ARTICLE VIII
1. Regarding Article 24 (Relief From Double Taxation) of the Convention as
incorporated in the alternat of the United States, in both the English and French
version of such alternat, paragraph 1 shall be renumbered paragraph 2, and
paragraph 2 shall be renumbered paragraph 1.
2. Clause (iii) of subparagraph a) of paragraph 1 of Article 24 (Relief From
Double Taxation) of the Convention, as amended by paragraph 1 of this Article
VIII of this Protocol, shall be deleted and replaced by the following:
“(iii) in the case of income referred to in Article 10 (Dividends),
Article 11 (Interest), paragraph 1 of Article 13 (Capital Gains),
Article 16 (Director’s Fees), and Article 17 (Artistes and
Sportsmen), to the amount of tax paid in the United States in
accordance with the provisions of the Convention; however, such
credit shall not exceed the amount of French tax attributable to such
income.”
3. Clause (i) of subparagraph b) of paragraph 1 of Article 24 (Relief From
Double Taxation) of the Convention, as amended by paragraph 1 of this Article
VIII of this Protocol, shall be deleted and replaced by the following:
“(i) income consisting of dividends paid by a company that is a
resident of the United States, or interest arising in the United States,
as described in paragraph 5 of Article 11 (Interest), or royalties
arising in the United States, as described in paragraph 4 of Article
12 (Royalties), that is derived and beneficially owned by such
individual and that is paid by:
aa) the United States or any political subdivision or local
authority thereof; or
bb) a person created or organized under the laws of a state of
the United States or the District of Columbia, the principal
class of shares of or interests in which is substantially and
regularly traded on a recognized stock exchange as defined in
subparagraph (d) of paragraph 7 of Article 30 (Limitation on
Benefits of the Convention); or
cc) a company that is a resident of the United States,
provided that less than 10 percent of the outstanding shares
of the voting power in such company was owned (directly or
indirectly) by the resident of France at all times during the
part of such company's taxable period preceding the date of
payment of the income to the owner of the income and
during the prior taxable period (if any) of such company, and
provided that less than 50 percent of such voting power was
owned (either directly or indirectly) by residents of France
during the same period; or
dd) a resident of the United States, not more than 25 percent
of the gross income of which for the prior taxable period (if
any) consisted directly or indirectly of income derived from
sources outside the United States;”.
4. Clause (i) of subparagraph e) of paragraph 1 of Article 24 (Relief From
Double Taxation) of the Convention as amended by paragraph 1 of this Article
VIII of this Protocol, shall be deleted and replaced by the following:
“(i) Where a company resident of France is taxed in that state
according to French domestic law on a consolidated tax base,
including the profits or losses of subsidiaries that are residents of
the United States or of permanent establishments situated in the
United States, the provisions of the Convention shall not prevent
the application of that law.”
5. Subparagraph (c) of paragraph 2 of Article 24 (Relief From Double Taxation)
of the Convention, as amended by paragraph 1 of this Article VIII of this
Protocol, shall be deleted.