UNITED STATES MODEL

INCOME TAX CONVENTION 

CONVENTION BETWEEN

THE GOVERNMENT OF THE UNITED STATES OF AMERICA

AND THE GOVERNMENT OF __________

FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE 

PREVENTION OF TAX EVASION 

WITH RESPECT TO TAXES ON INCOME

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

intending to conclude a Convention for the elimination of double taxation with respect to taxes 

on income without creating opportunities for non-taxation or reduced taxation through tax 

evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs 

provided in this Convention for the indirect benefit of residents of third states), have agreed as 

follows:
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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 this Convention.

2. This 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 to which both Contracting States are parties. 

3. a) Notwithstanding the provisions of subparagraph (b) of paragraph 2 of this Article:

i) for purposes of paragraph 3 of Article XXII (Consultation) of the General 

Agreement on Trade in Services, the Contracting States agree that any question 

arising as to the interpretation or application of this Convention and, in particular, 

whether a taxation measure is within the scope of this Convention, shall be 

determined exclusively in accordance with the provisions of Article 25 (Mutual 

Agreement Procedure) of this Convention; and

ii) the provisions of Article XVII (National Treatment) of the General 

Agreement on Trade in Services shall not apply to a taxation measure unless the 

competent authorities agree that the measure is not within the scope of Article 24

(Non-Discrimination) of this Convention.

b) For the purposes of this paragraph, a “measure” is a law, regulation, rule, 

procedure, decision, administrative action or any similar provision or action.

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

affect the taxation by a Contracting State of its residents (as determined under Article 4 

(Resident)) and its citizens. Notwithstanding the other provisions of this Convention, a former 

citizen or former long-term resident of a Contracting State may be taxed in accordance with the 

laws of that Contracting State. 

5. The provisions of paragraph 4 of this Article shall not affect:

a) the benefits conferred by a Contracting State under paragraph 3 of Article 7 

(Business Profits), paragraph 2 of Article 9 (Associated Enterprises), paragraph 7 of 

Article 13 (Gains), subparagraph (b) of paragraph 1, paragraphs 2, 3 and 6 of Article 17 

(Pensions, Social Security, Annuities, Alimony and Child Support), paragraph 3 of 
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Article 18 (Pension Funds), 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 1 of Article 18

(Pension Funds), and Articles 19 (Government Service), 20 (Students and Trainees) and 

27 (Members of Diplomatic Missions and Consular Posts), upon individuals who are 

neither citizens of, nor have been admitted for permanent residence in, that Contracting 

State.

6. For the purposes of this Convention, an item of income, profit or gain derived by or 

through an entity that is treated as wholly or partly fiscally transparent under the taxation laws of 

either Contracting State shall be considered to be derived by a resident of a Contracting State, 

but only to the extent that the item is treated for purposes of the taxation laws of such 

Contracting State as the income, profit or gain of a resident.

7. Where an item of income, profit or gain arising in one of the Contracting States otherwise 

would be entitled to the benefits of this Convention in that Contracting State and, under the law 

of the other Contracting State, a person’s tax in respect of such item is determined by reference 

to the amount thereof that is remitted to or received in that other Contracting State and not by 

reference to the full amount thereof, then the relief to be allowed under this Convention in the 

first-mentioned Contracting State shall apply only to so much of the amount as is taxed in the 

other Contracting State.

8. Where an enterprise of a Contracting State derives income from the other Contracting 

State, and the first-mentioned Contracting State treats that income as attributable to a permanent 

establishment situated outside of that Contracting State, the benefits of this Convention shall not 

apply to that income if:

a) the profits that are treated as attributable to the permanent establishment are 

subject to a combined aggregate effective rate of tax in the first-mentioned Contracting 

State and the state in which the permanent establishment is situated that is less than the 

lesser of (i) 15 percent or (ii) 60 percent of the general statutory rate of company tax 

applicable in the first-mentioned Contracting State; or

b) the permanent establishment is situated in a third state that does not have a 

comprehensive convention for the avoidance of double taxation in force with the 

Contracting State from which the benefits of this Convention are being claimed, unless 

the first-mentioned Contracting State includes the income treated as attributable to the 

permanent establishment in its tax base. 

However, if a resident of a Contracting State is denied the benefits of this Convention pursuant 

to this paragraph, the competent authority of the other Contracting State may, nevertheless, grant 

the benefits of this Convention with respect to a specific item of income if such competent 
4

authority determines that such grant of benefits is justified in light of the reasons such resident 

did not satisfy the requirements of this paragraph (such as the existence of losses). The 

competent authority of the Contracting State to which the request has been made shall consult 

with the competent authority of the other Contracting State before either granting or denying a 

request made under this paragraph by a resident of that other Contracting State.
5

Article 2

TAXES COVERED

1. This Convention shall apply to taxes on income imposed on behalf of a Contracting State 

irrespective of the manner in which they are levied.

2. There shall be regarded as taxes on income all taxes imposed on total income, or on 

elements of income, including taxes on gains from the alienation of property.

3. The existing taxes to which this Convention shall apply are:

a) in the case of __________:

b) in the case of the United States: the Federal income taxes imposed by the Internal 

Revenue Code (which do not include social security and unemployment taxes) and the 

Federal taxes imposed on the investment income of foreign private foundations.

4. This Convention also shall apply to any identical or substantially similar taxes that are 

imposed after the date of signature of this 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 taxation laws or other laws that relate to the 

application of this Convention.
6

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 Contracting State in which it 

is resident;

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 “enterprise” applies to the carrying on of any business;

e) the term “business” includes the performance of professional services and of other 

activities of an independent character;

f) the term “international traffic” means any transport by a ship or aircraft, except 

when such transport is solely between places in a Contracting State;

g) the term “competent authority” means:

i) in __________: ----------; and

ii) in the United States: the Secretary of the Treasury or his delegate;

h) the term “__________:” means ----------;

i) 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; 

j) the term “national” of a Contracting State means:
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i) any individual possessing the nationality or citizenship of that Contracting 

State; and

ii) any legal person, partnership or association deriving its status as such from 

the laws in force in that Contracting State;

k) the term “pension fund” means any person established in a Contracting State that 

is:

i) generally exempt from income taxation in that Contracting State; and

ii) operated exclusively or almost exclusively:

A) to administer or provide pension or retirement benefits; or 

B) to earn income for the benefit of one or more persons established 

in the same Contracting State that are generally exempt from income 

taxation in that Contracting State and that are operated exclusively or 

almost exclusively to administer or provide pension or retirement benefits;

l) the term “special tax regime” means any statute, regulation or administrative 

practice in a Contracting State with respect to a tax described in Article 2 (Taxes 

Covered) that meets all of the following conditions: 

i) results in one or more of the following:

A) a preferential rate of taxation for interest, royalties, guarantee fees 

or any combination thereof, as compared to income from sales of goods or 

services; 

B) a permanent reduction in the tax base with respect to interest, 

royalties, guarantee fees or any combination thereof, without a comparable 

reduction for income from sales of goods or services, by allowing:

1) an exclusion from gross receipts;

2) a deduction without regard to any corresponding payment 

or obligation to make a payment;

3) a deduction for dividends paid or accrued; or
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4) taxation that is inconsistent with the principles of Article 7 

(Business Profits) or Article 9 (Associated Enterprises); or

C) a preferential rate of taxation or a permanent reduction in the tax 

base of the type described in part (1), (2), (3) or (4) of subclause (B) of 

this clause with respect to substantially all of a company’s income or 

substantially all of a company’s foreign source income, for companies that 

do not engage in the active conduct of a trade or business in that 

Contracting State; 

ii) in the case of any preferential rate of taxation or permanent reduction in 

the tax base for royalties, does not condition such benefits on the extent of 

research and development activities that take place in the Contracting State; 

iii) is generally expected to result in a rate of taxation1 that is less than the 

lesser of either:

A) 15 percent; or 

B) 60 percent of the general statutory rate of company tax applicable 

in the other Contracting State; 

iv) does not apply principally to:

A) pension funds; 

B) organizations that are established and maintained exclusively for

religious, charitable, scientific, artistic, cultural or educational purposes; 

 

1 For inclusion in an instrument reflecting an agreed interpretation: Except as provided below, the rate of 

taxation shall be determined based on the income tax principles of the Contracting State that has 

implemented the regime in question. Therefore, in the case of a regime that provides only for a 

preferential rate of taxation, the generally expected rate of taxation under the regime will equal such 

preferential rate. In the case of a regime that provides only for a permanent reduction in the tax base, the 

rate of taxation will equal the statutory rate of company tax generally applicable in the Contracting State 

to companies subject to the regime in question less the product of such rate and the percentage reduction 

in the tax base (with the baseline tax base determined under the principles of the Contracting State, but 

without regard to any permanent reductions in the tax base described in subparagraph (l)(i)(B)) that the 

regime is generally expected to provide. Therefore, a regime that generally provides for a 20 percent 

permanent reduction in a company’s tax base would have a rate of taxation equal to the applicable 

statutory rate of company tax reduced by 20 percent of such statutory rate. In the case of a regime that 

provides for both a preferential rate of taxation and a permanent reduction in the tax base, the rate of 

taxation would be based on the preferential rate of taxation reduced by the product of such rate and the 

percentage reduction in the tax base.
9

C) persons the taxation of which achieves a single level of taxation 

either in the hands of the person or the person’s shareholders (with at most 

one year of deferral), that hold a diversified portfolio of securities, that are 

subject to investor-protection regulation in the Contracting State and the 

interests in which are marketed primarily to retail investors; or

D) persons the taxation of which achieves a single level of taxation 

either in the hands of the person or the person’s shareholders (with at most 

one year of deferral) and that hold predominantly real estate assets; and

v) after consultation with the first-mentioned Contracting State, has been 

identified by the other Contracting State through diplomatic channels to the firstmentioned Contracting State as satisfying clauses (i) through (iv) of this 

subparagraph.

No statute, regulation or administrative practice shall be treated as a special tax regime 

until 30 days after the date when the other Contracting State issues a written public 

notification identifying the regime as satisfying clauses (i) through (v) of this 

subparagraph; and

m) two persons shall be “connected persons” if one owns, directly or indirectly, 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 value of the company’s shares) or another 

person owns, 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 value of the company’s 

shares) in each person. In any case, a person shall 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.

2. As regards the application of this Convention at any time by a Contracting State, any 

term not defined herein 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 that it has at that time under the law of that Contracting State for 

the purposes of the taxes to which this Convention applies, any meaning under the applicable tax 

laws of that Contracting State prevailing over a meaning given to the term under other laws of 

that Contracting State.
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Article 4

RESIDENT

1. For the purposes of this Convention, the term “resident of a Contracting State” means any 

person who, under the laws of that Contracting 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, and also includes that Contracting State and any political 

subdivision or local authority thereof. This term does not include any person whose tax is 

determined in that Contracting State on a fixed-fee, “forfait” or similar basis, or who is liable to 

tax in respect only of income from sources in that Contracting State or of profits attributable to a 

permanent establishment in that Contracting State.

2. The term “resident of a Contracting State” includes:

a) a pension fund established in that Contracting State; and

b) an organization that is established and maintained in that Contracting State 

exclusively for religious, charitable, scientific, artistic, cultural, or educational purposes;

notwithstanding that all or part of its income or gains may be exempt from tax under the 

domestic law of that Contracting State.

3. Where, by reason of the provisions of paragraph 1 of this Article, 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 only of the Contracting State in which he has a 

permanent home available to him; if he has a permanent home available to him in both 

Contracting States, he shall be deemed to be a resident only of the Contracting State with 

which his personal and economic relations are closer (center of vital interests);

b) if the Contracting 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 

Contracting State, he shall be deemed to be a resident only of the Contracting State in 

which he has a habitual abode;

c) if he has a habitual abode in both Contracting States or in neither of them, he shall 

be deemed to be a resident only of the Contracting State of which he is a national;

d) if he is a national of both Contracting States or of neither of them, the competent 

authorities of the Contracting States shall endeavor to settle the question by mutual 

agreement.
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4. Where by reason of the provisions of paragraph 1 of this Article a company is a resident 

of both Contracting States, such company shall not be treated as a resident of either Contracting 

State for purposes of its claiming the benefits provided by this Convention.

5. Where by reason of the provisions of paragraph 1 of this Article a person other than an 

individual or a company is a resident of both Contracting States, the competent authorities of the 

Contracting States shall by mutual agreement endeavor to determine the mode of application of 

this Convention to that person. 
12

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 or exploitation of the sea bed and its subsoil and their natural 

resources, situated in one of the Contracting States constitutes a permanent establishment only if 

it lasts, or the activities of the rig or ship lasts, for more than twelve months. For the sole 

purpose of determining whether the twelve-month period referred to in this paragraph has been 

exceeded:

a) where an enterprise of a Contracting State carries on activities in the other 

Contracting State at a place that constitutes a building site or construction or installation 

project and these activities are carried on during periods of time that in the aggregate do 

not last more than twelve months; and

b) connected activities are carried on at the same building site or construction or 

installation project during different periods of time, each exceeding thirty days, by one or 

more enterprises that are connected persons with respect to the first-mentioned enterprise,

these different periods of time shall be added to the periods of time during which the firstmentioned enterprise has carried on activities at that building site or construction or installation 

project. 
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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) of this paragraph, provided that the 

overall activity of the fixed place of business resulting from this combination is of a 

preparatory or auxiliary character.

5. Notwithstanding the provisions of paragraphs 1 and 2 of this Article, where a person --

other than an agent of an independent status to whom paragraph 6 of this Article 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 Contracting 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 Contracting 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 Contracting State (whether through a permanent establishment or otherwise), shall not be 

taken into account in determining whether either company has a permanent establishment in that 

other Contracting State.
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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 Contracting State.

2. The term “real property” or “immovable property” shall have the meaning which it has 

under the law of the Contracting State in which the property in question is situated. The term 

shall in any case include property accessory to real property (immovable property), livestock and 

equipment used in agriculture and forestry, rights to which the provisions of general law 

respecting landed property apply, usufruct of real property (immovable property) and rights to 

variable or fixed payments as consideration for the working of, or the right to work, mineral 

deposits, sources and other natural resources. Ships and aircraft shall not be regarded as real

property (immovable property).

3. The provisions of paragraph 1 of this Article shall apply to income derived from the 

direct use, letting, or use in any other form of real property (immovable property).

4. The provisions of paragraphs 1 and 3 of this Article shall also apply to the income from 

real property (immovable property) of an enterprise.

5. A resident of a Contracting State that is liable to tax in the other Contracting State on 

income from real property (immovable 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 Contracting 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. 
15

Article 7

BUSINESS PROFITS

1. Profits of an enterprise of a Contracting State shall be taxable only in that Contracting 

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 profits that 

are attributable to the permanent establishment in accordance with the provisions of paragraph 2 

of this Article may be taxed in that other Contracting State. 

2. For the purposes of this Article, the profits that are attributable in each Contracting State 

to the permanent establishment referred to in paragraph 1 of this Article are the profits it might 

be expected to make, in particular in its dealings with other parts of the enterprise, if it were a 

separate and independent enterprise engaged in the same or similar activities under the same or 

similar conditions, taking into account the functions performed, assets used and risks assumed by 

the enterprise through the permanent establishment and through the other parts of the enterprise. 

3. Where, in accordance with paragraph 2 of this Article, a Contracting State adjusts the 

profits that are attributable to a permanent establishment of an enterprise of one of the 

Contracting States and taxes accordingly profits of the enterprise that have been charged to tax in 

the other Contracting State, the other Contracting State shall, to the extent necessary to eliminate 

double taxation, make an appropriate adjustment if it agrees with the adjustment made by the 

first-mentioned Contracting State; if the other Contracting State does not so agree, the 

Contracting States shall eliminate any double taxation resulting therefrom by mutual agreement. 

4. Where profits include items of income that are dealt with separately in other Articles of 

this Convention, then the provisions of those Articles shall not be affected by the provisions of 

this Article.

5. In applying this Article, paragraph 8 of Article 10 (Dividends), paragraph 5 of Article 11 

(Interest), paragraph 5 of Article 12 (Royalties), paragraph 3 of Article 13 (Gains) and paragraph 

3 of Article 21 (Other Income), any income, profit or gain attributable to a permanent 

establishment during its existence is taxable in the Contracting State where such permanent 

establishment is situated even if the payments are deferred until such permanent establishment 

has ceased to exist.
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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 Contracting State. 

2. For purposes of this Article, profits from the operation of ships or aircraft include, but are 

not limited to:

a) profits from the rental of ships or aircraft on a full (time or voyage) basis;

b) profits from the rental on a bareboat basis of ships or aircraft if the rental income 

is incidental to profits from the operation of ships or aircraft in international traffic; and

c) profits from the rental on a bareboat basis of ships or aircraft if such ships or 

aircraft are operated in international traffic by the lessee. 

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) shall 

be taxable only in that Contracting State, except to the extent that those containers are used for 

transport solely between places within the other Contracting State.

4. The provisions of paragraphs 1 and 3 of this Article shall also apply to profits from 

participation in a pool, a joint business, or an international operating agency.
17

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 Contracting 

State, and taxes accordingly, profits on which an enterprise of the other Contracting State has 

been charged to tax in that other Contracting 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 

Contracting State if the conditions made between the two enterprises had been those that would 

have been made between independent enterprises, then that other Contracting 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 had to the other provisions of this Convention and the 

competent authorities of the Contracting States shall if necessary consult each other.
18

Article 10

DIVIDENDS

1. Dividends paid by a company that is a resident of a Contracting State to a resident of the 

other Contracting State may be taxed in that other Contracting 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 Contracting State, 

but if the beneficial owner of the dividends is 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, for the twelve-month period 

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

i) the beneficial owner has been a company that was a resident of the other 

Contracting State or of a qualifying third state. The term “qualifying third state”

means a state that has in effect a comprehensive convention for the avoidance of 

double taxation with the Contracting State of the company paying the dividends 

that would have allowed the beneficial owner to benefit from a rate of tax on 

dividends that is less than or equal to 5 percent; and

ii) at least 10 percent of the aggregate vote and value of the shares of the 

payor of the dividends was owned directly by the beneficial owner or a qualifying 

predecessor owner. The term “qualifying predecessor owner” means a company 

from which the beneficial owner acquired the shares of the payor of the dividends, 

but only if such company was, at the time the shares were acquired, a connected 

person with respect to the beneficial owner of the dividend, and a resident of a 

state that has in effect a comprehensive convention for the avoidance of double 

taxation with the Contracting State of the company paying the dividends that

would have allowed such company to benefit from a rate of tax on dividends that 

is less than or equal to 5 percent. For this purpose, a company that is a resident of 

a Contracting State shall be considered to own directly the shares owned by an 

entity that:

A) is considered fiscally transparent under the laws of that 

Contracting State; and 

B) is not a resident of the other Contracting State of which the 

company paying the dividends is a resident; 

in proportion to the company’s ownership interest in that entity; and
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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. Notwithstanding the provisions of paragraph 2 of this Article, dividends shall not be 

taxed in the Contracting State of which the company paying the dividends is a resident if:

a) the beneficial owner of the dividends is a pension fund that is a resident of the 

other Contracting State; and 

b) such dividends are not derived from the carrying on of a trade or business by the 

pension fund or through a person that is a connected person with respect to the pension 

fund.

4. a) Subparagraph (a) of paragraph 2 of this Article 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 dividends paid by a RIC, subparagraph (b) of 

paragraph 2 and paragraph 3 of this Article shall apply. In the case of dividends paid by 

a REIT, subparagraph (b) of paragraph 2 and paragraph 3 of this Article 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 shares 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 shares; 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.

b) For purposes of this paragraph, a REIT shall be “diversified” if the value of no 

single interest in real property (immovable property) exceeds 10 percent of its total 

interests in real property (immovable property). For the purposes of this rule, foreclosure 

property shall not be considered an interest in real property (immovable 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 (immovable property) 

corresponding to its interest in the partnership.

5. In the case of the United States, notwithstanding the provisions of paragraph 2 of this 

Article, dividends paid by an expatriated entity and beneficially owned by a company resident in 

__________ that is a connected person with respect to such expatriated entity may be taxed in 
20

accordance with the law of the United States for a period of ten years beginning on the date on 

which the acquisition of the domestic entity is completed. For purposes of applying this 

paragraph:

a) no effect shall be given to any amendment to section 7874 of the Internal Revenue 

Code after the date of signature of this Convention; and 

b) no entity shall be treated as an expatriated entity that:

i) is a connected person with respect to the domestic entity immediately after 

the date on which the acquisition of the domestic entity is completed; and 

ii) prior to that date, was never a connected person with respect to the 

domestic entity. 

However, an entity described in the preceding sentence shall become an expatriated 

entity if, subsequent to the date on which the acquisition of the domestic entity is 

completed, the entity joins in filing a U.S. consolidated return with either the domestic 

entity or another entity that was a connected person with respect to the domestic entity 

immediately prior to the date on which the acquisition of the domestic entity was 

completed.

6. Notwithstanding the provisions of paragraphs 1 and 2 of this Article, in the case of a 

company seeking to satisfy the requirements of paragraph 4 of Article 22 (Limitation on 

Benefits) regarding a dividend, if such company fails to satisfy the criteria of that paragraph 

solely by reason of:

a) the requirement in subclause (B) of clause (i) of subparagraph (e) of paragraph 7

of Article 22 (Limitation on Benefits) of this Convention; or

b) the requirement in clause (ii) of subparagraph (e) of paragraph 7 of Article 22

(Limitation on Benefits) that a person entitled to benefits under paragraph 5 of Article 22

(Limitation on Benefits) would be entitled to a rate of tax with respect to the dividend

that is less than or equal to the rate applicable under paragraph 2 of this Article;

such company may be taxed in the Contracting State of which the company paying the dividends 

is a resident and according to the laws of that Contracting State. In these cases, however, the tax 

so charged shall not exceed the highest rate among the rates of tax to which persons described in 

subparagraph (e) of paragraph 7 of Article 22 (Limitation on Benefits) of this Convention 

(notwithstanding the requirements referred to in subparagraphs (a) and (b) of this paragraph) 

would have been entitled if such persons had received the dividend directly. For purposes of this 

paragraph, (i) such persons’ indirect ownership of the shares of the company paying the 

dividends shall be treated as direct ownership, and (ii) a person described in clause (iii) of 
21

subparagraph (e) of paragraph 7 of Article 22 (Limitation on Benefits) shall be treated as entitled 

to the limitation of tax to which such person would be entitled if such person were a resident of 

the same Contracting State as the company receiving the dividends.

7. For purposes of this Article, the term “dividends” means income from shares or other 

rights, not being debt-claims, participating in profits, as well as income that is subject to the 

same taxation treatment as income from shares under the laws of the Contracting State of which 

the company making the distribution is a resident. The term does not include distributions that 

are treated as gain under the laws of the Contracting State of which the company making the 

distribution is a resident. In such case, the provisions of Article 13 (Gains) shall apply. 

8. The provisions of paragraphs 1 through 6 of this Article 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, and the holding in respect of which the dividends are paid is 

effectively connected with such permanent establishment. In such case the provisions of Article 

7 (Business Profits) shall apply.

9. A Contracting State may not impose any tax on dividends paid by a resident of the other 

Contracting State, except insofar as the dividends are paid to a resident of the first-mentioned 

Contracting State or the dividends are attributable to a permanent establishment situated therein, 

nor may it impose tax on a corporation’s undistributed profits, except as provided in paragraph 

10 of this Article, even if the dividends paid or the undistributed profits consist wholly or partly 

of profits or income arising in that Contracting State.

10. a) A company that is a resident of one of the Contracting States and that has a 

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

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

Contracting State under Article 6 (Income from Real Property (Immovable Property)) or 

under paragraph 1 of Article 13 (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. 

b) Such tax, however, may be imposed:

i) on only the portion of the business profits of the company attributable to 

the permanent establishment and the portion of the income referred to in 

subparagraph (a) of this paragraph that is subject to tax under Article 6 (Income 

from Real Property (Immovable 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; and 
22

ii) at a rate not in excess of the rate specified in subparagraph (a) of 

paragraph 2 or paragraph 6 of this Article, but only if for the twelve-month period 

ending on the date on which the entitlement to the dividend equivalent amount is 

determined, the company has been a resident of the other Contracting State or of a 

qualifying third state. The term “qualifying third state” has the same meaning as 

in clause (i) of subparagraph (a) of paragraph 2 of this Article.
23

Article 11

INTEREST

1. Interest arising in a Contracting State and beneficially owned by a resident of the other 

Contracting State shall be taxable only in that other Contracting State.

2. Notwithstanding the provisions of paragraph 1 of this Article:

a) interest arising in __________ that is determined with reference to receipts, sales, 

income, profits or other cash flow of the debtor or a connected person with respect to the 

debtor, to any change in the value of any property of the debtor or a connected person 

with respect to the debtor or to any dividend, partnership distribution or similar payment 

made by the debtor or a connected person with respect to the debtor may be taxed in

__________, and according to the laws of __________, but if the beneficial owner is a 

resident of the United States, the interest may be taxed at a rate not exceeding 15 percent 

of the gross amount of the interest; 

b) interest arising in the United States that is contingent interest of a type that does 

not qualify as portfolio interest under the law of the United States may be taxed by the 

United States, but if the beneficial owner is a resident of __________, the interest may be 

taxed at a rate not exceeding 15 percent of the gross amount of the interest; 

c) interest arising in a Contracting State and beneficially owned by a resident of the 

other Contracting State that is a connected person with respect to the payor of the interest 

may be taxed in the first-mentioned Contracting State in accordance with domestic law if 

such resident benefits from a special tax regime with respect to such interest in its 

Contracting State of residence;

d) in the case of the United States, interest paid by an expatriated entity and 

beneficially owned by a company resident in __________ that is a connected person with 

respect to such expatriated entity may be taxed in accordance with the law of the United 

States for a period of ten years beginning on the date on which the acquisition of the 

domestic entity is completed. For purposes of applying this paragraph:

i) no effect shall be given to any amendment to section 7874 of the Internal 

Revenue Code after the date of signature of this Convention; and 

ii) no entity shall be treated as an expatriated entity that:

A) is a connected person with respect to the domestic entity 

immediately after the date on which the acquisition of the domestic entity 

is completed; and 
24

B) prior to that date, was never a connected person with respect to the 

domestic entity. 

However, an entity described in the preceding sentence shall become an expatriated 

entity if, subsequent to the date on which the acquisition of the domestic entity is 

completed, the entity joins in filing a U.S. consolidated return with either the domestic 

entity or another entity that was a connected person with respect to the domestic entity 

immediately prior to the date on which the acquisition of the domestic entity was 

completed;

e) interest arising in a Contracting State and beneficially owned by a resident of the 

other Contracting State that is a connected person with respect to the payor of the interest 

may be taxed in the first-mentioned Contracting State in accordance with domestic law if 

such resident benefits, at any time during the taxable year in which the interest is paid, 

from notional deductions with respect to amounts that the Contracting State of which the 

beneficial owner is resident treats as equity; 

f) interest arising in a Contracting State and beneficially owned by a resident of the 

other Contracting State that is entitled to the benefits of this Article only by reason of 

paragraph 5 of Article 22 (Limitation on Benefits) may be taxed in the first-mentioned 

Contracting State, but the tax so charged shall not exceed 10 percent of the gross amount 

of the interest; and

g) interest that is an excess inclusion with respect to a residual interest in a real 

estate mortgage investment conduit may be taxed by each Contracting State in 

accordance with its domestic law.

3. Notwithstanding the provisions of paragraph 1 of this Article, in the case of a company 

seeking to satisfy the requirements of paragraph 4 of Article 22 (Limitation on Benefits) of this 

Convention regarding a payment of interest, if such company fails to satisfy the criteria of that 

paragraph solely by reason of: 

a) the requirement in subclause (B) of clause (i) of subparagraph (e) of paragraph 7

of Article 22 (Limitation on Benefits) of this Convention; or

b) the requirement in clause (ii) of subparagraph (e) of paragraph 7 of Article 22 

(Limitation on Benefits) that a person entitled to benefits under paragraph 5 of Article 22 

(Limitation on Benefits) would be entitled to a rate of tax with respect to the interest that 

is less than or equal to the rate applicable under paragraph 2 of this Article; 

such company may be taxed by the Contracting State in which the interest arises according to the 

laws of that Contracting State. In these cases, however, the tax so charged shall not exceed the 
25

highest rate among the rates of tax to which persons described in subparagraph (e) of paragraph 7

of Article 22 (Limitation on Benefits) of this Convention (notwithstanding the requirements

referred to in subparagraphs (a) and (b) of this paragraph) would have been entitled if such 

persons had received the interest directly. For purposes of this paragraph, a person described in 

clause (iii) of subparagraph (e) of paragraph 7 of Article 22 (Limitation on Benefits) shall be 

treated as entitled to the limitation of tax to which such person would be entitled if such person 

were a resident of the same Contracting State as the company receiving the interest.

4. The term “interest” as used in this Article 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 

under the 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.

5. The provisions of paragraphs 1 through 3 of this Article 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, 

and the debt-claim in respect of which the interest is paid is effectively connected with such 

permanent establishment. In such case the provisions of Article 7 (Business Profits) shall apply.

6. For purposes of this Article, interest shall be deemed to arise in a Contracting State when 

the payor is a resident of that Contracting State. Where, however, the person paying the interest, 

whether a resident of a Contracting State or not, has in a Contracting State a permanent 

establishment or derives profits that are taxable on a net basis in a Contracting State under 

paragraph 5 of Article 6 (Income from Real Property (Immovable Property)) or paragraph 1 of 

Article 13 (Gains), and such interest is borne by such permanent establishment or allocable to 

such profits, then such interest shall be deemed to arise in the Contracting State in which the 

permanent establishment is situated or from which such profits are derived.

7. The excess, if any, of the amount of interest allocable to the profits of a company resident

in a Contracting State that are:

a) attributable to a permanent establishment in the other Contracting State (including 

gains under paragraph 3 of Article 13 (Gains)); or

b) subject to tax in the other Contracting State under Article 6 (Income from Real 

Property (Immovable Property)) or paragraph 1 of Article 13 (Gains);

over the interest paid by that permanent establishment, or in the case of profits subject to tax 

under Article 6 (Income from Real Property (Immovable Property)) or paragraph 1 of Article 13 
26

(Gains), over the interest paid by that company, shall be deemed to arise in that other Contracting 

State and to be beneficially owned by a resident of the first-mentioned Contracting State. The 

tax imposed under this Article on such interest shall not exceed the rates provided in paragraphs 

1 through 3 of this Article. 

8. Where, by reason of a special relationship between the payor 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 that would have been agreed upon by the 

payor 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 this Convention.
27

Article 12

ROYALTIES

1. Royalties arising in a Contracting State and beneficially owned by a resident of the other 

Contracting State shall be taxable only in that other Contracting State.

2. Notwithstanding the provisions of paragraph 1 of this Article:

a) a royalty arising in a Contracting State and beneficially owned by a resident of the 

other Contracting State that is a connected person with respect to the payor of the royalty

may be taxed in the first-mentioned Contracting State in accordance with domestic law if

such resident benefits from a special tax regime with respect to the royalty in its 

Contracting State of residence; and 

b) in the case of the United States, royalties paid by an expatriated entity and 

beneficially owned by a company resident in __________ that is a connected person with 

respect to such expatriated entity may be taxed in accordance with the law of the United 

States for a period of ten years beginning on the date on which the acquisition of the 

domestic entity is completed. For purposes of applying this paragraph: 

i) no effect shall be given to any amendment to section 7874 of the Internal 

Revenue Code after the date of signature of this Convention; and 

ii) no entity shall be treated as an expatriated entity that:

A) is a connected person with respect to the domestic entity 

immediately after the date on which the acquisition of the domestic entity 

is completed; and 

B) prior to that date, was never a connected person with respect to the 

domestic entity. 

However, an entity described in the preceding sentence shall become an expatriated 

entity if, subsequent to the date on which the acquisition of the domestic entity is 

completed, the entity joins in filing a U.S. consolidated return with either the domestic 

entity or another entity that was a connected person with respect to the domestic entity 

immediately prior to the date on which the acquisition of the domestic entity was 

completed.

3. Notwithstanding the provisions of paragraph 1 of this Article, in the case of a company 

seeking to satisfy the requirements of paragraph 4 of Article 22 (Limitation on Benefits) of this 

Convention regarding a royalty, if such company fails to satisfy the criteria of that paragraph 
28

solely by reason of the requirement in subclause (B) of clause (i) of subparagraph (e) of 

paragraph 7 of Article 22 (Limitation on Benefits) of this Convention, such company may be 

taxed in the Contracting State of which the royalty arises and according to the laws of that 

Contracting State, except that the tax so charged shall not exceed the highest rate among the rates

of tax to which persons described in subparagraph (e) of paragraph 7 of Article 22 (Limitation on 

Benefits) of this Convention (notwithstanding the requirement of subclause (B) of clause (i) of

subparagraph (e) of paragraph 7 of Article 22 (Limitation on Benefits)) would have been entitled 

if such persons had received the royalty directly. For purposes of this paragraph, a person 

described in clause (iii) of subparagraph (e) of paragraph 7 of Article 22 (Limitation on Benefits) 

shall be treated as entitled to the limitation of tax to which such person would be entitled if such 

person were a resident of the same Contracting State as the company receiving the royalties.

4. The term “royalty” as used in this Article means payments of any kind received as 

consideration for the use of, or the right to use, any copyright of literary, artistic, scientific or 

other work (including cinematographic films); any patent, trademark, design or model, plan, 

secret formula or process; or for information concerning industrial, commercial or scientific 

experience.

 

5. The provisions of paragraphs 1 through 3 of this Article 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 in which the royalties arise through a permanent establishment situated therein 

and the right or property in respect of which the royalties are paid is effectively connected with 

such permanent establishment. In such case the provisions of Article 7 (Business Profits) shall 

apply.

6. Royalties shall be deemed to arise in a Contracting State when they are in consideration 

for the use of, or the right to use, property, information or experience in that Contracting State. 

7. Where, by reason of a special relationship between the payor 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 that would have been 

agreed upon by the payor 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 this Convention.
29

Article 13

GAINS

1. Gains derived by a resident of a Contracting State from the alienation of real property

(immovable property) situated in the other Contracting State may be taxed in that other 

Contracting State.

2. For the purposes of this Article the term “real property (immovable property) situated in 

the other Contracting State” shall include: 

a) real property (immovable property) referred to in Article 6 (Income from Real 

Property (Immovable Property)); 

b) where that other Contracting State is the United States, a United States real 

property interest; and

c) where that other Contracting State is __________,

i) shares, including rights to acquire shares, other than shares in which there 

is regular trading on a stock exchange, deriving 50 percent or more of their value 

directly or indirectly from real property referred to in subparagraph (a) of this 

paragraph situated in __________; and

ii) an interest in a partnership or trust to the extent that the assets of the 

partnership or trust consist of real property situated in __________, or of shares 

referred to in clause (i) of this subparagraph.

3. Gains from the alienation of movable property forming part of the business property of a 

permanent establishment that an enterprise of a Contracting State has in the other Contracting

State, including such gains from the alienation of such a permanent establishment (alone or with 

the whole enterprise), may be taxed in that other Contracting State.

4. Gains derived by an enterprise of a Contracting State from the alienation of ships or

aircraft operated or used in international traffic or personal property pertaining to the operation 

or use of such ships or aircraft shall be taxable only in that Contracting State. 

5. Gains derived by an enterprise of a Contracting State from the alienation of containers 

(including trailers, barges and related equipment for the transport of containers) used for the 

transport of goods or merchandise shall be taxable only in that Contracting State, unless those 

containers are used for transport solely between places within the other Contracting State.
30

6. Gains from the alienation of any property other than property referred to in paragraphs 1 

through 5 of this Article shall be taxable only in the Contracting State of which the alienator is a 

resident. 

7. Where an individual who, upon ceasing to be a resident (as determined under paragraph 1 

of Article 4 (Resident)) of one of the Contracting States, is treated under the taxation law of that 

Contracting State as having alienated property for its fair market value and is taxed in that 

Contracting State by reason thereof, the individual may elect to be treated for purposes of 

taxation in the other Contracting State as if the individual had, immediately before ceasing to be 

a resident of the first-mentioned Contracting State, alienated and reacquired such property for an 

amount equal to its fair market value at such time.
31

Article 14

INCOME FROM EMPLOYMENT

1. Subject to the provisions of Articles 15 (Directors’ Fees), 17 (Pensions, Social Security, 

Annuities, Alimony, and Child Support) and 19 (Government Service), salaries, wages and other 

similar remuneration derived by a resident of a Contracting State in respect of an employment 

shall be taxable only in that Contracting 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 Contracting State.

2. Notwithstanding the provisions of paragraph 1 of this Article, 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 Contracting State if:

a) the recipient is present in the other Contracting State for a period or periods not 

exceeding in the aggregate 183 days for all twelve-month periods 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 Contracting State; and

c) the remuneration is not borne by a permanent establishment that the employer has 

in the other Contracting State.

3. Notwithstanding the preceding provisions of this Article, remuneration described in 

paragraph 1 of this Article 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 Contracting State.
32

Article 15

DIRECTORS’ FEES

Directors’ fees and other similar payments 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.
33

Article 16

ENTERTAINERS AND SPORTSMEN

1. Notwithstanding the provisions of Article 14 (Income from Employment), 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, may be taxed in that other Contracting 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 thirty 

thousand United States dollars (30,000) or its equivalent in ---------- for the taxable year of the 

payment. 

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 Article 14 (Income from Employment), may be taxed 

in the Contracting State in which the activities of the entertainer or sportsman are exercised

unless the contract pursuant to which the personal activities are performed allows that other 

person to designate the individual who is to perform the personal activities.
34

Article 17

PENSIONS, SOCIAL SECURITY, ANNUITIES,

ALIMONY, AND CHILD SUPPORT

1. a) Pensions and other similar remuneration beneficially owned by a resident of a 

Contracting State shall be taxable only in that Contracting State.

b) Notwithstanding subparagraph (a) of this paragraph, the amount of any such 

pension or remuneration arising in a Contracting State that, when received, would be 

exempt from taxation in that Contracting State if the beneficial owner were a resident 

thereof shall be exempt from taxation in the Contracting State of which the beneficial 

owner is a resident.

2. a) Where an individual who is a resident of a Contracting State is a member or 

beneficiary of, or participant in, a pension fund established in the other Contracting State, 

income earned by the pension fund may not be taxed as income of that individual, unless, 

and then only to the extent that, it is paid to, or for the benefit of, that individual from the 

pension fund (and not transferred to another pension fund established in that other 

Contracting State in a transfer that qualifies as a tax-deferred transfer under the laws of 

that other Contracting State). In such case, the provisions of paragraph 1 of this Article 

shall apply.

b) Where a citizen of the United States who is a resident of __________ is a member 

or beneficiary of, or participant in, a pension fund established in __________, the United 

States may not tax the income earned by the pension fund as income of the individual 

unless, and then only to the extent that, it is paid to, or for the benefit of, that individual 

from the pension fund (and not transferred to another pension fund established in 

__________ in a transfer that qualifies as a tax-deferred transfer under the laws of 

__________). In such case, the provisions of paragraph 1 of this Article, which generally

is subject to paragraph 4 of Article 1 (General Scope), shall apply.

3. Notwithstanding the provisions of paragraph 1 of this Article, payments made by a 

Contracting State under provisions of the social security or similar legislation of that Contracting 

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 Contracting State.

4. Annuities derived and beneficially owned by an individual resident of a Contracting State 

shall be taxable only in that Contracting State. The term “annuities” as used in this paragraph 

means a stated sum paid periodically at stated times during a specified number of years, or for 

life, under an obligation to make the payments in return for adequate and full consideration 

(other than services rendered).
35

5. Alimony paid by a resident of a Contracting State to a resident of the other Contracting 

State shall be taxable only in that other Contracting 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 Contracting State of which he is a resident.

6. Periodic payments, not dealt with in paragraph 5 of this Article, 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.
36

Article 18

PENSION FUNDS

1. Where an individual who is a member or beneficiary of, or participant in, a pension fund

established in one of the Contracting States exercises an employment or self-employment in the 

other Contracting State:

a) contributions paid by or on behalf of that individual to the pension fund during the 

period that he exercises an employment or self-employment in the other Contracting State 

shall be deductible (or excludible) in computing the individual’s taxable income in that 

other Contracting State; and

b) any benefits accrued under the pension fund, or contributions made to the pension 

fund by or on behalf of the individual’s employer, during that period shall not be treated 

as part of the employee’s taxable income and any such contributions shall be allowed as a 

deduction in computing the taxable income of the individual’s employer in that other 

Contracting State. 

The relief available under this paragraph shall not exceed the relief that would be allowed by the 

other Contracting State to residents of that Contracting State for contributions to, or benefits 

accrued under, a pension fund established in that Contracting State.

2. The provisions of paragraph 1 of this Article shall not apply unless: 

a) contributions by or on behalf of the individual, or by or on behalf of the 

individual’s employer, to the pension fund (or to another similar pension fund established 

in the same Contracting State for which the first-mentioned pension fund was substituted) 

were made before the individual began to exercise an employment or self-employment in 

the other Contracting State; and

b) the competent authority of the other Contracting State has agreed that the pension 

fund generally corresponds to a pension fund established in that other Contracting State.

3. a) Where a citizen of the United States who is a resident of __________ exercises an 

employment in __________ the income from which is taxable in __________, the 

contribution is borne by an employer who is a resident of __________ or by a permanent 

establishment situated in __________, and the individual is a member or beneficiary of, 

or participant in, a pension fund established in __________, 

i) contributions paid by or on behalf of that individual to the pension fund

during the period that the individual exercises the employment in _________, and 
37

that are attributable to the employment, shall be deductible (or excludible) in 

computing the individual’s taxable income in the United States; and

ii) any benefits accrued under the pension fund, or contributions made to the 

pension fund by or on behalf of the individual’s employer, during that period, and 

that are attributable to the employment, shall not be included in computing the 

employee’s taxable income in the United States. 

b) The relief available under this paragraph shall not exceed the lesser of:

i) the relief that would be allowed by the United States to its residents for 

contributions to, or benefits accrued under, a generally corresponding pension 

fund established in the United States; and

ii) the amount of contributions or benefits that qualify for tax relief in 

__________.

c) For purposes of determining an individual’s eligibility to participate in and 

receive tax benefits with respect to a pension fund established in the United States, 

contributions made to, or benefits accrued under, a pension fund established in 

__________ shall be treated as contributions or benefits under a generally corresponding 

pension fund established in the United States to the extent relief is available to the 

individual under this paragraph.

d) This paragraph shall not apply unless the competent authority of the United States 

has agreed that the pension fund generally corresponds to a pension fund established in 

the United States.
38

Article 19

GOVERNMENT SERVICE

1. Notwithstanding the provisions of Articles 14 (Income from Employment), 15 (Directors’

Fees), 16 (Entertainers and Sportsmen) and 20 (Students and Trainees): 

a) salaries, wages and other remuneration, other than a pension, paid to an individual 

in respect of services rendered to a Contracting State or a political subdivision or local 

authority thereof shall, subject to the provisions of subparagraph (b) of this paragraph, be 

taxable only in that Contracting State;

b) such remuneration, however, shall be taxable only in the other Contracting State if 

the services are rendered in that Contracting State and the individual is a resident of that 

Contracting State who:

i) is a national of that Contracting State; or

ii) did not become a resident of that Contracting State solely for the purpose 

of rendering the services.

2. Notwithstanding the provisions of paragraph 1 of Article 17 (Pensions, Social Security, 

Annuities, Alimony, and Child Support): 

a) any pension and other similar remuneration paid by, or out of funds created by, a 

Contracting State or a political subdivision or a local authority thereof to an individual in 

respect of services rendered to that Contracting State or subdivision or authority (other 

than a payment to which paragraph 3 of Article 17 (Pensions, Social Security, Annuities, 

Alimony, and Child Support) applies) shall, subject to the provisions of subparagraph (b)

of this paragraph, be taxable only in that Contracting State;

b) such pension and other similar remuneration, however, shall be taxable only in the 

other Contracting State if the individual is a resident of, and a national of, that 

Contracting State.

3. The provisions of Articles 14 (Income from Employment), 15 (Directors’ Fees), 16 

(Entertainers and Sportsmen) and 17 (Pensions, Social Security, Annuities, Alimony, and Child 

Support) shall apply to salaries, wages and other similar remuneration, and to pensions and other 

similar remuneration, in respect of services rendered in connection with a business carried on by 

a Contracting State or a political subdivision or a local authority thereof.
39

Article 20

STUDENTS AND TRAINEES

1. Payments, other than remuneration for personal services, received by a student 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 Contracting State for the 

purpose of his full-time education or for his full-time training, shall not be taxed in that 

Contracting State, provided that such payments arise outside that Contracting State, and are for 

the purpose of his maintenance, education or training. The exemption from tax provided by this 

paragraph shall apply to a business trainee only for a period of time not exceeding twelve months

from the date the business trainee first arrives in the first-mentioned Contracting State for the 

purpose of training.

2. A student or business trainee described in paragraph 1 of this Article shall be exempt 

from tax by the Contracting State in which the individual is temporarily present with respect to 

income from personal services in an aggregate amount equal to ten thousand United States

dollars (10,000) or its equivalent in ------ for the taxable year of the payment. The competent 

authorities of the Contracting States may adjust the amount provided in this paragraph to the 

extent necessary to take into account changes in the personal exemption, standard deduction or 

filing thresholds in the domestic laws of either Contracting State.

3. For purposes of this Article, a business trainee is an individual:

a) who is temporarily in a Contracting State for the purpose of securing training 

required to qualify the individual to practice a profession or professional specialty; or 

b) who is temporarily in a Contracting State as an employee of, or under contract 

with, a resident of the other Contracting State, for the primary purpose of acquiring 

technical, professional or business experience from a person other than that resident of 

the other Contracting State (or a connected person with respect to such resident of the 

other Contracting State). 
40

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 

Contracting State.

2. Notwithstanding paragraph 1 of this Article:

a) a guarantee fee arising in a Contracting State and characterized as other income 

by that Contracting State and beneficially owned by a resident of the other Contracting 

State that is a connected person with respect to the payor of the guarantee fee may be 

taxed in the first-mentioned Contracting State in accordance with domestic law if such 

resident benefits from a special tax regime with respect to the guarantee fee in its 

Contracting State of residence; and 

b) in the case of the United States, a guarantee fee characterized as other income 

paid by an expatriated entity and beneficially owned by a company resident in 

__________ that is a connected person with respect to such expatriated entity may be 

taxed in accordance with the law of the United States for a period of ten years beginning 

on the date on which the acquisition of the domestic entity is completed. For purposes of 

applying this paragraph:

i) no effect shall be given to any amendment to section 7874 of the Internal 

Revenue Code after the date of signature of this Convention; and 

ii) no entity shall be treated as an expatriated entity that:

A) is a connected person with respect to the domestic entity 

immediately after the date on which the acquisition of the domestic entity 

is completed; and 

B) prior to that date, was never a connected person with respect to the 

domestic entity. 

However, an entity described in the preceding sentence shall become an expatriated 

entity if, subsequent to the date on which the acquisition of the domestic entity is 

completed, the entity joins in filing a U.S. consolidated return with either the domestic 

entity or another entity that was a connected person with respect to the domestic entity 

immediately prior to the date on which the acquisition of the domestic entity was 

completed.
41

3. The provisions of paragraphs 1 and 2 of this Article shall not apply to income, other than 

income from real property (immovable 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 and the right or property in respect of which the income 

is paid is effectively connected with such permanent establishment. In such case the provisions 

of Article 7 (Business Profits) shall apply.

 
42

Article 22

LIMITATION ON BENEFITS

1. Except as otherwise provided in this Article and in paragraph 6 of Article 10 (Dividends), 

paragraph 3 of Article 11 (Interest) and paragraph 3 of Article 12 (Royalties), a resident of a 

Contracting State shall not be entitled to the benefits of this Convention otherwise accorded to 

residents of a Contracting State unless such resident is a “qualified person” as defined in 

paragraph 2 of this Article at the time when the benefit would be accorded.

2. A resident of a Contracting State shall be a qualified person at the time when a benefit 

otherwise would be accorded by this Convention if, at that time and, with respect to clause (i) of 

subparagraph (f) of this paragraph, on at least half of the days of any twelve-month period that 

includes the date when the benefit otherwise would be accorded, the resident is: 

a) an individual;

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

or instrumentality of any such Contracting State, political subdivision or local authority;

c) a company, if the principal class of its shares (and any disproportionate class of 

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

i) its principal class of shares is primarily traded on one or more recognized 

stock exchanges located in the Contracting State of which the company is a 

resident; or

ii) the company’s primary place of management and control is in the 

Contracting State of which it is a resident; 

d) a company, if:

i) at least 50 percent of the aggregate vote and value of the shares (and at 

least 50 percent of the aggregate vote and value of any disproportionate class of 

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

entitled to benefits under subparagraph (c) of this paragraph, provided that, in the 

case of indirect ownership, each intermediate owner is a resident of the 

Contracting State from which a benefit under this Convention is being sought or 

is a qualifying intermediate owner; and

ii) with respect to benefits under this Convention other than under Article 10 

(Dividends), less than 50 percent of the company’s gross income, and less than 50 

percent of the tested group’s gross income, is paid or accrued, directly or 
43

indirectly, in the form of payments that are deductible for purposes of the taxes 

covered by this Convention in the company’s Contracting State of residence (but 

not including arm’s length payments in the ordinary course of business for 

services or tangible property, and in the case of a tested group, not including intragroup transactions): (A) to persons that are not residents of either Contracting 

State entitled to the benefits of this Convention under subparagraph (a), (b), (c) or 

(e) of this paragraph; (B) to persons that are connected persons with respect to the 

company described in this subparagraph and that benefit from a special tax regime 

with respect to the deductible payment; or (C) with respect to a payment of 

interest, to persons that are connected persons with respect to the company 

described in this subparagraph and that benefit from notional deductions 

described in subparagraph (e) of paragraph 2 of Article 11 (Interest);

e) a person described in paragraph 2 of Article 4 (Resident) of this Convention, 

provided that: 

i) in the case of a person described in subclause (A) of clause (ii) of 

subparagraph (k) of paragraph 1 of Article 3 (General Definitions), more than 50 

percent of the person’s beneficiaries, members or participants are individuals 

resident in either Contracting State; and

ii) in the case of a person described in subclause (B) of clause (ii) of 

subparagraph (k) of paragraph 1 of Article 3 (General Definitions), the earnings 

of such person benefit exclusively, or almost exclusively, pension funds that 

satisfy the requirements of clause (i) of this subparagraph; or

f) a person other than an individual, if:

i) persons that are residents of that Contracting State entitled to the benefits 

of this Convention under subparagraph (a), (b), (c) or (e) of this paragraph own, 

directly or indirectly, shares or other beneficial interests representing at least 50 

percent of the aggregate vote and value (and at least 50 percent of the aggregate 

vote and value of any disproportionate class of shares) of the shares or other 

beneficial interests of such person, provided that, in the case of indirect 

ownership, each intermediate owner is a qualifying intermediate owner; and

ii) less than 50 percent of the person’s gross income, and less than 50 percent 

of the tested group’s gross income, is paid or accrued, directly or indirectly, in the 

form of payments that are deductible for purposes of the taxes covered by this 

Convention in the person’s Contracting State of residence (but not including 

arm’s length payments in the ordinary course of business for services or tangible 

property, and in the case of a tested group, not including intra-group transactions):

(A) to persons that are not residents of either Contracting State entitled to the 
44

benefits of this Convention under subparagraph (a), (b), (c) or (e) of this 

paragraph; (B) to persons that are connected persons with respect to the person 

described in this subparagraph and that benefit from a special tax regime with 

respect to the deductible payment; or (C) with respect to a payment of interest, to

persons that are connected persons with respect to the person described in this 

subparagraph and that benefit from notional deductions described in subparagraph 

(e) of paragraph 2 of Article 11 (Interest).

3. a) A resident of a Contracting State shall be entitled to benefits under this 

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

regardless of whether the resident is a qualified person, if the resident is engaged in the 

active conduct of a trade or business in the first-mentioned Contracting State, and the 

income derived from the other Contracting State emanates from, or is incidental to, that 

trade or business. For purposes of this Article, the term “active conduct of a trade or 

business” shall not include the following activities or any combination thereof:

i) operating as a holding company;

ii) providing overall supervision or administration of a group of companies; 

iii) providing group financing (including cash pooling); or 

iv) making or managing investments, unless these activities are carried on by 

a bank, insurance company or registered securities dealer in the ordinary course of 

its business as such.

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

business activity conducted by that resident in the other Contracting State, or derives an 

item of income arising in the other Contracting State from a connected person, the 

conditions described in subparagraph (a) of this paragraph shall be considered to be 

satisfied with respect to such item only if the trade or business activity conducted by the 

resident in the first-mentioned Contracting State to which the item is related is substantial 

in relation to the same or complementary trade or business activity carried on by the 

resident or such connected person in the other Contracting State. Whether a trade or 

business activity is substantial for the purposes of this paragraph shall be determined 

based on all the facts and circumstances. 

c) For purposes of applying this paragraph, activities conducted by persons 

connected to a resident of a Contracting State shall be deemed to be conducted by such 

resident.

4. A company that is a resident of a Contracting State shall be entitled to a benefit under this 

Convention, regardless of whether the resident is a qualified person if, at the time when the 
45

benefit would be accorded, and on at least half of the days of a twelve-month period 

commencing or ending on the date when the benefit otherwise would be accorded:

a) at least 95 percent of the aggregate vote 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, provided that, in the case of indirect 

ownership, each intermediate owner is a qualifying intermediate owner; and

b) less than 50 percent of the company’s gross income, and less than 50 percent of 

the tested group’s gross income, is paid or accrued, directly or indirectly, in the form of 

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

company’s Contracting State of residence (but not including arm’s length payments in the 

ordinary course of business for services or tangible property, and in the case of a tested 

group, not including intra-group transactions): (i) to persons that are not equivalent 

beneficiaries; (ii) to persons that are equivalent beneficiaries only by reason of paragraph 

5 of this Article or of a substantially similar provision in the relevant comprehensive 

convention for the avoidance of double taxation; (iii) to persons that are equivalent 

beneficiaries that are connected persons with respect to the company described in this 

paragraph and that benefit from a special tax regime with respect to the deductible 

payment, provided that if the relevant comprehensive convention for the avoidance of 

double taxation does not contain a definition of a special tax regime analogous to the 

definition in subparagraph (l) of paragraph 1 of Article 3 (General Definitions), the 

principles of the definition provided in this Convention shall apply, but without regard to 

the requirement in clause (v) of that definition; or (iv) with respect to a payment of 

interest, to persons that are equivalent beneficiaries that are connected persons with 

respect to the company described in this paragraph and that benefit from notional 

deductions of the type described in subparagraph (e) of paragraph 2 of Article 11 

(Interest). 

5. A company that is a resident of a Contracting State that functions as a headquarters 

company for a multinational corporate group consisting of such company and its direct and 

indirect subsidiaries shall be entitled to benefits under this Convention with respect to dividends 

and interest paid by members of its multinational corporate group. A company shall be 

considered a headquarters company for this purpose only if:

 

a) such company’s primary place of management and control is in the Contracting 

State of which it is a resident; 

b) the multinational corporate group consists of companies resident in, and engaged 

in the active conduct of a trade or business in, at least four countries, and the trades or 

businesses carried on in each of the four countries (or four groupings of countries) 

generate at least 10 percent of the gross income of the group; 
46

c) the trades or businesses of the multinational corporate group that are carried on in 

any one state other than the Contracting State of residence of such company generate less 

than 50 percent of the gross income of the group; 

d) no more than 25 percent of such company’s gross income is derived from the 

other Contracting State;

e) such company is subject to the same income taxation rules in its Contracting State 

of residence as persons described in paragraph 3 of this Article; and

f) less than 50 percent of such company’s gross income, and less than 50 percent of 

the tested group’s gross income, is paid or accrued, directly or indirectly, in the form of 

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

company’s Contracting State of residence (but not including arm’s length payments in the 

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

financial obligations to a bank that is not a connected person with respect to such 

company, and in the case of a tested group, not including intra-group transactions): (i) to 

persons that are not residents of either Contracting State entitled to the benefits of this 

Convention under subparagraph (a), (b), (c) or (e) of paragraph 2 of this Article; (ii) to 

persons that are connected persons with respect to such company and that benefit from a 

special tax regime with respect to the deductible payment; or (iii) with respect to a 

payment of interest, to persons that are connected persons with respect to such company 

and that benefit from notional deductions described in subparagraph (e) of paragraph 2 of 

Article 11 (Interest). 

If the requirements of subparagraph (b), (c) or (d) of this paragraph are not fulfilled for the 

relevant taxable year, they shall be deemed to be fulfilled if the required ratios are met when 

averaging the gross income of the preceding four taxable years.

6. If a resident of a Contracting State is neither a qualified person pursuant to the provisions 

of paragraph 2 of this Article, nor entitled to benefits under paragraph 3, 4 or 5 of this Article, 

the competent authority of the other Contracting State may, nevertheless, grant the benefits of 

this Convention, or benefits with respect to a specific item of income, taking into account the 

object and purpose of this Convention, but only if such resident demonstrates to the satisfaction 

of such competent authority a substantial nontax nexus to its Contracting State of residence and 

that neither its establishment, acquisition or maintenance, nor the conduct of its operations had as 

one of its principal purposes the obtaining of benefits under this Convention. The competent 

authority of the Contracting State to which the request has been made shall consult with the 

competent authority of the other Contracting State before either granting or denying a request 

made under this paragraph by a resident of that other Contracting State.

7. For the purposes of this Article:
47

a) the term “recognized stock exchange” means:

i) 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; 

ii) the _______ Stock Exchange; and 

iii) any other stock exchange agreed upon by the competent authorities of the 

Contracting States;

b) 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 aggregate vote 

and value of the company. If no single class of ordinary or common shares represents the 

majority of the aggregate vote and value of the company, the “principal class of shares” 

are those classes that in the aggregate represent a majority of the aggregate vote and 

value of the company;

c) the term “disproportionate class of shares” means any class of shares of a 

company, or in the case of a trust, any class of beneficial interests in such trust, resident 

in one of the Contracting States that entitles the shareholder or interest holder to 

disproportionately higher participation, through dividends, redemption payments or 

otherwise, in the earnings generated in the other Contracting State; 

d) a company’s “primary place of management and control” is in the Contracting 

State of which it is a resident only if: 

i) the executive officers and senior management employees of the company 

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

operational policy decision-making for the company and its direct and indirect 

subsidiaries in that Contracting State, and the staff of such persons conduct more 

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

that Contracting State, than in any other state; and

ii) such executive officers and senior management employees exercise 

responsibility for more of the strategic, financial and operational policy decisionmaking for the company and its direct and indirect subsidiaries, and the staff of 

such persons conduct more of the day-to-day activities necessary for preparing 

and making those decisions, than the officers or employees of any other company; 

e) the term “equivalent beneficiary” means:

i) a resident of any state, provided that:
48

A) the resident is entitled to all the benefits of a comprehensive 

convention for the avoidance of double taxation between that state and the 

Contracting State from which the benefits of this Convention are sought,

under provisions substantially similar to subparagraph (a), (b), (c) or (e) of 

paragraph 2 of this Article or, when the benefit being sought is with 

respect to interest or dividends paid by a member of the resident’s 

multinational corporate group, the resident is entitled to benefits under

provisions substantially similar to paragraph 5 of this Article, provided 

that, if such convention does not contain a comprehensive limitation on 

benefits article, the resident would be entitled to the benefits of this 

Convention by reason of subparagraph (a), (b), (c) or (e) of paragraph 2 of 

this Article if such resident were a resident of one of the Contracting 

States under Article 4 (Resident) of this Convention. Notwithstanding the 

preceding sentence, an individual who is (1) liable to tax in his or her state 

of residence with respect to foreign source income or gains only on a 

remittance or similar basis, or (2) whose tax is determined in that 

Contracting State on a fixed-fee, “forfait” or similar basis, shall not be 

considered an equivalent beneficiary; and

B) 1) with respect to income referred to in Article 10 

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

the resident had received such income directly, the resident would 

be entitled under such convention, a provision of domestic law or 

any other international agreement, to a rate of tax with respect to 

such income for which benefits are being sought under this 

Convention that is less than or equal to the rate applicable under 

this Convention. Regarding a company seeking benefits under 

paragraph 4 of this Article with respect to dividends, for purposes 

of this subclause:

I) if the resident is an individual, and the company is 

engaged in the active conduct of a trade or business in its

Contracting State of residence that is substantial in relation, 

and similar or complementary, to the trade or business that 

generated the earnings from which the dividend is paid, 

such individual shall be treated as if he or she were a 

company. Activities conducted by a person that is a

connected person with respect to the company seeking 

benefits shall be deemed to be conducted by such company. 

Whether a trade or business activity is substantial shall be 

determined based on all the facts and circumstances; and 
49

II) if the resident is a company (including an individual 

treated as a company), to determine whether the resident is 

entitled to a rate of tax that is less than or equal to the rate 

applicable under this Convention, the resident’s indirect 

ownership of the shares of the company paying the 

dividends shall be treated as direct ownership; or

2) with respect to an item of income, profit or gain referred to 

in Article 7 (Business Profits), 13 (Gains) or 21 (Other Income) of 

this Convention, the resident is entitled to benefits under such 

convention that are at least as favorable as the benefits that are 

being sought under this Convention; and

C) notwithstanding that a resident may satisfy the requirements of 

subclauses (A) and (B) of this clause, where the item of income, profit or 

gain has been derived through an entity that is treated as fiscally 

transparent under the laws of the Contracting State of the company 

seeking benefits, if the item of income, profit or gain would not be treated 

as the income, profit or gain of the resident under a provision analogous to 

paragraph 6 of Article 1 (General Scope) of this Convention had the 

resident, and not the company seeking benefits under paragraph 4 of this 

Article, itself owned the entity through which the income, profit or gain 

was derived by the company, such resident shall not be considered an 

equivalent beneficiary with respect to the item of income; and

ii) a resident of the same Contracting State as the company seeking benefits 

under paragraph 4 of this Article that is entitled to all the benefits of this 

Convention by reason of subparagraph (a), (b), (c) or (e) of paragraph 2 of this 

Article or, when the benefit being sought is with respect to interest or dividends 

paid by a member of the resident’s multinational corporate group, the resident is

entitled to benefits under paragraph 5 of this Article, provided that, in the case of 

a resident described in paragraph 5 of this Article, if the resident had received 

such interest or dividends directly, the resident would be entitled to a rate of tax 

with respect to such income that is less than or equal to the rate applicable under 

this Convention to the company seeking benefits under paragraph 4 of this 

Article; or

iii) a resident of the Contracting State from which the benefits of this 

Convention are sought that is entitled to all the benefits of this Convention by 

reason of subparagraph (a), (b), (c) or (e) of paragraph 2 of this Article, provided 

that all such residents’ ownership of the aggregate vote and value of the shares 

(and any disproportionate class of shares) of the company seeking benefits under 

paragraph 4 of this Article does not exceed 25 percent of the total vote and value 
50

of the shares (and any disproportionate class of shares) of the company.

f) the term “qualifying intermediate owner” means an intermediate owner that is 

either:

i) a resident of a state that has in effect with the Contracting State from 

which a benefit under this Convention is being sought a comprehensive 

convention for the avoidance of double taxation that includes provisions 

addressing special tax regimes and notional deductions analogous to subparagraph 

(l) of paragraph 1 of Article 3 (General Definitions) and subparagraph (e) of 

paragraph 2 of Article 11 (Interest), respectively; or

ii) a resident of the same Contracting State as the company applying the test

under subparagraph (d) or (f) of paragraph 2 or paragraph 4 of this Article to 

determine whether it is eligible for benefits under the Convention;

g) the term “tested group” means the resident of a Contracting State that is applying 

the test under subparagraph (d) or (f) of paragraph 2 of this Article or paragraph 4 or 5 of 

this Article to determine whether it is eligible for benefits under the Convention (the 

“tested resident”), and any company that:

i) participates as a member with the tested resident in a tax consolidation, 

fiscal unity or similar regime that requires members of the group to share profits 

or losses; or

ii) shares losses with the tested resident pursuant to a group relief or other 

loss sharing regime in the taxable year; and

h) the term “gross income” means gross receipts as determined in the person’s 

Contracting State of residence for the taxable year that includes the time when the benefit 

would be accorded, except that where a person is engaged in a business that includes the 

manufacture, production or sale of goods, “gross income” means such gross receipts 

reduced by the cost of goods sold, and where a person is engaged in a business of 

providing non-financial services, “gross income” means such gross receipts reduced by 

the direct costs of generating such receipts, provided that: 

i) except when relevant for determining benefits under Article 10 

(Dividends) of this Convention, gross income shall not include the portion of any 

dividends that are effectively exempt from tax in the person’s Contracting State of 

residence, whether through deductions or otherwise; and 
51

ii) except with respect to the portion of any dividend that is taxable, a tested 

group’s gross income shall not take into account transactions between companies 

within the tested group.
52

Article 23

RELIEF FROM DOUBLE TAXATION

1. In the case of __________, double taxation will be relieved as follows: 

2. 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 applicable to residents and citizens: 

a) the income tax paid or accrued to __________ by or on behalf of such resident or 

citizen; 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 subparagraph (a) of paragraph 3 and 

paragraph 4 of Article 2 (Taxes Covered) shall be considered income taxes.

3. For the purposes of applying paragraph 2 of this Article, an item of gross income, as 

determined under the law of the United States, derived by a resident of the United States that, 

under this Convention, may be taxed in __________ shall be deemed to be income from sources 

in __________.

4. Where a United States citizen is a resident of __________: 

a) with respect to items of income, profit or gain 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 paragraph 4 of 

Article 1 (General Scope); 

b) for purposes of applying paragraph 2 to compute United States tax on those items 

of income, profit or gain referred to in subparagraph (a) of this paragraph, 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) of this paragraph; 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) of this paragraph; and
53

c) for the exclusive purpose of relieving double taxation in the United States under 

subparagraph (b) of this paragraph, items of income, profit or gain referred to in 

subparagraph (a) of this paragraph shall be deemed to arise in __________ to the extent 

necessary to avoid double taxation of such income under subparagraph (b) of this 

paragraph.
54

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 Contracting State in the same 

circumstances, in particular with respect to residence, are or may be subjected. This provision 

shall also apply to persons who are not residents of one or both of the Contracting States. 

However, for the purposes of United States taxation, United States nationals who are subject to 

tax on a worldwide basis are not in the same circumstances as nationals of __________ who are 

not residents of the United States.

2. The taxation on a permanent establishment that an enterprise of a Contracting State has in 

the other Contracting State shall not be less favorably levied in that other Contracting State than 

the taxation levied on enterprises of that other Contracting State carrying on the same activities. 

3. The provisions of paragraphs 1 and 2 of this Article 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. 

4. Except where the provisions of paragraph 1 of Article 9 (Associated Enterprises), 

paragraph 8 of Article 11 (Interest), or paragraph 7 of Article 12 (Royalties) apply, interest, 

royalties, and other disbursements paid by an enterprise of a Contracting State to a resident of the 

other Contracting State shall, for the purpose of determining the taxable profits of such 

enterprise, be deductible under the same conditions as if they had been paid to a resident of the 

first-mentioned Contracting State. Similarly, any debts of an enterprise 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 Contracting State. 

5. 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 Contracting 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 Contracting State are or may be subjected.

6. Nothing in this Article shall be construed as preventing either Contracting State from 

imposing a tax as described in paragraph 10 of Article 10 (Dividends) or paragraph 7 of Article 

11 (Interest).
55

7. The provisions of this Article shall, notwithstanding the provisions of Article 2 (Taxes 

Covered), apply to taxes of every kind and description.
56

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 such person in taxation not in accordance with the provisions of this 

Convention, it may, irrespective of the remedies provided by the domestic law of those 

Contracting States, and the time limits prescribed in such laws for presenting claims for refund, 

present its case to the competent authority of one or both of the Contracting States. 

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 that is not in accordance with this 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 

period that any mutual agreement proceeding is pending.

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 this 

Convention. They also may consult together for the elimination of double taxation in cases not 

provided for in this 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 settlement of conflicting applications of this Convention, including 

conflicts regarding:

i) the characterization of particular items of income;

ii) the characterization of persons;

iii) the application of source rules with respect to particular items of income;

iv) the meaning of any term used in this Convention; 

v) the timing of particular items of income;
57

d) to advance pricing arrangements; and

e) to the application of the provisions of domestic law regarding penalties, fines, and 

interest in a manner consistent with the purposes of this Convention. 

4. The competent authorities of the Contracting States may agree to increase any specific 

monetary amounts referred to in this Convention to reflect economic or monetary developments. 

5. The competent authorities of the Contracting States may communicate with each other 

directly, including through a joint commission, for the purpose of reaching an agreement in the 

sense of the preceding paragraphs. 

6. Where a person has presented a case to the competent authority of one or both of the 

Contracting States either:

a) pursuant to paragraph 1 of this Article on the basis that the actions of one or both 

of the Contracting States resulted or will result for that person in taxation not in 

accordance with the provisions of this Convention; or 

b) on a taxpayer-specific case regarding a matter described in paragraph 3 of this 

Article; 

and the competent authorities are unable to reach agreement to resolve that case, and the 

conditions described in paragraph 7 of this Article are met, the case shall be resolved through 

arbitration conducted in the manner prescribed by paragraphs 7 through 9 of this Article and 

according to any rules or procedures agreed upon by the competent authorities of the Contracting 

States pursuant to paragraph 10 of this Article.

7. A case shall be submitted to arbitration on the earliest date on which all of the following 

conditions have been satisfied:

a) tax returns have been filed with at least one of the Contracting States with respect 

to the taxable years at issue in the case;

b) at least two years have passed since the commencement date of such case, unless 

the competent authorities of the Contracting States have agreed to a different date and 

notified the presenter of the case of such agreement; 

c) the presenter of the case has submitted a written request to the competent 

authority to which the case was presented for a resolution of the case through arbitration; 

and

d) all concerned persons and their authorized representatives or agents have 
58

submitted to the competent authorities of both Contracting States written agreements not 

to disclose to any other person any information received during the course of the 

arbitration proceeding from either Contracting State or the arbitration panel, other than 

the determination of the panel.

A case shall not, however, be submitted to arbitration if a decision with respect to such case has 

already been rendered by a court or administrative tribunal of either Contracting State, or if the 

competent authorities of the Contracting States have agreed prior to the date on which the 

arbitration otherwise would be submitted that the particular case is not suitable for resolution 

through arbitration. 

 

8. For the purposes of this Article, the following definitions shall apply:

a) the term “presenter” means the person that has presented a case to the competent 

authority of one or both of the Contracting States either: 

i) pursuant to paragraph 1 of this Article on the basis that the actions of one 

or both of the Contracting States result or will result for that person in taxation not 

in accordance with the provisions of this Convention; or 

ii) on a taxpayer-specific case regarding a matter described in paragraph 3 of 

this Article;

b) the term “concerned person” means the presenter and all other persons, if any, 

whose tax liability to either Contracting State may be directly affected by a mutual 

agreement to resolve a case submitted to arbitration pursuant to paragraph 7 of this 

Article; and

c) the “commencement date” for a case means the earliest date on which the 

information necessary to undertake substantive consideration for a mutual agreement has 

been received by both competent authorities.

9. For the purposes of arbitrations under this Article, the following rules shall apply:

a) The arbitration panel shall consist of three individual members. The competent 

authority of each Contracting State shall select one member of the arbitration panel. In 

the event that the competent authority of a Contracting State fails to select a member for 

the arbitration panel in the manner and within the time periods agreed by the competent 

authorities of the Contracting States pursuant to paragraph 10 of this Article, the 

competent authority of the other Contracting State shall select a second member. The 

two members of the arbitration panel who have been selected shall select the third 

member, who shall serve as Chair of the arbitration panel. If the two initial members of 

the arbitration panel fail to select the Chair in the manner and within the time periods 
59

agreed by the competent authorities of the Contracting States pursuant to paragraph 10 of 

this Article, these members shall be dismissed, and each competent authority of the 

Contracting States shall select a new member of the arbitration panel. The Chair shall not 

be a national or lawful permanent resident of either Contracting State. The members 

appointed shall not be employees, nor have been employees within the twelve-month 

period prior to the date on which a case is submitted to arbitration, of the tax 

administration or the treasury department of the Contracting State that identified them. 

Furthermore, the members appointed shall not have any prior involvement with the 

specific matters at issue in the arbitration proceeding for which they are being considered 

as arbitrators.

b) The members of the arbitration panel and their staff shall be considered to be 

“persons or authorities” to whom information may be disclosed under Article 26 

(Exchange of Information and Administrative Assistance) of this Convention.

c) All material received by a competent authority of a Contracting State in the 

course of, or relating to, an arbitration proceeding (including the arbitration panel’s 

determination) shall be considered to be information exchanged between the Contracting 

States. Accordingly, no such information relating to an arbitration proceeding may be 

disclosed by the competent authorities of the Contracting States, except as permitted 

under Article 26 (Exchange of Information and Administrative Assistance). The 

competent authorities of the Contracting States shall ensure that members of the 

arbitration panel and their staff agree in writing to treat any information relating to the 

arbitration proceeding consistent with the confidentiality and nondisclosure provisions of 

Article 26 (Exchange of Information and Administrative Assistance) of this Convention 

and the applicable domestic laws of the Contracting States.

d) If at any time before the arbitration panel delivers a determination to the 

competent authorities of the Contracting States:

i) the competent authorities of the Contracting States reach a mutual 

agreement to resolve the case pursuant to this Article;

ii) the presenter of the case withdraws the request for arbitration;

iii) a decision concerning the case is rendered by a court or administrative 

tribunal of one of the Contracting States during the arbitration proceeding; or

iv) if any concerned person or their authorized representatives or agents 

violates the written nondisclosure statement required by subparagraph (d) of 

paragraph 7 of this Article, and the competent authorities of both Contracting 

States agree that such violation should result in the termination of the arbitration 

proceeding;
60

the mutual agreement procedure, including the arbitration proceeding, with respect to the 

case shall terminate.

e) After a case is submitted to arbitration, the presenter shall be permitted to submit 

to the competent authorities of both Contracting States for submission to the arbitration 

panel a paper setting forth the presenter’s analysis and views of the case for consideration 

by the arbitration panel. Such submission must be submitted before the date on which the 

competent authorities of the Contracting States are required to submit their position 

papers to the arbitration panel, and shall not include any information not previously 

provided to the competent authorities before the case was submitted to arbitration.

f) After a case is submitted to arbitration, the competent authority of each of the 

Contracting States shall be permitted to submit to the arbitration panel a position paper 

with a proposed resolution addressing each adjustment or similar issue raised in the case, 

and shall simultaneously provide a copy of such position paper to the other competent 

authority. Such proposed resolution shall be a resolution of the entire case and shall 

reflect all agreements previously reached between the competent authorities of the 

Contracting States with respect to any adjustment or similar issue raised in the case. 

Such proposed resolution shall be limited to a disposition of specific monetary amounts 

(for example, of income, profit, gain or expense) or, where specified, the maximum rate 

of tax charged pursuant to the Convention for each adjustment or similar issue in the 

case. The competent authority of each of the Contracting States shall also be permitted to 

submit additional supporting papers for consideration by the arbitration panel, and shall 

simultaneously provide a copy of such supporting papers to the other competent 

authority.

g) Notwithstanding the provisions of subparagraph (e) of this paragraph, it is 

understood that, in the case of an arbitration proceeding concerning:

i) the tax liability of an individual for which the competent authorities have 

been unable to reach agreement with respect to the individual’s Contracting State 

of residence; 

ii) the taxation of the business profits of an enterprise with respect to which 

the competent authorities have been unable to reach an agreement on whether a 

permanent establishment exists; or 

iii) such other issues the determination of which are contingent on resolution 

of similar threshold questions;

the position paper may include positions regarding clause (i), (ii) or (iii) of this 

subparagraph, in addition to proposed resolutions limited to specific monetary amounts 
61

(for example, of income, profit, gain or expense) or, where specified, the maximum rate 

of tax charged pursuant to this Convention due as a consequence of the arbitration panel’s 

determination regarding residency, the existence of a permanent establishment or other 

threshold questions. 

h) Where an arbitration proceeding concerns a case comprising multiple adjustments 

or issues each requiring a disposition of specific monetary amounts of income, profit, 

gain or expense or, where specified, the maximum rate of tax charged pursuant to this 

Convention, the position paper may propose a separate disposition for each adjustment or 

similar issue.

i) Each competent authority shall be permitted to submit a reply to any position 

paper submitted to the arbitration panel, and shall simultaneously provide the other 

competent authority with a copy of any such reply submitted to the arbitration panel.

j) The arbitration panel shall deliver a determination in writing to the competent 

authorities of the Contracting States. The determination reached by the arbitration panel 

in the arbitration proceeding shall be limited to one of the proposed resolutions for the 

case submitted by one of the competent authorities of the Contracting States for each 

adjustment or similar issue and any threshold questions, and shall not include a rationale 

or any other explanation of the determination. The determination of the arbitration panel 

shall have no precedential value with respect to the application of this Convention in any 

other case.

k) The determination of the arbitration panel with respect to a case submitted to 

arbitration shall constitute a resolution by mutual agreement under this Article and shall 

be binding on the Contracting States if it is accepted by all of the concerned persons. 

Unless the competent authorities of both Contracting States agree to a longer time period, 

the concerned persons shall have 45 days from the date they receive the determination of 

the arbitration panel to notify, in writing, the competent authority of the Contracting State 

to whom the case was presented of their acceptance of determination. In the event the 

case is pending in litigation, each concerned person that is a party to such litigation must 

also advise, within the same time frame, the relevant court of its acceptance of the 

determination of the arbitration panel and its intention to withdraw from the consideration 

of the court the issues resolved through the proceeding. If any concerned person fails to 

so advise the relevant competent authority and relevant court within this time frame, the 

determination of the arbitration panel shall be considered not to have been accepted by 

the concerned persons. Where the determination of the arbitration panel is not accepted, 

the case shall not be eligible for any subsequent further consideration by the competent 

authorities.

l) The fees and expenses of the members of the arbitration panel, as well as any 

costs incurred in connection with the proceeding by the Contracting States, shall be borne 
62

equitably by the competent authorities of the Contracting States.

10. The competent authorities of the Contracting States shall agree in writing, before the first 

case is submitted to arbitration, on time periods and procedures that are consistent with 

paragraphs 6 through 9 of this Article for:

a) establishing when information necessary to undertake substantive consideration 

for a mutual agreement has been received by both competent authorities for purposes of 

determining the commencement date, and for notifying each other when such 

requirement has been satisfied; 

b) notifying the presenter of any agreements that a case is not suitable for resolution 

through arbitration, or to change the date on which a case shall be submitted to 

arbitration;

c) the appropriate application of arbitration in the context of a request for an 

advanced pricing agreement, including rules concerning the date on which a case may be 

submitted to arbitration;

d) obtaining the agreements of all concerned persons and their authorized 

representatives or agents not to disclose any information received during the course of the 

arbitration proceeding from the competent authority of either Contracting State or the 

arbitration panel, other than the determination of such panel pursuant to subparagraph (d) 

of paragraph 7 of this Article, and the agreements of the members of the arbitration panel 

and their staff to treat any information relating to the arbitration proceeding consistent 

with the confidentiality and nondisclosure provisions of Article 26 (Exchange of 

Information and Administrative Assistance), as required by subparagraph (c) of 

paragraph 9 of this Article;

e) the appointment of the members of the arbitration panel;

f) the submission of position papers, supporting papers and reply submissions by the 

competent authorities of the Contracting States to the arbitration panel;

g) the submission to the competent authorities of both Contracting States by the 

presenter of a paper setting forth the presenter’s views and analysis of the case for 

consideration by the arbitration panel;

h) the delivery by the arbitration panel of its determination to the competent 

authorities of the Contracting States; 

i) the acceptance or rejection by the concerned persons of the determination of the 

arbitration panel; and
63

j) the adoption by the arbitration panel of any additional procedures necessary for 

the conduct of its business.

The competent authorities of the Contracting States may mutually agree in writing to modify 

their agreement concerning these time periods and procedures, as needed, and may further agree 

in writing on such other rules, time periods and procedures as may be necessary for the effective 

and timely implementation of an arbitration proceeding.
64

Article 26

EXCHANGE OF INFORMATION AND ADMINISTRATIVE ASSISTANCE

1. The competent authorities of the Contracting States shall exchange such information as is 

foreseeably relevant for carrying out the provisions of this Convention or the domestic laws of 

the Contracting States concerning taxes of every kind imposed by a Contracting State to the 

extent that the taxation thereunder is not contrary to the Convention, including information 

relating to the assessment or collection, or administration of, the enforcement or prosecution in 

respect of, or the determination of appeals in relation to, such taxes. The exchange of 

information is not restricted by paragraph 1 of Article 1 (General Scope) or Article 2 (Taxes 

Covered). 

2. Any information received under this Article by a Contracting State shall be treated as

secret in the same manner as information obtained under the domestic law of that Contracting 

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 referred to in 

paragraph 1 of this Article, or the oversight of such functions. 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. Notwithstanding the preceding sentences of this paragraph, 

the competent authority of the Contracting State that receives information under the provisions

of this Article may, with the written consent of the Contracting State that provided the 

information, also make available that information for other purposes allowed under the 

provisions of a mutual legal assistance treaty in force between the Contracting States that allows 

for the exchange of tax information. 

3. In no case shall the provisions of paragraphs 1 and 2 of this Article 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; or

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.

4. If information is requested by a Contracting State in accordance with this Article, the 

other Contracting State shall use its information gathering measures to obtain the requested 

information, even though that other Contracting State may not need such information for its own 
65

tax purposes. The obligation contained in the preceding sentence is subject to the limitations of 

paragraph 3 of this Article but in no case shall such limitations be construed to permit a 

Contracting State to decline to supply information solely because it has no domestic interest in 

such information.

5. In no case shall the provisions of paragraph 3 of this Article be construed to permit a 

Contracting State to decline to supply information solely because the information is held by a 

bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or 

because it relates to ownership interests in a person. 

6. 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). 

7. 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 Contracting 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.

8. The requested Contracting State shall allow representatives of the requesting Contracting 

State to interview individuals and examine books and records in the requested Contracting State 

with the consent of the persons subject to examination.

9. The competent authorities of the Contracting States may develop an agreement upon the 

mode of application of this Article, including agreement to ensure comparable levels of 

assistance to each of the Contracting States, but in no case will the lack of such agreement 

relieve a Contracting State of its obligations under this Article.
66

Article 27

MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS

Nothing in this Convention shall affect the fiscal privileges of members of diplomatic 

missions or consular posts under the general rules of international law or under the provisions of 

special agreements.
67

Article 28

SUBSEQUENT CHANGES IN LAW

1. If at any time after the signing of this Convention, a Contracting State reduces the general 

statutory rate of company tax that applies with respect to substantially all of the income of 

resident companies with the result that such rate falls below the lesser of either (a) 15 percent or 

(b) 60 percent of the general statutory rate of company tax applicable in the other Contracting 

State, or the first-mentioned Contracting State provides an exemption from taxation to resident 

companies for substantially all foreign source income (including interest and royalties), the 

Contracting States shall consult with a view to amending this Convention to restore an 

appropriate allocation of taxing rights between the Contracting States. If such consultations do 

not progress, the other Contracting State may notify the first-mentioned Contracting State 

through diplomatic channels that it shall cease to apply the provisions of Articles 10 (Dividends), 

11 (Interest), 12 (Royalties) and 21 (Other Income). In such case, the provisions of such Articles 

shall cease to have effect in both Contracting States with respect to payments to resident 

companies six months after the date that the other Contracting State issues a written public 

notification stating that it shall cease to apply the provisions of Articles 10 (Dividends), 11 

(Interest), 12 (Royalties) and 21 (Other Income). 

2. For the purposes of determining the general statutory rate of company tax:

a) the allowance of generally available deductions based on a percentage of what 

otherwise would be taxable income, and other similar mechanisms to achieve a reduction 

in the overall rate of tax, shall be taken into account; and

b) a tax that applies to a company only upon a distribution by such company, or that 

applies to shareholders, shall not be taken into account.
68

Article 29

ENTRY INTO FORCE

1. This Convention shall be subject to ratification in accordance with the applicable 

procedures of each Contracting State. The Contracting States shall notify each other in writing, 

through diplomatic channels when their respective applicable procedures have been satisfied. 

2. This Convention shall enter into force on the date of the later of the notifications referred 

to in paragraph 1 of this Article. The provisions of this Convention 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 this Convention enters 

into force;

b) in respect of other taxes, for taxable years beginning on or after the first day of 

January next following the date on which this Convention enters into force.

3. Notwithstanding paragraph 2 of this Article: 

a) the provisions of paragraphs 6 through 10 of Article 25 (Mutual Agreement 

Procedure) of this Convention shall have effect with respect to:

i) cases that are under consideration by the competent authorities as of the 

date on which this Convention enters into force. For such cases, the 

commencement date shall be the date on which this Convention enters into force; 

and

ii) cases that come under consideration after the date on which this 

Convention enters into force; and

b) the provisions of Article 26 (Exchange of Information and Administrative 

Assistance) shall have effect from the date of entry into force of this Convention, without 

regard to the taxable year to which the matter relates. 
69

Article 30

TERMINATION

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 terminate on 

the date of such notification. Notwithstanding such termination, this Convention shall cease to 

have effect:

a) in respect of taxes withheld at source, for amounts paid or credited after the 

expiration of the six-month period beginning on the date on which notice of termination 

was given; and

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

the six-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 , 20 .

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF

THE UNITED STATES OF AMERICA: ______________________________
70

PROTOCOL TO THE CONVENTION BETWEEN

THE GOVERNMENT OF THE UNITED STATES OF AMERICA

AND

THE GOVERNMENT OF ----------

FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF TAX 

EVASION

WITH RESPECT TO TAXES ON INCOME

On signing the Convention between the Government of the United States of America and 

the Government of __________ for the Avoidance of Double Taxation and the Prevention of Tax 

Evasion with respect to Taxes on Income (the “Convention”), the two Governments have agreed 

to the following provisions.

1. With reference to subparagraph (k) of paragraph 1 of Article 3 (General Definitions) of 

the Convention:

a) In the case of the United States, the term “pension fund” includes the following: a 

trust providing pension or retirement benefits under an Internal Revenue Code section 

401(a) qualified pension plan (which includes a Code section 401(k) plan) and a profit 

sharing or stock bonus plan, a Code section 403(a) qualified annuity plan, a Code section 

403(b) plan, a trust that is an individual retirement account under Code section 408, a 

Roth individual retirement account under Code section 408A, a simple retirement account 

under Code section 408(p), a trust providing pension or retirement benefits under a 

simplified employee pension plan under Code section 408(k), a trust described in section 

457(g) providing pension or retirement benefits under a Code section 457(b) plan, and the 

Thrift Savings Fund (section 7701(j)). A group trust described in Revenue Ruling 81-

100, as amended by Revenue Ruling 2014-24 and Revenue Ruling 2011-1, qualifies as a 

pension fund only if it is operated exclusively or almost exclusively to earn income for 

the benefit of pension funds that are themselves entitled to benefits under the Convention 

as a resident of the United States.

 

b) In the case of __________, the term “pension fund” includes the following:

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 , 20 .

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF

THE UNITED STATES OF AMERICA: ______________________________