PROTOCOL 
 

AMENDING THE CONVENTION BETWEEN 
 

THE GOVERNMENT OF THE UNITED STATES OF AMERICA 
 

AND THE GOVERNMENT OF THE KINGDOM OF DENMARK 
 

FOR THE AVOIDANCE OF DOUBLE TAXATION 
 

AND THE PREVENTION OF FISCAL EVASION 
 

W I TH RESPECT TO TAXES ON INCOME 
 

The Government of the United States of America and the Government of the 

Kingdom of Denmark, desiring to amend the Convention Between the Government of 

the United States of America and the Government of the Kingdom of Denmark for the 

Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to 

Taxes on Income, signed at Washington on August 19, 1999 (hereinafter referred to as 

"the Convention"), 

Have agreed as follows: 
ARTICLE I 

Paragraph 4 of Article 1 (General Scope) of the Convention is omitted and the 

following paragraph is substituted: 

"4. Except to the extent provided in paragraph 5, this Convention shall not 

affect the taxation by a Contracting State of its residents (as determined under 

Article 4 (Residence)) and its citizens. Notwithstanding the other provisions of 

this Convention, a former citizen or long-term resident of a Contracting State may, 

for the period of ten years following the loss of such status, be taxed in accordance 

with the laws of that Contracting State." 

ARTICLE II 

1. Article 10 (Dividends) of the Convention shall be omitted and the 

following shall be substituted: 

"ARTICLE 10 

Dividends 

1. Dividends paid by 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 percent of the gross amount of the dividends if the beneficial owner is 

a company which holds directly at least 10 percent of the share capital of the 

company paying the dividends; 

b) 15 percent of the gross amount of the dividends in all other cases. 

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

of which the dividends are paid. 

3. Notwithstanding the provisions of paragraph 2, such dividends shall not 

be taxed in the Contracting State of which the company paying the dividends is a 

resident if the beneficial owner is: 

a) a company that is a resident of the other Contracting State that has 

owned, directly or indirectly through one or more residents of either 

Contracting State, shares representing 80 percent or more of the voting 

power in the company paying the dividends for a 12-month period ending 

on the date on which entitlement to the dividends is determined and: 

(i) satisfies the conditions of clause (i),(ii) or (iii) of subparagraph 

c) of paragraph 2 of Article 22 (Limitation of Benefits); 
 

(ii) satisfies the conditions of clauses (i) and (ii) of 
 

subparagraph f) of paragraph 2 of Article 22, provided that the 
 

company satisfies the conditions described in paragraph 4 of that 
 

Article with respect to the dividends; 
 

(iii) is entitled to benefits with respect to the dividends under 
 

paragraph 3 of Article 22; or 
 

(iv) has received a determination pursuant to paragraph 7 of 
 

Article 22 with respect to this paragraph; or 
 

b) a qualified governmental entity that is a resident of the other 

Contracting State and that does not control the payor of the dividend; or 

c) a pension fund, which is described in subparagraph e) of paragraph 2 of 

Article 22 (Limitation of Benefits), that is a resident of the other Contracting 

State, provided that such dividends are not derived from the carrying on of a 

business by the pension fund or through an associated enterprise. 

4. a) 	 Subparagraph a) of paragraph 2 and subparagraph a) of paragraph 3 

shall not apply in the case of dividends paid by a U.S. Regulated Investment 

Company (RIC) or a U.S. Real Estate Investment Trust (REIT). In the case of 

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dividends paid by a RIC, subparagraph b) of paragraph 2 and subparagraphs 

b) and c) of paragraph 3 shall apply. In the case of dividends paid by a REIT, 

subparagraph b) of paragraph 2 and subparagraphs b) and c) of paragraph 3 

shall apply only if: 

(i) the beneficial owner of the dividends is an individual or pension 
 

fund, in either case holding an interest of not more than 10 percent in 
 

the REIT; 
 

(ii) the dividends are paid with respect to a class of stock that is 
 

publicly traded and the beneficial owner of the dividends is a person 
 

holding an interest of not more than 5 percent of any class of the 
 

REIT’s stock; or 
 

(iii) the beneficial owner of the dividends is a person holding an 
 

interest of not more than 10 percent in the REIT and the REIT is 
 

“diversified.” 
 

The rules of this paragraph shall also apply to dividends paid by companies resident in 

Denmark that are similar to the United States companies referred to in this paragraph. 

Whether companies that are residents of Denmark are similar to the United States 

companies referred to in this paragraph will be determined by mutual agreement of the 

competent authorities. 

b) For purposes of this paragraph, a REIT shall be diversified if the value 

of no single interest in real property exceeds 10 percent of its total interests in 

real property. For the purposes of this rule, foreclosure property shall not be 

considered an interest in real property. Where a REIT holds an interest in a 

partnership, it shall be treated as owning directly a proportion of the 

partnership's interests in real property corresponding to its interest in the 

partnership. 

5. The term "dividends" as used in this Article means income from 

shares or other rights, not being debt-claims, participating in profits, as well as 

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income that is subject to the same taxation treatment as income from shares by the 

laws of the State of which the payor is a resident. 

6. The provisions of paragraphs 2 and 3 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, or 

performs in that other State independent personal services from a fixed base 

situated therein, and the dividends are attributable to such permanent 

establishment or fixed base. In such case, the provisions of Article 7 (Business 

Profits) or Article 14 (Independent Personal Services), as the case may be, shall 

apply. 

7. A Contracting State may not impose any tax on dividends paid by a 

company which is not a resident of that State, except insofar as the dividends are paid 

to a resident of that Contracting State or the dividends are attributable to a permanent 

establishment or a fixed base situated in that State, nor may it impose tax on a 

corporation's undistributed profits, except as provided in paragraph 8, even if the 

dividends paid or the undistributed profits consist wholly or partly of profits or income 

arising in that State. 

8. A company that is a resident of a Contracting State and that has a 

permanent establishment in the other Contracting State, or that is subject to tax in that 

other Contracting State on a net basis on its income that may be taxed in that other 

State under Article 6 (Income from Real Property) or under paragraph 1 of Article 13 

(Capital Gains) may be subject in that other Contracting State to a tax in addition to 

the tax allowable under the other provisions of this Convention. Such tax, however, 

may be imposed on only the portion of the business profits of the corporation 

attributable to the permanent establishment, and the portion of the income referred to 

in the preceding sentence that is subject to tax under Article 6 (Income from Real 

Property) or under paragraph 1 of Article 13 (Capital Gains) that, in the case of the 

United States, represents the dividend equivalent amount of such profits or income 

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and, in the case of Denmark, is an amount that is analogous to the dividend equivalent 

amount. 

9. The tax referred to in paragraph 8 shall not be imposed at a rate 

exceeding the rate specified in subparagraph a) of paragraph 2. In any case, it shall 

not be imposed on a company that: 

a) satisfies the conditions of clause (i), (ii) or(iii) of subparagraph c) of 

paragraph 2 of Article 22 (Limitation of Benefits); 

b) satisfies the conditions of clauses i) and ii) of subparagraph f) of 

paragraph 2 of Article 22, provided that the company satisfies the 

conditions described in paragraph 4 of that Article with respect to an item 

of income, profit or gain described in paragraph 8 of this Article; 

c) is entitled under paragraph 3 of Article 22 to benefits with respect 

to an item of income, profit or gain described in paragraph 8 of this 

Article; or 

d) has received a determination pursuant to paragraph 7 of Article 22 

with respect to this paragraph." 

ARTICLE III 

Subparagraph b) of paragraph 2 of Article 19 (Government Service) of the 

Convention is amended by omitting the words "a resident or a national" and 

substituting "a resident and a national". 

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ARTICLE IV 

Article 22 (Limitation of Benefits) of the Convention shall be omitted and the 

following Article substituted: 

"ARTICLE 22 

Limitation of Benefits 

1. A resident of a Contracting State shall be entitled to benefits otherwise 

accorded to residents of a Contracting State by this Convention only to the extent 

provided in this Article. 

2. A resident of a Contracting State shall be entitled to all the benefits of 

this Convention only if such resident is: 

a) an individual; 

b) a Contracting State, a political subdivision, or local authority thereof, or 

an agency of instrumentality of that State, subdivision, or authority; 

c) a company, if: 

(i) its principal class of shares (and any disproportionate class of 

shares) is regularly traded on one or more recognized stock exchanges, 

and either: 

A) its principal class of shares is primarily traded on a 

recognized stock exchange located in the Contracting State of 

which the company is a resident (or, in the case of a company 

resident in Denmark, on a recognized stock exchange located 

within the European Union or in any other European Economic 

Area state or, in the case of a company resident in the United 

States, on a recognized stock exchange located in another state 

that is a party to the North American Free Trade Agreement); or 

B) the company’s primary place of management and 

control is in the Contracting State of which it is a resident; 

(ii) in the case of a company that is a resident of Denmark, one or 

more taxable nonstock corporations entitled to benefits under 

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subparagraph g) own shares representing more than 50 percent of the 

voting power of the company and all other shares are listed on a 

recognized stock exchange and are primarily traded on a recognized 

stock exchange located within the European Union or in any other 

European Economic Area state; or 

(iii) at least 50 percent of the aggregate voting power and value of 

the shares (and at least 50 percent of any disproportionate class of 

shares) in the company are owned directly or indirectly by five or fewer 

companies entitled to benefits under clause (i) or (ii), or any 

combination thereof, provided that, in the case of indirect ownership, 

each intermediate owner is a resident of either Contracting State; 

d) a charitable organization or other legal person described in 

subparagraph b)(i) of paragraph 1 of Article 4 (Residence) of this Convention, 

e) a legal person, whether or not exempt from tax, organized under the 

laws of a Contracting State to provide a pension or other similar benefits to 

employees, including self-employed individuals, pursuant to a plan, provided 

that more than 50 percent of the person's beneficiaries, members or participants 

are individuals resident in either Contracting State; or 

f) 	 a person other than an individual, if: 

(i) on at least half the days of the taxable year at least 50 percent of 

each class of shares or other beneficial interests in the person is owned, 

directly or indirectly, by residents of the Contracting State of which 

that person is a resident that are entitled to the benefits of this 

Convention under subparagraph a), subparagraph b), clause i) of 

subparagraph c), or subparagraphs d) or e) of this paragraph, provided 

that, in the case of indirect ownership, each intermediate owner is a 

resident of that Contracting State; and 

(ii) less than 50 percent of the person’s gross income for the taxable 

year, as determined in the person's State of residence, is paid or 

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accrued, directly or indirectly, to persons who are not residents of either 

Contracting State entitled to the benefits of this Convention under 

subparagraph a), subparagraph b), clause i) of subparagraph c), or 

subparagraphs d) or e) of this paragraph in the form of payments that 

are deductible for purposes of the taxes covered by this Convention in 

the person’s State of residence (but not including arm’s length 

payments in the ordinary course of business for services or tangible 

property and payments in respect of financial obligations to a bank that 

is not related to the payor); 

g) 	 in the case of Denmark, a taxable nonstock corporation if: 

(i) the amount paid or accrued in the form of deductible payments 

(but not including arms length payments in the ordinary course of its 

activities of a charitable nature and authorized by the Danish laws on 

taxable non-stock companies (lov om erhvervsmæssige fonde and lov 

om fonde og visse foreninger) for services or tangible property) in the 

taxable year and in each of the preceding three taxable years, directly or 

indirectly, to persons who are not entitled to benefits under 

subparagraphs a) or b), clause (i) of subparagraph c), or subparagraphs 

d) or e), does not exceed 50 percent of its gross income, as determined 

under Danish law (excluding its tax-exempt income); and 

(ii) the amount paid or accrued, in the form of both deductible 

payments (but not including arms length payments in the ordinary 

course of its activities of a charitable nature and authorized by the 

Danish laws on taxable non-stock companies (lov om erhvervsmæssige 

fonde and lov om fonde og visse foreninger) for services or tangible 

property) and non-deductible distributions, in the taxable year and in 

each of the preceding three taxable years, directly or indirectly, to 

persons who are not entitled to benefits under subparagraphs a) or b), 

clause (i) of subparagraph c), or subparagraphs d) or e), does not 

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exceed 50 percent of the amount of its total income (including its taxexempt income). 

3. A company that is a resident of a Contracting State shall also be 

entitled to the benefits of the Convention if: 

a) at least 95 percent of the aggregate voting power and value of its shares 

(and at least 50 percent of any disproportionate class of shares) is owned, 

directly or indirectly, by seven or fewer persons that are equivalent 

beneficiaries; and 

b) less than 50 percent of the company’s gross income, as determined in 

the company's State of residence, for the taxable year is paid or accrued, 

directly or indirectly, to persons who are not equivalent beneficiaries, in the 

form of payments (but not including arm's length payments in the ordinary 

course of business for services or tangible property and payments in respect of 

financial obligations to a bank that is not related to the payor), that are 

deductible for the purposes of the taxes covered by this Convention in the 

company's State of residence. 

4.a) A resident of a Contracting State will be entitled to benefits of the 

Convention with respect to an item of income derived from the other State, 

regardless of whether the resident is entitled to benefits under paragraph 2 or 3 

of this Article, if the resident is engaged in the active conduct of a trade or 

business in the first-mentioned State (other than the business of making or 

managing investments for the resident’s own account, unless these activities 

are banking, insurance or securities activities carried on by a bank, insurance 

company or registered securities dealer), and the income derived from the 

other Contracting State is derived in connection with, or is incidental to, that 

trade or business. 

b) If a resident of a Contracting State derives an item of income from a 

trade or business activity in the other Contracting State, or derives an item of 

income arising in the other Contracting State from an associated enterprise, 

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subparagraph a) of this paragraph shall apply to such item only if the trade or 

business activity in the first-mentioned State is substantial in relation to the 

trade or business activity in the other State. Whether a trade or business 

activity is substantial for purposes of this paragraph will be determined based 

on all the facts and circumstances. 

c) In determining whether a person is “engaged in the active conduct of a 

trade or business” in a Contracting State under subparagraph a) of this 

paragraph, activities conducted by persons connected to such person shall be 

deemed to be conducted by such person. A person shall be connected to 

another if one possesses at least 50 percent of the beneficial interest in the 

other (or, in the case of a company, at least 50 percent of the aggregate vote 

and at least 50 percent of the aggregate value of the shares in the company or 

of the beneficial equity interest in the company) or another person possesses, 

directly or indirectly, at least 50 percent of the beneficial interest (or, in the 

case of a company, at least 50 percent of the aggregate vote and at least 50 

percent of the aggregate value of the shares in the company or of the beneficial 

equity interest in the company) in each person. In any case, a person shall be 

considered to be connected to another if, based on all the relevant facts and 

circumstances, one has control of the other or both are under the control of the 

same person or persons. 

5. A resident of one of the Contracting States that derives from the other 

Contracting State income mentioned in Article 8 (Shipping and Air Transport) and 

that is not entitled to the benefits of this Convention because of the foregoing 

paragraphs, shall nevertheless be entitled to the benefits of this Convention with 

respect to such income if at least 50 percent of the beneficial interest in such person 

(or, in the case of a company, at least 50 percent of the aggregate vote and value of the 

stock of such company) is owned directly or indirectly: 

a) by persons described in subparagraphs a) or b), or clause (i) of 

subparagraph c), or subparagraphs d) or e) of paragraph 2, or citizens of 

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the United States, or individuals who are residents of a third state; or 

b) by a company or combination of companies the stock of which is 

primarily and regularly traded on an established securities market in a 

third state; 

provided that such third state grants an exemption under similar terms for profits as 

mentioned in Article 8 (Shipping and Air Transport) of this Convention to citizens and 

corporations of the other Contracting State either under its national law or in common 

agreement with that other Contracting State or under a convention between that third 

state and the other Contracting State. 

6. Notwithstanding the preceding provisions of this Article, where an 

enterprise of Denmark derives interest or royalties from the United States, and the 

income consisting of such interest or royalties is exempt from taxation in Denmark 

because it is attributable to a permanent establishment which that enterprise has in a 

third state, the tax benefits that would otherwise apply under the other provisions of 

the Convention will not apply to such income if the tax that is actually paid with 

respect to such income in the third state is less than 60 percent of the tax that would 

have been payable in Denmark if the income were earned in Denmark by the 

enterprise and were not attributable to the permanent establishment in the third state. 

Any interest or royalties to which the provisions of this paragraph apply may be taxed 

in the United States at a rate that shall not exceed 15 percent of the gross amount 

thereof. The provisions of this paragraph shall not apply if: 

a) in the case of interest, the income derived from the United States is 

derived in connection with, or is incidental to, the active conduct of a trade or 

business carried on by the permanent establishment in the third state (other 

than the business of making, managing or simply holding investments for the 

person’s own account, unless these activities are banking or securities activities 

carried on by a bank or registered securities dealer); or 

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b) in the case of royalties, the royalties are received as compensation for 

the use of, or the right to use, intangible property produced or developed by the 

permanent establishment itself. 

7. A resident of a Contracting State that is not entitled to benefits pursuant 

to the preceding paragraphs of this Article shall, nevertheless, be granted benefits of 

the Convention if the competent authority of the other Contracting State determines 

that the establishment, acquisition or maintenance of such person and the conduct of 

its operations did not have as one of its principal purposes the obtaining of benefits 

under the Convention. The competent authority of the other Contracting State shall 

consult with the competent authority of the first-mentioned State before denying the 

benefits of the Convention under this paragraph. 

8. For the purposes of this Article, 

a) the term “principal class of shares” means the ordinary or common 

shares of the company, provided that such class of shares represents the 

majority of the voting power and value of the company. If no single class of 

ordinary or common shares represents the majority of the aggregate voting 

power and value of the company, the “principal class of shares” is that class or 

those classes that in the aggregate represent a majority of the aggregate voting 

power and value of the company. 

b) the term “disproportionate class of shares” means any class of shares of 

a company resident in one of the States that entitles the shareholder to 

disproportionately higher participation, through dividends, redemption 

payments or otherwise, in the earnings generated in the other State by 

particular assets or activities of the company; 

c) the term “shares” shall include depository receipts thereof; 

d) 	 the term “recognized stock exchange” means: 

(i) the NASDAQ System owned by the National Association of 

Securities Dealers, Inc. and any stock exchange registered with the U.S. 

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Securities and Exchange Commission as a national securities exchange 
 

under the U.S. Securities Exchange Act of 1934; 
 

(ii) the Copenhagen Stock Exchange; 
 

(iii) the stock exchanges of Amsterdam, Brussels, Frankfurt, 
 

Hamburg, Helsinki, London, Oslo, Paris, Stockholm, Sydney, Tokyo 
 

and Toronto; and 
 

(iv) any other stock exchanges agreed upon by the competent 
 

authorities of the Contracting States. 
 

e) the term "taxable nonstock corporation" as used in paragraph 2 means 

a foundation that is taxable in accordance with paragraph 1 of Article 1 of the 

Danish Act on Taxable Nonstock Corporations (fonde der beskattes efter 

fondsbeskatningsloven); 

f) 	 (i) for the purposes of paragraph 2, the shares in a class of shares 

are considered to be regularly traded on one or more recognized stock 

exchanges in a taxable year if: 

(A) 	 trades in such class are effected on one or more of 

such stock exchanges other than in de minimis quantities 

during every quarter; and 

(B) the aggregate number of shares or units of that class 

traded on such stock exchange or exchanges during the 

previous taxable year is at least 6 percent of the average 

number of shares or units outstanding in that class 

(including shares held by taxable nonstock corporations) 

during that taxable year; and 

(ii) for purposes of determining whether a company satisfies the 

requirements of clause c) (ii) of paragraph 2, clause (i) of this 

paragraph shall be applied as if all the shares issued by the company 

were one class of shares and shares held by taxable nonstock 

corporations will be considered outstanding for 

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purposes of determining whether 6 percent of the outstanding 

shares have been traded during a taxable year. 

g) a company’s primary place of management and control will be in the 

State of which it is a resident only if executive officers and senior management 

employees exercise day-to-day responsibility for more of the strategic, financial 

and operational policy decision making for the company (including its direct and 

indirect subsidiaries) in that State than in any other state, and the staffs conduct 

more of the day-to-day activities necessary for preparing and making those 

decisions in that State than in any other state; 

h) the term "equivalent beneficiary" means a resident of a member state 

of the European Union or of any other European Economic Area state or of a party 

to the North American Free Trade Agreement, or of Switzerland, but only if that 

resident: 

(i) 	 A) would be entitled to all the benefits of a comprehensive 

convention for the avoidance of double taxation between any 

member state of the European Union or any other European 

Economic Area state or any party to the North American Free 

Trade Agreement, or Switzerland, and the State from which the 

benefits of this Convention are claimed under provisions 

analogous to subparagraphs a), b), clause i) of subparagraph c) 

or subparagraphs d) or e) of paragraph 2 of this Article, 

provided that if such convention does not contain a 

comprehensive limitation on benefits article, the person would 

be entitled to the benefits of this Convention by reason of 

subparagraph a), b), clause i) of subparagraph c) or 

subparagraphs d) or e) of paragraph 2 of this Article if such 

person were a resident of one of the States under Article 4 

(Residence) of this Convention; and 

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B) with respect to income referred to in Article 10 

(Dividends), 11 (Interest) or 12 (Royalties) of this Convention, 

would be entitled under such convention to a rate of tax with 

respect to the particular class of income for which benefits are 

being claimed under this Convention that is at least as low as 

the rate applicable under this Convention; or 

(ii) is a resident of a Contracting State that is entitled to the benefits 

of this Convention by reason of subparagraph a), b), clause i) of 

subparagraph c) or subparagraphs d) or e) of paragraph 2 of this 

Article. 

For the purposes of applying paragraph 3 of Article 10 (Dividends) in order to 

determine whether a person, owning shares, directly or indirectly, in the 

company claiming the benefits of this Convention, is an equivalent beneficiary, 

such person shall be deemed to hold the same voting power in the company 

paying the dividend as the company claiming the benefits holds in such 

company; 

i) with respect to dividends, interest or royalties arising in Denmark and 

beneficially owned by a company that is a resident of the United States, a company 

that is a resident of a member state of the European Union will be treated as satisfying 

the requirements of subparagraph h)(i) B) for purposes of determining whether such 

United States resident is entitled to benefits under this paragraph if a payment of 

dividends, interest or royalties arising in Denmark and paid directly to such resident of 

a member state of the European Union would have been exempt from tax pursuant to 

any directive of the European Union, notwithstanding that the income tax convention 

between Denmark and that other member state of the European Union would provide 

for a higher rate of tax with respect to such payment than the rate of tax applicable to 

such United States company under Article 10 (Dividends), 11 (Interest), or 12 

(Royalties) of this Convention." 

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ARTICLE V

1. The Contracting States shall notify each other when the requirements 

for the entry into force of this Protocol have been complied with. 

2. This Protocol shall enter into force upon the date of the receipt of the 

later of such notifications, and its provisions shall have effect: 

a) in respect of taxes withheld at source, on income derived on or 

after the first day of the second month next following the date on which 

the Protocol enters into force; and 

b) in respect of other taxes, for taxable periods beginning on or after the 

first day of January next following the date on which the Protocol enters into force. 

3. This Protocol shall remain in force for so long as the Convention shall 

remain in force. 

IN WITNESS WHEREOF the undersigned, duly authorized thereto by their respective 

Governments, have signed this Protocol. 

DONE in duplicate at Copenhagenon the second day of May, 2006, in the English 

language. 

FOR THE GOVERNMENT OF THE FOR THE GOVERNMENT OF THE 

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