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~~cied bq 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 
I~~L~icti c~ co~iy~ny 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.