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13012 Germany - Protocol Amending the Convention of December 3, 1980 for the Avoidance of Double Taxation with Respect to Taxes on Estates, Inheritances, and Gifts


   
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TREATIES AND OTHER INTERNATIONAL ACTS SERIES 13012

 

 

DOUBLE TAXATION

Taxes on Estates, Inheritances, and Gifts

 

 

 

Protocol Between the
UNITED STATES OF AMERICA
and GERMANY

 

Amending the Convention of
December 3, 1980


Signed at Washington December 14, 1998

 

 

 


 

 


NOTE BY THE DEPARTMENT OF STATE

Pursuant to Public Law 89—497, approved July 8, 1966
(80 Stat. 271; 1 U.S.C. 113)—

“. . .the Treaties and Other International Acts Series issued
under the authority of the Secretary of State shall be competent
evidence . . . of the treaties, international agreements other than
treaties, and proclamations by the President of such treaties and
international agreements other than treaties, as the case may be,
therein contained, in all the courts of law and equity and of maritime
jurisdiction, and in all the tribunals and public offices of the
United States, and of the several States, without any further proof
or authentication thereof.”


 

 

 

 


GERMANY

Double Taxation: Taxes on Estates, Inheritances, and Gifts

Protocol signed at Washington December 14, 1998;
Transmitted by the President of the United States of America
to the Senate September 21, 1999 (Treaty Doc. 106-13,
106th Congress, 1st Session);
Reported favorably by the Senate Committee on Foreign Relations
November 3, 1999 (Senate Executive Report No. 106-10,
106th Congress, 1st Session);
Advice and consent to ratification by the Senate
November 5, 1999;
Ratified by the President December 28, 1999;
Ratified by Germany November 17, 2000;
Ratifications exchanged at Berlin December 14, 2000;
Entered into force December 14, 2000.

 

 

 

 

 

PROTOCOL
AMENDING THE CONVENTION BETWEEN
THE UNITED STATES OF AMERICA
AND
THE FEDERAL REPUBLIC OF GERMANY
FOR THE AVOIDANCE OF DOUBLE TAXATION
WITH RESPECT TO TAXES ON ESTATES, INHERITANCES, AND GIFTS,
SIGNED AT BONN ON DECEMBER 3, 1980
-2-
The United States of America and the Federal Republic
of Germany, desiring to conclude a Protocol to amend the
Convention Between the United States of America and the
Federal Republic of Germany For the Avoidance of Double
Taxation with Respect to Taxes on Estates, Inheritances, and
Gifts, signed at Bonn on December 3, 1980 (hereinafter
referred to as "the Convention"), have agreed as follows:
ARTICLE 1
Subparagraph c) of paragraph 3 of Article 4 (Fiscal
Domicile) of the Convention shall be replaced by the
following:
"c) by reason of the provisions of paragraph 1
domiciled in the other Contracting State for not more
than ten years,".
ARTICLE 2
The following sentence shall be added to the end of
paragraph 4 of Article 10 (Deductions and Exemptions) of the
Convention:
"The provisions of this paragraph shall not apply
to a citizen of the United States of America domiciled
in the Federal Republic of Germany or a former citizen
or long-term resident of the United States of America
referred to in subparagraph a) of paragraph 1 of
Article 11."
-3-
ARTICLE 3
New paragraphs 5 and 6 shall be added to Article 10
(Deductions and Exemptions) of the Convention as follows:
"5. In determining the estate tax imposed by the
United States of America, the estate of a decedent
(other than a citizen of the United States of America)
who was domiciled in the Federal Republic of Germany at
the time of the decedent's death shall be allowed a
unified credit equal to the greater of:
a) The amount that bears the same ratio to
the credit allowed to the estate of a citizen of
the United States of America under the law of the
United States of America as the value of the part
of the decedent's gross estate that at the time of
the decedent's death is situated in the United
States of America bears to the value of the
decedent's entire gross estate wherever situated;
or
b) The unified credit allowed to the estate
of a nonresident not a citizen of the United
States of America under the law of the United
States of America.
The amount of any unified credit otherwise allowable
under this paragraph shall be reduced by the amount of
any credit previously allowed with respect to any gift
made by the decedent. For purposes of subparagraph a),
-4-
the part of the decedent's gross estate that is
situated in the United States of America shall not
exceed the part of the decedent's gross estate that may
be taxed by the United States of America in accordance
with this Convention. A credit otherwise allowable
under subparagraph a) shall be allowed only if all
information necessary for the verification and
computation of the credit is provided.
6. In determining the estate tax imposed by the
United States of America, the value of the decedent's
taxable estate shall be determined by deducting from
the value of the gross estate an amount equal to the
value of any interest in property that passes to the
decedent's surviving spouse (within the meaning of the
law of the United States of America) and that would
qualify for the estate tax marital deduction under the
law of the United States of America if the surviving
spouse were a citizen of the United States of America
and all applicable elections were properly made
(hereinafter referred to as "qualifying property"). The
decedent's estate shall be entitled to such marital
deduction provided that:
a) At the time of the decedent's death, the
decedent was domiciled in either the Federal
Republic of Germany or the United States of
America;
-5-
b) The decedent's surviving spouse was at the
time of the decedent's death domiciled in either
the Federal Republic of Germany or the United
States of America;
c) If both the decedent and the decedent's
surviving spouse were domiciled in the United
States of America at the time of the decedent's
death, one or both was a citizen of the Federal
Republic of Germany; and
d) The executor of the decedent's estate
elects the benefits of this paragraph and
irrevocably waives the benefits of any other
estate tax marital deduction that would be allowed
under the law of the United States of America on a
United States estate tax return filed for the
decedent's estate by the date on which a qualified
domestic trust election could be made under the
law of the United States of America.
The marital deduction allowed under this paragraph
shall be equal to the lesser of the value of the
qualifying property or the applicable exclusion amount
(within the meaning of the law of the United States of
America, determined without regard to any gift
previously made by the decedent)."
-6-
ARTICLE 4
Paragraph 1 of Article 11 (Credits) of the Convention shall
be replaced by the following:
"1. The provisions of this Convention shall not
preclude
a) the United States of America from taxing
in accordance with its law the estate of a
decedent or the gift of a donor who, at his death
or at the making of the gift, was:
i) a citizen of the United States of
America,
ii) domiciled (within the meaning of
Article 4) in the United States of America,
or
iii) a former citizen or long-term
resident whose loss of such status had as one
of its principal purposes the avoidance of
tax (as defined under the laws of the United
States of America), but only for a period of
ten years following such loss;
b) the Federal Republic of Germany from
taxing in accordance with its law an heir, a
donee, or another beneficiary who was domiciled
(within the meaning of Article 4) in the Federal
Republic of Germany at the time of the death of
the decedent or the making of the gift.
-7-
The preceding sentence shall not, however, apply to
paragraphs 2, 3, and 4 of Article 10, paragraphs 2, 3,
4 and 5 of this Article, and Article 13; or paragraphs
5 or 6 of Article 10 as applied to the estates of
persons other than former citizens and long-term
residents referred to in the preceding sentence."
ARTICLE 5
1. This Protocol shall be subject to ratification in
accordance with the applicable procedures in the United
States of America and the Federal Republic of Germany and.
instruments of ratification shall be exchanged as soon as
possible.
2. This Protocol shall enter into force upon the exchange
of-instruments of ratification and shall have effect with
respect to deaths occurring and gifts made after that date.
3. Notwithstanding the foregoing provisions of paragraph 2
of this Article, Articles 3 and 4 of this Protocol shall,
notwithstanding any limitation imposed under the law of a
Contracting State on the assessment, reassessment or refund
with respect to a person's or estate's return, have effect
with respect to deaths occurring and gifts made after
November 10, 1988, provided that any return or claim for
refund asserting the benefits of this Protocol shall be
filed within one year of the date on which this Protocol
-8-
enters into force or within the otherwise applicable period
for filing such claims under domestic law.
IN WITNESS WHEREOF, the undersigned, being duly
authorized thereto, have signed this Protocol.
DONE at Washington, in duplicate, this 14th day of
December, 1998, in the English and German languages,
both texts being equally authentic.
FOR THE UNITED STATES
OF AMERICA:
FOR THE FEDERAL REPUBLIC
OF GERMANY:



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