ARTICLE 22

Income Not Expressly Mentioned

This Article of the proposed Convention contains a general rule that items of income of a resident of one of the States which are not expressly mentioned in the foregoing articles of the proposed Convention shall be taxable only in that State except that, if such income is derived from sources within the other State, that other State may also tax such income. This rule provides for the same result as found in paragraph (1) of Article 22 (General Rules of Taxation) of our French Convention which provides that any income from sources within a State to which the Convention is not expressly applicable will be taxable by that State in accordance with its own law. For example, because income from prizes or awards is not generally covered by the Convention, such income will ordinarily be taxed in accordance with the internal law of the State from which such income is derived. However, this Article does not apply to industrial and commercial profits attributable to a permanent establishment since such income is expressly covered in Article 7 (Business Profits). The existing Convention does not contain an express statement of this general rule. The OECD Model Convention differs on this point and provides that income which is not expressly mentioned will be taxable only in the State of residence. In any event it should be noted that the proposed Convention specifically covers most types of income.