ARTICLE I
1. Subparagraph b) (iii) of paragraph 2 of Article 4 (Resident) of the Convention
shall be deleted and replaced by the following:
“(iii) in the case of the United States, a regulated investment
company, a real estate investment trust, and a real estate mortgage
investment conduit; in the case of France, a “société
d’investissement à capital variable” (SICAV), a “société
d’investissement immobilier cotée” (SIIC), a “société de placement
à prépondérance immobilière à capital variable” (SPPICAV); and
any similar investment entities agreed upon by the competent
authorities of both Contracting States.”
2. Subparagraphs b) (iv), (b) (v), and (b) (vi) of paragraph 2 of Article 4
(Resident) of the Convention shall be deleted.
3. New subparagraph c) of paragraph 2 of Article 4 (Resident) of the Convention
shall be added as follows:
“c) An item of income paid from the United States to a French qualified
partnership shall be considered derived by a resident of France only to the
extent that such income is included currently in the taxable income of a
shareholder, associate or other member that is otherwise treated as a
resident of France under the provisions of this Convention. A French
qualified partnership means a partnership:
(i) that has its place of effective management in France,
(ii) that has not elected to be taxed in France as a corporation,
(iii) the tax base of which is computed at the partnership level for
French tax purposes, and
(iv) all of the shareholders, associates or other members of which,
pursuant to the tax laws of France, are liable to tax therein in
respect of their share of the profits of that partnership.”
4. New paragraph 3 of Article 4 (Resident) of the Convention shall be added as
follows:
“3. For purposes of applying this Convention, an item of income, profit or
gain derived through an entity that is fiscally transparent under the laws
of either Contracting State, and that is formed or organized:
a) in either Contracting State, or;
b) in a state that has concluded an agreement containing a provision for
the exchange of information with a view to the prevention of tax evasion
with the Contracting State from which the income, profit, or gain is
derived,
shall be considered to be derived by a resident of a Contracting State to
the extent that the item is treated for purposes of the taxation law of such
Contracting State as the income, profit or gain of a resident.”
5. Paragraphs 3 and 4 of Article 4 (Resident) of the Convention shall be
renumbered as paragraphs 4 and 5.