#### Article 24. Basis of Taxation
- 1 Notwithstanding any provision of the Convention except paragraph 2, each of the States
may tax its residents and nationals as if the Convention had not come into effect.
For this purpose, as regards the United States, the term national shall include a
former citizen or long-term resident, not being a national of the Netherlands, whose
loss of such United States status has as one of its principal purposes the avoidance
of income tax, but only for a period of 10 years following such loss.
- 2 The provisions of paragraph 1 shall not affect
- a) the benefits conferred by one of the States under [paragraph 2 of Article 9](#Verdrag_2_Verdragtekst_1_HoofdstukIII_Artikel9) (Associated Enterprises), under [paragraphs 4, 7, 8 and 10 of Article 19](#Verdrag_2_Verdragtekst_1_HoofdstukIII_Artikel19) (Pensions, Annuities, Alimony), and under [Articles 25](#Verdrag_2_Verdragtekst_1_HoofdstukIV_Artikel25) (Methods of Elimination of Double Taxation), [28](#Verdrag_2_Verdragtekst_1_HoofdstukV_Artikel28) (Non-Discrimination), and [29](#Verdrag_2_Verdragtekst_1_HoofdstukV_Artikel29) (Mutual Agreement Procedure); and
- b) the benefits conferred by one of the States under [Articles 20](#Verdrag_2_Verdragtekst_1_HoofdstukIII_Artikel20) (Government Service), [21](#Verdrag_2_Verdragtekst_1_HoofdstukIII_Artikel21) (Professors and Teachers), [22](#Verdrag_2_Verdragtekst_1_HoofdstukIII_Artikel22) (Students and Trainees), and [33](#Verdrag_2_Verdragtekst_1_HoofdstukV_Artikel33) (Diplomatic Agents and Consular Officers), upon individuals who are neither citizens
of that State, nor, in the case of the United States, lawful permanent residents of
the United States.
- 3 For the implementation of [paragraphs 1 and 2 of Article 7](#Verdrag_2_Verdragtekst_1_HoofdstukIII_Artikel7) (Business Profits), [paragraph 7 of Article 10](#Verdrag_2_Verdragtekst_1_HoofdstukIII_Artikel10) (Dividends), [paragraph 3 of Article 12](#Verdrag_2_Verdragtekst_1_HoofdstukIII_Artikel12) (Interest), [paragraph 3 of Article 13](#Verdrag_2_Verdragtekst_1_HoofdstukIII_Artikel13) (Royalties), [paragraph 3 of Article 14](#Verdrag_2_Verdragtekst_1_HoofdstukIII_Artikel14) (Capital Gains), [paragraph 1 of Article 15](#Verdrag_2_Verdragtekst_1_HoofdstukIII_Artikel15) (Independent Personal Services), and [paragraph 2 of Article 23](#Verdrag_2_Verdragtekst_1_HoofdstukIII_Artikel23) (Other Income), any income, gain or expense attributable to a permanent establishment
or fixed base during its existence is taxable or deductible in the State where such
permanent establishment or fixed base is situated even if the payments are deferred
until such permanent establishment or fixed base has ceased to exist. Nothing in the
preceding sentence shall affect the application to such deferred payments of rules
regarding the accrual of income and expenses according to the domestic law of each
of the States.
Gains from the alienation of personal property that at any time formed part of the
business property of a permanent establishment or fixed base that a resident of one
of the States has or had in the other State may be taxed by that other State only
to the extent that the gain is attributable to the period in which the personal property
in question formed part of the afore-mentioned business property. Such tax may be
imposed on such gains at the time when realized and recognized under the laws of that
other State, if that date is within 3 years of the date on which the property ceases
to be part of the business property of the permanent establishment or fixed base.
- 4 In the case of an item of income, profit or gain derived through a person that is
fiscally transparent under the laws of either State, such item shall be considered
to be derived by a resident of a State to the extent that the item is treated for
the purposes of the taxation law of such State as the income, profit or gain of a
resident.