Protocol PDF

96TH
CONGRESS
SENATE
EXECUTIVE
2d Se8sion
fz
PROTOCOL AMENDING THE 1971 TAX CONVENTION
WITH THE
KINGDOM OF NORWAY
MESSAGE
FROM
THE
PRESIDENT OF
THE UNITED STATES
TRANSMITTING
THE PROTOCOL
AMNENDING
THE
CONVENTION
BETWEEN
THE GOVERNMENT
OF THE
UNITED STATES
OF
AMERICA
AND THE KINGDOM OF NORWAY
FOR THE AVOIDANCE OF
DOUBLE TAXATION
AND THE
PREVENTION
OF FISCAL
EVASION WITH
RESPECT
TO
TAXES ON INCOME
AND
PROPERTY SIGNED AT
OSLO ON DECEMBER 3,
1971, WHICH
PROTOCOL WAS SIGNED AT OSLO
ON SEPTEMBER 19, 1980
December 2, 1980.-Protocol
was read the first
time and, together
with the accompanying
papers, referred to the Committee
on Foreign
Relations
and ordered to be printed for
the use of the Senate
79-118 0
U.S. GOVERNMENT PRINTING
OFFICE
WASHINGTON: 1980

I

LETTER OF
TRANSMITTAL
Tm
WHiTE
Housp,
December
2,1980.
To the
Senate of the United
State8:
I transmit
herewith, for Senate
advice and
consent to ratification,
a protocol
amending the Convention
between the United States
of
America and
the Kingdom of
Norway signed
at Oslo on December
3,
1971, which
Protocol was signed
at Oslo on September
19, 1980.
I also
enclose for
the information
of the Senate, the
report of the
Depart-
ment ol
State.
The Protocol
modifies the existing
convention
between the
United
States and
Norway. It takes
into account changes
in Norway's
tax
system during the
years since the Convention
was negotiated and
other-
wise brings
it up to date.
In 1975, Norway
amended
its corporate tax
in several ways
to
increase the
burden of that tax
on corporations
deriving income
from
the extraction
of offshore oil
and gas. The 1975
legislation also
added
a special tax
on income from
submarine
petroleum
resources.
Article
I of the Protocol
clarifies certain
questions arising
from these
changes
by providing
foreign tax credits
with respect
to the corporate
tax
'and
-the
special
tax,
with
a
limitation
for
taxpayers
subject
to
the
special tax to
the amount necessary
to offset United
States tax
on the
petroleum income
from sources
within Norway.
This limitation
is
similar to that
contained in
the Third Protocol
to the income
tax
convention between
the United
States and the United
Kingdom.
The Convention
does not provide
specific rules
to determine
when a
country has
the right to tax
income resulting
from the exploration
or
exploitation
of its continental
shelf and its natural
resources.
Article
II of the Protocol
allows Norway
and the United
States to impose
a
tax on income
derived from the
exploitation or
exploration of
natural
resources on
their respective
continental shelves
after such activities
have existed
for more than
30 days in a twelve
month period.
With
respect
to income from
employment in
such activities, however,
an
exemption is provided for wages attributable to sixty days of personal
services
performed in the
taxable year.
In
addition, the Protocol
modifies the
rate of withholding
tax at
source on dividends
and interest
and allows
the United States
to tax
gains from the
sale of shares in
companies whose assets
consist prin-
cipally of United
States real
property. It also
contains other
provi-
sions, including
a new provision
on the tax treatment
of entertainers
and athletes
and clarifies provisions
on administrative
cooperation.
I recommend that the Senate give early and favorable consideration
to the Protocol
and give advice
and consent to
its ratification.
JIMY
CARTER.

LETTER
OF
SUBMITTAL
DEPARTMENT
OF
STATE,
Washington,
November
13, 1980.
The
PRESIDENT,
The
White
House.
TiiE
PRESIDENT:
I have
the
honor
to
submit
to you,
with
a
view to
its
transmission
to the
Senate
for
advice
and
consent
to
ratification,
the
Protocol
amending
the
Convention
between
the Government
of the
United
States
of America
and
the Kingdom
of Norway
for the
avoid-
ance
of
double
taxation
and
the
prevention
of fiscal
evasion
with
respect
to taxes
on
income
and
property
signed
at
Oslo
on
December
3,
1971,
which
Protocol
was
signed
at
Oslo
on
September
19, 1980.
The
Protocol
modifies
the
existing
convention
between
the
United
States
and
Norway.
It
takes
into
account
changes
in Norway's
tax
system
during
the
intervening
years
and
otherwise
brings
the
Con-
vention
up to
date.
In 1975,
Norway
amended
its
corporate
tax
in several
ways
to in-
crease
the burden
of
that
tax on
corporations
deriving
income
from
the
extraction
of
offshore
oil
and
gas. The
1975
legislation
also
added
a
special
tax
on
income
from
submarine
petroleum
resources.
Due
to
the
nature
of
the
1975
changes
and subsequent
amendments,
it
is not
clear
whether
the
payments
being
made
to Norway
by
United
States
taxpayers
engaged
in
offshore
petroleum
extraction
are
eligible
for
the
foreign
tax credit
in the
United
States.
Article
I of
the Protocol
resolves
this
issue
by
providing
that
foreign
tax credits
are
available
with
respect
to
the
corporate
tax
and
special
surcharge
on
offshore
petroleum
income.
The
amount
of
credit
for
taxpayers
subject
to
the
special
tax
is limited,
however,
to t'he
amount
necessary
to
offset
United
States
tax
on
the petroleum
income
from
sources
within
Norway.
This
per
country
limitation
is
similar
to
the
limitation
contained
in
the Third
Protocol
to the
income
tax
convention
between
the
United
States
and
the
United
Kingdom.
The
existing
income
tax
convention
between
the United
States
and
Norway
does
not
specify
when
activities
in
connection
with
the
ex-
ploration
or exploitation
of a
country's
continental
shelf
and
its
nat-
ural
resources
are sufficient
to
give
that
country
the
right
to
impose
tax,
as the
country
of the
source
of
the
income
from
such
activities.
Article
II
of the
Protocol
allows
Norway
and
the
United
States
to
impose
tax
on income
arising
from
the exploitation
or
exploration
of
natural
resources
on
its continental
shelf
after
such
activities
exist
for
more
than
30 days
in
a twelve
month
period.
This
rule
applies
to income
of employees
and
independent
contractors
as well
as
to
corporate
profits.
In
the
case
of employees,
however,
an
exemption
is
provided
for wages
attributable
to
sixty
days
of
personal
services
performed
in
the
taxable
year.

The Protocol
modifies the provisions for the rates
of withholding
tax at source
on dividends and interest. In the case
of dividends, the
rate of withholding is increased
from 10 to 15 percent.
Norway has
been amending
its tax conventions with
other countries to assure the
uniform
application of 15 percent withholding
on Norwegian divi-
dends. This increase
in
Norway's withholding
tax is mitigated by
Nor-
way's split
rate tax system which
allows corporations
to reduce
their
Norwegian
corporate tax burden by
making larger distributions
to
their shareholders.
The provision in the Convention
exempting interest from tax in
the
country of source is modified
by Article V of the Protocol
to allow im-
position of a 10 percent withholding
tax. Interest arising on commer-
cial credit, bank loans,
and obligations outstanding
on the date of the
signature of the Protocol remains,
however, exempt from withhold-
ing tax. Furthermore,
interest generally
remains exempt in the coun-
try of source unless
the other country has legislation
in effect which
authorizes the taxation
of interest paid to nonresidents.
Norway does
not now have a withholding
tax on interest. Thus,
at this time, all in-
terest remains exempt from
tax at source under Article V of the Pro-
tocol.
As in the case of other
recent United States tax treaties,
the Protocol
with Norway contains
a provision designed to allow
the United States
to tax
gains derived by residents of Norway
from the sale of stock of a
corporation,
or an interest in a partnership,
trust or an estate, in cases
where
the property of such entities
consists principally of
United
States
real estate. Other provisions
of the Protocol include a new
arti-
cle
on the tax treatment of entertainers
and athletes, a technical
amendment
to the exemption for
social security payments made
by the
other
country, and a clarification
that former United States
citizens
who
give up their citizenship to
avoid United States tax do not
bene-
fit from the Convention.
Also included is a definition
of Norway's
obli-
gation to give
credits for United States taxes,
and provisions to mod-
ernize
the Mutual Agreement Procedure
and Exchange of Informa-
tion articles of the Convention.
The Protocol
will enter
into force
upon the
exchange
of instru-
ments of ratification
and its provisions will have
effect:
(a) In
respect
of credits
against
United
States
tax
allowed
pur-
suant to
Article
I of this
Protocol,
as
of the
sixth taxable
year
pre-
ceding January 1 of
the year in which the
Portocol enters into
force;
(b) In respect
of tax
withheld
at
the source,
to amounts
paid
on or after the first
day of the sixth
month next following
the
date on which the Protocol
enters into force;
(c)
In
respect
of
other
taxes,
for
taxable
years
beginning
on
or
after January
1 of the
year
following
the year
in
which the
Pro-
tocol enters into force.
A technical memorandum
explaining
in detail
the provisions of
the
Protocol is being prepared
by the Department
of the Treasury
and will
be
submitted
to the
Senate Committee
on Foreign
Relations.
The Department
of the
Treasury,
with
the cooperation
of the
De-
partment of State,
was primarily
responsible for
the negotiation
of
the
Convention.
It
has the
approval
of
both
Departments.
Respectfully
submitted.
EDMVUNP S. ]MtS8Kr~l.

PROTOCOL AMENDING
THE CONVENTION BETWEEN
THE UNITED STATES
OF AMERICA
AND THE KINGDOM
OF NORWAY FOR THE
AVOIDANCE OF
DOUBLE
TAXATION AND THE PREVENTION
OF FISCAL
EVASION WITH
RESPECT
TO TAXES ON INCOME
AND PROPERTY, SIGNED
AT OSLO ON
DECEMBER
3, 1971
The
United States of America
and the Kingdom
of Norway, desiring
to
conclude a Protocol to
amendthe Coanvention
for the Avoidance of
Double Taxation
and the Prevention
of Fiscal Evasion with
Respect
to
Taxes on Income and Property,
signed at Oslo
on December 3, 1971,
have agreed as follows:
ARTICLE
I
(1) Paragraph
(2) of Article
1 (Taxes Covered) shall
be deleted
and replaced by the
following:
"(2) (a)
This Convention
shall also apply to:
"(i) taxes
substantially similar
to those covered
by paragraph
(1) which
are imposed in addition
to, or in place of,
existing taxes
after the
date of signature of
this Convention; and
"(ii) in
the case of Norway,
the national and municipal
taxes
on income
(including contributions
to the tax equalization
fund),
and the
special tax administered
under section 5 of
the Act of 13
June 1975, No. 35, relating
to the taxation of submarine
petroleum
resources,
as in effect on the
date of signature of
the Protocol
to this
Convention, and taxes
substantially similar
thereto enacted
after
such date.
"(b) The
terms 'United States
tax' and 'Norwegian
tax' used in
paragraph
(1) are deemed to
include, respectively, the
taxes imposed
by the
United States and Norway
described in this paragraph
(2).-
(2) Paragraph
(1) of Article
23 (Relief From Double
Taxation),
and the introductory
language that precedes
paragraph (1) of Article
23, shall be deleted
and replaced by
the following:
"(1) in the case
of the United States,
double taxation shall
be
avoided
as follows:
"(a) in accordance
with the provisions and subject to the limitations
of the law
of the United States
(as it may be amended from
time to time
without changing
the general principle hereof),
the United States
shall
allow to
a resident or citizen of
the United States as
a credit against
the
United
States tax on
income and appropriate
amount of income
taxes imposed by
Norway; and, in the case
of a United States company
owning
at least 10 percent
of the voting stock
of a company which
is a
resident of Norway
from which it receives
dividends in any taxable
year, the
United States
shall
allow as a credit
against the United States
tax on
income the appropriate
amount of income
taxes imposed
by
Norway
on the company which
is a resident of Norway
with respect
to the
profits out of which
such dividends are
paid. For purposes
of
applying
the United States
credit in relation
to taxes paid or accrued
to Norway, the Norwegian
taxes referred
to in paragraphs (1) (b)
and

(2) of Article 1 (Taxes Covered) (other than the national
and munici-
pal taxes
on capital, the
municipal tax
on real property,
and taxes sub-
stantially
similar to such taxes
on capital and real
property but imposed
by Norway after
the date
of signature of
the Convention)
shall be
considered to
be income taxes, and
shall be allowed as
a credit against
the United States
tax on income,
subject to the provisions
of subpara-
graph
(b).
"(b) The appropriate
amount
allowed as a credit
by the United
States
shall be based upon
the amount
of income taxes paid
or accrued
to Norway. However,
the credit
shall not exceed
the limitations
(for
the purpose of
limiting the
credit to the United
States tax
on income
fron sources outside
of the United
States) provided
by United States
law for the taxable
year. In addition,
in the case
of income taxes
paid
or accrued to Norway
by persons
subject to the
special tax referred
to in subparagraph
(2) (a)
(ii) of Article
1 (Taxes Covered),
or to a
substantially
similar tax, the
appropriate
amount allowed
as a credit
by the United
States shall
be limited to the
amount of
income taxes
paid or accrued
to Norway
attributable to
Norwegian source
taxable
income
in the following
way:
"(i)
with respect to
income taxes
paid or accrued
to Norway
on oil
and gas extraction
income from
oil or gas wells
in Norway,
the amount
to be allowed
as a credit
for
a taxable
year shall not
exceed
the product
of:
"(a) the maximum
statutory
United States
tax
rate appli-
cable to a corporation
for such
taxable year,
and
"(b)
the amount of
such income.
"(ii)
further, the
lesser of :
"(a) the amount
of taxes paid
or accrued to
Norway on oil
and gas extraction
income from
oil or gas wells
in Norway
that is not allowable
as a credit
under subparagraph
(i), or
"(b) two percent
of
such
income for the
taxable year
shall be deemed
to be income
taxes paid or
accrued in the
two preceding
or five succeeding
taxable years,
to the
extent
not deemed
paid or accrued
in a prior taxable
year, and
shall be allowable
as a credit
in the year
in which it is
deemed
paid or accrued
subject to the
limitation in
subparagraph
(i).
"(iii) the
provisions of
subparagraphs
(i) and (ii)
shall apply
separately,
in the same way
(but with the
deletion, in the
case of
subparagraph
(ii), of the
words 'the lesser
of (a)' and
'or (b)
two percent
of such
income for the
taxable year')
to the amount
of
income taxes paid
or accrued to
Norway on:
"(a)
Norwegian
source oil related
income not described
in subparagraph (i)
; and
"(b)
other
Norwegian source
income."
ARTICLE
II
The following
new
Article
4A (Offshore
Activities)
shall
be inserted
after Article
4 (Permanent
Establishment)
:
"ARTICLE
4A-OFPSHORE
ACTIVITIES
"(1)
Notwithstanding
the
provisions
of
Articles
4 (Permanent
Establishment)
and 13
(Independent
Personal
Services),
a resident

of
a Contracting
State
who
carries
on
activities
in the
other
Contract-
ing
State
in connection
with
the
exploration
or exploitation
of
the
seabed
and
sub-soil
and
their
natural
resources
situated
in
that
other
Contracting
State
shall
be
deemed
to
be carrying
on in
respect
of those
activities
a business
in
that
other
Contracting
State
through
a
permanent
establishment
or fixed
base
situated
therein.
"(2)
The
provisions
of
paragraph
(1)
shall
no
apply
where
the
activities
are
carried
on
for
a
period
not
exceeding
30
days
in
the
aggregate
in
any
12
month
period.
However,
for
the
purpose
of
this
paragraph,
activities
carried
on
by a
person
related
to
another
person
within
the
meaning
of
Article
7 (Related
Persons)
shall
be
regarded
as carried
on
by
the
last-mentioned
person
if the
activities
in
question
are
substantially
the same
as those
carried
on
by
that
last-mentioned
person.
"(3)
Notwithstanding
the
preceding
paragraphs,
the
provisions
of
Article
6 (Shipping
and
Air
Transport)
shall
apply
to
profits
derived
by
a resident
of a
Contracting
State
from
the
transportation
by
ship
or
aircraft
of
supplies
or personnel
to
a location
where
activities
in
connection
with
the
exploration
or
exploitation
of
the
seabed
and
sub-
soil
and
their
natural
resources
are
being
carried
on
in the
other
Con-
tracting
State,
or
from
the
operation
of
tugboats
and
similar
vessels
in
connection
with
such
activities.
"(4)
Notwithstanding
Article
14
(Dependent
Personal
Services),
wages,
salaries
and
similar
remuneration
derived
by
an
individual
who
is
a
resident
of
one
of the
Contracting
States
from
labor
or
per-
sonal
services
in connection
with
the
exploration
or exploitation
of
the
seabed
and
sub-soil
and
their
natural
resources
situated
in
the
other
Contracting
State
shall
not
be
taxable
in that
other
State
to
the
extent
such
wages,
salaries
and
similar
remuneration
are
attribut-
able
to:
"(a)
Labor
or
personal
services
performed
in
that
other
State
for
a
period
of
60
days
in
the taxable
year;
or
"(b)
If
that
other
State
is Norway,
labor
or
personal
services
performed
on
behalf
of
an
employer
who
is a
resident
of
the
United
States
with
respect
to petroleum
reservoirs
which
extend
between
Norway
and
any
other
State,
provided
that
there
is
an
agreement
between
Norway
and
that
other
State
for
joint
ex-
ploitation
of the
reservoir
and
the
exploitation
is
performed
simultaneously
in
both
States.
This
provision
shall,
however,
only
come
into
force
by
a
separate
agreement
between
the
competent
authoities
of
the
Contracting
States.
"(5)
Wages,
salaries
and
similar
remuneration
derived
by
an indi-
vidual
who
is a
resident
of
a Contracting
State
in
respect
of labor
or
personal
services
rendered
aboard
a
ship
or
aircraft
covered
by
paragraph
(3)
shall
be
taxed
in
accordance
with
paragraph
(3)
of
Article
14
(Dependent
Personal
Services)."
ARTICLE
III
Paragraph
(1)
of
Article
6 (Shipping
and
Air
Transport)
shall
be deleted
and
replaced
by the
following:
"(1)
Notwithstanding
Article
5 (Business
Profits),
income
which
a resident
of
the
United
States
derives
from
the
operation
in
inter-

national traffic
of ships or aircraft shall be
exempt from Norwegian
tax.7
ARTICLE IV
(1) Paragraph (2) of Article 8
(Dividends) shall be deleted and
replaced by the following:
"(2) The rate of tax imposed by
one of the Contracting States on
dividends derived
from sources
within that Contracting
State by a
resident of the other Contracting
State shall not exceed 15 percent
of the gross amount actually distributed."
(2) Paragraph (4) of Article 8
(Dividends) shall be deleted and
replaced by the following:
"(4) Dividends paid by a corporation
of one of the Contracting
States shall be exempt from tax by
the other Contracting State ex-
cept insofar as:
"(a) The recipient of the dividends
is a resident of the other
Contracting State;
"(b) In the case of dividends
paid by a Norwegian corpora-
tion, the recipient of the dividends
is a citizen of the United
States;
"(c) The recipient of the dividends has a permanent establish-
ment in that other State and the shares with respect to which the
dividends are paid are effectively connected with such permanent
establishment; or
"(d) In cases where that other State is the United States, such
dividends are paid out of profits attributable to one or more
permanent establishments which
such
corporation had in that
other State, provided that such profits constituted at least 50
percent of such corporation's gross income from all sources.
"Where subparagraph
(d) applies and subparagraphs (a), (b) and
(c) do not apply, any such tax shall be subject to the limitation of
paragraph (2)."
ARTICLE V
Article 9 (Interest) shall be deleted and replaced by the following:
'c
ARTICLE
9-INTEREST
"(1) Interest derived from sources within one of the Contracting
States by a resident of the other Contracting State may be taxed by
both
Contracting States; provided, however, that such interest shall
be exempt in the first-mentioned State in any calendar year in which
the other State exempts similar interest derived from sources within
that State from taxation under its domestic law.
"(2) The rate of tax imposed by a Contracting State on interest
derived from sources within that State by a resident of the other
Contracting State shall in no event exceed 10 percent of the gross
amount of the interest.
"(3) Notwithstanding the provisions of paragraph (2), interest de-
rived from sources within one of the Contracting States 'by a resident
of the other Contracting State shall in all events be exempt from tax
by the first-mentioned State if :
"(a) The interest is beneficially owned by, or is paid by, a
Contracting State,
a political subdivision
or local authority there-

of or an instrumentality, sub-division or authority of a Contract-
ing State which is not subject to tax by that State;
,(b)
The
interest
is
beneficially
owned
by
a resident
of
a
Con-
tracting State with respect to debt obligations guaranteed or in-
sured by that State, a political subdivision or local authority
thereof or an instrumentality, subdivision or authority of such
State which is not subject to tax by that State;
"(c) The interest is paid by a purchaser to a seller in connec-
tion with a commercial credit resulting from deferred payments
for goods, merchandise or services;
"(d) The interest is paid with respect to a loan of any nature
made by a bank; or
"(e) The interest is paid with respect to an obligation outstand-
ing on the date of signature of this Protocol.
"(4) The term 'interest' as used in this Convention means income
from bonds, debentures, Government securities, notes or other evi-
dences of indebtedness, whether or not secured, and debt-claims of
every kind, as well as all other income which, under the taxation law of
the Contracting State in which the income has its source, is
assimilated
to income from money lent.
"(5) Paragraphs (2) and (3) shall not apply if the beneficial owner
of the interest, being a resident of one of the Contracting
States, has
a permanent establishment in the other Contracting State
and the in-
debtedness giving rise to the interest is effectively connected
with such
permanent establishment. In such a case, see paragraph
(6) (a) of
Article 5 (Business Profits).
"(6) Where any
interest paid by a person
to any related
person ex-
ceeds an amount which would have been paid to an unrelated
person,
the provisions
of this Article shall
apply only to so much of
the inter-
est as would have been paid to an unrelated person. In such a case the
excess payment may be taxed by each Contracting State according
to
its own law, including the
provisions of this Convention where
applicable.
"(7) Interest
paid
by a resident
of one of
the Contracting
States
to a
person other
than a
resident of
the other
Contracting
State (and
in
the case of interest paid by a Norwegian corporation, to a person
other
than a citizen
of the United
States) shall be exempt
from tax by the
other Contracting State. This paragraph shall not apply if:,
"(a) Such
interest
is treated
as income
from sources
within
the other
Contracting
State under
paragraph
(2) of Article
24
(Source of Income) ; or
"(b)
The
recipient
of the
interest
has
a permanent
establish-
ment in the other Contracting State and the indebtedness giving
rise to the interest is effectively connected with such permanent
establishment."
ARTICLE VI
(1) Paragraph (1) of Article 12 (Capital
Gains) shall be amended
by redesignating subparagraphs
(b) and (c) as. respectively,
(d) and
(e), and
by inserting
after subparagraph
(a) the
following
new sub-
paragraphs (b) and (c):

"(b) The gain is derived by a resident of one of the Contracting
States from the sale, exchange or other disposition of :
"(i) Stock
of a corporation the
property of which consists
principally
of
real property
situated
within
the other
Contracting
State; or
"(ii) An interest in a partnership,
trust or estate the property
of which
consists principally
of real property
situated within
the
other
Contracting
State.
For the purposes of this subparagraph, the term 'real property' in-
cludes
stock of a corporation
referred to
in
subparagraph
(b) (i) or
an
interest in a partnership, trust
or estate referred to in
subpara-
graph
(b)
(ii).
"(c)
The gain
is derived
by a resident
of
one of the
Contracting
States
from the sale,
exchange or other
disposition of
stock of a corpo-
ration
which
is a resident
of the
other Contracting
State,
but only
if:
"(i)
The recipient
of the gain
owns within
the 12 month
period
preceding
such
sale,
exchange
or
other
disposition
more
than
25
percent
of the
stock
of that
corporation;
and
"(ii)
More
than 50
percent
of the
fair
market
value
of the
gross
assets
of
that corporation
used
in
its trade
or business
are physi-
cally located
in the
other
Contracting
State
on the
last
day of
each
of
the three
taxable
years
preceding
the
sale,
exchange
or other
disposition
(or,
if
the corporation
has been
in
existence
for
less
than
3 years,
on
the last
day
of each
preceding
taxable
year
of the
corporation)
."
(2) Paragraphs
(3)
and
(4) of
Article
12
(Capital
Gains)
shall
be
deleted
and
a new
paragraph
(3)
shall
be inserted
after
paragraph
(2) :
"(3)
In the
case
of gains
described
in
paragraph
(1) (a),
see
Arti-
cle
11
(Income
from
Real
Property).
In
the case
of
gains
described
in
paragraph
(1) (d),
see
paragraph
6 (a)
of Article
5
(Business
Profits)
."
(3) Paragraph
(8)
of Article
24
(Source
of
Income)
shall
be deleted
and
replaced
by
the following:
"(8)
Income
from
gains
described
in
paragraph
(1) of
Article
12
(Capital
Gains),
derived
by
a resident
of
a Contracting
'State
but
which
may
be
taxed
by
the other
Contracting
State,
shall
be treated
as income
from
sources
within
that
other
Contracting
State."
ARTICLE
VII
(1) Subparagraph
(c) of
paragraph
(2) of
Article
13 (Independent
Personal
Services)
shall
be
deleted
and
replaced
by
the following:
"(c)
The individual
is
a public
entertainer,
such
as a
theater,
motion
picture
or television
artist,
a musician
or an
athlete,
and
the income
is
derived
from
his personal
services
as
a public
entertainer
provided
that
he
is present
in
that
other
Contracting
State
for
more
than a
total
of
90 days
during
the
taxable
year
or
such
income
exceeds
in
the
aggregate
10,000
United
States
dollars
or its
equivalent
in
Nor-
wegian
Kroner
during
the taxable
year."
(2) The
following
now
Article
14A
(Artistes
and
Athletes)
shall
be
inserted
after
Article
14 (Dependent
Personal
Services)
:

"ARTICLE
14A-ARTISTES
AND
ATHLETES
"Where income
in respect of
activities exercised
by an entertainer
or an athlete
in his capacity
as such
accrues not to
that entertainer
or athlete
but to another
person,
that income
may,
notwithstanding
the provisions of Articles 5 (Business
Profits), 13 (Independent Per-
sonal Services), and 14 (Dependent
Personal Services), be taxed in
the Contracting
State in which the activities of the entertainer or
athlete are exercised. For purposes
of the preceding sentence, income
of an entertainer or athlete shall
be deemed not to accrue to another
person if it is established that
neither the entertainer or athlete, nor
persons related thereto, participate
directly or indirectly in the profits
of such
other person in any manner, including
the receipt of deferred
remuneration, bonuses, fees,
dividends, partnership distributions or
other distributions."
ARTICLE
VIII
Article 19 (Social Security Payments) shall be deleted
and replaced
by the following:
"ARTICLE
19-SOCIAL
SECURITY
PAYMENTS
"Social Security payments and other
public pensions paid by one
of the Contracting States to an individual
who is a resident of the
other Contracting State or a citizen
of the United States shall be tax-
able only in the first-mentioned
Contracting State. This Article shall
not apply to payments
described in Article 17 (Governmental Func-
tions)."
ARTICLE IX
Paragraph
(3) of Article 22 (General Rules of Taxation)
shall be
amended 'by
adding after the first sentence thereof
-the following:
"For this purpose
the term "citizen" shall include
a former citizen
whose loss
of citizenship had as one of its principal
purposes the
avoidance of
income tax, but only for a period of ten
years following
such loss."
ARTICLE X
Paragraph (2) of Article 23 (Relief from
Double Taxation) shall
be amended as follows:
(1) The first sentence of
subparagraph (a) shall be amended
by
changing "subject to the provisions
of subparagraphs (b) or (c)
of
this paragraph"
to "subject to the provisions of subparagraphs
(b),
(c), or
(d) of this paragraph".
(2) Subparagraph
(c) shall be deleted and replaced with the
fol-
lowing:
"(c)
In
determining
its
tax
on
a Norwegian
corporation
receiving
dividends
from a United States corporation in which it owns 10
per-
cent or more of the stock, Norway
shall allow a credit against the
tax
otherwise
payable by the Norwegian corporation for that part
of
United States tax imposed on
the profits of the United States corpora-
tion out
of which the dividends were paid, in the proportion that
the

dividends received
bear to the accumulated profits of the United States
corporation
in excess
of that
tax, provided
that
an amount
equal
to
such
credit
is recognized
by the Norwegian
corporation
as income
in
the year
in which the
dividend is
received. Such
credit shall not,
how-
ever,
exceed
that
part
of the
tax,
as computed
before
the credit
is
given,
which is appropriate
to the
income derived
from sources
in the
United
States under the rules
set forth in Article 24 (Source
of
Income)."
(3)
A new
subparagraph
(d) shall
be added
as
follows:
"(d) Where
a resident
of
Norway
derives
income
which,
in accord-
ance
with
paragraph
(1)
of Article
4 (A)
(Offshore
Activities),
may
be
taxed
in the
United
States,
Norway
may
tax such
income
but
shall
allow
as a
credit
against
the tax
in Norway
on
that income
an
amount
equal
to the
tax
paid in
the United
States.
Such credit
shall
not,
how-
ever,
exceed
that
part
of the
tax as
computed
before
the credit
is
given,
which
is
attributable
to
the income
which
may be
taxed
in the
United
States."
ARTICLE
XI
(1)
Paragraph
(4)
of Article
27 (Mutual
Agreement
Procedure)
shall
be amended
by adding
at
the end
thereof
the
following:
"Any
agreement
reached
shall be
implemented
notwithstanding
any
time
limits
in the
domestic
law
of the
Contracting
States."
(2)
The following
new
paragraph
(5)
shall
be added
to
Article
27
(Mutual
Agreement
Procedure)
:
"(5)
Where
any
provision
in this
Convention
specifies
an
amount
in
currency,
the
competent
authorities
may
agree
to adjust
such
amount
upward
in
light of
economic
developments."
ARTICLE
XII
Paragraph
(3) of
Article
28 (Exchange
of Information)
shall
be
deleted
and replaced
by the
following:
"(3)
The exchange
of information
shall
be either
on a
routine
basis
or
on request
with
reference
to particular
cases. If
information
is re-
quested
by
a Contracting
State
in
accordance
with
this
Article,
the
other
Contracting
State
shall
obtain
the
information
to
which
the
request
relates
in the
same manner
and to
the same
extent
as
if the
tax of
the first-mentioned
State were
the
tax of
that
other State
and
were
being
imposed
by
that
other State.
If
specifically
requested
-by
the competent
authority
of
a Contracting
State,
the competent
author-
ity of
the other
Contracting
State
shallprovide
information
under
this
Article
in the
form
of depositions
of
witnesses
and
authenticated
copies
of unedited
original
documents
(including
books,
papers,
state-
ments,
records,
accounts
or
writings),
to the
same extent
such deposi-
tions and
documents
can be
obtained
under
the laws
and
administrative
practices
of
such other
State
with
respect
to its
own taxes."
ARTICLE
XII
(1)
This
Protocol
shall
be ratified
and the
instruments
of ratifi-
cation
shall
be
exchanged
at
Washington
as soon
as possible.

(2)
This
Protocol
shall
enter
into
force
upon
the
exchange
of in-
struments
of ratification
and
its
provisions
shall
have
effect:
(a)
In respect
of
credits
against
United
States
tax
allowed
pursuant
to
Article
I of
this Protocol,
as
of the
sixth
taxable
year
preceding
January
1 of
the
year
in which
this
Protocol
enters
into force;
(b)
In
respect
of
tax withheld
at
the source,
to amounts
paid
on
or
after
the first
day
of
the sixth
month
next
following
the
date
on
which
this Protocol
enters
into
force;
(c)
In
respect
of
other
taxes,
for
taxable
years
beginning
on
or
after
January
1 of the
year
following
the
year in
which
this
Protocol
enters
into
force.
DONE
at
Oslo
in duplicate,
in the
English
and Norwegian
languages,
both
texts
having
equal
authenticity,
this
19th
day
of September,
1980.
FOR
THE
UNITED
STATES
OF
AMERICA:
FOR THE
KINGDOM
OF