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II SÉRIE - NÚMERO 63

3 — The provisions of paragraph 1 shall appy 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 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 entenprh* carries cr business in the other Contracting State through e permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterpris may be taxed 'in the other State but only so much of them as is atributable to that permanent establishment.

2 — Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on businese 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 esteirprtee engaged1, in the same or similier activities under the same or •similar conditions and dealing wholly independently with the enterprise of which it is a remanent establishment.

3 — In determine 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 oustomary in a Con-¡tracting State to determine the profits to be attributed to a permanent estabMshmet 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 determing the profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted shail, 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 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.

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

Snipping 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 tc 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 wich the operator of the ship is a resident.

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

ARTICLE 9

Associated interprises

Where:

o) An enterprise of a Contracting State participates 'directly or ind.reetly .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 which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, 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.

ARTICLE 10

Dividends

1 — Dividends 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 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 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.

This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.