Notes Exchanged at signing of Protocol Amending Convention… US and Denmark… Taxes on Income, May 5, 2006

EMBASSY OF THE

UNITED STATES OF AMERICA

Copenhagen, May 2,2006
1 [lave the honor to refer to the Protocol signed today between the Government
ui' the biiited States of America and the Government of the Kingdom of Denmark
i\nieiiding the Convention for the Avoidance of Double Taxation and the Prevention
of Fiscal Lvasion with Respect to Taxes on Income, and to confirm, on behalf of the
607eriinient of the United States of Anierica, the following understandings reached
bet\\ cell our two Governments
111 reference to clause a) (iv) of paragraph 3 of Article 10 (Dividends) of the
on\ cntloii, as amended by the Protocol, it is understood that the U.S.competent
cutlioi-itjgenerally will exercise its discretion to grant benefits under such paragraph
to :t csoiiipany that is a resident of Denmark if
I ) the company meets the requirements of paragraph 4 of Article 22
(iLiinitation of Benefits) regarding the active conduct of a trade or business in
11eninark;
2 I the company meets the base erosion test of clause f) (ii) of paragraph 2 of'
Article 22; ;md
3 i iiioie than 80 percent of the voting power and the value of the shares in the
company
is owned by one or more taxable nonstock corporations that meet the
requirements
of subparagraph h) of paragraph 2 of Article 22.
Hou el a, the competent authority may choose not to grant benefits pursuant
to ~111sparcigrapli if he determines that a significant percentage or amount of the
ii~coi-nequalifying for benefits under such paragraph will inure to the benefit of a
pi IL att person who is not a resident of Denmark

2-

lit ixfcrencc to pal-agraph 4 of ihticle 10 (Dividends) of the Convention, as
cii~ic~~ciedbq the Protocol, it is understood that a Danish undertaking for collective
iii L cstment 111 transferable securities that is required to currently distribute its income
u I 11 be trcated as a company that is similar to a U.S. regulated investment company
loi puiposes of this paragraph, while such an undertaking that is permitted to
<iciumulale its inccme will not be so treated
If' this IS in accordance with your understanding, 1would appreciate an
xkiiowlcdgment fiom you to that effect.
iicccpt, bxcellency, the renw ed assurances of my highest consideration.

Copenhagen, 2Ild May, 2006
1 lid\ e the honor to acknowledge receipt cf your note of 2"d May, 2006.
\I hich t cads as follows:
"I have the honor to refer to the Protocol signed today between the Government of
the iinited States of America and the Government of the Kingdom of Denmark
Amencliiig the Convention for the Avoidance
of Double Taxation and the Prevention of
Fiscal Fvasion with Respect to Taxes on Income, and to confirm, on behalf of the
Government
of the llnited States of America, the following understandings reached
bctween mir two Governments.
In reference to clause a) (iv) of paragraph 3 of Article 10 (Dividends) of the
I om entioii, as amended by the Protocol, it is understood that the US. competent
aiithority generally will exercise its discretion to grant benefits under such paragraph to a
company that is a resident
of Denmark if:
1) the company meets the requirements of paragraph 4 of Article 22 (Limitation
of Benefits) regarding the active conduct of a trade or business in Denmark;
7) the company meets the base erosion test of clause f) (ii) of paragraph 2 of
.4r-ticle 22; and
i) more than 80 percent of the voting power and the value of the shares in the
company is owned by one or more taxable nonstock corporations that meet the
requirements of subparagraph h) of paragraph 2 of Article 22.
I lowever, the competent authority may choose not to grant benefits pursuant to
this paragraph
if he determines that a significant percentage or amount of the income
qualifying
for benefits under such paragraph will inure to the benefit of a private person
\z ho is not a resident of Denmark.
in reieretice to paragraph I of Article 10 (Dividends) of the Convention, as
dniciidetl by the Protocol, it is understood that a Danish undertaking for collective
investment III transferable securities that is required to currently distribute its income will

c~ co~iy~nyI~~L~icti that IS siniilai to d i 1 S tcgiilated 111~estmeiit company foi
’Jui pwi of this paiagiaph. while wch dii undei-taking that IS peiniitted to accumulate its
lilLoiiie ‘ifill not be so treated
1i this IS in accordance with yo~ii-tindei\tanding, I would appreciate an
tLi\iiom lodgment from you to that effect
hcccpt. I-uccllency, the renewed assurances of iny highest consideration.”
1 ltdve the honor to conhi that the foregoing understandings are also shared by
thc (JOvcrnment of the Kingdom of Denmark.
?ccept.
Excellency. the renewed assurances of my highest consideration.