UNITED STATES MODEL 

INCOME TAX CONVENTION OF 

NOVEMBER 15, 2006

 CONVENTION BETWEEN 

THE GOVERNMENT OF THE UNITED STATES OF AMERICA 

AND THE GOVERNMENT OF -------

FOR THE AVOIDANCE OF DOUBLE TAXATION 

AND THE PREVENTION OF FISCAL EVASION 

WITH RESPECT TO TAXES ON INCOME 

The Government of the United States of America and the Government of -----, desiring 

to conclude a Convention for the avoidance of double taxation and the prevention of fiscal 

evasion with respect to taxes on income, have agreed as follows: 
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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 the 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 the 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 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, 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, for the period of ten years following the loss of such status, 

be taxed in accordance with the laws of that Contracting State. 

5. The provisions of paragraph 4 shall not affect: 

a) the benefits conferred by a Contracting State under paragraph 2 of Article 9 

(Associated Enterprises), paragraphs 1 b), 2, and 5 of Article 17 (Pensions, Social 

Security, Annuities, Alimony, and Child Support), paragraphs 1 and 4 of Article 18 

(Pension Funds), and Articles 23 (Relief From Double Taxation), 24 

(Non-Discrimination), and 25 (Mutual Agreement Procedure); and 
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b) the benefits conferred by a Contracting State under paragraph 2 of Article 18 

(Pension Funds), 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 State. 

6. An item of income, profit or gain derived through an entity that is fiscally transparent 

under the laws of either Contracting State shall be considered to be derived by a resident of a 

State to the extent that the item is treated for purposes of the taxation law of such Contracting 

State as the income, profit or gain of a resident. 
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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 (but excluding social security and unemployment taxes), and the Federal 

excise taxes imposed with respect to private foundations. 

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

imposed after the date of signature of the Convention in addition to, or in place of, the existing 

taxes. The competent authorities of the Contracting States shall notify each other of any changes 

that have been made in their respective taxation or other laws that significantly affect their 

obligations under this Convention. 
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Article 3 

GENERAL DEFINITIONS 

1. For the purposes of this Convention, unless the context otherwise requires: 

a) the term "person" includes an individual, an estate, a trust, a partnership, a 

company, and any other body of persons; 

b) the term "company" means any body corporate or any entity that is treated as a 

body corporate for tax purposes according to the laws of the state in which it is 

organized; 

c) the terms "enterprise of a Contracting State" and "enterprise of the other 

Contracting State" mean respectively an enterprise carried on by a resident of a 

Contracting State, and an enterprise carried on by a resident of the other Contracting 

State; the terms also include an enterprise carried on by a resident of a Contracting State 

through an entity that is treated as fiscally transparent in that Contracting State; 

d) the term “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; 
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j) the term "national" of a Contracting State means: 

i) any individual possessing the nationality or citizenship of that State; and 

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

from the laws in force in that State; 

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

is: 

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

ii) operated principally either: 

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

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

 clause A). 

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

not defined therein shall, unless the context otherwise requires, or the competent authorities 

agree to a common meaning pursuant to the provisions of Article 25 (Mutual Agreement 

Procedure), have the meaning which it has at that time under the law of that State for the 

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

laws of that State prevailing over a meaning given to the term under other laws of that State. 
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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 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 State and any political subdivision or local authority 

thereof. This term, however, does not include any person who is liable to tax in that State in 

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

establishment in that State. 

. 

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

a) a pension fund established in that State; and 

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

3. Where, by reason of the provisions of paragraph 1, an individual is a resident of both 

Contracting States, then his status shall be determined as follows: 

a) he shall be deemed to be a resident only of the State in which he has a permanent 

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

shall be deemed to be a resident only of the State with which his personal and economic 

relations are closer (center of vital interests); 

b) if the State in which he has his center of vital interests cannot be determined, or if 

he does not have a permanent home available to him in either State, he shall be deemed 

to be a resident only of the State in which he has an habitual abode; 

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

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

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

the Contracting States shall endeavor to settle the question by mutual agreement. 
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4. Where by reason of the provisions of paragraph 1 a company is a resident of both 

Contracting States, then if it is created or organized under the laws of one of the Contracting 

States or a political subdivision thereof, but not under the laws of the other Contracting State or a 

political subdivision thereof, such company shall be deemed to be a resident of the firstmentioned Contracting State. In all other cases involving dual resident companies, the 

competent authorities of the Contracting States shall endeavor to determine the mode of 

application of the Convention to such company. If the competent authorities do not reach such an 

agreement, that company will not be treated as a resident of either Contracting State for purposes 

of its claiming any benefits provided by the Convention. 

5. Where by reason of the provisions of paragraphs 1 and 2 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. 
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Article 5 

PERMANENT ESTABLISHMENT 

1. For the purposes of this Convention, the term "permanent establishment" means a fixed 

place of business through which the business of an enterprise is wholly or partly carried on. 

2. The term "permanent establishment" includes especially: 

a) a place of management; 

b) a branch; 

c) an office; 

d) a factory; 

e) a workshop; and 

f) a mine, an oil or gas well, a quarry, or any other place of extraction of natural 

resources. 

3. A building site or construction or installation project, or an installation or drilling rig or 

ship used for the exploration of natural resources, constitutes a permanent establishment only if 

it lasts, or the exploration activity continues for more than twelve months. 

4. Notwithstanding the preceding provisions of this Article, the term "permanent 

establishment" shall be deemed not to include: 

a) the use of facilities solely for the purpose of storage, display or delivery of goods 

or merchandise belonging to the enterprise; 

b) the maintenance of a stock of goods or merchandise belonging to the enterprise 

solely for the purpose of storage, display or delivery; 

c) the maintenance of a stock of goods or merchandise belonging to the enterprise 

solely for the purpose of processing by another enterprise; 

d) the maintenance of a fixed place of business solely for the purpose of purchasing 

goods or merchandise, or of collecting information, for the enterprise; 

e) the maintenance of a fixed place of business solely for the purpose of carrying on, 

for the enterprise, any other activity of a preparatory or auxiliary character; 
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f) the maintenance of a fixed place of business solely for any combination of the 

activities mentioned in subparagraphs a) through e), 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, where a person -- other than an 

agent of an independent status to whom paragraph 6 applies -- is acting on behalf of an 

enterprise and has and habitually exercises in a Contracting State an authority to conclude 

contracts that are binding on the enterprise, that enterprise shall be deemed to have a permanent 

establishment in that State in respect of any activities that the person undertakes for the 

enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 that, 

if exercised through a fixed place of business, would not make this fixed place of business a 

permanent establishment under the provisions of that paragraph. 

6. An enterprise shall not be deemed to have a permanent establishment in a Contracting 

State merely because it carries on business in that State through a broker, general commission 

agent, or any other agent of an independent status, provided that such persons are acting in the 

ordinary course of their business as independent agents. 

7. The fact that a company that is a resident of a Contracting State controls or is controlled 

by a company that is a resident of the other Contracting State, or that carries on business in that 

other State (whether through a permanent establishment or otherwise), shall not be taken into 

account in determining whether either company has a permanent establishment in that other 

State. 
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Article 6 

INCOME FROM REAL PROPERTY 

1. Income derived by a resident of a Contracting State from real property, including income 

from agriculture or forestry, situated in the other Contracting State may be taxed in that other 

State. 

2. The term "real property” 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 (including livestock and equipment used in 

agriculture and forestry), rights to which the provisions of general law respecting landed 

property apply, usufruct of real 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. 

3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, 

or use in any other form of real property. 

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

an enterprise. 

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

income from real property situated in the other Contracting State may elect for any taxable year 

to compute the tax on such income on a net basis as if such income were business profits 

attributable to a permanent establishment in such other State. Any such election shall be binding 

for the taxable year of the election and all subsequent taxable years unless the competent 

authority of the Contracting State in which the property is situated agrees to terminate the 

election. 
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Article 7 

BUSINESS PROFITS 

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

unless the enterprise carries on business in the other Contracting State through a permanent 

establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the 

enterprise may be taxed in the other State but only so much of them as are attributable to that 

permanent establishment. 

2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State 

carries on business in the other Contracting State through a permanent establishment situated 

therein, there shall in each Contracting State be attributed to that permanent establishment the 

profits that it might be expected to make if it were a distinct and independent enterprise engaged 

in the same or similar activities under the same or similar conditions. For this purpose, the 

profits to be attributed to the permanent establishment shall include only the profits derived from 

the assets used, risks assumed and activities performed by the permanent establishment. 

3. In determining the profits of a permanent establishment, there shall be allowed as 

deductions expenses that are incurred for the purposes of the permanent establishment, including 

executive and general administrative expenses so incurred, whether in the State in which the 

permanent establishment is situated or elsewhere.∗

4. No profits shall be attributed to a permanent establishment by reason of the mere 

purchase by that permanent establishment of goods or merchandise for the enterprise. 

∗ Protocol or Notes should include the following language: 

It is understood that the business profits to be attributed to a permanent establishment shall include only the 

profits derived from the assets used, risks assumed and activities performed by the permanent establishment. The 

principles of the OECD Transfer Pricing Guidelines will apply for purposes of determining the profits attributable to 

a permanent establishment, taking into account the different economic and legal circumstances of a single entity. 

Accordingly, any of the methods described therein as acceptable methods for determining an arm’s length result may 

be used to determine the income of a permanent establishment so long as those methods are applied in accordance 

with the Guidelines. In particular, in determining the amount of attributable profits, the permanent establishment 

shall be treated as having the same amount of capital that it would need to support its activities if it were a distinct 

and separate enterprise engaged in the same or similar activities. With respect to financial institutions other than 

insurance companies, a Contracting State may determine the amount of capital to be attributed to a permanent 

establishment by allocating the institution’s total equity between its various offices on the basis of the proportion of 

the financial institution’s risk-weighted assets attributable to each of them. In the case of an insurance company, 

there shall be attributed to a permanent establishment not only premiums earned through the permanent 

establishment, but that portion of the insurance company's overall investment income from reserves and surplus that 

supports the risks assumed by the permanent establishment. 
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5. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent 

establishment shall be determined by the same method year by year unless there is good and 

sufficient reason to the contrary. 

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

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

this Article. 

7. In applying this Article, paragraph 6 of Article 10 (Dividends), paragraph 4 of Article 11 

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

2 of Article 21 (Other Income), any income 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 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 shall also apply to profits from participation in a 

pool, a joint business, or an international operating agency. 
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Article 9 

ASSOCIATED ENTERPRISES 

1. Where: 

a) an enterprise of a Contracting State participates directly or indirectly in the 

management, control or capital of an enterprise of the other Contracting State; or 

b) the same persons participate directly or indirectly in the management, control, or 

capital of an enterprise of a Contracting State and an enterprise of the other Contracting 

State, 

and in either case conditions are made or imposed between the two enterprises in their 

commercial or financial relations that differ from those that would be made between independent 

enterprises, then any profits that, but for those conditions, would have accrued to one of the 

enterprises, but by reason of those conditions have not so accrued, may be included in the profits 

of that enterprise and taxed accordingly. 

2. Where a Contracting State includes in the profits of an enterprise of that State, and taxes 

accordingly, profits on which an enterprise of the other Contracting State has been charged to tax 

in that other State, and the other Contracting State agrees that the profits so included are profits 

that would have accrued to the enterprise of the first-mentioned State if the conditions made 

between the two enterprises had been those that would have been made between independent 

enterprises, then that other State shall make an appropriate adjustment to the amount of the tax 

charged therein on those profits. In determining such adjustment, due regard shall be had to the 

other provisions of this Convention and the competent authorities of the Contracting States shall 

if necessary consult each other. 
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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 State. 

2. However, such dividends may also be taxed in the Contracting State of which the 

company paying the dividends is a resident and according to the laws of that State, but if the 

dividends are beneficially owned by a resident of the other Contracting State, except as 

otherwise provided, the tax so charged shall not exceed: 

a) 5 percent of the gross amount of the dividends if the beneficial owner is a 

company that owns directly at least 10 percent of the voting stock of the company paying 

the dividends; 

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

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

the dividends are paid. 

3. Notwithstanding paragraph 2, 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 an associated enterprise. 

4. a) Subparagraph a) of paragraph 2 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 shall apply. In the case of dividends paid by a REIT, subparagraph b) of 

paragraph 2 and paragraph 3 shall apply only if: 

i) the beneficial owner of the dividends is an individual or pension fund, in 

either case holding an interest of not more than 10 percent in the REIT; 

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

traded and the beneficial owner of the dividends is a person holding an interest of 

not more than 5 percent of any class of the REIT’s stock; or 
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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 exceeds 10 percent of its total interests in real property. 

For the purposes of this rule, foreclosure property shall not be considered an interest in 

real property. Where a REIT holds an interest in a partnership, it shall be treated as 

owning directly a proportion of the partnership's interests in real property corresponding 

to its interest in the partnership. 

5. 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 subjected to the 

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

a resident. 

6. The provisions of paragraphs 2 through 4 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 payer 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. 

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

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

dividends are attributable to a permanent establishment, nor may it impose tax on a corporation's 

undistributed profits, except as provided in paragraph 8, even if the dividends paid or the 

undistributed profits consist wholly or partly of profits or income arising in that State. 

8. a) A company that is a resident of one of the States and that has a permanent 

establishment in the other State or that is subject to tax in the other State on a net basis on 

its income that may be taxed in the other State under Article 6 (Income from Real 

Property) or under paragraph 1 of Article 13 (Gains) may be subject in that other State to 

a tax in addition to the tax allowable under the other provisions of this Convention. 

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) that is subject to tax under Article 6 or under paragraph 1 

of Article 13 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 

ii) at a rate not in excess of the rate specified in paragraph 2 a). 
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Article 11 

INTEREST 

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

Contracting State may be taxed only in that other State. 

2. Notwithstanding the provisions of paragraph 1: 

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

income, profits or other cash flow of the debtor or a related person, to any change in the 

value of any property of the debtor or a related person or to any dividend, partnership 

distribution or similar payment made by the debtor or a related person may be taxed in 

the Contracting State in which it arises, and according to the laws of that State, but if the 

beneficial owner is a resident of the other Contracting State, the 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 United States law may be taxed by the United 

States but, if the beneficial owner of the interest is a resident of ----------, the interest may 

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

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

estate mortgage investment conduit may be taxed by each State in accordance with its 

domestic law. 

3. 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 by 

the taxation law of the Contracting State in which the income arises. Income dealt with in 

Article 10 (Dividends) and penalty charges for late payment shall not be regarded as interest for 

the purposes of this Convention. 

4. The provisions of paragraphs 1 and 2 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. 
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5. Where, by reason of a special relationship between the payer and the beneficial owner or 

between both of them and some other person, the amount of the interest, having regard to the 

debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the 

payer and the beneficial owner in the absence of such relationship, the provisions of this Article 

shall apply only to the last-mentioned amount. In such case the excess part of the payments shall 

remain taxable according to the laws of each State, due regard being had to the other provisions 

of this Convention. 
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Article 12 

ROYALTIES 

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

Contracting State may be taxed only in that other State. 

2. The term "royalties" as used in this Article means: 

a) payments of any kind received as a 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; and 

b) gain derived from the alienation of any property described in subparagraph a), to 

the extent that such gain is contingent on the productivity, use, or disposition of the property. 

3. The provisions of paragraph 1 shall not apply if the beneficial owner of the royalties, 

being a resident of a Contracting State, carries on business in the other Contracting State through 

a permanent establishment situated therein 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. 

4. Where, by reason of a special relationship between the payer and the beneficial owner or 

between both of them and some other person, the amount of the royalties, having regard to the 

use, right, or information for which they are paid, exceeds the amount which would have been 

agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case the excess part 

of the payments shall remain taxable according to the laws of each Contracting State, due regard 

being had to the other provisions of the Convention. 
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Article 13 

GAINS 

1. Gains derived by a resident of a Contracting State that are attributable to the alienation of 

real property situated in the other Contracting State may be taxed in that other State. 

2. For the purposes of this Article the term "real property situated in the other Contracting 

State" shall include: 

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

b) where that other State is the United States, a United States real property interest; 

and 

c) where that other State is ------, 

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

is regular trading on a stock exchange, deriving their value or the greater part 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 sub-paragraph. 

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 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 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 State, unless those containers are 

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

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

through 5 shall be taxable only in the Contracting State of which the alienator is a resident. 
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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 State unless the employment is exercised in the other Contracting 

State. If the employment is so exercised, such remuneration as is derived therefrom may be 

taxed in that other State. 

2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a 

Contracting State in respect of an employment exercised in the other Contracting State shall be 

taxable only in the first-mentioned State if: 

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

the aggregate 183 days in any twelve month period commencing or ending in the taxable 

year concerned; 

b) the remuneration is paid by, or on behalf of, an employer who is not a resident of 

the other State; and 

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

has in the other State. 

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

paragraph 1 that is derived by a resident of a Contracting State in respect of an 

employment as a member of the regular complement of a ship or aircraft operated in 

international traffic shall be taxable only in that State. 
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Article 15 

 DIRECTORS' FEES 

Directors' fees and other compensation derived by a resident of a Contracting State for 

services rendered in the other Contracting State in his capacity as a member of the board of 

directors of a company that is a resident of the other Contracting State may be taxed in that other 

Contracting State. 
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Article 16 

ENTERTAINERS AND SPORTSMEN 

1. Income derived by a resident of a Contracting State as an entertainer, such as a theater, 

motion picture, radio, or television artiste, or a musician, or as a sportsman, from his personal 

activities as such exercised in the other Contracting State, which income would be exempt from 

tax in that other Contracting State under the provisions of Articles 7 (Business Profits) and 14 

(Income from Employment) may be taxed in that other State, except where the amount of the 

gross receipts derived by such entertainer or sportsman, including expenses reimbursed to him or 

borne on his behalf, from such activities does not exceed twenty thousand United States dollars 

($20,000) or its equivalent in ---------- for the taxable year 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 7 (Business Profits) or 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. 
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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 State. 

b) Notwithstanding subparagraph a), the amount of any such pension or 

remuneration arising in a Contracting State that, when received, would be exempt from 

taxation in that 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. Notwithstanding the provisions of paragraph 1, payments made by a Contracting State 

under provisions of the social security or similar legislation of that State to a resident of the other 

Contracting State or to a citizen of the United States shall be taxable only in the first-mentioned 

State. 

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

shall be taxable only in that State. The term "annuities" as used in this paragraph means a stated 

sum paid periodically at stated times during a specified number of years, or for life, under an 

obligation to make the payments in return for adequate and full consideration (other than 

services rendered). 

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

State shall be taxable only in that other State. The term "alimony" as used in this paragraph 

means periodic payments made pursuant to a written separation agreement or a decree of 

divorce, separate maintenance, or compulsory support, which payments are taxable to the 

recipient under the laws of the State of which he is a resident. 

5. Periodic payments, not dealt with in paragraph 4, for the support of a child made pursuant 

to a written separation agreement or a decree of divorce, separate maintenance, or compulsory 

support, paid by a resident of a Contracting State to a resident of the other Contracting State, 

shall be exempt from tax in both Contracting States. 
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Article 18 

PENSION FUNDS 

1. Where an individual who is a resident of one of the States is a member or beneficiary of, 

or participant in, a pension fund that is a resident of the other State, income earned by the 

pension fund may be taxed as income of that individual only when, and, subject to the provisions 

of paragraph 1 of Article 17 (Pensions, Social Security, Annuities, Alimony and Child Support), 

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 in that other State). 

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

that is a resident of one of the States exercises an employment or self-employment in the other 

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 State shall be 

deductible (or excludible) in computing his taxable income in that other 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 his employer in that other State. 

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

other State to residents of that State for contributions to, or benefits accrued under, a pension 

plan established in that State. 

3. The provisions of paragraph 2 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 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 State; and 

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

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

4. 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 plan established in ------, 
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i) contributions paid by or on behalf of that individual to the pension fund 

during the period that he exercises the employment in --------, and that are 

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

his 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 treated as part of the 

employee’s taxable income in computing his 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 

plan 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 plan established in the United States, 

contributions made to, or benefits accrued under, a pension plan established in ------ shall 

be treated as contributions or benefits under a generally corresponding pension plan 

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 plan generally corresponds to a pension plan established in 

the United States. 
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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), be taxable 

only in that State; 

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

if the services are rendered in that State and the individual is a resident of that State who: 

i) is a national of that State; or 

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

the services. 

2. Notwithstanding the provisions of paragraph 1 of Article 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 State or subdivision or authority (other than a 

payment to which paragraph 2 of Article 17 applies) shall, subject to the provisions of 

subparagraph b), be taxable only in that State; 

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

individual is a resident of, and a national of, that State. 

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 remuneration, and to pensions, 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. 
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Article 20 

STUDENTS AND TRAINEES 

1. Payments, other than compensation 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 State for the purpose of his 

full-time education or for his full-time training, shall not be taxed in that State, provided that 

such payments arise outside that State, and are for the purpose of his maintenance, education or 

training. The exemption from tax provided by this paragraph shall apply to a business trainee 

only for a period of time not exceeding one year 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 within the meaning of paragraph 1 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 $9,000 or its equivalent in [ ] 

annually. The competent authorities shall, every five years, adjust the amount provided in this 

subparagraph to the extent necessary to take into account changes in the U.S. personal exemption 

and the standard deduction. 

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 person related to such resident of the other Contracting 

State). 
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Article 21 

OTHER INCOME 

1. Items of income beneficially owned by a resident of a Contracting State, wherever 

arising, not dealt with in the foregoing Articles of this Convention shall be taxable only in that 

State. 

2. The provisions of paragraph 1 shall not apply to income, other than income from real 

property as defined in paragraph 2 of Article 6 (Income from Real Property), 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 income is 

attributable to such permanent establishment. In such case the provisions of Article 7 (Business 

Profits) shall apply. 
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Article 22 

LIMITATION ON BENEFITS 

1. Except as otherwise provided in this Article, 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. 

2. A resident of a Contracting State shall be a qualified person for a taxable year if the 

resident is: 

a) an individual; 

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

c) a company, if: 

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

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

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

recognized stock exchanges located in the Contracting State of which the 

company is a resident; or 

B) the company's primary place of management and control is in the 

Contracting State of which it is a resident; or 

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

least 50 percent of any disproportionate class of shares) in the company is owned 

directly or indirectly by five or fewer companies entitled to benefits under clause 

i) of this subparagraph, provided that, in the case of indirect ownership, each 

intermediate owner is a resident of either Contracting State; 

d) a person described in paragraph 2 of Article 4 of this Convention, provided that, 

in the case of a person described in subparagraph a) of that paragraph, more than 50 

percent of the person's beneficiaries, members or participants are individuals resident in 

either Contracting State; or 

e) a person other than an individual, if: 
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i) on at least half the days of the taxable year, persons who are residents of 

that Contracting State and that are entitled to the benefits of this Convention 

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

subparagraph d) of this paragraph own, directly or indirectly, shares or other 

beneficial interests representing at least 50 percent of the aggregate voting power 

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

person, provided that, in the case of indirect ownership, each intermediate owner 

is a resident of that Contracting State, and 

ii) less than 50 percent of the person’s gross income for the taxable year, as 

determined in the person's State of residence, is paid or accrued, directly or 

indirectly, to persons who are not residents of either Contracting State entitled to 

the benefits of this Convention under subparagraph a), subparagraph b), clause i) 

of subparagraph c), or subparagraph d) of this paragraph in the form of payments 

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

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

ordinary course of business for services or tangible property). 

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

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

resident is a qualified person, if the resident is engaged in the active conduct of a trade or 

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

investments for the resident’s own account, unless these activities are banking, insurance 

or securities activities carried on by a bank, insurance company or registered securities 

dealer), and the income derived from the other Contracting State is derived in connection 

with, or is incidental to, that trade or business. 

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

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

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

conditions described in subparagraph a) shall be considered to be satisfied with respect to 

such item only if the trade or business activity carried on by the resident in the firstmentioned Contracting State is substantial in relation to the trade or business activity 

carried on by the resident or such person in the other Contracting State. Whether a trade 

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

based on all the facts and circumstances. 
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c) For purposes of applying this paragraph, activities conducted by persons 

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

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

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

the company's shares or of the beneficial equity interest in the company) or another 

person possesses 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 or 

of the beneficial equity interest in the company) in each person. In any case, a person 

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

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

person or persons. 

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

of paragraph 2 nor entitled to benefits with respect to an item of income under paragraph 3 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, if it determines 

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

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

Convention. 

5. For purposes of this Article: 

a) the term "recognized stock exchange" means: 

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

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

Exchange Commission as a national securities exchange under the U.S. Securities 

Exchange Act of 1934; 

ii) stock exchanges of -------; and 

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

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 voting power 

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

majority of the aggregate voting power and value of the company, the “principal class of 

shares” are those classes that in the aggregate represent a majority of the aggregate voting 

power and value of the company 

c) the term "disproportionate class of shares" means any class of shares of a 

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

disproportionately higher participation, through dividends, redemption payments or 

otherwise, in the earnings generated in the other State by particular assets or activities of 

the company; and 
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d) a company's "primary place of management and control" will be in the 

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

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

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

and indirect subsidiaries) in that State than in any other state and the staff of such persons 

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

decisions in that State than in any other state. 
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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 payer with respect to the profits out of which the dividends are paid. 

For the purposes of this paragraph, the taxes referred to in paragraphs 3 a) and 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 laws 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 that under the provisions of this Convention are 

exempt from United States tax or that are subject to a reduced rate of United States tax 

when derived by a resident of ------ who is not a United States citizen, ------- shall allow 

as a credit against -------- tax, only the tax paid, if any, that the United States may impose 

under the provisions of this Convention, other than taxes that may be imposed solely by 

reason of citizenship under the saving clause of paragraph 4 of Article 1 (General Scope); 

b) for purposes of applying paragraph 2 to compute United States tax on those items 

of income referred to in subparagraph a), the United States shall allow as a credit against 

United States tax the income tax paid to -------- after the credit referred to in 

subparagraph a); the credit so allowed shall not reduce the portion of the United States 

tax that is creditable against the ----------- tax in accordance with subparagraph a); and 

c) for the exclusive purpose of relieving double taxation in the United States under 

subparagraph b), items of income referred to in subparagraph a) shall be deemed to arise 

in ------- to the extent necessary to avoid double taxation of such income under subparagraph b). 
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Article 24 

NON-DISCRIMINATION 

1. Nationals of a Contracting State shall not be subjected in the other Contracting State to 

any taxation or any requirement connected therewith that is more burdensome than the taxation 

and connected requirements to which nationals of that other State in the same circumstances, 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 State than the taxation 

levied on enterprises of that other State carrying on the same activities. 

3. The provisions of paragraphs 1 and 2 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 5 of Article 11 (Interest), or paragraph 4 of Article 12 (Royalties) apply, interest, 

royalties, and other disbursements paid by a resident of a Contracting State to a resident of the 

other Contracting State shall, for the purpose of determining the taxable profits of the first-mentioned resident, be deductible under the same conditions as if they had been paid to a resident of 

the first-mentioned State. Similarly, any debts of a resident of a Contracting State to a resident 

of the other Contracting State shall, for the purpose of determining the taxable capital of the 

first-mentioned resident, be deductible under the same conditions as if they had been contracted 

to a resident of the first-mentioned State. 

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 State to any taxation or any requirement connected 

therewith that is more burdensome than the taxation and connected requirements to which other 

similar enterprises of the first-mentioned State are or may be subjected. 

6. Nothing in this Article shall be construed as preventing either Contracting State from 

imposing a tax as described in paragraph 8 of Article 10 (Dividends). 

7. The provisions of this Article shall, notwithstanding the provisions of Article 2 (Taxes 

Covered), apply to taxes of every kind and description imposed by a Contracting State or a 

political subdivision or local authority thereof. 
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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 States, 

and the time limits prescribed in such laws for presenting claims for refund, present its case to 

the competent authority of either Contracting State. 

2. The competent authority shall endeavor, if the objection appears to it to be justified and if 

it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement 

with the competent authority of the other Contracting State, with a view to the avoidance of 

taxation which is not in accordance with the Convention. Any agreement reached shall be 

implemented notwithstanding any time limits or other procedural limitations in the domestic law 

of the Contracting States. Assessment and collection procedures shall be suspended during the 

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 the 

Convention. They also may consult together for the elimination of double taxation in cases not 

provided for in the Convention. In particular the competent authorities of the Contracting States 

may agree: 

a) to the same attribution of income, deductions, credits, or allowances of an 

enterprise of a Contracting State to its permanent establishment situated in the other 

Contracting State; 

b) to the same allocation of income, deductions, credits, or allowances between 

persons; 

c) to the settlement of conflicting application of the 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 the Convention; 

v) the timing of particular items of income; 
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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 the Convention. 

4. The competent authorities also may agree to increases in any specific dollar amounts 

referred to in the Convention to reflect economic or monetary developments. 

5. The competent authorities of the Contracting States may communicate with each other 

directly, including through a joint commission, for the purpose of reaching an agreement in the 

sense of the preceding paragraphs. 
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Article 26 

EXCHANGE OF INFORMATION AND ADMINISTRATIVE ASSISTANCE 

1. The competent authorities of the Contracting States shall exchange such information as 

may be relevant for carrying out the provisions of this Convention or of 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 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 laws of that State and 

shall be disclosed only to persons or authorities (including courts and administrative bodies) 

involved in the assessment, collection, or administration of, the enforcement or prosecution in 

respect of, or the determination of appeals in relation to, the taxes referred to above, 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. 

3. In no case shall the provisions of the preceding paragraphs be construed so as to impose 

on a Contracting State the obligation: 

a) to carry out administrative measures at variance with the laws and administrative 

practice of that or of the other Contracting State; 

b) to supply information that is not obtainable under the laws or in the normal course 

of the administration of that or of the other Contracting State; 

c) to supply information that would disclose any trade, business, industrial, 

commercial, or professional secret or trade process, or information the disclosure of 

which would be contrary to public policy (ordre public). 

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 State may not need such information for its own purposes. 

The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 

but in no case shall such limitation be construed to permit a Contracting State to decline to 

supply information because it has no domestic interest in such information. 
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5. In no case shall the provisions of paragraph 3 be construed to permit a Contracting State 

to decline to supply information requested by the other Contracting State 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 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 State shall allow representatives of the requesting State to enter the 

requested State to interview individuals and examine books and records with the consent of the 

persons subject to examination. 

8. 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. 
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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. 
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 Income Tax Convention 

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Article 28 

ENTRY INTO FORCE 

1. This Convention shall be subject to ratification in accordance with the applicable 

procedures of each Contracting State, and instruments of ratification will be exchanged as soon 

thereafter as possible. 

2. This Convention shall enter into force on the date of the exchange of instruments of 

ratification, and its provisions shall have effect: 

a) in respect of taxes withheld at source, for amounts paid or credited on or after the 

first day of the second month next following the date on which the Convention enters into 

force; 

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

January next following the date on which the Convention enters into force. 

3. Notwithstanding paragraph 2, 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 period to which the matter relates. 
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2006 U.S. Model 

 Income Tax Convention 

- 43 -

Article 29 

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 cease to 

have effect: 

a) in respect of taxes withheld at source, for amounts paid or credited after 

the expiration of the 6 month period beginning on the date on which notice of 

termination was given; and 

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

expiration of the 6 month period beginning on the date on which notice of 

termination was given. 

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

respective Governments, have signed this Convention. 

DONE at in duplicate, in the English and ---------- languages, both texts being 

equally authentic, this day of _______, 20 . 

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF 

THE UNITED STATES OF AMERICA: