The Government of the United States of America and the Government of the Republic of Italy, desiring to conclude a protocol clarifying and supplementing the Convention for the avoidance of double taxation with respect to taxes on income and the prevention of fraud or fiscal evasion to be signed simultaneously with the signing of this Protocol, have agreed upon the following provisions. ARTICLE 1 　　1. For purposes of paragraph 2 (b) of Article 1 (Personal Scope) of the Convention, the term "citizen" as applied to the United States shall include a former citizen whose loss of citizenship had as one of its principal purposes the avoidance of tax, but only for a period of 10 years following such loss. 　　2. The provisions of paragraph 2 of Article 1 (Personal Scope) of the Convention shall not affect: 　　(a) the benefits conferred by a Contacting State under paragraph 14 of Article 1 of this Protocol to residents of the other Contracting State who are nationals of that other State, even if they are also Nationals of the first-mentioned State; 　　(b) the benefits conferred by a Contacting State under Article 4 of this Protocol. 　　3. For purposes of paragraph 2 (a) of Article 2 (Taxes Covered) of the Convention, the Convention shall apply to the excise tax imposed by the United States on insurance premiums paid to foreign insurers only to the extent that the foreign insurer does not reinsure such risks with a person not entitled to exemption from such tax under this or any other Convention. 　　4. For purposes of paragraph 2 of Article 5 (Permanent Establishment) of the Convention, a drilling rig or ship used for the exploration or development of natural resources constitutes a permanent establishment in a Contracting State only if it remains in that State for more than 180 days in a twelve month period. 　　5. For purposes of paragraph 1 of Article 8 (Shipping and Air Transport) of the Convention, profits from the operation in international traffic of ships or aircraft include: 　　(a) profits from the use, maintenance, or rental of containers (including trailers, barges, and related equipment for the transport of containers) used for the transport in international traffic of goods or merchandise; and 　　(b) profits derived from the rental on a full basis of ships or aircraft and profits derived from the rental on a bareboat basis of ships or aircraft, provided in the latter case that such rental profits are incidental to other profits from the operation of ships or aircraft in international traffic. 　　6. For purposes of Article 8 (Shipping and Air Transport) of the Convention, and notwithstanding any other provision of the Convention, profits which a national of the United States not resident in Italy, or a United States corporation, derives from operating ships documented or aircraft registered under the laws of the United States shall be exempt from tax in Italy. 　　7. If, in accordance with Article 9 (Associated Enterprises) of the Convention, a redetermination has been made by one Contracting State with respect to a person, the other Contracting State shall, to the extent it agrees that such redetermination reflects arrangements or conditions which would be made between independent persons, make the corresponding adjustments with respect to persons who are related to such person and are subject to the taxing jurisdiction of that other State. Any such adjustment shall be made only in accordance with the mutual agreement procedure in Article 25 (Mutual Agreement Procedure) of the Convention and with paragraph 15 of Article 1 of this Protocol. 　　8. The provisions of Article 9 (Associated Enterprises) of the Convention shall not limit any provisions of the law of either Contracting State which permit the distribution, apportionment, or allocation of income, deductions, credits, or allowances between persons owned or controlled directly or indirectly by the same interests when necessary in order to prevent evasion of taxes or clearly to reflect the income of any of such persons. 　　9. For purposes of paragraph 2 (a) of Article 10 (Dividends), the term "subsidiary company" means a corporation in which the company paying the dividends owns more than 50 percent of the voting stock. 　　10. Notwithstanding paragraph 2 of Article 12 (Royalties) of the Convention, in the case of royalties derived with respect to tangible personal (movable) property, the tax imposed by the Contracting State in which such royalties arise may not exceed 7 percent of the gross amount of such royalties. 　　11. For purposes of paragraph 1 of Article 13 (Capital Gains) of the Convention: 　　(a) the term "immovable property", in the case of the United States, includes a United States real property interest; and 　　(b) the term " immovable property" in the case of Italy includes: 　　(i) immovable property referred to in Article 6; 　　(ii) shares or comparable interests in a company or other body of persons, the assets of which consist wholly or principally of real property situated in Italy; and 　　(iii) an interest in an estate of a deceased individual, the assets of which consist wholly or principally of real property situated in Italy. 　　(c) property described in subparagraph (a) of this paragraph shall be deemed to be situated in the United States and property described in subparagraph (b) of this paragraph shall be deemed to be situated in Italy. 　　12. For purposes of paragraph 3 of Article 13 (Capital Gains) of the Convention, gains derived by an enterprise of a Contracting State from the alienation of ships or aircraft operated by such enterprise in international traffic include: 　　(a) gains from the alienation of containers (including trailers, barges, and related equipment for the transport of containers) used for the transport in international traffic of goods or merchandise; and 　　(b) gains from the alienation of ships or aircraft rented on a full basis or gains from the alienation of ships or aircraft rented on a bareboat basis if, in the latter case, rental profits were incidental to other profits from the operation of ships or aircraft in international traffic. 　　13. Directors' fees and other similar payments derived by a resident of a Contracting State which are described in Article 16 (Directors' Fees) of the Convention may be taxed in the other Contracting State only to the extent that the fees and other payments are attributable to services performed in such other State. 　　14. With respect to Article 18 (Pensions, etc.) of the Convention, it is agreed that social security payments and similar public pensions not covered by Article 19 (Government Service) of the Convention are covered by paragraph 1 of said Article 18 (Pensions, etc.). 　　15. With respect to Article 25 (Mutual Agreement Procedure) of the Convention, it is understood that an adjustment of taxes pursuant to that Article may be made only prior to the final determination of such taxes. It is further understood that, in the case of Italy, the preceding sentence means that invoking the mutual agreement procedure does not relieve a taxpayer of the obligation to initiate the procedures of domestic law for resolving tax disputes. 　　16. For purposes of Article 26 (Exchange of Information) of the Convention, the Convention shall apply to taxes of every kind imposed by a Contracting State, but only insofar as the information is relevant to the assessment of taxes covered by Article 2 (Taxes Covered) of the Convention. It is understood that appropriate United States Congressional Committees and the General Accounting Office shall be afforded access to the information exchanged under the Convention where such access is necessary to carry out their oversight responsibilities, subject only to the limitations and procedures of the Internal Revenue Code. ARTICLE 2 　　1. A person (other than an individual) which is a resident of a Contracting State shall not be entitled under this Convention to benefits provided in Articles 7 (Business Profits), 10 (Dividends), 11 (Interest), 12 (Royalties), 13 (Capital Gains) or 22 (Other Income) unless: 　　(a) more than 50 percent of the beneficial ownership of such person (or in the case of a company, more than 50 percent of the number of shares of each class of the company's shares) is owned, directly or indirectly, by any combination of one or more of: 　　(i) individuals who are residents of the United States; 　　(ii) citizens of the United States; 　　(iii) individuals who are residents of Italy; 　　(iv) companies as described in subparagraph (b); or 　　(v) the Contracting States; or 　　(b) it is a company in whose principal class of shares there is substantial and regular trading on a recognized stock exchange. 　　2. Paragraph 1 shall not apply unless the competent authority of the other Contracting State determines that either the establishment, acquisition or maintenance of such person or the conduct of its operations had as a principal purpose obtaining benefits under the Convention. 　　3. For the purpose of subparagraph (1) (b), the term ''a recognized stock exchange" means: 　　(a) the NASDAQ System owned by the National Association of Securities Dealers, Inc. and any stock exchange registered with the Securities and Exchange Commission as a national securities exchange for the purposes of the Securities Exchange Act of 1934. 　　(b) any stock exchange constituted and organized according to Italian laws; and 　　(c) any other stock exchange agreed upon by the competent authorities of the Contracting States. ARTICLE 3 　　The Convention shall not restrict in any manner any exclusion, exemption, deduction, credit, or other allowance now or hereafter accorded - 　　(a) by the laws of either Contracting State, or 　　(b) by any other agreement between the Contracting States. 　　　　　　　　　　　　　ARTICLE 4 　　It is agreed that a United States citizen resident in Italy who is a partner of a partnership that is a national of the United States shall be entitled to a refundable credit against that partner's individual income tax (l'imposta sul reddito delle persone fisiche) imposed by Italy for the taxable period equal to the portion of the corporation income tax (l'imposta sul reddito delle persone giuridiche) imposed by Italy for the same period on the partnership that is attributable to that partner's share of the partnership income. ARTICLE 5 　　Taxes withheld at the source in a Contracting State at the rates provided by domestic law will be refunded by request of the taxpayer if the right to collect the said taxes is limited by the provisions of the Convention. Claims for refund, which shall be made within the time limit fixed by the law of the Contracting State which is obliged to make the refund, shall be accompanied by an official certificate of the Contracting State of which the taxpayer is a resident certifying the existence of the conditions required for being entitled to the benefits provided for by the Convention. This provision shall not be construed to prevent the competent authority of each Contracting State from establishing other modes of application of the benefits provided for by the Convention. ARTICLE 6 　　Each of the Contracting States may collect on behalf of the other Contracting State such amounts as may be necessary to ensure that relief granted by the Convention from taxation imposed by such other State does not ensure to the benefit of persons not entitled thereto. The preceding sentence shall not, however, impose upon either of the Contracting States the obligation to carry out administrative measures which are of a different nature from those used in the collection of its own tax, or which would be contrary to its sovereignty, security, or public policy. ARTICLE 7 　　1. This Protocol shall be subject to ratification in accordance with the applicable procedures of each Contracting State, and instruments of ratification shall be exchanged at Washington. 　　2. The Protocol shall enter into force upon the exchange of instruments of ratification and shall thereafter have effect in accordance with Article 28 of the Convention. ARTICLE 8 　　This Protocol shall remain in force as long as the Convention between the United States of America and Italy for the avoidance of double taxation with respect to taxes on income and the prevention of fraud or fiscal evasion of this date shall remain in force. 　　Done at Rome in duplicate, in the English and Italian languages, the two texts having equal authenticity, this 17th day of April, 1984. FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA (s) Maxwell Rabb FOR THE GOVERNMENT OF THE REPUBLIC OF ITALY (s) Giulio Andreotti