(1) 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 the basis upon which German
tax is imposed, any item of income derived from
Liberia and any item of capital situated within Liberia,
which, according to this Agreement, may be taxed in
Liberia. The Federal Republic of Germany, however,
retains the right to take into account in the determina-
tion of its rate of tax the items of income and capital
so excluded. In the case of income from dividends,
the foregoing provisions of this sub-paragraph shall
apply only to such dividends as are paid to a company
being a resident of the Federal Republic of Germany
by a company being a resident of Liberia if at least
25 per cent of the capital of the Liberian company is
held directly by the German company. There shall
also be excluded from the basis upon which German
tax is imposed any shareholding, the dividends of
which, if paid, would be excluded from the basis
upon which tax is imposed according to the immedia-
tely foregoing sentence.
b
Subject to the provisions of German tax law regard-
ing credit for foreign tax, there shall be allowed as a
credit against German income tax and corporation
tax, including the surcharge thereon, payable in
respect of the following items of income derived from
Liberia, the Liberian tax paid under the laws of Liberia
and in accordance with this Agreement on
aa) dividends to which sub-paragraph a) does not
apply; provided that in the case of dividends to
which paragraph (2), sub-paragraph a), of Ar-
ticle 10 applies, the amount so credited shall be
15 per cent of the gross amount of such dividends;
bb) interest to which paragraph (2) of Article 11
applies;
cc) royalties to which paragraph (2) of Article 12
applies;
dd) gains to which paragraph (3) of Article 13
applies;
ee) remuneration to which Article 16 applies.
The credit shall not, however, exceed that part of the
German tax, as computed before the credit is given,
which is appropriate to such items of income.
For purposes of credit referred to in the foregoing
sub-paragraph b), where the rate of Liberian tax
on interest, or on royalties to which paragraph (2),
sub-paragrap:ı b), of Article 12 applies, is reduced
below 10 per cent of the gross amount of such in-
terest or royalties by virtue of special incentive
measures designed to promote economic development
in Liberia, the amount of Liberian tax shall be
deemed to be 10 per cent of the gross amount of suh
interest or royalties.
(2) Tax shall be determined in the case of a resident
of Liberia as follows:
a) Unless the provisions of sub-paragraph b)
apply,
there shall be excluded from the basis upon which
Liberian tax is imposed, any item of income derived
from the Federal Republic of Germany and any item
of capital situated within the Federal Republic of
Germany, which, according to this Agreement, may
be taxed in the Federal Republic of Germany. Liberia,
however, retains the right to take into account in the
determination of its rate of tax the items of income
and capital so excluded.
Subject to the provisions of Liberian tax law regard-
b
ing credit for foreign tax, there shall be allowed as
a credit against Liberian income tax payable in
respect of the following items of income derived from
the Federal Republic of Germany, the German tax
paid under the laws of the Federal Republic of Ger-
many and in accordance with this Agreement on
aa) dividends to which paragraph (2) of Article 10
applies;
bb) interest to which paragraph (2) of Article f1
applies;
cc) royalties to which paragraph (2) of Article 12
applies;
dd) gains to which paragraph (3) of Article 13 applies;
ee) remuneration to which Article 16 applies.
The credit shall not, however, exceed that part of
the Liberian tax, as computed before the credit is
given, which is appropriate to such items of income.