Income Tax Treaty PDF

UNITED STATES MODEL INCOME TAX CONVENTION OF
SEPTEMBER 20, 1996
TABLE OF ARTICLES
Article 1---------------------------------General Scope
Article 2---------------------------------Taxes Covered
Article 3---------------------------------General Definitions
Article 4---------------------------------Residence
Article 5---------------------------------Permanent Establishment
Article 6---------------------------------Income from Real Property (Immovable Property)
Article 7---------------------------------Business Profits
Article 8---------------------------------Shipping and Air Transport
Article 9---------------------------------Associated Enterprises
Article 10--------------------------------Dividends
Article 11--------------------------------Interest
Article 12--------------------------------Royalties
Article 13--------------------------------Gains
Article 14--------------------------------Independent Personal Services
Article 15--------------------------------Dependent Personal Services
Article 16--------------------------------Directors' Fees
Article 17--------------------------------Artistes and Sportsmen
Article 18--------------------------------Pensions, Social Security, Annuities,
Alimony, and Child Support
Article 19--------------------------------Government Service
Article 20--------------------------------Students and Trainees
Article 21--------------------------------Other Income
Article 22--------------------------------Limitation on Benefits
Article 23--------------------------------Relief from Double Taxation
Article 24--------------------------------Non-discrimination
Article 25--------------------------------Mutual Agreement Procedure
Article 26--------------------------------Exchange of Information and Administrative Assistance
Article 27--------------------------------Diplomatic Agents and Consular Officers
Article 28--------------------------------Entry into Force
Article 29--------------------------------Termination
The “Saving Clause”-------------------Paragraph 4 of Article 1
CONVENTION BETWEEN
THE UNITED STATES OF AMERICA
AND -------
FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE
PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME

The United States of America and -----, desiring to conclude a Convention for the avoidance of
double taxation and the prevention of fiscal evasion with respect to taxes on income, have agreed
as follows:
ARTICLE 1
General Scope
1. This Convention shall apply only to persons who are residents of one or both of the
Contracting States, except as otherwise provided in the Convention.
2. The Convention shall not restrict in any manner any benefit now or hereafter accorded:
a) by the laws of either Contracting State; or
b) by any other agreement between the Contracting States.
3. Notwithstanding the provisions of subparagraph 2(b):
(a) the provisions of Article 26 (Mutual Agreement Procedure) of this Convention
exclusively shall apply to any dispute concerning whether a measure is within the scope
of this Convention, and the procedures under this Convention exclusively shall apply to
that dispute; and
(b) unless the competent authorities determine that a taxation measure is not
within the scope of this Convention, the nondiscrimination obligations of this Convention
exclusively shall apply with respect to that measure, except for such national treatment or
most-favored-nation obligations as may apply to trade in goods under the General
Agreement on Tariffs and Trade. No national treatment or most-favored-nation obligation
under any other agreement shall apply with respect to that measure.
(c) For the purpose of this paragraph, a "measure" is a law, regulation, rule,
procedure, decision, administrative action, or any similar provision or action.
4. Notwithstanding any provision of the Convention except paragraph 5 of this Article, a
Contracting State may tax its residents (as determined under Article 4 (Residence)), and by
reason of citizenship may tax its citizens, as if the Convention had not come into effect. For this
purpose, the term "citizen" shall include a former citizen or long-term resident whose loss of
such status had as one of its principal purposes the avoidance of tax (as defined under the laws of
the Contracting State of which the person was a citizen or long-term resident), but only for a
period of 10 years following such loss.
5. The provisions of paragraph 4 shall not affect:
a) the benefits conferred by a Contracting State under paragraph 2 of Article 9
(Associated Enterprises), paragraphs 2 and 5 of Article 18 (Pensions, Social Security,
Annuities, Alimony, and Child Support), and Articles 23 (Relief From Double Taxation),

24 (Non-Discrimination), and 25 (Mutual Agreement Procedure); and
b) the benefits conferred by a Contracting State under paragraph 6 of Article 18
(Pensions, Social Security, Annuities, Alimony, and Child Support), Articles 19
(Government Service), 20 (Students and Trainees), and 27 (Diplomatic Agents and
Consular Officers), upon individuals who are neither citizens of, nor have been admitted
for permanent residence in, that State.
ARTICLE 2
Taxes Covered
1. The existing taxes to which this Convention shall apply are:
a) in the United States: the Federal income taxes imposed by the Internal Revenue
Code (but excluding social security taxes), and the Federal excise taxes imposed with
respect to private foundations.
b) in __________ : ________________________________
________________________________________________________________________
________.
2. The Convention shall apply also to any identical or substantially similar taxes that are
imposed after the date of signature of the Convention in addition to, or in place of, the existing
taxes. The competent authorities of the Contracting States shall notify each other of any
significant changes that have been made in their respective taxation laws or other laws affecting
their obligations under the Convention, and of any official published material concerning the
application of the Convention, including explanations, regulations, rulings, or judicial decisions.
ARTICLE 3
General Definitions
1. For the purposes of this Convention, unless the context otherwise requires:
a) the term "person" includes an individual, an estate, a trust, a partnership, a
company, and any other body of persons;
b) the term "company" means any body corporate or any entity that is treated as a
body corporate for tax purposes according to the laws of the state in which it is organized;
c) the terms "enterprise of a Contracting State" and "enterprise of the other
Contracting State" mean respectively an enterprise carried on by a resident of a
Contracting State, and an enterprise carried on by a resident of the other Contracting
State; the terms also include an enterprise carried on by a resident of a Contracting State
through an entity that is treated as fiscally transparent in that Contracting State;
d) the term "international traffic" means any transport by a ship or aircraft, except
when such transport is solely between places in a Contracting State;
e) the term "competent authority" means:
(i) in the United States: the Secretary of the Treasury or his delegate; and
(ii) in ___________: ___________________;

f) the term "United States" means the United States of America, and includes the
states thereof and the District of Columbia; such term also includes the territorial sea
thereof and the sea bed and subsoil of the submarine areas adjacent to that territorial sea,
over which the United States exercises sovereign rights in accordance with international
law; the term, however, does not include Puerto Rico, the Virgin Islands, Guam or any
other United States possession or territory;
g) the term _________ means _________________;
h) the term "national" of a Contracting State, means:
(i) any individual possessing the nationality or citizenship of that State;
and
(ii) any legal person, partnership or association deriving its status as such
from the laws in force in that State;
i) the term "qualified governmental entity" means:
(i) any person or body of persons that constitutes a governing body of a
Contracting State, or of a political subdivision or local authority of a Contracting
State;
(ii) a person that is wholly owned, directly or indirectly, by a Contracting
State or a political subdivision or local authority of a Contracting State, provided
(A) it is organized under the laws of the Contracting State,
(B) its earnings are credited to its own account with no portion of
its income inuring to the benefit of any private person, and
(C) its assets vest in the Contracting State, political subdivision or
local authority upon dissolution; and
(iii) a pension trust or fund of a person described in subparagraph (i) or (ii)
that is constituted and operated exclusively to administer or provide pension
benefits described in Article 19;
provided that an entity described in subparagraph (ii) or (iii) does not carry on commercial
activities.
2. As regards the application of the Convention at any time by a Contracting State any term
not defined therein shall, unless the context otherwise requires, or the competent authorities
agree to a common meaning pursuant to the provisions of Article 25 (Mutual Agreement
Procedure), have the meaning which it has at that time under the law of that State for the
purposes of the taxes to which the Convention applies, any meaning under the applicable tax
laws of that State prevailing over a meaning given to the term under other laws of that State
ARTICLE 4
Residence
1. Except as provided in this paragraph, for the purposes of this Convention, the term
"resident of a Contracting State" means any person who, under the laws of that State, is liable to
tax therein by reason of his domicile, residence, citizenship, place of management, place of
incorporation, or any other criterion of a similar nature.
a) The term “resident of a Contracting State” does not include any person who is

liable to tax in that State in respect only of income from sources in that State or of profits
attributable to a permanent establishment in that State.
b) A legal person organized under the laws of a Contracting State and that is
generally exempt from tax in that State and is established and maintained in that State
either:
i) exclusively for a religious, charitable, educational, scientific, or other
similar purpose; or
ii) to provide pensions or other similar benefits to employees pursuant to a
plan
is to be treated for purposes of this paragraph as a resident of that Contracting State.
c) A qualified governmental entity is to be treated as a resident of the Contracting
State where it is established.
d) An item of income, profit or gain derived through an entity that is fiscally
transparent under the laws of either Contracting State shall be considered to be derived by
a resident of a State to the extent that the item is treated for purposes of the taxation law
of such Contracting State as the income, profit or gain of a resident.
2. Where by reason of the provisions of paragraph 1, an individual is a resident of both
Contracting States, then his status shall be determined as follows:
a) he shall be deemed to be a resident of the State in which he has a permanent
home available to him; if he has a permanent home available to him in both States, he
shall be deemed to be a resident of the State with which his personal and economic
relations are closer (center of vital interests);
b) if the State in which he has his center of vital interests cannot be determined, or
if he does not have a permanent home available to him in either State, he shall be deemed
to be a resident of the State in which he has an habitual abode;
c) if he has an habitual abode in both States or in neither of them, he shall be
deemed to be a resident of the State of which he is a national;
d) if he is a national of both States or of neither of them, the competent authorities
of the Contracting States shall endeavor to settle the question by mutual agreement.
3. Where by reason of the provisions of paragraph 1 a company is a resident of both
Contracting States, then if it is created under the laws of one of the Contracting States or a
political subdivision thereof, it shall be deemed to be a resident of that State.
4. Where by reason of the provisions of paragraph 1 a person other than an individual or a
company is a resident of both Contracting States, the competent authorities of the Contracting
States shall endeavor to settle the question by mutual agreement and determine the mode of
application of the Convention to such person.
ARTICLE 5
Permanent Establishment
1. For the purposes of this Convention, the term "permanent establishment" means a fixed

place of business through which the business of an enterprise is wholly or partly carried on.
2. The term "permanent establishment" includes especially:
a) a place of management;
b) a branch;
c) an office;
d) a factory;
e) a workshop; and
f) a mine, an oil or gas well, a quarry, or any other place of extraction of natural
resources.
3. A building site or construction or installation project, or an installation or drilling rig or
ship used for the exploration of natural resources, constitutes a permanent establishment only if it
lasts or the activity continues for more than twelve months.
4. Notwithstanding the preceding provisions of this Article, the term "permanent
establishment" shall be deemed not to include:
a) the use of facilities solely for the purpose of storage, display or delivery of
goods or merchandise belonging to the enterprise;
b) the maintenance of a stock of goods or merchandise belonging to the enterprise
solely for the purpose of storage, display or delivery;
c) the maintenance of a stock of goods or merchandise belonging to the enterprise
solely for the purpose of processing by another enterprise;
d) the maintenance of a fixed place of business solely for the purpose of
purchasing goods or merchandise, or of collecting information, for the enterprise;
e) the maintenance of a fixed place of business solely for the purpose of carrying
on, for the enterprise, any other activity of a preparatory or auxiliary character;
f) the maintenance of a fixed place of business solely for any combination of the
activities mentioned in subparagraphs a) through e).
5. Notwithstanding the provisions of paragraphs 1 and 2, where a person -- other than an
agent of an independent status to whom paragraph 6 applies -- is acting on behalf of an enterprise
and has and habitually exercises in a Contracting State an authority to conclude contracts that are
binding on the enterprise, that enterprise shall be deemed to have a permanent establishment in
that State in respect of any activities that the person undertakes for the enterprise, unless the
activities of such person are limited to those mentioned in paragraph 4 that, if exercised through
a fixed place of business, would not make this fixed place of business a permanent establishment
under the provisions of that paragraph.
6. An enterprise shall not be deemed to have a permanent establishment in a Contracting
State merely because it carries on business in that State through a broker, general commission
agent, or any other agent of an independent status, provided that such persons are acting in the
ordinary course of their business as independent agents.
7. The fact that a company that is a resident of a Contracting State controls or is controlled by

a company that is a resident of the other Contracting State, or that carries on business in that
other State (whether through a permanent establishment or otherwise), shall not constitute either
company a permanent establishment of the other.
ARTICLE 6
Income from Real Property (Immovable Property)
1. Income derived by a resident of a Contracting State from real property (immovable
property), including income from agriculture or forestry, situated in the other Contracting State
may be taxed in that other State.
2. The term "real property (immovable property)" shall have the meaning which it has under
the law of the Contracting State in which the property in question is situated.
3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or
use in any other form of real property.
4. The provisions of paragraphs 1 and 3 shall also apply to the income from real property of
an enterprise and to income from real property used for the performance of independent personal
services.
5. A resident of a Contracting State who is liable to tax in the other Contracting State on
income from real property situated in the other Contracting State may elect for any taxable year
to compute the tax on such income on a net basis as if such income were business profits
attributable to a permanent establishment in such other State. Any such election shall be binding
for the taxable year of the election and all subsequent taxable years unless the competent
authority of the Contracting State in which the property is situated agrees to terminate the
election.
ARTICLE 7
Business Profits
1. The business profits of an enterprise of a Contracting State shall be taxable only in that
State unless the enterprise carries on business in the other Contracting State through a permanent
establishment situated therein. If the enterprise carries on business as aforesaid, the business
profits of the enterprise may be taxed in the other State but only so much of them as are
attributable to that permanent establishment.
2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries
on business in the other Contracting State through a permanent establishment situated therein,
there shall in each Contracting State be attributed to that permanent establishment the business
profits that it might be expected to make if it were a distinct and independent enterprise engaged
in the same or similar activities under the same or similar conditions. For this purpose, the

business profits to be attributed to the permanent establishment shall include only the profits
derived from the assets or activities of the permanent establishment.
3. In determining the business profits of a permanent establishment, there shall be allowed as
deductions expenses that are incurred for the purposes of the permanent establishment, including
a reasonable allocation of executive and general administrative expenses, research and
development expenses, interest, and other expenses incurred for the purposes of the enterprise as
a whole (or the part thereof which includes the permanent establishment), whether incurred in the
State in which the permanent establishment is situated or elsewhere.
4. No business profits shall be attributed to a permanent establishment by reason of the mere
purchase by that permanent establishment of goods or merchandise for the enterprise.
5. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent
establishment shall be determined by the same method of accounting year by year unless there is
good and sufficient reason to the contrary.
6. Where business profits include items of income that are dealt with separately in other
Articles of the Convention, then the provisions of those Articles shall not be affected by the
provisions of this Article.
7. For the purposes of the Convention, the term "business profits" means income from any
trade or business, including income derived by an enterprise from the performance of personal
services, and from the rental of tangible personal property.
8. In applying paragraphs 1 and 2 of Article 7 (Business Profits), paragraph 6 of Article 10
(Dividends), paragraph 3 of Article 11 (Interest), paragraph 3 of Article 12 (Royalties), paragraph
3 of Article 13 (Gains), Article 14 (Independent Personal Services) and paragraph 2 of Article 21
(Other Income), any income or gain attributable to a permanent establishment or fixed base
during its existence is taxable in the Contracting State where such permanent establishment or
fixed base is situated even if the payments are deferred until such permanent establishment or
fixed base has ceased to exist.
ARTICLE 8
Shipping and Air Transport
1. Profits of an enterprise of a Contracting State from the operation of ships or aircraft in
international traffic shall be taxable only in that State.
2. For the purposes of this Article, profits from the operation of ships or aircraft include
profits derived from the rental of ships or aircraft on a full (time or voyage) basis. They also
include profits from the rental of ships or aircraft on a bareboat basis if such ships or aircraft are
operated in international traffic by the lessee, or if the rental income is incidental to profits from
the operation of ships or aircraft in international traffic. Profits derived by an enterprise from the

inland transport of property or passengers within either Contracting State, shall be treated as
profits from the operation of ships or aircraft in international traffic if such transport is
undertaken as part of international traffic.
3. Profits of an enterprise of a Contracting State from the use, maintenance, or rental of
containers (including trailers, barges, and related equipment for the transport of containers) used
in international traffic shall be taxable only in that State.
4. The provisions of paragraphs 1 and 3 shall also apply to profits from participation in a
pool, a joint business, or an international operating agency.
ARTICLE 9
Associated Enterprises
1. Where:
a) an enterprise of a Contracting State participates directly or indirectly in the
management, control or capital of an enterprise of the other Contracting State; or
b) the same persons participate directly or indirectly in the management, control,
or capital of an enterprise of a Contracting State and an enterprise of the other
Contracting State,
and in either case conditions are made or imposed between the two enterprises in their
commercial or financial relations that differ from those that would be made between independent
enterprises, then, any profits that, but for those conditions, would have accrued to one of the
enterprises, but by reason of those conditions have not so accrued, may be included in the profits
of that enterprise and taxed accordingly.
2. Where a Contracting State includes in the profits of an enterprise of that State, and taxes
accordingly, profits on which an enterprise of the other Contracting State has been charged to tax
in that other State, and the other Contracting State agrees that the profits so included are profits
that would have accrued to the enterprise of the first-mentioned State if the conditions made
between the two enterprises had been those that would have been made between independent
enterprises, then that other State shall make an appropriate adjustment to the amount of the tax
charged therein on those profits. In determining such adjustment, due regard shall be paid to the
other provisions of this Convention and the competent authorities of the Contracting States shall
if necessary consult each other.
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 payor is

a resident and according to the laws of that State, but if the dividends are beneficially owned by a
resident of the other Contracting State, except as otherwise provided, the tax so charged shall not
exceed:
a) 5 percent of the gross amount of the dividends if the beneficial owner is a
company that owns directly at least 10 percent of the voting stock of the company paying
the dividends;
b) 15 percent of the gross amount of the dividends in all other cases.
This paragraph shall not affect the taxation of the company in respect of the profits out of which
the dividends are paid.
3. Subparagraph a) of paragraph 2 shall not apply in the case of dividends paid by a United
States person that is a Regulated Investment Company or a Real Estate Investment Trust (REIT).
In the case of a United States person that is a REIT, subparagraph b) of paragraph 2 also shall not
apply, unless the dividend is beneficially owned by an individual holding a less than 10-percent
interest in the REIT.
4. Notwithstanding paragraph 2, dividends may not be taxed in the Contracting State of
which the payor is a resident if the beneficial owner of the dividends is a resident of the other
Contracting State that is a qualified governmental entity that does not control the payor of the
dividend.
5. For purposes of the Convention, the term "dividends" means income from shares or other
rights, not being debt-claims, participating in profits, as well as income that is subjected to the
same taxation treatment as income from shares under the laws of the State of which the payor is a
resident.
6. The provisions of paragraphs 1 and 2 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 payor 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 resident of the other
State, except insofar as the dividends are paid to a resident of the first-mentioned 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 corporation that is a resident of one of the States and that has a permanent establishment
in the other State or that is subject to tax in the other State on a net basis on its income that may
be taxed in the other State under Article 6 (Income from Real Property (Immoveable Property))

or under paragraph 1 of Article 13 (Gains) may be subject in that other 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 (Immoveable Property)) or under
paragraph 1 of Article 13 (Gains) that, in the case of the United States, represents the dividend
equivalent amount of such profits or income and, in the case of __________, is an amount that is
analogous to the dividend equivalent amount.
9. The tax referred to in paragraph 8 may not be imposed at a rate in excess of the rate
specified in paragraph 2 a).
ARTICLE 11
Interest
1. Interest arising in a Contracting State and beneficially owned by a resident of the other
Contracting State may be taxed only in that other State.
2. The term "interest" as used in this Convention means income from debt-claims of every
kind, whether or not secured by mortgage, and whether or not carrying a right to participate in the
debtor's profits, and in particular, income from government securities and income from bonds or
debentures, including premiums or prizes attaching to such securities, bonds or debentures, and
all other income that is subjected to the same taxation treatment as income from money lent by
the taxation law of the Contracting State in which the income arises. Income dealt with in Article
10 (Dividends) and penalty charges for late payment shall not be regarded as interest for the
purposes of this Convention.
3. The provisions of paragraph 1 shall not apply if the beneficial owner of the interest, being
a resident of a Contracting State, carries on business in the other Contracting State, in which the
interest arises, through a permanent establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein, and the interest is 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.
4. Where, by reason of a special relationship between the payer and the beneficial owner or
between both of them and some other person, the amount of the interest, having regard to the
debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the
payer and the beneficial owner in the absence of such relationship, the provisions of this Article
shall apply only to the last-mentioned amount. In such case the excess part of the payments shall
remain taxable according to the laws of each State, due regard being had to the other provisions
of this Convention.
5. Notwithstanding the provisions of paragraph 1:
a) interest paid by a resident of a Contracting State and that is determined with

reference to receipts, sales, income, profits or other cash flow of the debtor or a related
person, to any change in the value of any property of the debtor or a related person or to
any dividend, partnership distribution or similar payment made by the debtor to a related
person, and paid to a resident of the other State also may be taxed in the Contracting State
in which it arises, and according to the laws of that State, but if the beneficial owner is a
resident of the other Contracting State, the gross amount of the interest may be taxed at a
rate not exceeding the rate prescribed in subparagraph b) of paragraph 2 of Article 10
(Dividends); and
b) Interest that is an excess inclusion with respect to a residual interest in a real
estate mortgage investment conduit may be taxed by each State in accordance with its
domestic law.
ARTICLE 12
Royalties
1. Royalties arising in a Contracting State and beneficially owned by a resident of the other
Contracting State may be taxed only in that other State.
2. The term "royalties" as used in this Convention means:
(a) any consideration for the use of, or the right to use, any copyright of literary,
artistic, scientific or other work (including computer software, cinematographic films,
audio or video tapes or disks, and other means of image or sound reproduction), any
patent, trademark, design or model, plan, secret formula or process, or other like right or
property, or for information concerning industrial, commercial, or scientific experience;
and
(b) gain derived from the alienation of any property described in subparagraph (a),
provided that such gain is contingent on the productivity, use, or disposition of the
property.
3. The provisions of paragraph 1 shall not apply if the beneficial owner of the royalties, being
a resident of a Contracting State, carries on business in the other Contracting State through a
permanent establishment situated therein, or performs in that other State independent personal
services from a fixed base situated therein, and the royalties 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.
4. Where, by reason of a special relationship between the payer and the beneficial owner or
between both of them and some other person, the amount of the royalties, having regard to the
use, right, or information for which they are paid, exceeds the amount which would have been
agreed upon by the payer and the beneficial owner in the absence of such relationship, the
provisions of this Article shall apply only to the last-mentioned amount. In such case the excess
part of the payments shall remain taxable according to the laws of each Contracting State, due
regard being had to the other provisions of the Convention.

ARTICLE 13
Gains
1. Gains derived by a resident of a Contracting State that are attributable to the alienation of
real property situated in the other Contracting State may be taxed in that other State.
2. For the purposes of this Convention the term "real property situated in the other
Contracting State" shall include:
a) real property referred to in Article 6 (Income from Real Property (Immovable
Property));
b) a United States real property interest; and
c) an equivalent interest in real property situated in _____.
3. Gains from the alienation of personal property that are attributable to a permanent
establishment that an enterprise of a Contracting State has in the other Contracting State, or that
are attributable to a fixed base that is available to a resident of a Contracting State in the other
Contracting State for the purpose of performing independent personal services, and gains from
the alienation of such a permanent establishment (alone or with the whole enterprise) or of such a
fixed base, may be taxed in that other State.
4. Gains derived by an enterprise of a Contracting State from the alienation of ships, aircraft,
or containers operated or used in international traffic or personal property pertaining to the
operation or use of such ships, aircraft, or containers shall be taxable only in that State.
5. Gains from the alienation of any property other than property referred to in paragraphs 1
through 4 shall be taxable only in the Contracting State of which the alienator is a resident.
ARTICLE 14
Independent Personal Services
1. Income derived by an individual who is a resident of a Contracting State in respect of the
performance of personal services of an independent character shall be taxable only in that State,
unless the individual has a fixed base regularly available to him in the other Contracting State for
the purpose of performing his activities. If he has such a fixed base, the income attributable to the
fixed base that is derived in respect of services performed in that other State also may be taxed by
that other State.
2. For purposes of paragraph 1, the income that is taxable in the other Contracting State shall
be determined under the principles of paragraph 3 of Article 7.
ARTICLE 15
Dependent Personal Services

1. Subject to the provisions of Articles 16 (Directors' Fees), 18 (Pensions, Social Security,
Annuities, Alimony, and Child Support) and 19 (Government Service), salaries, wages, and other
remuneration derived by a resident of a Contracting State in respect of an employment shall be
taxable only in that State unless the employment is exercised in the other Contracting State. If the
employment is so exercised, such remuneration as is derived therefrom may be taxed in that other
State.
2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a
Contracting State in respect of an employment exercised in the other Contracting State shall be
taxable only in the first-mentioned State if:
a) the recipient is present in the other State for a period or periods not exceeding
in the aggregate 183 days in any twelve month period commencing or ending in the
taxable year concerned;
b) the remuneration is paid by, or on behalf of, an employer who is not a resident
of the other State; and
c) the remuneration is not borne by a permanent establishment or a fixed base
which the employer has in the other State.
3. Notwithstanding the preceding provisions of this Article, remuneration described in
paragraph 1 that is derived by a resident of a Contracting State in respect of an employment as a
member of the regular complement of a ship or aircraft operated in international traffic shall be
taxable only in that State.
ARTICLE 16
Directors' Fees
Directors' fees and other compensation derived by a resident of a Contracting State for
services rendered in the other Contracting State in his capacity as a member of the board of
directors of a company that is a resident of the other Contracting State may be taxed in that other
Contracting State.
ARTICLE 17
Artistes and Sportsmen
1. Income derived by a resident of a Contracting State as an entertainer, such as a theater,
motion picture, radio, or television artiste, or a musician, or as a sportsman, from his personal
activities as such exercised in the other Contracting State, which income would be exempt from
tax in that other Contracting State under the provisions of Articles 14 (Independent Personal
Services) and 15 (Dependent Personal Services) may be taxed in that other State, except where
the amount of the gross receipts derived by such entertainer or sportsman, including expenses
reimbursed to him or borne on his behalf, from such activities does not exceed twenty thousand
United States dollars ($20,000) or its equivalent in ______ for the taxable year concerned.

2. Where income in respect of activities exercised by an entertainer or a sportsman in his
capacity as such accrues not to the entertainer or sportsman himself but to another person, that
income, notwithstanding the provisions of Articles 7 (Business Profits) and 14 (Independent
Personal Services), may be taxed in the Contracting State in which the activities of the
entertainer or sportsman are exercised, unless it is established that neither the entertainer or
sportsman nor persons related thereto participate directly or indirectly in the profits of that other
person in any manner, including the receipt of deferred remuneration, bonuses, fees, dividends,
partnership distributions, or other distributions.
ARTICLE 18
Pensions, Social Security, Annuities,
Alimony, and Child Support
1. Subject to the provisions of Article 19 (Government Service), pension distributions and
other similar remuneration beneficially owned by a resident of a Contracting State, whether paid
periodically or as a single sum, shall be taxable only in that State, but only to the extent not
included in taxable income in the other Contracting State prior to the distribution.
2. Notwithstanding the provisions of paragraph 1, payments made by a Contracting State
under provisions of the social security or similar legislation of that State to a resident of the other
Contracting State or to a citizen of the United States shall be taxable only in the first-mentioned
State.
3. Annuities derived and beneficially owned by an individual resident of a Contracting State
shall be taxable only in that State. The term "annuities" as used in this paragraph means a stated
sum paid periodically at stated times during a specified number of years, under an obligation to
make the payments in return for adequate and full consideration (other than services rendered).
4. Alimony paid by a resident of a Contracting State, and deductible therein, to a resident of
the other Contracting State shall be taxable only in that other State. The term "alimony" as used
in this paragraph means periodic payments made pursuant to a written separation agreement or a
decree of divorce, separate maintenance, or compulsory support, which payments are taxable to
the recipient under the laws of the State of which he is a resident.
5. Periodic payments, not dealt with in paragraph 4, for the support of a child made pursuant
to a written separation agreement or a decree of divorce, separate maintenance, or compulsory
support, paid by a resident of a Contracting State to a resident of the other Contracting State,
shall be exempt from tax in both Contracting States.
6. For purposes of this Convention, where an individual who is a participant in a pension plan
that is established and recognized under the legislation of one of the Contracting States performs
personal services in the other Contracting State:
a) Contributions paid by or on behalf of the individual to the plan during the

period that he performs such services in the other State shall be deductible (or excludible)
in computing his taxable income in that State. Any benefits accrued under the plan or
payments made to the plan by or on behalf of his employer during that period shall not be
treated as part of the employee's taxable income and shall be allowed as a deduction in
computing the profits of his employer in that other State.
b) Income earned but not distributed by the plan shall not be taxable in the other
State until such time and to the extent that a distribution is made from the plan.
c) Distributions from the plan to the individual shall not be subject to taxation in
the other Contracting State if the individual contributes such amounts to a similar plan
established in the other State within a time period and in accordance with any other
requirements imposed under the laws of the other State.
d) The provisions of this paragraph shall not apply unless:
(i) contributions by or on behalf of the individual to the plan (or to another
similar plan for which this plan was substituted) were made before he arrived in
the other State; and
(ii) the competent authority of the other State has agreed that the pension
plan generally corresponds to a pension plan recognized for tax purposes by that
State.
The benefits granted under this paragraph shall not exceed the benefits that would be allowed by
the other State to its residents for contributions to, or benefits otherwise accrued under a pension
plan recognized for tax purposes by that State.
ARTICLE 19
Government Service
1. Notwithstanding the provisions of Articles 14 (Independent Personal Services), 15
(Dependent Personal Services), 16 (Director's Fees) and 17 (Artistes and Sportsmen):
a) Salaries, wages and other remuneration, other than a pension, paid from the
public funds of a Contracting State or a political subdivision or a local authority thereof
to an individual in respect of services rendered to that State or subdivision or authority in
the discharge of functions of a governmental nature shall, subject to the provisions of
subparagraph (b), be taxable only in that State;
b) such remuneration, however, shall be taxable only in the other Contracting
State if the services are rendered in that State and the individual is a resident of that State
who:
i) is a national of that State; or
ii) did not become a resident of that State solely for the purpose of
rendering the services.
2. Notwithstanding the provisions of paragraph 1 of Article 18 (Pensions, Social Security,
Annuities, Alimony, and Child Support):
a) any pension paid from the public funds of a Contracting State or a political
subdivision or a local authority thereof to an individual in respect of services rendered to

that State or subdivision or authority in the discharge of functions of a governmental
nature shall, subject to the provisions of subparagraph (b), be taxable only in that State;
b) such pension, however, shall be taxable only in the other Contracting State if
the individual is a resident of, and a national of, that State.
ARTICLE 20
Students and Trainees
Payments received by a student, apprentice, or business trainee who is, or was immediately
before visiting a Contracting State, a resident of the other Contracting State, and who is present
in the first-mentioned State for the purpose of his full-time education at an accredited educational
institution, or for his full-time training, shall not be taxed in that State, provided that such
payments arise outside that State, and are for the purpose of his maintenance, education or
training. The exemption from tax provided by this Article shall apply to an apprentice or business
trainee only for a period of time not exceeding one year from the date he first arrives in the first-
mentioned Contracting State for the purpose of his training.
ARTICLE 21
Other Income
1. Items of income beneficially owned by a resident of a Contracting State, wherever arising,
not dealt with in the foregoing Articles of this Convention shall be taxable only in that State.
2. The provisions of paragraph 1 shall not apply to income, other than income from real
property as defined in paragraph 2 of Article 6 (Income from Real Property (Immovable
Property)), if the beneficial owner of the income, being a resident of a Contracting State, carries
on business in the other Contracting State through a permanent establishment situated therein, or
performs in that other State independent personal services from a fixed base situated therein, and
the income is 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.
ARTICLE 22
Limitation on 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 if
the resident is:
a) an individual;
b) a qualified governmental entity;

c) a company, if
i) all the shares in the class or classes of shares representing more than 50
percent of the voting power and value of the company are regularly traded on a
recognized stock exchange, or
ii) at least 50 percent of each class of shares in the company is owned
directly or indirectly by companies entitled to benefits under clause i), provided
that in the case of indirect ownership, each intermediate owner is a person entitled
to benefits of the Convention under this paragraph;
d) described in subparagraph 1(b)(i) of Article 4 (Residence);
e) described in subparagraph 1(b)(ii) of Article 4 (Residence), 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 persons described in
subparagraphs a), b), c), d) or e) own, directly or indirectly (through a chain of
ownership in which each person is entitled to benefits of the Convention under
this paragraph), at least 50 percent of each class of shares or other beneficial
interests in the person, and
ii) less than 50 percent of the person's gross income for the taxable year is
paid or accrued, directly or indirectly, to persons who are not residents of either
Contracting State (unless the payment is attributable to a permanent establishment
situated in either State), in the form of payments that are deductible for income
tax purposes in the person’s State of residence.
3.a) A resident of a Contracting State not otherwise entitled to benefits shall be
entitled to the benefits of this Convention with respect to an item of income derived from
the other State, if:
i) the resident is engaged in the active conduct of a trade or business in the
first-mentioned State,
ii) the income is connected with or incidental to the trade or business, and
iii) the trade or business is substantial in relation to the activity in the other
State generating the income.
b) For purposes of this paragraph, the business of making or managing
investments will not be considered an active trade or business unless the activity is
banking, insurance or securities activity conducted by a bank, insurance company or
registered securities dealer.
c) Whether a trade or business is substantial for purposes of this paragraph will be
determined based on all the facts and circumstances. In any case, however, a trade or
business will be deemed substantial if, for the preceding taxable year, or for the average
of the three preceding taxable years, the asset value, the gross income, and the payroll
expense that are related to the trade or business in the first-mentioned State equal at least
7.5 percent of the resident's (and any related parties') proportionate share of the asset
value, gross income and payroll expense, respectively, that are related to the activity that
generated the income in the other State, and the average of the three ratios exceeds 10
percent.

d) Income is derived in connection with a trade or business if the activity in the
other State generating the income is a line of business that forms a part of or is
complementary to the trade or business. Income is incidental to a trade or business if it
facilitates the conduct of the trade or business in the other State.
4. A resident of a Contracting State not otherwise entitled to benefits may be granted benefits
of the Convention if the competent authority of the State from which benefits are claimed so
determines.
5. For purposes of this Article the term "recognized stock exchange" means:
a) the NASDAQ System owned by the National Association of Securities Dealers,
Inc. and any stock exchange registered with the U.S. Securities and Exchange
Commission as a national securities exchange under the U.S. Securities Exchange Act of
1934; and
b) [stock exchanges of the other Contracting State].
ARTICLE 23
Relief from Double Taxation
1. In accordance with the provisions and subject to the limitations of the law of the United
States (as it may be amended from time to time without changing the general principle hereof),
the United States shall allow to a resident or citizen of the United States as a credit against the
United States tax on income
a) the income tax paid or accrued to _______ by or on behalf of such citizen or
resident; and
b) in the case of a United States company owning at least 10 percent of the voting
stock of a company that is a resident of _______ and from which the United States
company receives dividends, the income tax paid or accrued to ________ by or on behalf
of the payor with respect to the profits out of which the dividends are paid.
For the purposes of this paragraph, the taxes referred to in paragraphs 1(b) and 2 of Article 2
(Taxes Covered) shall be considered income taxes.
2. In accordance with the provisions and subject to the limitations of the law of ________ (as
it may be amended from time to time without changing the general principle hereof), ________
shall allow to a resident or citizen of_________ as a credit against the _________ tax on income
a) the income tax paid or accrued to the United States by or on behalf of such
resident of citizen; and
b) in the case of a company owning at least 10 percent of the voting stock of
a company that is a resident of the United States and from which the company
receives dividends, the income tax paid or accrued to the United States by or on behalf of
the payor with respect to the profits out of which the dividends are paid.
For the purposes of this paragraph, the taxes referred to in paragraphs 1(a) and 2 of Article 2

(Taxes Covered) shall be considered income taxes.
3. Where a United States citizen is a resident of ________:
a) with respect to items of income that under the provisions of this Convention are
exempt from United States tax or that are subject to a reduced rate of United States tax
when derived by a resident of __________ who is not a United States citizen, _________
shall allow as a credit against ________ tax, only the tax paid, if any, that the United
States may impose under the provisions of this Convention, other than taxes that may be
imposed solely by reason of citizenship under the saving clause of paragraph 4 of Article
1 (General Scope);
b) for purposes of computing United States tax on those items of income referred
to in subparagraph (a), the United States shall allow as a credit against United States tax
the income tax paid to ________ after the credit referred to in subparagraph (a); the credit
so allowed shall not reduce the portion of the United States tax that is creditable against
the ________ tax in accordance with subparagraph (a); and
c) for the exclusive purpose of relieving double taxation in the United States
under subparagraph (b), items of income referred to in subparagraph (a) shall be deemed
to arise in ________ to the extent necessary to avoid double taxation of such income
under subparagraph (b).
ARTICLE 24
Non-discrimination
1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any
taxation or any requirement connected therewith that is more burdensome than the taxation and
connected requirements to which nationals of that other State in the same circumstances,
particularly with respect to taxation on worldwide income, are or may be subjected. This
provision shall also apply to persons who are not residents of one or both of the Contracting
States.
2. The taxation on a permanent establishment or fixed base that a resident or enterprise of a
Contracting State has in the other Contracting State shall not be less favorably levied in that other
State than the taxation levied on enterprises or residents of that other State carrying on the same
activities. The provisions of this paragraph shall not be construed as obliging a Contracting State
to grant to residents of the other Contracting State any personal allowances, reliefs, and
reductions for taxation purposes on account of civil status or family responsibilities that it grants
to its own residents.
3. Except where the provisions of paragraph 1 of Article 9 (Associated Enterprises),
paragraph 4 of Article 11 (Interest), or paragraph 4 of Article 12 (Royalties) apply, interest,
royalties, and other disbursements paid by a resident of a Contracting State to a resident of the
other Contracting State shall, for the purpose of determining the taxable profits of the first-
mentioned resident, be deductible under the same conditions as if they had been paid to a resident
of the first-mentioned State. Similarly, any debts of a resident of a Contracting State to a resident

of the other Contracting State shall, for the purpose of determining the taxable capital of the first-
mentioned resident, be deductible under the same conditions as if they had been contracted to a
resident of the first-mentioned State.
4. Enterprises of a Contracting State, the capital of which is wholly or partly owned or
controlled, directly or indirectly, by one or more residents of the other Contracting State, shall
not be subjected in the first-mentioned State to any taxation or any requirement connected
therewith that is more burdensome than the taxation and connected requirements to which other
similar enterprises of the first-mentioned State are or may be subjected.
5. Nothing in this Article shall be construed as preventing either Contracting State from
imposing a tax as described in paragraph 8 of Article 10 (Dividends).
6. The provisions of this Article shall, notwithstanding the provisions of Article 2 (Taxes
Covered), apply to taxes of every kind and description imposed by a Contracting State or a
political subdivision or local authority thereof.
ARTICLE 25
Mutual Agreement Procedure
1. Where a person considers that the actions of one or both of the Contracting States result or
will result for him in taxation not in accordance with the provisions of this Convention, he may,
irrespective of the remedies provided by the domestic law of those States, and the time limits
prescribed in such laws for presenting claims for refund, present his case to the competent
authority of either Contracting State.
2. The competent authority shall endeavor, if the objection appears to it to be justified and if
it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement
with the competent authority of the other Contracting State, with a view to the avoidance of
taxation which is not in accordance with the Convention. Any agreement reached shall be
implemented notwithstanding any time limits or other procedural limitations in the domestic law
of the Contracting States. Assessment and collection procedures shall be suspended during the
pendency of any mutual agreement proceeding.
3. The competent authorities of the Contracting States shall endeavor to resolve by mutual
agreement any difficulties or doubts arising as to the interpretation or application of the
Convention. In particular the competent authorities of the Contracting States may agree:
a) to the same attribution of income, deductions, credits, or allowances of an
enterprise of a Contracting State to its permanent establishment situated in the other
Contracting State;
b) to the same allocation of income, deductions, credits, or allowances between
persons;
c) to the same characterization of particular items of income, including the same
characterization of income that is assimilated to income from shares by the taxation law

of one of the Contracting States and that is treated as a different class of income in the
other State;
d) to the same characterization of persons;
e) to the same application of source rules with respect
to particular items of income;
f) to a common meaning of a term;
g) to advance pricing arrangements; and
h) to the application of the provisions of domestic law regarding penalties, fines,
and interest in a manner consistent with the purposes of the Convention.
They may also consult together for the elimination of double taxation in cases not provided for in
the Convention.
4. The competent authorities also may agree to increases in any specific dollar amounts
referred to in the Convention to reflect economic or monetary developments.
5. The competent authorities of the Contracting States may communicate with each other
directly for the purpose of reaching an agreement in the sense of the preceding paragraphs.
ARTICLE 26
Exchange of Information and Administrative Assistance
1. The competent authorities of the Contracting States shall exchange such information as is
relevant for carrying out the provisions of this Convention or of the domestic laws of the
Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder
is not contrary to the Convention, including information relating to the assessment or collection
of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the
taxes covered by the Convention. The exchange of information is not restricted by Article 1
(General Scope). Any information received by a Contracting State shall be treated as secret in the
same manner as information obtained under the domestic laws of that State and shall be
disclosed only to persons or authorities (including courts and administrative bodies) involved in
the assessment, collection, or administration of, the enforcement or prosecution in respect of, or
the determination of appeals in relation to, the taxes covered by the Convention or the oversight
of the above. Such persons or authorities shall use the information only for such purposes. They
may disclose the information in public court proceedings or in judicial decisions.
2. In no case shall the provisions of paragraph 1 be construed so as to impose on a
Contracting State the obligation:
a) to carry out administrative measures at variance with the laws and
administrative practice of that or of the other Contracting State;
b) to supply information that is not obtainable under the laws or in the normal
course of the administration of that or of the other Contracting State;
c) to supply information that would disclose any trade, business, industrial,
commercial, or professional secret or trade process, or information the disclosure of

which would be contrary to public policy (ordre public).
3. Notwithstanding paragraph 2, the competent authority of the requested State shall have the
authority to obtain and provide information held by financial institutions, nominees or persons
acting in an agency or fiduciary capacity, or respecting interests in a person, including bearer
shares, regardless of any laws or practices of the requested State that might otherwise preclude
the obtaining of such information. If information is requested by a Contracting State in
accordance with this Article, the other Contracting State shall obtain that information in the same
manner and to the same extent as if the tax of the first-mentioned State were the tax of that other
State and were being imposed by that other State, notwithstanding that the other State may not, at
that time, need such information for purposes of its own tax. If specifically requested by the
competent authority of a Contracting State, the competent authority of the other Contracting State
shall provide information under this Article in the form of depositions of witnesses and
authenticated copies of unedited original documents (including books, papers, statements,
records, accounts, and writings), to the same extent such depositions and documents can be
obtained under the laws and administrative practices of that other State with respect to its own
taxes.
4. Each of the Contracting States shall endeavor to collect on behalf of the other Contracting
State such amounts as may be necessary to ensure that relief granted by the Convention from
taxation imposed by that other State does not inure to the benefit of persons not entitled thereto.
This paragraph shall not impose upon either of the Contracting States the obligation to carry out
administrative measures that would be contrary to its sovereignty, security, or public policy.
5. For the purposes of this Article, the Convention shall apply, notwithstanding the provisions
of Article 2 (Taxes Covered), to taxes of every kind imposed by a Contracting State.
6. The competent authority of the requested State shall allow representatives of the applicant
State to enter the requested State to interview individuals and examine books and records with
the consent of the persons subject to examination.
ARTICLE 27
Diplomatic Agents and Consular Officers
Nothing in this Convention shall affect the fiscal privileges of diplomatic agents or consular
officers under the general rules of international law or under the provisions of special
agreements.
ARTICLE 28
Entry into Force
1. This Convention shall be subject to ratification in accordance with the applicable
procedures of each Contracting State. Each Contracting State shall notify the other as soon as its

procedures have been complied with.
2. The Convention shall enter into force on 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, for amounts paid or credited on or after
the first day of the second month next following the date on which the Convention enters
into force;
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 Convention enters into force.
ARTICLE 29
Termination
1. This Convention shall remain in force until terminated by a Contracting State. Either
Contracting State may terminate the Convention by giving notice of termination to the other
Contracting State through diplomatic channels. In such event, the Convention shall cease to have
effect:
a) in respect of taxes withheld at source, for amounts paid or credited after the
expiration of the 6 month period beginning on the date on which notice of termination
was given; and
b) in respect of other taxes, for taxable periods beginning on or after the
expiration of the 6 month period beginning on the date on which notice of termination
was given.
IN WITNESS WHEREOF, the undersigned, being duly authorized thereto by their respective
Governments, have signed this Convention.
DONE at in duplicate, in the English and
languages, both texts being equally
authentic, this day of (month) , 19 .
FOR THE GOVERNMENT OF THE FOR THE GOVERNMENT OF
UNITED STATES OF AMERICA: :