DAN ROSTENKOWSKI, Illinois

Chairman

SAM GIBBONS, Florida

J.J. PICKLE, Texas

BILL ARCHER, Texas

PHILIP M. CRANE, Illinois

DANIEL PATRICK MOYNIHAN, New York
Vice Chairman

MAX BAUCUS, Montana

DAVID L. BOREN, Oklahoma

BOB PACKWOOD, Oregon

ROBERT DOLE, Kansas

HARRY L. GUTMAN, Chief of Staff

PETER V.Z. Coss, Deputy Chief of Staff

MARY M. SCHMITT, Associate Chief of Staff (Law)

BERNARD A. SCHMITT, Associate Chief of Staff (Revenue Analysis)

(II)

CONTENTS

INTRODUCTION

I. SUMMARY

II. ISSUES

III. OVERVIEW OF UNITED STATES TAXATION OF INTER-

NATIONAL TRADE AND INVESTMENT AND U.S. TAX

TREATIES

A. United States Tax Rules .......

Page

1

2

15

32

B. United States Tax Treaties-In General

IV. EXPLANATION OF PROPOSED TAX TREATY

38

Article 1. General Scope .......

38

39

32

35

Article 2. Taxes Covered

Article 3. General Definitions

Article 4. Resident

43

Article 5. Permanent Establishment

47