Article 28 (Limitation — U.S. Income Tax Treaty

substituted:

“Article 28 Limitation on Benefits

Except as otherwise provided in this Article, a resident of one of the Contracting States

that derives income from the other Contracting State shall be entitled, in that other

Contracting State, to all the benefits of this Convention otherwise accorded to residents of

a Contracting State only if such resident is a “qualified person” as defined in paragraph 2

of this Article and satisfies any other conditions specified in the Convention for the

obtaining of such benefits.

A resident of one of the Contracting States is a qualified person for a taxable year only

if such resident is either:

a) an individual;

b) a Contracting State, political subdivision or local authority thereof;

c) a company, if

aa) its principal class of shares (and any disproportionate class of shares) is

regularly traded on one or more recognized stock exchanges, and either

A) its principal class of shares is primarily traded on a recognized stock

exchange located in the Contracting State of which the company is a resident;

B) the company’s primary place of management and control is in the

Contracting State of which it is a resident; or

bb) shares representing at least 50 percent of the aggregate voting power and value

(and at least 50 percent of any disproportionate class of shares) of the company

are owned directly or indirectly by five or fewer companies entitled to benefits

under clause aa) of this subparagraph, provided that, in the case of indirect

ownership, each intermediate owner is a resident of either Contracting State;

d) an entity organized under the laws of one of the Contracting States and established

and maintained in that Contracting State exclusively for a religious, charitable,

educational, scientific, or other similar purpose;

e) an entity organized under the laws of one of the Contracting States and established

and maintained in that Contracting State to provide, pursuant to a plan, pensions or

other similar benefits to employed and self-employed persons, provided that:

aa) more than 50 percent of the entity’s beneficiaries, members or participants are

individuals resident in either Contracting State; or

bb) the organization sponsoring such person is entitled to the benefits of the

Convention pursuant to this paragraph;

f) a person other than an individual, if:

aa) on at least half the days of the taxable year at least 50 percent of each class of

shares or other beneficial interests in the person is owned, directly or indirectly,

by residents of that Contracting State that are entitled to the benefits of this

Convention under subparagraph a), subparagraph b), clause aa) of subparagraph

c), subparagraph d) or subparagraph e) of this paragraph, provided that, in the

case of indirect ownership, each intermediate owner is a resident of that

Contracting State; and

bb) less than 50 percent of the person’s gross income for the taxable year is paid or

accrued, directly or indirectly, to persons who are not residents of either

Contracting State entitled to the benefits of this Convention under subparagraph

a), subparagraph b), clause aa) of subparagraph c), subparagraph d) or

subparagraph e) of this paragraph in the form of payments that are deductible for

purposes of the taxes covered by this Convention in the person’s State of

residence.

Notwithstanding that a company that is a resident of a Contracting State may not be a

qualified person, it shall be entitled to all the benefits of this Convention otherwise

accorded to residents of a Contracting State with respect to an item of income if it

satisfies any other specified conditions for the obtaining of such benefits and:

a) shares representing at least 95 percent of the aggregate voting power and value (and

at least 50 percent of any disproportionate class of shares) of the company are

owned, directly or indirectly, by seven or fewer persons who are equivalent

beneficiaries; and

b) less than 50 percent of the company’s gross income for the taxable year in which

the item of income arises is paid or accrued, directly or indirectly, to persons who

are not equivalent beneficiaries, in the form of payments that are deductible for the

purposes of the taxes covered by this Convention in the Contracting State of which

the company is a resident.

a) Notwithstanding that a resident of a Contracting State may not be a qualified

person, it shall be entitled to all the benefits of this Convention otherwise accorded

to residents of a Contracting State with respect to an item of income derived from

the other Contracting State, if the resident is engaged in the active conduct of a

trade or business in the first-mentioned Contracting State (other than the activities

of making or managing investments for the resident’s own account, unless these

activities are banking, insurance or securities dealing carried on by a bank,

insurance company or registered securities dealer), the income derived from the

other Contracting State is derived in connection with, or is incidental to, that trade

or business and that resident satisfies any other specified conditions for the

obtaining of such benefits.

b) If a resident of one of the Contracting States or any of its associated enterprises

carries on a trade or business activity in the other Contracting State which gives rise

to an item of income, subparagraph a) of this paragraph shall apply to such item

only if the trade or business activity in the first-mentioned Contracting State is

substantial in relation to the trade or business activity in the other Contracting State.

c) In determining whether a person is engaged in the active conduct of a trade or

business in a Contracting State under subparagraph a) of this paragraph, activities

conducted by persons connected to such person shall be deemed to be conducted by

such person. A person shall be connected to another if one possesses at least 50

percent of the beneficial interest in the other (or, in the case of a company, shares

representing at least 50 percent of the aggregate voting power and value of the

company or of the beneficial equity interest in the company) or another person

possesses, directly or indirectly, at least 50 percent of the beneficial interest (or, in

the case of a company, shares representing at least 50 percent of the aggregate

voting power and value of the company or of the beneficial equity interest in the

company) in each person. In any case, a person shall be considered to be connected

to another if, on the basis of all the facts and circumstances, one has control of the

other or both are under the control of the same person or persons.

Notwithstanding the preceding provisions of this Article, where an enterprise of a

Contracting State derives income from the other Contracting State, and that income is

attributable to a permanent establishment which that enterprise has in a third jurisdiction,

the tax benefits that would otherwise apply under the other provisions of the Convention

will not apply to that income if the combined tax that is actually paid with respect to such

income in the first-mentioned Contracting State and in the third jurisdiction is less than

60 percent of the tax that would have been payable in the first-mentioned State if the

income were earned in that Contracting State by the enterprise and were not attributable

to the permanent establishment in the third jurisdiction. Any dividends, interest or

royalties to which the provisions of this paragraph apply shall be subject to tax at a rate

that shall not exceed 15 percent of the gross amount thereof. Any other income to which

the provisions of this paragraph apply will be subject to tax under the provisions of the

domestic law of the other Contracting State, notwithstanding any other provision of the

Convention. The provisions of this paragraph shall not apply if:

a) in the case of royalties, the royalties are received as compensation for the use of, or

the right to use, intangible property produced or developed by the permanent

establishment itself; or

b) in the case of any other income, the income derived from the other Contracting

State is derived in connection with, or is incidental to, the active conduct of a trade

or business carried on by the permanent establishment in the third jurisdiction

(other than the business of making, managing or simply holding investments for the

person’s own account, unless these activities are banking or securities activities

carried on by a bank or registered securities dealer).

Notwithstanding the preceding provisions of this Article, a German Investment Fund

or German Investmentaktiengesellschaft ( collectively referred to as Investmentvermögen)

may only be granted the benefits of this Convention if at least 90 percent of the shares or

other beneficial interests in the German Investmentvermögen are owned, directly or

indirectly, by residents of the Federal Republic of Germany that are entitled to the

benefits of this Convention under subparagraph a), subparagraph b), clause aa) of

subparagraph c), subparagraph d) or subparagraph e) of paragraph 2 of this Article or by

persons that are equivalent beneficiaries with respect to the income derived by the

German Investmentvermögen for which benefits are being claimed. For the purposes of

this paragraph, beneficiaries of entities that are subject to numbers 3 and 5 of paragraph 1

of section 1 of the German Corporate Tax Act shall be treated as indirectly owning shares

of a German Investmentvermögen. Foundations referred to in number 5 of paragraph 1

of section 1 of the German Corporate Tax Act, other than those referred to in

subparagraph d) of paragraph 2 of this Article, shall not be taken into account in

determining whether a German Investmentvermögen meets the 90 percent minimum

ownership threshold.

A person resident of one of the Contracting States, who is not entitled to some or all of

the benefits of this Convention because of the foregoing paragraphs, may, nevertheless,

be granted benefits of this Convention if the competent authority of the Contracting State

in which the income in question arises so determines. In making such determination, the

competent authority shall take into account as its guidelines whether the establishment,

acquisition or maintenance of such person or the conduct of its operations has or had as

one of its principal purposes the obtaining of benefits under this Convention. The

competent authority of the Contracting State in which the income arises will consult with

the competent authority of the other Contracting State before denying the benefits of the

Convention under this paragraph.

For the purposes of this Article the following rules and definitions shall apply:

a) the term “recognized stock exchange” means:

aa) the NASDAQ System and any stock exchange registered with the U.S.

Securities and Exchange Commission as a national securities exchange under the

U.S. Securities Exchange Act of 1934;

bb) any German stock exchange on which registered dealings in shares take place;

cc) any other stock exchange which the competent authorities agree to recognize

for the purposes of this Article;

aa) the term “principal class of shares” means the ordinary or common shares of the

company, provided that such class of shares represents the majority of the voting

power and value of the company. If no single class of ordinary or common

shares represents the majority of the aggregate voting power and value of the

company, the “principal class of shares” is that class or those classes that in the

aggregate represent a majority of the aggregate voting power and value of the

company;

bb) the term “shares” shall include depository receipts thereof or trust certificates

thereof;

c) the term “disproportionate class of shares” means any class of shares of a company

resident in one of the Contracting States that entitles the shareholder to

disproportionately higher participation, through dividends, redemption payments or

otherwise, in the earnings generated in the other Contracting State by particular

assets or activities of the company;

d) the company’s primary place of management and control will be in the Contracting

State of which it is a resident only if executive officers and senior management

employees exercise day-to-day responsibility for more of the strategic, financial

and operational policy decision making for the company (including its direct and

indirect subsidiaries) in that Contracting State than in any other state and the staffs

conduct more of the day-to-day activities necessary for preparing and making those

decisions in that Contracting State than in any other state.

e) an equivalent beneficiary is a resident of a member state of the European Union or

of a European Economic Area state or of a party to the North American Free Trade

Agreement but only if that resident:

aa)

A) would be entitled to all the benefits of a comprehensive convention for the

avoidance of double taxation between any member state of the European

Union or a European Economic Area state or any party to the North

American Free Trade Agreement and the State from which the benefits of this

Convention are claimed under provisions analogous to subparagraph a),

subparagraph b), clause aa) of subparagraph c), subparagraph d) or

subparagraph e) of paragraph 2 of this Article provided that if such

convention does not contain a comprehensive limitation on benefits article,

the person would be a qualified person under subparagraph a), subparagraph

b), clause aa) of subparagraph c), subparagraph d) or subparagraph e) of

paragraph 2 of this Article if such person were a resident of one of the States

under Article 4 (Resident) of this Convention; and

B) with respect to insurance premiums and to income referred to in Article 10

(Dividends), 11 (Interest) or 12 (Royalties) of this Convention, would be

entitled under such convention to a rate of tax with respect to the particular

class of income for which benefits are being claimed under this Convention

that is at least as low as the rate applicable under this Convention; or

bb) is a resident of a Contracting State that is a qualified person by reason of

subparagraph a), subparagraph b), clause aa) of subparagraph c), subparagraph

d) or subparagraph e) of paragraph 2 of this Article.

For the purposes of applying paragraph 3 of Article 10 (Dividends) in order to

determine whether a person, owning shares, directly or indirectly, in the company

claiming the benefits of this Convention, is an equivalent beneficiary, such person

shall be deemed to hold the same voting power in the company paying the dividend

as the company claiming the benefits holds in such company;

f) with respect to dividends, interest or royalties arising in the Federal Republic of

Germany and beneficially owned by a company that is a resident of the United States, a

company that is a resident of a member state of the European Union will be treated as

satisfying the requirements of clause aa) B) of subparagraph e) for purposes of

determining whether such United States resident is entitled to benefits under this

paragraph if a payment of dividends, interest or royalties arising in the Federal Republic

of Germany and paid directly to such resident of a member state of the European Union

would have been exempt from tax pursuant to any directive of the European Union,

notwithstanding that the income tax convention between the Federal Republic of

Germany and that other member state of the European Union would provide for a higher

rate of tax with respect to such payment than the rate of tax applicable to such United

States company under Article 10 (Dividends), 11 (Interest), or 12 (Royalties) of this

Convention.”