned person fails to so advise the relevant competent authority within this time

frame, the determination of the board will be considered not to have been accepted in that

case. Where the determination of the board is not accepted, the case may not

subsequently be the subject of a Proceeding.

l) Any meeting(s) of the arbitration board shall be in facilities provided by the

Contracting State whose competent authority initiated the mutual agreement proceedings

in the case.

m) The treatment of any associated interest or penalties will be determined by

applicable domestic law of the Contracting State(s) concerned.

n) No information relating to the Proceeding (including the board's determination)

may be disclosed by the members of the arbitration board or their staffs or by either

competent authority, except as permitted by the Convention and the domestic laws of the

Contracting States. In addition, all material prepared in the course of, or relating to, the

Proceeding shall be considered to be information exchanged between the Contracting

States. All members of the arbitration board and their staffs must agree in statements sent

to each of the Contracting States in confirmation of their appointment to the arbitration

board to abide by and be subject to the confidentiality and nondisclosure provisions of