Loi du 14 août 2020 portant approbation de l’« Agreement between the Government of the Grand Duchy of Luxembourg and the Government of the Republic of Botswana for the elimination of double taxation with respect to taxes on income and on capital and the prevention of tax evasion and avoidance », et le Protocole y relatif, faits à Luxembourg, le 19 septembre 2018.

N° 709 du 25 août 2020

Loi du 14 août 2020 portant approbation de l’« Agreement between the Government of the Grand

Duchy of Luxembourg and the Government of the Republic of Botswana for the elimination of double

taxation with respect to taxes on income and on capital and the prevention of tax evasion and

avoidance », et le Protocole y relatif, faits à Luxembourg, le 19 septembre 2018.

Nous Henri, Grand-Duc de Luxembourg, Duc de Nassau,

Notre Conseil d’État entendu ;

De l’assentiment de la Chambre des députés ;

Vu la décision de la Chambre des députés du 22 juillet 2020 et celle du Conseil d’État du 24 juillet 2020

portant qu’il n’y a pas lieu à second vote ;

Avons ordonné et ordonnons

Sont approuvés l’« Agreement between the Government of the Grand Duchy of Luxembourg and the

Government of the Republic of Botswana for the elimination of double taxation with respect to taxes on

income and on capital and the prevention of tax evasion and avoidance », et le Protocole y relatif, faits à

Luxembourg, le 19 septembre 2018.

Mandons et ordonnons que la présente loi soit insérée au Journal officiel du Grand-Duché de Luxembourg

pour être exécutée et observée par tous ceux que la chose concerne.

Le Ministre des Affaires étrangères

et européennes,

Jean Asselborn

Le Ministre des Finances,

Pierre Gramegna

Cabasson, le 14 août 2020.

Henri

Doc. parl. 7615 ; sess. ord. 2019-2020.

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AGREEMENT

between the Government of the Grand Duchy of Luxembourg

and the Government of the Republic of Botswana

for the elimination of double taxation with respect to taxes on

income

and on capital and the prevention of tax evasion and avoidance

The Government of the Grand Duchy of Luxembourg and the Government of the Republic of Botswana

Desiring to further develop their economic relationship and to enhance their cooperation in tax matters,

Intending to conclude an Agreement for the elimination of double taxation with respect to taxes on income and

on capital without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance

(including through treaty-shopping arrangements aimed at obtaining reliefs provided in this Agreement for

the indirect benefit of residents of third States)

Have agreed as follows

Article 1

PERSONS COVERED

This Agreement shall apply to persons who are residents of one or both of the Contracting States.

Article 2

TAXES COVERED

(1) This Agreement shall apply to taxes on income and on capital imposed on behalf of a Contracting State

or of its local authorities, irrespective of the manner in which they are levied.

(2) There shall be regarded as taxes on income and on capital all taxes imposed on total income, on total

capital, or on elements of income or of capital, including taxes on gains from the alienation of movable or

immovable property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes

on capital appreciation.

(3) The existing taxes to which the Agreement shall apply are in particular

(a) in Botswana

(i)

the income tax including any withholding tax, prepayment or advance tax payment with respect to

aforesaid tax; and

(ii)

the capital gains tax;

(hereinafter referred to as “Botswana tax”);

(b) in Luxembourg

(i)

the income tax on individuals (l'impôt sur le revenu des personnes physiques);

(ii)

the corporation tax (l'impôt sur le revenu des collectivités);

(iii)

the capital tax (l'impôt sur la fortune); and

(iv)

the communal trade tax (l'impôt commercial communal);

(hereinafter referred to as “Luxembourg tax”).

(4) Nothing in this Agreement shall limit the right of either Contracting State to charge tax on the profits of a

mineral enterprise at an effective rate different from that charged on the profits of any other enterprise. The

term “a mineral enterprise” means an enterprise carrying on the business of mining.

(5) The Agreement shall apply also to any identical or substantially similar taxes that are imposed by either

ContractingState after the date of signature of the Agreement in addition to, or in place of, the existing taxes.

The competent authorities of the Contracting States shall notify each other of any significant changes that

have been made in their taxation laws.

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Article 3

GENERAL DEFINITIONS

(1) For the purposes of this Agreement, unless the context otherwise requires

(a) the term “Botswana” means the Republic of Botswana;

(b) the term “Luxembourg” means the Grand Duchy of Luxembourg and, when used in a geographical sense,

means the territory of the Grand Duchy of Luxembourg;

(c) the terms “Contracting State” and “the other Contracting State” mean Botswana or Luxembourg as the

context requires;

(d) the term “person” includes an individual, a company, a trust, an estate, a collective investment vehicle

or undertaking and any other body of persons;

(e) the term “company” means any body corporate or any entity that is treated as a body corporate for tax

purposes;

(f) the term “enterprise” applies to the carrying on of any business;

(g) the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean

respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on

by a resident of the other Contracting State;

(h) the term “international traffic” means any transport by a ship, aircraft, rail or road vehicle operated by

an enterprise that has its place of effective management in a Contracting State, except when the ship,

aircraft, rail or road vehicle is operated solely between places in the other Contracting State;

(i) the term “competent authority” means

(i)

in Botswana, the Minister responsible for finance, represented by the Commissioner General of the

Botswana Unified Revenue Service or a representative of the Commissioner General;

(ii)

in Luxembourg, the Minister of Finance or his authorised representative;

(j) the term “national” means

(i)

any individual possessing the nationality of a ContractingState;

(ii)

any legal person, partnership or association deriving its status as such from the laws in force in a

Contracting State;

(k) the term “business” includes the performance of professional services and of other activities of an

independent character.

(2) As regards the application of the Agreement at any time by a Contracting State, any term not defined

therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law

of that State for the purposes of the taxes to which the Agreement applies, any meaning under the applicable

tax laws of that State prevailing over a meaning given to the term under other laws of that State.

Article 4

RESIDENT

(1) For the purposes of this Agreement, the term “resident of a Contracting State” means any person who,

under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management

or any other criterion of a similar nature, and also includes that State and any local authority thereof. This

term, however, does not include any person who is liable to tax in that State in respect only of income from

sources in that State or capital situated therein.

(2) Where by reason of the provisions of paragraph (1) an individual is a resident of both Contracting States,

then his status shall be determined as follows

(a) he shall be deemed to be a resident only of the State in which he has a permanent home available to

him; if he has a permanent home available to him in both States, he shall be deemed to be a resident

only of the State with which his personal and economic relations are closer (centre of vital interests);

(b) if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent

home available to him in either State, he shall be deemed to be a resident only of the State in which he

has an habitual abode;

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(c) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident only

of the State of which he is a national;

(d) if he is a national of both States or of neither of them, the competent authorities of the Contracting States

shall settle the question by mutual agreement.

(3) Where by reason of the provisions of paragraph (1) a person other than an individual is a resident of both

Contracting States, then it shall be deemed to be a resident only of the State in which its place of effective

management is situated.

Article 5

PERMANENT ESTABLISHMENT

(1) For the purposes of this Agreement, the term “permanent establishment” means a fixed place of business

through which the business of an enterprise is wholly or partly carried on.

(2) The term “permanent establishment” includes especially

(a) a place of management;

(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;

(f) a mine, an oil or gas well, a quarry or any other place of extraction or exploitation of natural resources; and

(g) an installation or structure used for the exploration of natural resources, provided that the installation or

structure continues for a period or periods aggregating more than 183 days in any twelve-month period

commencing or ending in the fiscal year concerned.

(3) The term “permanent establishment” likewise encompasses

(a) a building site, a construction, assembly or installation project or supervisory activities in connection with

such site or activities, but only where such site, project or activities continue for a period of more than

six months;

(b) the furnishing of services, including consultancy services, by an enterprise through employees or other

personnel engaged by the enterprise for such purpose, but only where activities of that nature continue

(for the same or connected project) within a Contracting State for a period or periods aggregating more

than 183 days in any twelve-month period commencing or ending in the fiscal year concerned.

(4) Notwithstanding the preceding provisions of this Article, the term “permanent establishment” shall be

deemed not to include

(a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging

to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose

of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose

of processing by another enterprise;

(d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise

or of collecting information for the enterprise;

(e) the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any

other activity of a preparatory or auxiliary character;

(f) the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-

paragraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from this

combination is of a preparatory or auxiliary character.

(5) Notwithstanding the provisions of paragraphs (1) and (2), where a person – other than an agent of an

independent status to whom paragraph (6) applies – is acting on behalf of an enterprise and has, and

habitually exercises, in a Contracting State an authority to conclude contracts in the name of the enterprise,

that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities

which that person undertakes for the enterprise, unless the activities of such person are limited to those

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mentioned in paragraph (4) which, if exercised through a fixed place of business, would not make this fixed

place of business a permanent establishment under the provisions of that paragraph.

(6) An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely

because it carries on business in that State through a broker, general commission agent or any other agent

of an independent status, provided that such persons are acting in the ordinary course of their business.

(7) Notwithstanding the preceding provisions of this Article, an insurance enterprise of a Contracting State

shall, except in regard to reinsurance, be deemed to have a permanent establishment in the other Contracting

State if it collects premiums in the territory of that other State or insures risks situated therein through a person

other than an agent of an independent status to who paragraph (6) applies.

(8) The fact that a company which is a resident of a Contracting State controls or is controlled by a company

which is a resident of the other Contracting State, or which carries on business in that other State (whether

through a permanent establishment or otherwise), shall not of itself constitute either company a permanent

establishment of the other.

Article 6

INCOME FROM IMMOVABLE PROPERTY

(1) Income derived by a resident of a Contracting State from immovable property (including income from

agriculture or forestry) situated in the other Contracting State may be taxed in that other State.

(2) The term “immovable property” shall have the meaning which it has under the law of the Contracting State

in which the property in question is situated. The term shall in any case include property accessory to

immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions

of general law respecting landed property apply, usufruct of immovable property and rights to variable or

fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other

natural resources; ships, boats and aircraft shall not be regarded as immovable property.

(3) The provisions of paragraph (1) shall apply to income derived from the direct use, letting, or use in any

other form of immovable property.

(4) The provisions of paragraphs (1) and (3) shall also apply to the income from immovable property of an

enterprise.

Article 7

BUSINESS PROFITS

(1) The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise

carries on business in the other Contracting State through a permanent establishment situated therein. If the

enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but

only so much of them as is attributable to that permanent establishment.

(2) Subject to the provisions of paragraph (3), where an enterprise of a Contracting State carries on business

in the other Contracting State through a permanent establishment situated therein, there shall in each

Contracting State be attributed to that permanent establishment the profits which it might be expected to make

if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar

conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.

(3) In determining the profits of a permanent establishment, there shall be allowed as deductions expenses

which are incurred for the purposes of the permanent establishment, including executive and general

administrative expenses so incurred, whether in the State in which the permanent establishment is situated

or elsewhere. However, no such deduction shall be allowed in respect of amounts, if any, paid (otherwise

than towards reimbursement of actual expenses) by the permanent establishment to the head office of

the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return

for the use of patents or other rights, or by way of commission, for specific services performed or for

management, or, except in the case of a banking enterprise by way of interest on moneys lent to the

permanent establishment. Likewise, no account shall be taken, in the determination of the profits of a

permanent establishment, for amounts charged (otherwise than towards reimbursement of actual expenses),

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by the permanent establishment to the head office of the enterprise or any of its other offices, by way

of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of

commission for specific services performed or for management, or, except in the case of a banking enterprise

by way of interest on moneys lent to the head office of the enterprise or any of its other offices.

(4) No profits shall be attributed to a permanent establishment by reason of the mere purchase by that

permanent establishment of goods or merchandise for the enterprise.

(5) For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment

shall be determined by the same method year by year unless there is good and sufficient reason to the

contrary.

(6) Where profits include items of income which are dealt with separately in other Articles of this Agreement,

then the provisions of those Articles shall not be affected by the provisions of this Article.

Article 8

INTERNATIONAL TRANSPORT

(1) Profits from the operation of ships, aircraft, rail or road vehicle in international traffic shall be taxable only

in the Contracting State in which the place of effective management of the enterprise is situated.

(2) Profits from the operation of boats engaged in inland waterways transport shall be taxable only in the

Contracting State in which the place of effective management of the enterprise is situated.

(3) If the place of effective management of a shipping enterprise or of an inland waterways transport enterprise

is aboard a ship or boat, then it shall be deemed to be situated in the Contracting State in which the home

harbour of the ship or boat is situated, or, if there is no such home harbour, in the Contracting State of which

the operator of the ship or boat is a resident.

(4) The provisions of paragraph (1) shall also apply to profits from the participation in a pool, a joint business

or an international operating agency.

Article 9

ASSOCIATED ENTERPRISES

(1) Where

(a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital

of an enterprise of the other Contracting State, or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise

of a Contracting State and an enterprise of the other Contracting State,

and in either case conditions are made or imposed between the two enterprises in their commercial or

financial relations which differ from those which would be made between independent enterprises, then any

profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those

conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

(2) Where a Contracting State includes in the profits of an enterprise of that State - and taxes accordingly

- profits on which an enterprise of the other Contracting State has been charged to tax in that other State

and the profits so included are profits which would have accrued to the enterprise of the first-mentioned

State if the conditions made between the two enterprises had been those which would have been made

between independent enterprises, then that other State shall make an appropriate adjustment to the amount

of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the

other provisions of this Agreement and the competent authorities of the Contracting States shall if necessary

consult each other.

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Article 10

DIVIDENDS

(1) Dividends paid by a company which is a resident of a Contracting State to a resident of the other

Contracting State may be taxed in that other State.

(2) However, such dividends may also be taxed in the Contracting State of which the company paying the

dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is

a resident of the other Contracting State, the tax so charged shall not exceed

(a) 5 per cent of the gross amount of the dividends if the beneficial owner is a company (other than a

partnership) which holds directly at least 25 per cent of the capital of the company paying the dividends;

(b) 10 per cent of the gross amount of the dividends in all other cases.

This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends

are paid.

(3) The term “dividends” as used in this Article means income from shares, “jouissance” shares or

“jouissance” rights, mining shares, founders’ shares or other rights, not being debt-claims, participating in

profits, as well as income from other corporate rights which is subjected to the same taxation treatment as

income from shares by the laws of the State of which the company making the distribution is a resident.

(4) The provisions of paragraphs (1) and (2) shall not apply if the beneficial owner of the dividends, being

a resident of a Contracting State, carries on business in the other Contracting State of which the company

paying the dividends is a resident, through a permanent establishment situated therein, and the holding in

respect of which the dividends are paid is effectively connected with such permanent establishment. In such

case the provisions of Article 7 shall apply.

(5) Where a company which is a resident of a Contracting State derives profits or income from the other

Contracting State, that other State may not impose any tax on the dividends paid by the company, except

insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of

which the dividends are paid is effectively connected with a permanent establishment situated in that other

State, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even

if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such

other State.

Article 11

INTEREST

(1) Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed

in that other State.

(2) However, such interest may also be taxed in the Contracting State in which it arises and according to the

laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the

tax so charged shall not exceed 7.5 per cent of the gross amount of the interest.

(3) Notwithstanding the provisions of paragraph (2), interest referred to in paragraph (1) shall be taxable only

in the Contracting State of which the recipient is a resident if the beneficial owner of the interest is a resident

of that State, and

(a) is that State or the Central Bank or a local authority thereof;

(b) if the interest is paid by the State in which the interest arises or by a local authority or statutory body

thereof;

(c) if the interest is paid in respect of a loan, debt-claim or credit that is owed to, or made, provided,

guaranteed or insured by, that State or a local authority or export financing agency thereof.

(4) The term “interest” as used in this Article means income from debt-claims of every kind, whether or not

secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular,

income from government securities and income from bonds or debentures, including premiums and prizes

attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded

as interest for the purpose of this Article.

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(5) The provisions of paragraph (1), (2) and (3) shall not apply if the beneficial owner of the interest, being a

resident of a Contracting State, carries on business in the other Contracting State in which the interest arises,

through a permanent establishment situated therein, and the debt-claim in respect of which the interest is

paid is effectively connected with such permanent establishment. In such case the provisions of Article 7

shall apply.

(6) Interest shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where,

however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a

Contracting State a permanent establishment in connection with which the indebtedness on which the interest

is paid was incurred, and such interest is borne by such permanent establishment, then such interest shall

be deemed to arise in the State in which the permanent establishment is situated.

(7) Where, by reason of a special relationship between the payer and the beneficial owner or between both

of them and some other person, the amount of the interest, having regard to the debt-claim for which it

is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner

in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned

amount. In such case, the excess part of the payments shall remain taxable according to the laws of each

Contracting State, due regard being had to the other provisions of this Agreement.

Article 12

ROYALTIES

(1) Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed

in that other State.

(2) However, such royalties may also be taxed in the Contracting State in which they arise and according to

the laws of that State, but if the beneficial owner of the royalties is a resident of the other ContractingState,

the tax so charged shall not exceed 7.5 per cent of the gross amount of the royalties.

(3) The term “royalties” as used in this Article means payments of any kind received as a consideration for

the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films

and films, tapes or discs for radio or television broadcasting, any patent, trade mark, design or model, plan,

secret formula or process, or for the use of or the right to use industrial, commercial or scientific equipment

or for information concerning industrial, commercial or scientific experience.

(4) The provisions of paragraphs (1) and (2) shall not apply if the beneficial owner of the royalties, being

a resident of a Contracting State, carries on business in the other Contracting State in which the royalties

arise, through a permanent establishment situated therein, and the right or property in respect of which the

royalties are paid is effectively connected with such permanent establishment. In such case the provisions

of Article 7 shall apply.

(5) Royalties shall be deemed to arise in a Contracting State when the payer is a resident of that State.

Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has

in a Contracting State a permanent establishment in connection with which the liability to pay the royalties

was incurred, and such royalties are borne by such permanent establishment, then such royalties shall be

deemed to arise in the Contracting State in which the permanent establishment is situated.

(6) Where, by reason of a special relationship between the payer and the beneficial owner or between both

of them and some other person, the amount of the royalties, having regard to the use, right or information

for which they are paid, exceeds the amount which would have been agreed upon by the payer and the

beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-

mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws

of each Contracting State, due regard being had to the other provisions of this Agreement.

Article 13

FEES FOR TECHNICAL SERVICES

(1) Fees for technical services arising in a Contracting State and paid to a resident of the other

Contracting State may be taxed in that other State.

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(2) However, such fees for technical services may also be taxed in the Contracting State in which they arise

and according to the laws of that State, but where the beneficial owner of the fees for technical services is a

resident of the other Contracting State, the tax so charged shall not exceed 7.5 per cent of the gross amount

of the fees for technical services.

(3) The term “fees for technical services” as used in this Article means payments of any kind to any person,

other than to an employee of the person making the payments, in consideration for any services of a technical,

managerial or consultancy nature.

(4) The provisions of paragraphs (1) and (2) shall not apply if the beneficial owner of the fees for technical

services, being a resident of a Contracting State, carries on business in the other Contracting State in which

the fees for technical services arise through a permanent establishment situated therein, and the fees for

technical services are effectively connected with such permanent establishment. In such case, the provisions

of Article 7 shall apply.

(5) Fees for technical services shall be deemed to arise in a Contracting State when the payer is a resident

of that State. Where, however, the person paying the fees for technical services, whether he is a resident of

a Contracting State or not, has in a Contracting State a permanent establishment in connection with which

the obligation to pay the fees for technical services was incurred, and such fees for technical services are

borne by such permanent establishment, then such fees for technical services shall be deemed to arise in

the Contracting State in which the permanent establishment is situated.

(6) Where by reason of a special relationship between the payer and the beneficial owner or between both of

them and some other person, the amount of the fees for technical services paid exceeds, for whatever reason,

the amount which would have been agreed upon by the payer and the beneficial owner in the absence of

such a relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case,

the excess part of the payments shall remain taxable according to the laws of each Contracting State, due

regard being had to the other provisions of this Agreement.

Article 14

CAPITAL GAINS

(1) Gains derived by a resident of a Contracting State from the alienation of immovable property referred to

in Article 6 and situated in the other Contracting State may be taxed in that other State.

(2) Gains from the alienation of movable property forming part of the business property of a permanent

establishment which an enterprise of a Contracting State has in the other Contracting State, including such

gains from the alienation of such a permanent establishment (alone or with the whole enterprise), may be

taxed in that other State.

(3) Gains from the alienation of ships, aircraft, rail or road vehicles operated in international traffic, boats

engaged in inland waterways transport or movable property pertaining to the operation of such ships,

aircraft, rail or road vehicles, or boats, shall be taxable only in the Contracting State in which the place of

effective management of the enterprise is situated.

(4) Gains from the alienation of any property other than that referred to in paragraphs (1), (2) and (3), shall

be taxable only in the Contracting State of which the alienator is a resident.

Article 15

INCOME FROM EMPLOYMENT

(1) Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration

derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State

unless the employment is exercised in the other Contracting State. If the employment is so exercised, such

remuneration as is derived therefrom may be taxed in that other State.

(2) Notwithstanding the provisions of paragraph (1), remuneration derived by a resident of a Contracting State

in respect of an employment exercised in the other Contracting State shall be taxable only in the first-

mentioned State if

(a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days

in any twelve month period commencing or ending in the fiscal year concerned; and

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(b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and

(c) the remuneration is not borne by a permanent establishment which the employer has in the other State.

(3) Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an

employment exercised aboard a ship, aircraft, rail or road vehicles operated in international traffic, or aboard

a boat engaged in inland waterways transport, may be taxed in the Contracting State in which the place of

effective management of the enterprise is situated.

Article 16

DIRECTORS' FEES

Directors' fees and other similar payments derived by a resident of a Contracting State in his capacity as a

member of the board of directors of a company which is a resident of the other Contracting State may be

taxed in that other State.

Article 17

ARTISTES AND SPORTSPERSONS

(1) Notwithstanding the provisions of Articles 7 and 15, income derived by a resident of a Contracting State as

an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsperson,

from his personal activities as such exercised in the other Contracting State, may be taxed in that other State.

(2) Where income in respect of personal activities exercised by an entertainer or a sportsperson in his

capacity as such accrues not to the entertainer or sportsperson himself but to another person, that income

may, notwithstanding the provisions of Articles 7 and 15, be taxed in the Contracting State in which the

activities of the entertainer or sportsperson are exercised.

(3) The provisions of paragraphs (1) and (2) of this Article shall not apply to income derived from activities

performed in a Contracting State by entertainers or sportspersons if the visit to that State is wholly or

substantially supported by public funds. In such case, the income shall be taxable only in the Contracting

State of which the entertainer or sportsperson is a resident.

Article 18

PENSIONS

(1) Subject to the provisions of paragraph (2) of Article 19, pensions and other similar remuneration and

annuities arising in a Contracting State and paid to a resident of the other Contracting State may be taxed

in the first-mentioned Contracting State.

(2) Notwithstanding the provisions of paragraph (1), pensions and other payments made under the social

security legislation of a Contracting State shall be taxable only in that State.

(3) Notwithstanding the provisions of paragraph (1), pensions and other similar remuneration (including lump-

sum payments) arising in a Contracting State and paid to a resident of the other Contracting State shall be

taxable only in the first-mentioned State, provided that such payments derive from contributions paid to or

from provisions made under a pension scheme by the recipient or on his behalf and that these contributions,

provisions or the pensions or other similar remuneration have been subjected to tax in the first-mentioned

State under the ordinary rules of its tax laws.

(4) The term “annuity” means a stated sum payable periodically at stated times during life or during a specified

or ascertainable period of time under an obligation to make the payments in return for adequate and full

consideration in money or money’s worth.

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Article 19

GOVERNMENT SERVICE

(1) (a) Salaries, wages and other similar remuneration paid by a Contracting State or a local authority thereof

to an individual in respect of services rendered to that State or authority shall be taxable only in that

State.

(b) However, such salaries, wages and other similar remuneration shall be taxable only in the other

Contracting State if the services are rendered in that State and the individual is a resident of that

State who

(i)

is a national of that State; or

(ii)

did not become a resident of that State solely for the purpose of rendering the services.

(2) (a) Notwithstanding the provisions of paragraph (1), pensions and other similar remuneration paid by, or

out of funds created by, a Contracting State or a local authority thereof to an individual in respect of

services rendered to that State or authority shall be taxable only in that State.

(b) However, such pensions and other similar remuneration shall be taxable only in the other

Contracting State if the individual is a resident of, and a national of, that State.

(3) The provisions of Articles 15, 16, 17 and 18 shall apply to salaries, wages, pensions, and other similar

remuneration in respect of services rendered in connection with a business carried on by a Contracting State

or a local authority thereof.

Article 20

PROFESSORS, TEACHERS AND RESEARCHERS

(1) A professor, teacher or researcher who is or was a resident of one of the Contracting States immediately

before visiting the other Contracting State for the purpose of teaching or engaging in research, or both, at a

university, college or other similar institution in that other Contracting State, shall be exempt from tax in that

other State on any remuneration for such teaching or research for a period not exceeding two years from

the date of his first arrival in that other State.

(2) This Article shall apply to income from research only if such research is undertaken in the public interest

and not primarily for the benefit of some private person or persons.

Article 21

STUDENTS

Payments which a student, apprentice or business trainee who is or was immediately before visiting a

Contracting State a resident of the other Contracting State and who is present in the first-mentioned State

solely for the purpose of his education or training receives for the purpose of his maintenance, education or

training shall not be taxed in that State, provided that such payments arise from sources outside that State.

Article 22

OTHER INCOME

(1) Items of income of a resident of a ContractingState, wherever arising, not dealt with in the foregoing

Articles of this Agreement shall be taxable only in that State.

(2) The provisions 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 permanent establishment situated therein,

and the right or property in respect of which the income is paid is effectively connected with such permanent

establishment. In such case the provisions of Article 7 shall apply.

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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 part of the business property of a permanent

establishment which an enterprise of a Contracting State has in the other Contracting State may be taxed

in that other State.

(3) Capital represented by ships, aircraft, rail or road vehicles operated in international traffic and by boats

engaged in inland waterways transport, and by movable property pertaining to the operation of such ships,

aircraft, rail or road vehicles and boats, 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 ContractingState shall be taxable only in that State.

Article 24

ELIMINATION OF DOUBLE TAXATION

Double taxation shall be eliminated as follows

(1) Subject to the provisions of the law of Botswana regarding the allowance of a credit against Botswana

tax of tax payable under the laws of a country outside Botswana, Luxembourg tax payable under the laws of

Luxembourg and in accordance with this Agreement, whether directly or by deduction, on profits or income

liable to tax in Luxembourg shall be allowed as a credit against any Botswana tax payable in respect of the

same profits or income by reference to which the Luxembourg tax is computed. However, the amount of

such credit shall not exceed the amount of the Botswana tax payable on that income in accordance with

the laws of Botswana.

(2) Subject to the provisions of the law of Luxembourg regarding the elimination of double taxation which

shall not affect the general principle hereof, double taxation shall be eliminated as follows

(a) Where a resident of Luxembourg derives income or owns capital which, in accordance with the provisions

of this Agreement, may be taxed in Botswana, Luxembourg shall, subject to the provisions of sub-

paragraphs (b) and (c), exempt such income or capital from tax, but may, in order to calculate the amount

of tax on the remaining income or capital of the resident, apply the same rates of tax as if the income

or capital had not been exempted.

(b) Where a resident of Luxembourg derives income which, in accordance with the provisions of Articles 10,

11, 12, 13 and 17 may be taxed in Botswana, Luxembourg shall allow as a deduction from the income tax

on individuals or from the corporation tax of that resident an amount equal to the tax paid in Botswana.

Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given,

which is attributable to such items of income derived from Botswana.

(c) The provisions of sub-paragraph (a) shall not apply to income derived or capital owned by a resident of

Luxembourg where Botswana applies the provisions of this Agreement to exempt such income or capital

from tax or applies the provisions of paragraph (2) of Articles 10, 11, 12 or 13 to such income.

(d) Where by reason of the relief given under the provisions of Botswana laws for the purpose of encouraging

investment in Botswana, the Botswana tax actually levied on dividends, interest, royalties or fees for

technical services arising in Botswana is lower than the respective rate referred to in Articles 10, 11, 12

and 13, then the amount of the tax paid in Botswana on such dividends, interest, royalties and fees for

technical services shall be deemed to have been paid at the respective rates referred to in Articles 10,

11, 12 and 13.

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Article 25

NON-DISCRIMINATION

(1) Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or

any requirement connected therewith, which is other or more burdensome than the taxation and connected

requirements to which nationals of that other State in the same circumstances, in particular with respect to

residence, are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also

apply to persons who are not residents of one or both of the Contracting States.

(2) The taxation on a permanent establishment which an enterprise of a Contracting State has in the other

Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises

of that other State carrying on the same activities.

(3) Except where the provisions of paragraph (1) of Article 9, paragraph (7) of Article 11, paragraph (6)

of Article 12, or paragraph (6) of Article 13, apply, interest, royalties, fees for technical services and other

disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall,

for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions

as if they had been paid to a resident of the first-mentioned State. Similarly, any debts of an enterprise of

a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the

taxable capital of such enterprise, be deductible under the same conditions as if they had been contracted

to a resident of the first-mentioned State.

(4) Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or

indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned

State to any taxation or any requirement connected therewith which is other or more burdensome than the

taxation and connected requirements to which other similar enterprises of the first-mentioned State are or

may be subjected.

(5) The provisions of this Article shall not be construed as obliging a Contracting State to grant to residents of

the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account

of civil status or family responsibilities which it grants to its own residents.

(6) The provisions of this Article shall apply to taxes covered by this Agreement.

Article 26

MUTUAL AGREEMENT PROCEDURE

(1) Where a person considers that the actions of one or both of the Contracting States result or will result for

him in taxation not in accordance with the provisions of this Agreement, he may, irrespective of the remedies

provided by the domestic law of those States, present his case to the competent authority of either Contracting

State. The case must be presented within three years from the first notification of the action resulting in

taxation not in accordance with the provisions of the Agreement.

(2) The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself

able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority

of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the

Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the domestic

law of the Contracting States.

(3) The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any

difficulties or doubts arising as to the interpretation or application of the Agreement. They may also consult

together for the elimination of double taxation in cases not provided for in the Agreement.

(4) The competent authorities of the Contracting States may communicate with each other directly, including

through a joint commission consisting of themselves or their representatives, for the purpose of reaching an

agreement in the sense of the preceding paragraphs.

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Article 27

EXCHANGE OF INFORMATION

(1) The competent authorities of the Contracting States shall exchange such information as is foreseeably

relevant for carrying out the provisions of this Agreement or to the administration or enforcement of the

domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States,

or local authorities, insofar as the taxation thereunder is not contrary to the Agreement. The exchange of

information is not restricted by Articles 1 and 2.

(2) Any information received under paragraph (1) by a Contracting State shall be treated as secret in the same

manner as information obtained under the domestic laws of that State and shall be disclosed only to persons

or authorities (including courts and administrative bodies) concerned with the assessment or collection of,

the enforcement or prosecution in respect of, or the determination of appeals in relation to the taxes referred

to in paragraph (1), or the oversight of the above. Such persons or authorities shall use the information only

for such purposes. They may disclose the information in public court proceedings or in judicial decisions.

(3) In no case shall the provisions of paragraphs (1) and (2) be construed so as to impose on a

Contracting State the obligation

(a) to carry out administrative measures at variance with the laws and administrative practice of that or of

the other Contracting State;

(b) to supply information which is not obtainable under the laws or in the normal course of the administration

of that or of the other Contracting State;

(c) to supply information which would disclose any trade, business, industrial, commercial, or professional

secret or trade process, or information the disclosure of which would be contrary to public policy (ordre

public).

(4) If information is requested by a Contracting State in accordance with this Article, the other

Contracting State shall use its information gathering measures to obtain the requested information, even

though that other State may not need such information for its own tax purposes. The obligation contained

in the preceding sentence is subject to the limitations of paragraph (3) but in no case shall such limitations

be construed to permit a ContractingState to decline to supply information solely because it has no domestic

interest in such information.

(5) In no case shall the provisions of paragraph (3) be construed to permit a Contracting State to decline to

supply information upon request solely because the information is held by a bank, other financial institution,

nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests

in a person.

Article 28

ASSISTANCE IN COLLECTION

(1) The Contracting States undertake to lend assistance and support to each other in the collection of the

taxes to which this Agreement relates, together with the interest, costs, and additions to the taxes and fines

not being of a penal character.

(2) Such application must be accompanied by such documents as are required by the laws of the State

making the application to establish that the taxes being collected are due.

(3) At the request of the competent authority of a Contracting State, the competent authority of the other

Contracting State will ensure, according to the provisions of laws and regulations applied to collection of the

above-mentioned taxes in the last State, collection of fiscal claims covered by the first paragraph, which are

recoverable in the first State. These claims shall not enjoy any privilege in the requested State and the latter

is not obliged to apply means of execution which are not authorised by the provisions of laws and regulations

of the requested State.

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(4) The provisions of paragraph (1) of Article 27, shall apply equally to all information brought, for the

application of the preceding paragraphs of the present Article, to the knowledge of the competent authority

of the requested State.

Article 29

MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

Nothing in this Agreement shall affect the fiscal privileges of members of diplomatic missions or consular

posts under the general rules of international law or under the provisions of special agreements.

Article 30

ENTITLEMENT TO BENEFITS

(1) Notwithstanding the other provisions of this Agreement, a benefit under this Agreement shall not be

granted in respect of an item of income or capital if it is reasonable to conclude, having regard to all relevant

facts and circumstances, that obtaining that benefit was one of the principal purposes of any arrangement or

transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit

in these circumstances would be in accordance with the object and purpose of the relevant provisions of

this Agreement.

(2) Where a benefit under this Agreement is denied to a person under paragraph 1, the competent authority

of the Contracting State that would otherwise have granted this benefit shall nevertheless treat that person

as being entitled to this benefit, or to different benefits with respect to a specific item of income or capital,

if such competent authority, upon request from that person and after consideration of the relevant facts and

circumstances, determines that such benefits would have been granted to that person in the absence of the

transaction or arrangement referred to in paragraph 1. The competent authority of the Contracting State to

which the request has been made will consult with the competent authority of the other State before rejecting

a request made under this paragraph by a resident of that other State.

Article 31

ENTRY INTO FORCE

(1) The Contracting States shall notify each other in writing, through diplomatic channels, that the procedures

required by its law for the entry into force of this Agreement have been satisfied. The Agreement shall enter

into force on the date of receipt of the last notification.

(2) The provisions of the Agreement shall have effect

(a) in Botswana;

(i)

with regard to taxes withheld at source, in respect of amounts paid or credited on or after the thirtieth

day following the date upon which the Agreement enters into force; and

(ii)

with regard to other taxes, in respect of tax years or years of assessment beginning on or after the

thirtieth day following the date upon which the Agreement enters into force;

(b) in Luxembourg

(i)

in respect of taxes withheld at source, to income derived on or after 1 January of the calendar year

next following the year in which the Agreement enters into force; and

(ii)

in respect of other taxes on income, and taxes on capital, to taxes chargeable for any taxable year

beginning on or after 1 January of the calendar year next following the year in which the Agreement

enters into force.

Article 32

TERMINATION

(1) This Agreement shall remain in force until terminated by a Contracting State. Either Contracting State

may terminate the Agreement, through diplomatic channels, by giving written notice of termination at least

six months before the end of any calendar year beginning after the expiration of a period of five years from

the date of its entry into force.

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(2) The Agreement shall cease to have effect

(a) in Botswana

(i)

with regard to taxes withheld at source, in respect of amounts paid or credited on or after the end

of the calendar year in which such notice is given; and

(ii)

with regard to other taxes, in respect of tax years or years of assessment beginning after the end

of the calendar year in which such notice is given;

(b) in Luxembourg

(i)

in respect of taxes withheld at source, to income derived on or after 1 January of the calendar year

next following the year in which the notice is given; and

(ii)

in respect of other taxes on income, and taxes on capital, to taxes chargeable for any taxable year

beginning on or after 1 January of the calendar year next following the year in which the notice is

given.

In witness whereof the undersigned, duly authorised thereto, have signed this Agreement.

Done in duplicate at Luxembourg, this 19

th day of September 2018, in the English language.

For the Government of the

Grand Duchy of Luxembourg

Pierre GRAMEGNA

Minister of Finance

For the Government of the

Republic of Botswana

Samuel O. OUTLULE

Ambassador of the Republic of Botswana

to the Grand Duchy of Luxembourg

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PROTOCOL

At the moment of the signing of the Agreement between the Government of the Grand Duchy of Luxembourg

and the Government of the Republic of Botswana for the elimination of double taxation with respect to taxes

on income and on capital and the prevention of tax evasion and avoidance, both sides have agreed upon the

following provisions, which shall form an integral part of the Agreement

I.

With reference to Article 4

A trust, an estate, a collective investment vehicle or undertaking which is established in a

Contracting State shall be considered as a resident of the Contracting State in which it is established

and as the beneficial owner of the income it receives.

II.

With reference to Article 24

The provisions of paragraph (2) (d) shall apply for a period of 10 years beginning on 1 January of the

calendar year next following the year in which the Agreement enters into force. This period may be

extended by mutual agreement between the competent authorities.

III.

With reference to Article 27

The competent authority of the requesting State shall provide the following information to the competent

authority of the requested State when making a request for information under the Agreement to

demonstrate the foreseeable relevance of the information to the request

(a) the identity of the person under examination or investigation;

(b) a statement of the information sought including its nature and the form in which the requesting State

wishes to receive the information from the requested State;

(c) the tax purpose for which the information is sought;

(d) grounds for believing that the information requested is held in the requested State or is in the

possession or control of a person within the jurisdiction of the requested State;

(e) to the extent known, the name and address of any person believed to be in possession of the

requested information;

(f) a statement that the requesting State has pursued all means available in its own territory to obtain

the information, except those that would give rise to disproportionate difficulties.

In witness whereof the undersigned, duly authorised thereto, have signed this Protocol.

Done in duplicate at Luxembourg, this 19

th day of September 2018, in the English language.

For the Government of the

Grand Duchy of Luxembourg

Pierre GRAMEGNA

Minister of Finance

For the Government of the

Republic of Botswana

Samuel O. OUTLULE

Ambassador of the Republic of Botswana

to the Grand Duchy of Luxembourg