Article 4-7

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 incorporation, or any other criterion of a similar nature. However, this term does not include any person who is liable to tax in that State in respect only of income from sources in that State or property situated therein.

2.

Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:

a)

he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (center of vital interests);

b)

if the State in which he has his center of vital interests cannot be determined, or if he does not have a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode;

c)

if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a citizen;

d)

if each State considers him as its citizen or if he is a citizen of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

3.

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

1.

For the purposes of this Convention, the term ``permanent establishment'' means a fixed place of business through which a resident of a Contracting State, whether or not a legal entity, either wholly or in part carries on its business activities in the other Contracting State.

2.

The term ``permanent establishment'' includes especially:

a)

a place of management;

b)

a branch;

c)

an office;

d)

a factory;

e)

a workshop;

f)

a mine, an oil or gas well, a quarry, or any other place of extraction of natural resources; and

g)

a store or any premises used as a sales outlet.

3.

A building site or construction, installation or assembly project, or an installation or drilling rig or ship used for the exploration or development of natural resources, constitutes a permanent establishment only if it lasts more than 6 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 resident;

b)

the maintenance of a stock of goods or merchandise belonging to the resident solely for the purpose of storage, display, or delivery;

c)

the maintenance of a stock of goods or merchandise belonging to the resident solely for the purpose of processing by another person;

d)

the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or of collecting information, for the resident;

e)

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

5.

Notwithstanding the provisions of paragraphs 1 and 2, where a resident of a Contracting State carries on activities in the other Contracting State through an agent, that resident shall be deemed to have a permanent establishment in that other State in respect of any activities which the agent undertakes for that resident, if the agent meets each of the following conditions:

a)

he has an authority to conclude contracts in that other State in the name of the ;

b)

he habitually exercises that authority;

c)

he is not an agent of an independent status to whom the provisions of paragraph 6 apply; and

d)

his activities are not limited to those mentioned in paragraph 4.

6.

A resident of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other 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.

7.

The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

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, 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, boats and aircraft shall not be regarded as real property.

3.

The provisions of paragraph 1 shall apply to income derived from the direct use, leasing or subleasing, or use in any other form of real property.

4.

The provisions of paragraphs 1 and 3 shall also apply to the income from real property of an enterprise and to income from real property used for the performance of independent personal services.

5.

A resident of a Contracting State who is liable to tax in the other contracting State on income from real property situated in that other State may elect, subject to the procedures of the domestic law of that other State, to compute the tax on such income on a net basis as if such income were attributable to a permanent establishment in that other State. Any such election shall be binding for the taxable year of the election and all subsequent taxable years unless revoked pursuant to the procedures under the domestic law of the contracting State in which the property is situated.

1.

The business profits of a resident of a Contracting State shall be taxable only in that State unless the resident carries on or has carried on business in the other Contracting State through a permanent establishment situated therein. If the resident carries on or has carried on business as aforesaid, the business profits of the resident nay be taxed in the other State but only so much of them as is attributable to the assets or activities of that permanent establishment.

2.

Subject to the provisions of paragraph 3, where a resident of a Contracting State carries on or has carried 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 person engaged in the same or similar activities under the same or similar conditions, and dealing wholly independently with the enterprise of which it is a permanent establishment and any other enterprise that is an associated enterprise within the meaning of Article 9 (Associated Enterprises).

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 executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere. However, no such deduction shall be allowed in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission, for specific services performed or for management, or by way of interest on moneys lent to the permanent establishment.

4.

The business profits attributed to a permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.

5.

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 resident.

6.

For purposes of this Article, the term ``business profits'' means profits derived from the active conduct of business. It includes, for example, profits from manufacturing, mercantile, fishing, transportation, communication, or extractive activities, from the rental of tangible movable property, and from the furnishing of services of another person. It does not include income received by an individual for his performance of personal services (either as an employee or in an independent capacity). Income of an individual from the performance of services as an employee is dealt within Article 15 (Dependent personal Services). Income of an individual from the performance of services in an independent capacity is dealt within Article 14 (Independent personal Services).

7.

Where business profits include items of income which 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.

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