ARTICLE IX

The following new Article 18A (Pension Plans) shall be added to the Convention:

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“Article 18A Pension Plans

1. Where an individual who is a resident of a Contracting State is a member or

beneficiary of, or participant in, a pension plan established in the other Contracting State,

income earned by the pension plan may be taxed as income of that individual only when,

and, to the extent that, it is paid to, or for the benefit of, that individual from the pension

plan (and not transferred to another pension plan in that other Contracting State).

2. Where an individual who is a beneficiary of, or participant in, a pension plan

established in a Contracting State exercises an employment or self-employment in the

other Contracting State:

a) contributions paid by or on behalf of that individual to the pension plan during the

period or attributable to the period that he exercises an employment or self

employment in the other State shall be deductible (or excludable) in computing

his taxable income in that other State; and

b) any benefits accrued under the pension plan, or contributions made to the pension

plan by or on behalf of the individual’s employer, during that period shall not be

treated as part of the employee’s taxable income; any such contributions shall be

allowed as a deduction in computing the business profits of his employer in that

other State.

The relief available under this paragraph shall not exceed the relief that would be allowed

by the other State to residents of that State for contributions to, or benefits accrued under,

a pension plan or plans established in that State. The competent authorities of the

Contracting States shall determine the relief available under this paragraph pursuant to

the preceding sentence.

3. The provisions of paragraph 2 shall not apply unless:

a) contributions by or on behalf of the individual, or by or on behalf of the

individual’s employer were made before the individual began to exercise an

employment or self-employment in the other State; and

b) the pension plan is accepted by the competent authority of that State as generally

corresponding to a pension plan recognized as such for tax purposes by that State.

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4. The term “pension plan” means an arrangement established in a Contracting State

which is operated principally to administer or provide pension or retirement benefits or to

earn income for the benefit of one or more such arrangements.

5. a) Where a citizen of the United States who is a resident of the Federal Republic of

Germany exercises an employment in the Federal Republic of Germany the income from

which is taxable in the Federal Republic of Germany and is borne by an employer who is

a resident of the Federal Republic of Germany or by a permanent establishment situated

in the Federal Republic of Germany, and the individual is a beneficiary of, or participant

in, a pension plan established in the Federal Republic of Germany,

aa) contributions paid by or on behalf of that individual to the pension planduring the

period or attributable to the period that he exercises the employment in the Federal

Republic of Germany, and that are attributable to the employment, shall be deductible (or

excludable) in computing his taxable income in the United States; and

bb) any benefits accrued under the pension plan, or contributions made to the pension

plan by or on behalf of the individual’s employer, during that period or attributable to that

period, and that are attributable to the employment, shall not be treated as part of the

employee’s taxable income in computing his taxable income in the United States.

This paragraph shall apply only to the extent that the contributions or benefits qualify for

tax relief in the Federal Republic of Germany.

b) The relief available under this paragraph shall not exceed the relief that would be

allowed by the United States to its residents for contributions to, or benefits accrued

under, a generally corresponding pension planestablished in the United States.

c) For purposes of determining an individual’s eligibility to participate in and receive tax

benefits with respect to a pension plan established in the United States, contributions

made to, or benefits accrued under, a pension plan established in the Federal Republic of

Germany shall be treated as contributions or benefits under a generally corresponding

pension planestablished in the United States to the extent relief is available to the

individual under this paragraph.

d) This paragraph shall not apply unless the competent authority of the United States has

agreed that the pension plan generally corresponds to a pension plan established in the

United States.”

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