CONVENTION BETWEEN

THE UNITED STATES OF AMERICA

AND THE REPUBLIC OF SLOVENIA 

FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE 

PREVENTION OF FISCAL EVASION 

WITH RESPECT TO TAXES ON INCOME AND CAPITAL

The United States of America and the Republic of Slovenia, desiring to conclude a

Convention for the avoidance of double taxation and the prevention of fiscal evasion with

respect to taxes on income and capital, have agreed as follows:
-2-

ARTICLE 1

General Scope

1. This Convention shall apply only to persons who are residents of one or both of the

Contracting States, except as otherwise provided in the Convention.

2. The Convention shall not restrict in any manner any exclusion, exemption, deduction,

credit or other allowance or benefit now or hereafter accorded:

a) by the laws of either Contracting State; or

b) by any other agreement between the Contracting States. 

3. Notwithstanding the provisions of subparagraph 2 b):

a) the provisions of Article 25 (Mutual Agreement Procedure) of this

Convention exclusively shall apply to any dispute concerning whether a measure is within

the scope of this Convention, and the procedures under this Convention exclusively shall

apply to that dispute; and

b) unless the competent authorities determine that a taxation measure is not

within the scope of this Convention, the nondiscrimination obligations of this Convention

exclusively shall apply with respect to that measure, except for such national treatment

or most-favored-nation obligations as may apply to trade in goods under the General

Agreement on Tariffs and Trade. No national treatment or most-favored-nation

obligation under any other agreement shall apply with respect to that measure. 

c) For the purposes of this paragraph, a "measure" is a law, regulation, rule,

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

4. Notwithstanding any provision of the Convention except paragraph 5 of this Article,

a Contracting State may tax its residents (as determined under Article 4 (Residence)), and by

reason of citizenship may tax its citizens, as if the Convention had not come into effect. For this

purpose, the term "citizen" shall include a former citizen or long-term resident whose loss of

such status had as one of its principal purposes the avoidance of tax (as defined under the laws

of the Contracting State of which the person was a citizen or long-term resident), but only for a

period of 10 years following such loss.

5. The provisions of paragraph 4 shall not affect:
-3-

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

(Associated Enterprises), paragraphs 2 and 5 of Article 18 (Pensions, Social Security,

Annuities, Alimony, and Child Support), and Articles 23 (Relief From Double Taxation),

24 (Non-Discrimination), and 25 (Mutual Agreement Procedure); and

b) the benefits conferred by a Contracting State under Articles 19 (Government

Service), 20 (Students, Trainees, Professors and Researchers), and 27 (Diplomatic

Agents and Consular Officers), upon individuals who are neither citizens of, nor have

been admitted for permanent residence in, that State.

ARTICLE 2

Taxes Covered

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

a) in the United States:

(i) the Federal income taxes imposed by the Internal Revenue Code (but

excluding social security taxes); and

(ii) the Federal excise taxes imposed with respect to private foundations;

b) in Slovenia:

(i) the tax on profits of legal persons;

(ii) the tax on income of individuals, including wages and salaries, income

from agricultural activities, income from business, capital gains and income from

immovable and movable property; and

(iii) the assets tax on banks and savings institutions.

2. The Convention shall apply also to any identical or substantially similar taxes that are

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

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

significant changes that have been made in their respective taxation laws or other laws affecting

their obligations under the Convention, and of any official published material concerning the

application of the Convention, including explanations, regulations, rulings, or judicial decisions.
-4-

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; 

d) the term "international traffic" means any transport by a ship or aircraft, except

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

e) the term "competent authority" means:

(i) in the United States: the Secretary of the Treasury, or his delegate; and

(ii) in Slovenia: the Ministry of Finance, or its authorized representative; 

f) the term "United States" means the United States of America, and includes

the states thereof and the District of Columbia; such term also includes the territorial sea

thereof and the sea bed and subsoil of the submarine areas adjacent to that territorial sea,

over which the United States exercises sovereign rights in accordance with international

law; the term, however, does not include Puerto Rico, the Virgin Islands, Guam or any

other United States possession or territory; 

g) the term "Slovenia" means the Republic of Slovenia and, when used in a

geographical sense, means the territory of the Republic of Slovenia, including the

territorial sea, sea bed and subsoil adjacent to the territorial sea to the extent the

Republic of Slovenia exercises its sovereign rights or jurisdiction over such territorial
-5-

sea, sea area, sea bed and subsoil in accordance with its domestic legislation and

international law; 

h) the term "national" of a Contracting State, means:

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

and

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

from the laws in force in that State;

i) the term "qualified governmental entity" means:

(i) any person or body of persons that constitutes a governing body of a

Contracting State, or of a political subdivision or local authority of a Contracting

State;

(ii) a person that is wholly owned, directly or indirectly, by a Contracting

State or a political subdivision or local authority of a Contracting State, provided

(A) it is organized under the laws of the Contracting State, (B) its earnings are

credited to its own account with no portion of its income inuring to the benefit of

any private person, and (C) its assets vest in the Contracting State, political

subdivision or local authority upon dissolution; and

(iii) a pension trust or fund of a person described in subparagraph (i) or

(ii) that is constituted and operated exclusively to administer or provide pension

benefits described in Article 19 (Government Service);

provided that an entity described in either subparagraph (ii) or (iii) does not carry on

commercial activities.

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

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

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

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

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

tax laws of that State prevailing over a meaning given to the term under other laws of that State.
-6-

ARTICLE 4

Residence

1. Except as provided in this paragraph, for the purposes of this Convention, the term

"resident of a Contracting State" means any person who, under the laws of that State, is liable to

tax therein by reason of his domicile, residence, citizenship, place of management, place of

incorporation, or any other criterion of a similar nature, except that a United States citizen or

alien lawfully admitted for permanent residence (a “green card” holder) shall be considered to be

a resident of the United States only if such person has a substantial presence, permanent home or

habitual abode in the United States.

a) The term “resident of a Contracting State” does not include any person who is

liable to tax in that State in respect only of income from sources in that State or capital

situated therein or of profits attributable to a permanent establishment in that State. 

b) In the case of income derived or paid by an entity that is treated as a

partnership, estate, or trust under the laws of either Contracting State, this term applies

only to the extent that the income derived by such partnership, estate, or trust is subject

to tax in that State, either in its hands or in the hands of its partners or beneficiaries.

c) A legal person organized under the laws of a Contracting State and that is

generally exempt from tax in that State and is established and maintained in that State

either:

(i) exclusively for a religious, charitable, educational, scientific, or other

similar purpose; or

(ii) to provide pensions or other similar benefits to employees pursuant to

a plan

is to be treated for purposes of this paragraph as a resident of that Contracting State.

d) A qualified governmental entity is to be treated as a resident of the

Contracting State where it is established. 

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

Contracting States, then his status shall be determined as follows:
-7-

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

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

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

relations are closer (center of vital interests);

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

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

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

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

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

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

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

agreement.

3. Where by reason of the provisions of paragraph 1 a company is a resident of both

Contracting States, then if it is created 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, the company shall be treated as a resident of a

Contracting State for purposes of this Convention only if and to the extent that the competent

authorities of the Contracting States so agree pursuant to Article 25 (Mutual Agreement

Procedure).

4. Where by reason of the provisions of paragraph 1 a person other than an individual or

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

States shall endeavor to settle the question by mutual agreement and determine the mode of

application of the Convention to such person.

ARTICLE 5

Permanent Establishment

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

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

2. The term "permanent establishment" includes especially:
-8-

a) a place of management;

b) a branch;

c) an office;

d) a factory;

e) a workshop; and

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

resources.

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

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

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

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

establishment" shall be deemed not to include:

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

goods or merchandise belonging to the enterprise;

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

enterprise solely for the purpose of storage, display or delivery;

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

enterprise solely for the purpose of processing by another enterprise;

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

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

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

on, for the enterprise, any other activity of a preparatory or auxiliary character;

f) the maintenance of a fixed place of business solely for any combination of the

activities mentioned in subparagraphs a) through e).
-9-

5. Notwithstanding the provisions of paragraphs 1 and 2, where a person -- other than

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

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

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

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

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

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

permanent establishment under the provisions of that paragraph.

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

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

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

ordinary course of their business as independent agents. 

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

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

business in that other State (whether through a permanent establishment or otherwise), shall not

constitute either company a permanent establishment of the other.

ARTICLE 6

Income from Real Property (Immovable Property)

1. Income derived by a resident of a Contracting State from real property (immovable

property), including income from agriculture or forestry, situated in the other Contracting State

may be taxed in that other State.

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

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

shall in any case include property accessory to immovable property, livestock and equipment

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

property apply, usufruct of 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, boats and aircraft shall not be regarded as immovable 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.
-10-

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

property of an enterprise and to income from real property used for the performance of

independent personal services.

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

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

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

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

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

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

election. 

ARTICLE 7

Business Profits

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

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

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

business profits of the enterprise may be taxed in the other State but only so much of them as are

attributable to that permanent establishment.

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

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

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

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

engaged in the same or similar activities under the same or similar conditions.

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

allowed as deductions expenses that are incurred for the purposes of the permanent establishment, including a reasonable allocation of executive and general administrative expenses,

research and development expenses, interest, and other expenses incurred for the purposes of

the enterprise as a whole (or the part thereof which includes the permanent establishment),

whether incurred in the State in which the permanent establishment is situated or elsewhere.

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

mere purchase by that permanent establishment of goods or merchandise for the enterprise.
-11-

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, and shall include only the profits derived from the

assets or activities of the permanent establishment. 

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

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

provisions of this Article.

7. For the purposes of the Convention, the term "business profits" means income from

any trade or business, including income derived by an enterprise from the performance of

personal services, and from the rental of tangible personal property (movable property). 

8. In applying paragraphs 1 and 2 of Article 7 (Business Profits), paragraph 6 of

Article 10 (Dividends), paragraph 5 of Article 11 (Interest), paragraph 4 of Article 12

(Royalties), paragraph 3 of Article 13 (Gains), Article 14 (Independent Personal Services) and

paragraph 2 of Article 21 (Other Income), any income or gain attributable to a permanent

establishment or fixed base during its existence is taxable in the Contracting State where such

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

permanent establishment or fixed base has ceased to exist. 

ARTICLE 8

Shipping and Air Transport

1. Profits of an enterprise of a Contracting State from the operation of ships or aircraft

in international traffic shall be taxable only in that State. 

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

profits derived from the rental of ships or aircraft on a full (time or voyage) basis. They also

include profits from the rental of ships or aircraft on a bareboat basis if such ships or aircraft are

operated in international traffic by the lessee, or if the rental income is incidental to profits from

the operation of ships or aircraft in international traffic. Profits derived by an enterprise from the

inland transport of property or passengers within either Contracting State, shall be treated as

profits from the operation of ships or aircraft in international traffic if such transport is

undertaken as part of international traffic. 
-12-

3. Profits of an enterprise of a Contracting State from the use, maintenance, or rental of

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

in international traffic shall be taxable only in that State.

4. The provisions of paragraphs 1 and 3 shall also apply to profits from participation in a

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

ARTICLE 9

Associated Enterprises

1. Where:

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

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

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

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

Contracting State,

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

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

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

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

of that enterprise and taxed accordingly. 

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

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

charged to tax in that other State, and the other Contracting State agrees that the profits so

included are profits that would have accrued to the enterprise of the first-mentioned State if the

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

between independent enterprises, then that other State shall make an appropriate adjustment to

the amount of the tax charged therein on those profits. In determining such adjustment, due

regard shall be paid to the other provisions of this Convention and the competent authorities of

the Contracting States shall if necessary consult each other.
-13-

ARTICLE 10

Dividends

1. Dividends paid by a resident of a Contracting State to a resident of the other

Contracting State may be taxed in that other State.

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

payer 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 25 percent of the voting stock (or, in the case of

Slovenia, if there is no voting stock, at least 25 percent of the statutory capital) of the

company paying the dividends;

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

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

the dividends are paid.

3. Subparagraph a) of paragraph 2 shall not apply in the case of dividends paid by a

United States Regulated Investment Company (RIC) or a United States Real Estate Investment

Trust (REIT). In the case of dividends paid by a RIC, subparagraph b) of paragraph 2 shall

apply. In the case of dividends paid by a REIT, subparagraph b) of paragraph 2 also shall not

apply unless:

a) the beneficial owner of the dividends is an individual holding an interest of not

more than 10 percent in the REIT; 

b) 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

c) 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.

4. Notwithstanding paragraph 2, dividends may not be taxed in the Contracting State of

which the payer is a resident if the beneficial owner of the dividends is a resident of the other
-14-

Contracting State that is a qualified governmental entity that does not control the payer of the

dividend.

5. For purposes of the Convention, the term "dividends" means income from shares or

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

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

payer is a resident. 

6. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the

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

State, of which the payer is a resident, through a permanent establishment situated therein, or

performs in that other State independent personal services from a fixed base situated therein, and

the dividends are attributable to such permanent establishment or fixed base. In such case the

provisions of Article 7 (Business Profits) or Article 14 (Independent Personal Services), as the

case may be, shall apply.

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

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

the dividends are attributable to a permanent establishment or a fixed base situated in that State,

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

8, even if the dividends paid or the undistributed profits consist wholly or partly of profits or

income arising in that State.

8. A 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

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

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

Such tax, however, may be imposed on only the portion of the business profits of the company

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

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

(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

Slovenia, is an amount that is analogous to the dividend equivalent amount.

9. The tax referred to in paragraph 8 may not be imposed at a rate in excess of the rate

specified in subparagraph a) of paragraph 2.
-15-

10. The provisions of this Article shall not apply if it was the main purpose or one of the

main purposes of any person concerned with the creation or assignment of the shares or other

rights in respect of which the dividend is paid to take advantage of this Article by means of that

creation or assignment.

ARTICLE 11

Interest

1. Interest arising in a Contracting State and paid to a resident of the other Contracting

State may be taxed in that other State. 

2. However, such interest may also be taxed in the Contracting State in which it arises

and according to the laws of that State, but if the beneficial owner of the interest is a resident of

the other Contracting State, the tax so charged shall not exceed 5 percent of the gross amount

of the interest.

3. Notwithstanding paragraph 2, 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 if:

a) the beneficial owner is a qualified governmental entity that does not control

the person paying the interest;

b) the interest is paid or accrued with respect to debt obligations guaranteed or

insured by a qualified governmental entity of that other State; or

c) the interest is paid or accrued with respect to a deferred payment for personal

property (movable property) or services.

4. The term "interest" as used in this Convention means income from debt-claims of

every kind, whether or not secured by mortgage, and whether or not carrying a right to

participate in the debtor's profits, and in particular, income from government securities and

income from bonds or debentures, including premiums or prizes attaching to such securities,

bonds or debentures, and all other income that is subjected to the same taxation treatment as

income from money lent by the taxation law of the Contracting State in which the income arises. 

Income dealt with in Article 10 (Dividends) and penalty charges for late payment shall not be

regarded as interest for the purposes of this Convention.
-16-

5. The provisions of paragraphs 1, 2, and 3 shall not apply if the beneficial owner of the

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

State, in which the interest arises, through a permanent establishment situated therein, or

performs in that other State independent personal services from a fixed base situated therein, and

the interest is attributable to such permanent establishment or fixed base. In such case the provisions of Article 7 (Business Profits) or Article 14 (Independent Personal Services), as the case

may be, shall apply.

6. Interest shall be deemed to arise in a Contracting State when the payer is a resident of

that State. Where, however, the person paying the interest, whether he is a resident of a

Contracting State or not, has in a Contracting State a permanent establishment or a fixed base

and such interest is borne by such permanent establishment or fixed base, then such interest shall

be deemed to arise in the State in which the permanent establishment or fixed base is situated.

7. 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.

8. a) Notwithstanding the provisions of paragraphs 2 and 3, interest paid by a

resident of a Contracting State and that is determined with reference to receipts, sales,

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

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

distribution or similar payment made by the debtor to a related person, and paid to a

resident of the other State also may be taxed in the Contracting State in which it arises,

and according to the laws of that State, but if the beneficial owner is a resident of the

other Contracting State, the gross amount of the interest may be taxed at a rate not

exceeding the rate prescribed in subparagraph b) of paragraph 2 of Article 10

(Dividends); and

b) Notwithstanding the provisions of paragraphs 2 and 3, 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.

9. In the case of the United States, the excess, if any, of the amount of interest allocable

to the profits of a company resident in the other Contracting State that are either attributable to
-17-

a permanent establishment in the United States or subject to tax in the United States 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 trade or business in the United

States shall be deemed to arise in the United States and be beneficially owned by a resident of

the other Contracting State. The tax imposed under this Article on such interest shall not

exceed the rate specified in paragraph 2.

10. The provisions of this Article shall not apply if it was the main purpose or one of the

main purposes of any person concerned with the creation or assignment of the debt-claim in

respect of which the interest is paid to take advantage of this Article by means of that creation or

assignment.

ARTICLE 12

Royalties

1. Royalties arising in a Contracting State and paid to a resident of the other

Contracting State may be taxed in that other State.

2. However, such royalties may also be taxed in the Contracting State in which they arise

and according to the laws of that State, but if the beneficial owner of the royalties is a resident of

the other Contracting State, the tax so charged shall not exceed 5 percent of the gross amount

of the royalties.

3. The term "royalties" as used in this Convention means:

a) any consideration for the use of, or the right to use, any copyright of literary,

artistic, scientific or other work (including computer software, cinematographic films,

audio or video tapes or disks, and other means of image or sound reproduction), any

patent, trademark, design or model, plan, secret formula or process, or other like right or

property, or for information concerning industrial, commercial, or scientific experience;

and 

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

provided that such gain is contingent on the productivity, use, or disposition of the

property. 
-18-

4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the

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

State through a permanent establishment situated therein, or performs in that other State

independent personal services from a fixed base situated therein, and the royalties are

attributable to such permanent establishment or fixed base. In such case the provisions of

Article 7 (Business Profits) or Article 14 (Independent Personal Services), as the case may be,

shall apply.

5. Royalties shall be deemed to arise in a Contracting State when the payer is that State

itself, a political or administrative subdivision, a local authority, or a resident of that State.

Where, however, the person paying the royalties, whether he is a resident of a Contracting State

or not, has in a Contracting State a permanent establishment or a fixed base in connection with

which the obligation to pay the royalties was incurred, and such royalties are borne by such

permanent establishment or fixed base, then such royalties shall be deemed to arise in the State

in which the permanent establishment or fixed base is situated. Notwithstanding the preceding

provisions of this paragraph, royalties with respect to the use of, or the right to use, rights or

property within a Contracting State may be deemed to arise within that State. 

6. 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.

7. The provisions of this Article shall not apply if it was the main purpose or one of the

main purposes of any person concerned with the creation or assignment of the rights in respect

of which the royalties are paid to take advantage of this Article by means of that creation or

assignment.

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.
-19-

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

Contracting State" shall include: 

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

Property)); 

b) shares or other comparable rights, other than shares that are regularly traded

on an established securities market, in a company that is a resident of the other

Contracting State and that derives at least 50 percent of its value directly or indirectly

from immovable property situated in the other Contracting State and an interest in a

partnership, trust or estate to the extent that its assets consist of real property situated in

the other Contracting State.

3. Gains from the alienation of personal property (movable property) that are

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

other Contracting State, or that are attributable to a fixed base that is available to a resident of a

Contracting State in the other Contracting State for the purpose of performing independent

personal services, and gains from the alienation of such a permanent establishment (alone or with

the whole enterprise) or of such a fixed base, may be taxed in that other State.

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

aircraft, or containers operated or used in international traffic or personal property (movable

property) pertaining to the operation or use of such ships, aircraft, or containers shall be taxable

only in that State. 

5. Gains from the alienation of any property other than property referred to in

paragraphs 1 through 4 shall be taxable only in the Contracting State of which the alienator is a

resident. 

ARTICLE 14

Independent Personal Services

1. Income derived by an individual who is a resident of a Contracting State in respect of

professional services or other activities of an independent character shall be taxable only in that

State, unless the individual has a fixed base regularly available to him in the other Contracting

State for the purpose of performing his activities. If he has such a fixed base, the income
-20-

attributable to the fixed base that is derived in respect of services performed in that other State

also may be taxed by that other State.

2. The term “professional services” includes especially independent scientific, literary,

artistic, educational or teaching activities as well as the independent activities of physicians,

lawyers, engineers, architects, dentists and accountants.

3. For purposes of paragraph 1, the income that is taxable in the other Contracting State

shall be determined under the principles of paragraph 3 of Article 7 (Business Profits).

ARTICLE 15

Dependent Personal Services

1. Subject to the provisions of Articles 16 (Directors' Fees), 18 (Pensions, Social

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

and other 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 or a fixed base

which the employer has in the other State.

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

paragraph 1 that is derived by a resident of a Contracting State in respect of an employment as a
-21-

member of the regular complement of a ship or aircraft operated in international traffic shall be

taxable only in that State.

ARTICLE 16

Directors’ Fees

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

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

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

other Contracting State.

ARTICLE 17

Artistes and Sportsmen

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

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

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

exempt from tax in that other Contracting State under the provisions of Articles 14 (Independent Personal Services) and 15 (Dependent Personal Services) may be taxed in that other State,

except where the amount of the gross receipts derived by such entertainer or sportsman, including expenses reimbursed to him or borne on his behalf, from such activities does not exceed

fifteen thousand United States dollars ($15,000) or its equivalent in Slovenian tolars for the

taxable year concerned. 

2. Where income in respect of activities exercised by an entertainer or a sportsman in his

capacity as such accrues not to the entertainer or sportsman himself but to another person, that

income, notwithstanding the provisions of Articles 7 (Business Profits), 14 (Independent

Personal Services), and 15 (Dependent Personal Services), may be taxed in the Contracting

State in which the activities of the entertainer or sportsman are exercised, unless it is established

that neither the entertainer or sportsman nor persons related thereto participate directly or

indirectly in the profits of that other person in any manner, including the receipt of deferred

remuneration, bonuses, fees, dividends, partnership distributions, or other distributions.

3. The provisions of paragraphs 1 and 2 shall not apply to income derived from activities

performed in a Contracting State by artistes or sportsmen if the visit to that State is wholly or

mainly supported by public funds of one or both Contracting States or political subdivisions or
-22-

local authorities thereof. In such a case the income is taxable only in the Contracting State in

which the artiste or sportsman is a resident.

ARTICLE 18

Pensions, Social Security, Annuities, Alimony, and Child Support

1. Subject to the provisions of paragraph 2 of Article 19 (Government Service), pension

distributions and other similar remuneration beneficially owned by a resident of a Contracting

State, whether paid periodically or as a single sum, shall be taxable only in that State; however,

that State may not tax such pension distributions and similar remuneration to the extent it has

been included in taxable income in the other Contracting State prior to the distribution.

2. Notwithstanding the provisions of paragraph 1, payments made by a Contracting

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

the other Contracting State or to a citizen of the United States shall be taxable only in the firstmentioned 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 specific time period, 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, and deductible therein, to a

resident of the other Contracting State shall be taxable only in that other State. The term

"alimony" as used in this paragraph means periodic payments made pursuant to a written

separation agreement or a decree of divorce, separate maintenance, or compulsory support,

which payments are taxable to the recipient under the laws of the State of which he is a resident.

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

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

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

Contracting State, shall be exempt from tax in both Contracting States.
-23-

ARTICLE 19

Government Service

1. Notwithstanding the provisions of Articles 14 (Independent Personal Services), 15

(Dependent Personal Services), 16 (Directors' Fees) and 17 (Artistes and Sportsmen): 

a) Salaries, wages and other remuneration, other than a pension, paid from the

public funds of a Contracting State or a political subdivision or a local authority thereof

to an individual in respect of services rendered to that State or subdivision or authority in

the discharge of functions of a governmental nature shall, subject to the provisions of

subparagraph b), be taxable only in that State;

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

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

who:

(i) is a national of that State; or

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

rendering the services.

2. Subject to the provisions of paragraph 2 of Article 18 (Pensions, Social Security,

Annuities, Alimony, and Child Support): 

a) any pension paid from the public funds of a Contracting State or a political

subdivision or a local authority thereof to an individual in respect of services rendered to

that State or subdivision or authority in the discharge of functions of a governmental

nature shall, subject to the provisions of subparagraph b), be taxable only in that State;

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

the individual is a resident of, and a national of, that State.
-24-

ARTICLE 20

Students, Trainees, Professors and Researchers

1. a) Except as provided in paragraph 2, an individual who is a resident of a

Contracting State at the beginning of his visit to the other Contracting State and who is

temporarily present in that other Contracting State for the primary purpose of :

i) studying at a university or other recognized educational institution in

that other Contracting State, or 

ii) securing training required to qualify him to practice a profession or

professional specialty, or 

iii) studying or doing research as a recipient of a grant, allowance, or

award from a governmental, religious, charitable, scientific, literary, or

educational organization, 

shall be exempt from tax by that other Contracting State with respect to the amounts

described in subparagraph b) of this paragraph for a period not exceeding 5 taxable years

from the date of his arrival in the other Contracting State, and for such additional period

of time as is necessary to complete, as a full-time student, educational requirements as a

candidate for a postgraduate or professional degree from a recognized educational

institution.

b) The amounts referred to in subparagraph a) of this paragraph are:

i) payments from abroad, other than compensation for personal services,

for the purpose of his maintenance, education, study, research, or training;

ii) the grant, allowance, or award; and

iii) income from personal services performed in that other Contracting

State in an aggregate amount not in excess of five thousand United States dollars

($5,000) or its equivalent in Slovenian tolars for the taxable year concerned.

2. An individual who is a resident of a Contracting State at the beginning of his visit to

the other Contracting State and who is temporarily present in that other Contracting State as an

employee of, or under contract with, a resident of the first-mentioned Contracting State, for the

primary purpose of:
-25-

a) acquiring technical, professional, or business experience from a person other

than that resident of the first-mentioned Contracting State, or

b) studying at a university or other recognized educational institution in that

other Contracting State, 

shall be exempt from tax by that other Contracting State for a period not to exceed 12 months

with respect to his income from personal services in an aggregate amount not in excess of eight

thousand United States dollars ($8,000) or its equivalent in Slovenian tolars.

3. An individual who is a resident of a Contracting State at the beginning of his visit to

the other Contracting State and who is temporarily present in the other Contracting State for the

purpose of teaching or carrying on research at a recognized educational or research institution

shall be exempt from tax in the other Contracting State on his income from personal services for

teaching or research at such institution for a period not exceeding two years from the date of the

individual's arrival in that other State. In no event shall any individual have the benefits of this

paragraph for more than five taxable years.

4. This Article shall not apply to income from research if such research is undertaken

not in the public interest but primarily for the private benefit of a specific person or persons.

ARTICLE 21

Other Income

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

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

State.

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

property as defined in paragraph 2 of Article 6 (Income from Real Property (Immovable

Property)), if the beneficial owner of the income, being a resident of a Contracting State, carries

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

or performs in that other State independent personal services from a fixed base situated therein,

and the income is attributable to such permanent establishment or fixed base. In such case the

provisions of Article 7 (Business Profits) or Article 14 (Independent Personal Services), as the

case may be, shall apply.
-26-

3. The provisions of this Article shall not apply if it was the main purpose or one of the

main purposes of any person concerned with the creation or assignment of the rights in respect

of which the income is paid to take advantage of this Article by means of that creation or

assignment.

ARTICLE 22

Limitation on Benefits

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

residents of a Contracting State by this Convention only to the extent provided in this Article.

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

Convention if the resident is: 

a) an individual;

b) a qualified governmental entity; 

c) a company, if

(i) all the shares in the class or classes of shares representing more than

50 percent of the voting power and value of the company are regularly traded on

a recognized stock exchange, or

(ii) at least 50 percent of each class of shares in the company is owned

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

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

person entitled to benefits of the Convention under this paragraph; 

d) described in subparagraph 1 c)(i) of Article 4 (Residence); 

e) described in subparagraph 1 c)(ii) of Article 4 (Residence), provided that more

than 50 percent of the person's beneficiaries, members or participants are individuals

resident in either Contracting State; or

f) a person other than an individual, if:

(i) On at least half the days of the taxable year persons described in

subparagraphs a), b), c), d) or e) own, directly or indirectly (through a chain of
-27-

ownership in which each person is entitled to benefits of the Convention under

this paragraph), at least 50 percent of each class of shares or other beneficial

interests in the person, and

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

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

either Contracting State (unless the payment is attributable to a permanent

establishment situated in either State), in the form of payments that are deductible

for income tax purposes in the person’s State of residence.

3. a) A resident of a Contracting State not otherwise entitled to benefits shall be

entitled to the benefits of this Convention with respect to an item of income derived from

the other State, if:

(i) the resident is engaged in the active conduct of a trade or business in

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

investments, unless the activity is banking, insurance or securities activity

conducted by a bank, insurance company or registered securities dealer),

(ii) the income is connected with or incidental to the trade or business,

and 

(iii) the trade or business is substantial in relation to the activity in the

other State generating the income.

b) Income is derived in connection with a trade or business if the activity in the

other State generating the income is a line of business that forms a part of or is

complementary to the trade or business. Income is incidental to a trade or business if it

facilitates the conduct of the trade or business in the other State.

4. A resident of a Contracting State not otherwise entitled to benefits may be granted

benefits of the Convention if the competent authority of the State from which benefits are

claimed so determines. 

5. For purposes of this Article the term "recognized stock exchange" means:

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

Dealers, Inc. and any stock exchange registered with the U.S. Securities and Exchange
-28-

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

1934; 

b) the Ljubljana Stock Exchange; and

c) the stock exchanges of Frankfurt, London, Paris and Vienna, and any other

stock exchanges agreed upon by the competent authorities of both Contracting States.

ARTICLE 23

Relief from Double Taxation

1. In accordance with the provisions and subject to the limitations of the law of the

United States (as it may be amended from time to time without changing the general principle

hereof), the United States shall allow to a resident or citizen of the United States as a credit

against the United States tax on income: 

a) the income tax paid or accrued to Slovenia by or on behalf of such citizen or

resident; and

b) in the case of a United States company owning at least 10 percent of the

voting stock of a company that is a resident of Slovenia and from which the United

States company receives dividends, the income tax paid or accrued to Slovenia 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 1 b)(i), 1 b)(ii), and 2 of

Article 2 (Taxes Covered) shall be considered income taxes.

2. Where a resident of Slovenia derives income which, in accordance with the provisions

of this Convention, may be taxed in the United States, Slovenia shall allow as a deduction from

the tax on the income of that resident, an amount equal to the income tax paid in the United

States. Such deduction shall in no case exceed that portion of the income tax which has been

computed before making the deduction which is attributable to the income which may be taxed

in the United States. For the purposes of this paragraph, the taxes referred to in paragraphs 1 a)

and 2 of Article 2 (Taxes Covered) shall be considered income taxes. 

3. Where a United States citizen is a resident of Slovenia: 
-29-

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 Slovenia who is not a United States citizen, Slovenia

shall allow as a credit against Slovenian tax, only the tax paid, if any, that the United

States may impose under the provisions of this Convention, other than taxes that may be

imposed solely by reason of citizenship under the saving clause of paragraph 4 of Article

1 (General Scope); 

b) for purposes of computing United States tax on those items of income

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

States tax the income tax paid to Slovenia 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 Slovenian 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 Slovenia to the extent necessary to avoid double taxation of such income

under subparagraph b).

4. Where in accordance with any provision of the Convention income derived by a

resident of a Contracting State is exempt from tax in that State, such State may, nevertheless, in

calculating the amount of tax on the remaining income of such resident, take into account the

exempted income. 

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 are or may be subjected. For purposes of United States taxation of income,

United States nationals not resident in the United States are not in the same circumstances as

Slovenian nationals not resident in the United States. This provision shall also apply to persons

who are not residents of one or both of the Contracting States.

2. The taxation on a permanent establishment or fixed base that a resident of a

Contracting State or an enterprise of a Contracting State has in the other Contracting State shall
-30-

not be less favorably levied in that other State than the taxation levied on enterprises or residents

of that other State carrying on the same activities. The provisions of this paragraph shall not be

construed as obliging a Contracting State to grant to residents of the other Contracting State

any personal allowances, reliefs, and reductions for taxation purposes on account of civil status

or family responsibilities that it grants to its own residents. 

3. Except where the provisions of paragraph 1 of Article 9 (Associated Enterprises),

paragraph 7 of Article 11 (Interest), or paragraph 6 of Article 12 (Royalties) apply, interest,

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

resident of the other Contracting State shall, for the purpose of determining the taxable profits

of the resident or enterprise of the first-mentioned Contracting State, 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 or enterprise of a Contracting State to a resident of the other Contracting

State shall, for the purpose of determining the taxable capital of the resident or enterprise of the

first-mentioned Contracting State, be deductible under the same conditions as if they had been

contracted to a resident of the first-mentioned State.

4. Enterprises of a Contracting State, the capital of which is wholly or partly owned or

controlled, directly or indirectly, by one or more residents of the other Contracting State, shall

not be subjected in the first-mentioned State to any taxation or any requirement connected

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

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

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

imposing a tax as described in paragraph 8 of Article 10 (Dividends) or paragraph 9 of Article

11 (Interest).

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

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

political subdivision or local authority thereof.

ARTICLE 25

Mutual Agreement Procedure

1. Where a person considers that the actions of one or both of the Contracting States

result or will result for him in taxation not in accordance with the provisions of this Convention,

he may, irrespective of the remedies provided by the domestic law of those States, and the time
-31-

limits prescribed in such laws for presenting claims for refund, present his case to the competent

authority of the Contracting State of which he is a resident or, if his case comes under paragraph

1 of Article 24 (Non-Discrimination), to that of the Contracting State of which he is a national. 

The case must be presented within five years from the first notification of the action resulting in

taxation not in accordance with the provisions of the Convention.

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

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

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

avoidance of taxation which is not in accordance with the Convention. Any agreement reached

shall be implemented notwithstanding any time limits or other procedural limitations in the

domestic law of the Contracting States. Assessment and collection procedures shall be

suspended during the pendency of any mutual agreement proceeding.

3. The competent authorities of the Contracting States shall endeavor to resolve by

mutual agreement any difficulties or doubts arising as to the interpretation or application of the

Convention. In particular the competent authorities of the Contracting States may agree:

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

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

Contracting State;

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

persons;

c) to the same characterization of particular items of income, including the same

characterization of income that is assimilated to income from shares by the taxation law

of one of the Contracting States and that is treated as a different class of income in the

other State;

d) to the same characterization of persons;

e) to the same application of source rules with respect to particular items of

income; 

f) to a common meaning of a term; and
-32-

g) that the conditions for the application of paragraph 10 of Article 10

(Dividends), paragraph 10 of Article 11 (Interest), paragraph 7 of Article 12 (Royalties),

or paragraph 3 of Article 21 (Other Income) of the Convention are met.

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

in the Convention.

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

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

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

other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs.

ARTICLE 26

Exchange of Information and Administrative Assistance

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

as is relevant for carrying out the provisions of this Convention or of the domestic laws of the

Contracting States concerning taxes covered by the Convention insofar as the taxation

thereunder is not contrary to the Convention, including information relating to the assessment or

collection of, the enforcement or prosecution in respect of, or the determination of appeals in

relation to, the taxes covered by the Convention. The exchange of information is not restricted

by Article 1 (General Scope). Any information received by a Contracting State shall be treated

as secret in the same manner as information obtained under the domestic laws of that State and

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

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

respect of, or the determination of appeals in relation to, the taxes covered by the Convention or

the oversight of the above. Such persons or authorities shall use the information only for such

purposes. They may disclose the information in public court proceedings or in judicial decisions.

2. In no case shall the provisions of paragraph 1 be construed so as to impose on a

Contracting State the obligation:

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

administrative practice of that or of the other Contracting State;
-33-

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

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

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

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

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

3. If information is requested by a Contracting State in accordance with this Article, the

other Contracting State shall obtain that information in the same manner and to the same extent

as if the tax of the first-mentioned State were the tax of that other State and were being imposed

by that other State, notwithstanding that the other State may not, at that time, need such

information for purposes of its own tax. If specifically requested by the competent authority of

a Contracting State, the competent authority of the other Contracting State shall provide

information under this Article in the form of depositions of witnesses and authenticated copies of

unedited original documents (including books, papers, statements, records, accounts, and

writings), to the same extent such depositions and documents can be obtained under the laws

and administrative practices of that other State with respect to its own taxes.

4. For the purposes of this Article, the Convention shall apply, notwithstanding the

provisions of Article 2 (Taxes Covered), to taxes of every kind imposed by a Contracting State.

ARTICLE 27

Diplomatic Agents and Consular Officers

Nothing in this Convention shall affect the fiscal privileges of diplomatic agents or

consular officers under the general rules of international law or under the provisions of special

agreements.

ARTICLE 28

Capital

1. Capital represented by real property referred to in Article 6 (Income from Real

Property (Immovable Property)), owned by a resident of a Contracting State and situated in the

other Contracting State, may be taxed in that other State.
-34-

2. Capital represented by personal property (movable property) forming part of the

business property of a permanent establishment which an enterprise of a Contracting State has in

the other Contracting State, or by personal property (movable property) pertaining to a fixed

base available to a resident of a Contracting State in the other Contracting State for the purpose

of performing independent personal services, may be taxed in that other State.

3. Capital represented by ships, aircraft, and containers owned by a resident of a

Contracting State and operated in international traffic, and by personal property (movable

property) pertaining to the operation of such ships, aircraft, and containers shall be taxable only

in that State.

4. All other elements of capital of a resident of a Contracting State shall be taxable only

in that State.

ARTICLE 29

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 shall be exchanged as soon

as possible. 

2. The Convention shall enter into force upon 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 third 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.
-35-

ARTICLE 30

Termination

1. This Convention shall remain in force until terminated by a Contracting State. Either

Contracting State may terminate the Convention by giving notice of termination to the other

Contracting State through diplomatic channels. In such event, the Convention shall cease to

have effect:

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

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

was given; and

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

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

was given.

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

respective Governments, have signed this Convention.

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

equally authentic, this 21st day of June, 1999.

FOR THE UNITED STATES FOR THE REPUBLIC OF

OF AMERICA: SLOVENIA: