(1) Tax shall be determined in the case of a resident of the
Federal Republic of Germany as follows:
a) Unless foreign tax credit is to be allowed under sub-para-
graph b), there shall be exempted from the assessment
basis of the German tax any item of income and capital
gains arising in the Republic of Ghana and any item of cap-
ital situated within the Republic of Ghana which, according
to this Agreement, may be taxed in the Republic of Ghana.
In the case of items of income from dividends the preceding
provision shall apply only to such dividends as are paid to a
company (not including partnerships) being a resident of
the Federal Republic of Germany by a company being a res-
ident of the Republic of Ghana at least 10 per cent of the
capital of which is owned directly by the German company
and which were not deducted when determining the profits
of the company distributing these dividends.
There shall be exempted from the assessment basis of the
taxes on capital any shareholding the dividends of which if
paid, would be exempted, according to the foregoing sen-
tences.
b) Subject to the provisions of German tax law regarding cred-
it for foreign tax, there shall be allowed as a credit against
German tax on income and capital gains payable in respect
of the following items of income and capital gains the Ghana
tax paid under the laws of the Republic of Ghana and in
accordance with this Agreement:
aa) dividends not dealt with in sub-paragraph a);
bb) interest;
cc) royalties and services fees;
dd) capital gains that may be taxed in the Republic of
Ghana according to paragraph 2 of Article 13;
ee) directors’ fees;
ff)
items of income within the meaning of Article 17.
c) The provisions of sub-paragraph b) shall apply instead of
the provisions of sub-paragraph a) to items of income as
defined in Articles 7 and 10 and to the assets from which
such income is derived if the resident of the Federal Repub-
lic of Germany does not prove that the gross income of the
permanent establishment in the business year in which the
profit has been realised or of the company resident in the
Republic of Ghana in the business year for which the divi-
dends were paid was derived exclusively or almost exclu-
sively from activities within the meaning of nos. 1 to 6 of
paragraph 1 of section 8 of the German Law on External Tax
Relations (Aussensteuergesetz); the same shall apply to
immovable property used by a permanent establishment
and to income from this immovable property of the perma-
nent establishment (paragraph 4 of Article 6) and to gains
from the alienation of such immovable property
(paragraph 1 of Article 13) and of the movable property
forming part of the business property of the permanent
establishment (paragraph 3 of Article 13).
d) The Federal Republic of Germany, however, retains the right
to take into account in the determination of its rate of tax the
items of income and capital, which are under the provisions
of this Agreement exempted from German tax.
e) Notwithstanding the provisions of sub-paragraph a) double
taxation shall be avoided by allowing a tax credit as laid
down in sub-paragraph b)
aa) if in the Contracting States items of income, capital or
capital gains are placed under differing provisions of
this Agreement or attributed to different persons
(except pursuant to Article 9) and this conflict cannot
be settled by a procedure in accordance with para-
graph 3 of Article 26 and if as a result of this difference
in placement or attribution the relevant income, capital
or capital gains would remain untaxed or be taxed
lower than without this conflict or
bb) if after due consultation with the competent authority of
the Republic of Ghana the Federal Republic of Ger-
many notifies the Republic of Ghana through diplomat-
ic channels of other items of income or capital gains to
which it intends to apply the provisions of sub-para-
graph b). Double Taxation is then avoided for the noti-
fied income or capital gains by allowing a tax credit
from the first day of the calendar year, next following
that in which the notification was made.
(2) Tax shall be determined in the case of a resident of the
Republic of Ghana as follows:
a) The German tax payable under the laws of the Federal
Republic of Germany and in accordance with the provisions
of this Agreement, whether directly (by assessment) or by
deduction (withholding), on profits, income or capital gains
from sources within the Federal Republic of Germany
(excluding in the case of dividends, tax payable in respect of
profits out of which the dividends are paid) shall be allowed
as a credit against any Ghana tax computed by reference to
the same profits, income or capital gains by reference to
which the German tax is computed;
b) In the case of dividends paid by a company which is a re-
sident of the Federal Republic of Germany to a company
which is resident in the Republic of Ghana and which con-
trols directly at least 10 per cent of the capital of the compa-
ny paying the dividends, the credit shall take into account (in
addition to any German tax for which credit may be allowed
under the provisions of sub-paragraph a) the German tax
payable by the company in respect of the profits out of
which such dividends are paid;
c) In any case the amount of tax credit to be granted under this
paragraph shall not exceed the proportion of Ghana tax
which such profits, income or capital gains bear to the
entire profits, income or capital gains as the case may be
chargeable to Ghana tax.