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II SÉRIE — NÚMERO 53

landed property apply, usufruct of immovable property and rights to variable of 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 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 immovable property.

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

5 — The foregoing provisions shall also apply to income from movable property which, under the taxation law of the Contracting State in which the property in question is situated, is assimilated to income from immovable property.

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 entreprise may be taxed in the other State but only so much of them as is 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 which it might be expected to make if it were a distinct and separate enterprise 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.

3 — In determining the profits of a permanent establishment, there shall be allowed as deductions •expenses which 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 — Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this article.

5 — 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.

6 — For the pu-npases of the preceding paragraphs, the profits to be attributed to the permanent esta-

blishement shall be determined by the same method year by y:ar unkc; the.?; g-ccd and sufficient reason to the contrary.

7 — Where profits include items of income which are dealt with separately in other articles of this Convention, then the provisions of those articles shall not be affected by the provisions of this article.

ARTICLE 8 (Shipping and air transport)

1 — Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

2 — If the place of effective management of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship is a resident.

3 — The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.

ARTICLE 9 (Associated enterprises)

Where:

a) An enterprise of a Contracting State partici-

pates 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 indi-

rectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State,

and 'in either cass conditions are miarte or (imposed between the 'two entireprisss m their com medial or financial relations which differ from those which would be made- between independent enterprises, then any profits which would, but for those conditions, have accruad the one of the enterprises, but, by reason df those icondtticns, have mot so 'accrued, may be fcnehided in the profits of that enterprise laird taxed accordingly.

ARTICLE 10 (Dividends)

1 — Dividends attributed or paid by a company which 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 attributing or paying the dividends is a resident and according to the laws of that State, but if the recipient is the beneficial owner of the dividends the 1 tax so charged shall not exceed 15 per cent of the gross amount of the dividends.

The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation.