ARTICLE 15

Dependent Personal Services

Generally, under the proposed Convention income from labor or personal services as an employee may be taxed in the State in which such labor or personal services are performed (except as provided in Article 20 (Teachers) and Article 21 (Students and Trainees)). However, such income will be exempt from tax in the State of source if

(1) the recipient, being a resident of one of the Contracting States, is present in the State of source for a period or periods aggregating less than 183 days during the taxable year;

(2) the recipient is an employee of a resident of the State of his residence (or a permanent establishment located in the State of his residence); and

(3) the remuneration is not borne as such by a permanent establishment which the employer has in the State of source. Thus, the rule applicable to dependent personal services is similar to that contained in the existing Convention.

However, income from personal services performed in Belgium by a United States resident who is employed by a Belgian permanent establishment maintained by a United States corporation

would no longer be exempt from tax in Belgium (nor would there be an exemption from United States tax in the reverse situation). In addition, the proposed Convention would eliminate the rule in the existing Convention generally exempting a resident of one State from taxation by the other State of compensation received for services performed in the other State where such resident is temporarily present in the other State for a period aggregating 90 days or less during the taxable year and the compensation received for such services is not in excess of $3,000. The proposed Convention also adds a rule that income from personal services aboard ships or aircraft registered in one State and operated by a resident of that State in international traffic will not be taxed in the other State so long as the services are rendered by a member of the regular complement of the ship or aircraft.

This Article of the proposed Convention is substantially similar to the OECD Model Convention except that, under the proposed Convention, an individual temporarily present in one State who is an employee of a permanent establishment located in the other State and maintained by a corporation of the first-mentioned State will be exempt from taxation by the first-mentioned State on wages earned while temporarily present therein if the other requirements are met.