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II SÉRIE - NÚMERO 63

a cooperation program entered into by the Government cf a Centra/citing State shall from the date of his first arrival in that other State be exempt from tax in that State:

a) On the amount of such grant, allowance or

award;

b) On ail remittances from abroad for the purpo-

ses of his maintenance education or training; and

c) For a period not exceding in the aggregate

three years on any remuneration not exceeding 7 200 DM or the equivalent in Portuguese corrency for .the calendar year, for personal services rendered in that other State with a view to supplement the resources available to himfor his maintenance, education or training.

3 — A resident of one of the Contracting States who is an employee cf, or under a contract whith, an enterprise of such State or an organization described in paragraph 2 of this article, and who is temporarily present in the other Contracting State for a period net exceeding one year solely to acquire technical, professional business experience from any person ether than such enterprise or organization shall be exempt from tax by .such ether State on compensation for services wherever performed unless the amount thereof exceads 15 000 DM or the equivalent in Portuguese currency.

ARTICLE 22 Other income

1 — Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Cmvetion shall be taxable only in that State. However, if those items of income are not subject to tax in that State they may be taxed in the other Contracting State.

2 — The provisions of the first part 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 p&rmanet establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such case the items of income may be taxed in that other State in accordance with its taxation law.

CHAPTER IV Taxation of capital ARTICLE 23 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 parte of the business property of a permanent which an enterprise of a Contracting State has in the other Contracting State or by 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 may be taxed in that other State.

3 — Capital represented by ships and' aircraft operated in international traffic and by movable property peintaixting 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 Relief from double taxation ARTICLE 24

Methods

1:

a) Where a resident of Portugal derives income

which, in accordance with the provisions of this Convention, may be taxed in the Federal Republic of Germany, Portugal shall allow as a deduction from the tax on the income of that resident, an amount equail to the income tax paid in the Federal Republic of Germany.

Such deduction shall not, however, exceed that part of the income tax as computed before the deduction is given, which is attributable to the income which may be taxed in the Federal Republic of Germany;

b) Where in accordance with any prevision of

the Convention income derived by a resident of Portugal is exempt from tax in this State, Portugal may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income. .

2 — Tax shall be determined in the case of a resident of the Federal Republic of Germany as follows:

• a) Unless the provisions of sub-paragraph b) apply, there shall be excluded from basis upen which German tax is imposed, any item of income arising in Portugal and any item of capital situated within Portugal which, according to this Agreement, may be taxed in Portugal. The Federal Republic of Germany, however, retains the right to take into account in the determination of its rate of tax items of income and capital so excluded. In respect to dividends the foregoing provisions shall only apply to such dividends as are paid to a company being a resident of the Federal Republic of Germany a company being a resident of Portugal at least 25 per cent of the