Convention Signed at Oslo December 3, 1971; 　　Ratification Advised by the Senate of the United States of America August 11, 1972; 　　Ratified by the President of the United States of America August 28, 1972; 　　Ratified by Norway May 5, 1972; 　　Ratifications Exchanged at Washington September29, 1972; 　　Proclaimed by the President of the United States of America October 31, 1972; 　　Entered into Force November 29, 1972. GENERAL EFFECTIVE DATE UNDER ARTICLE 31: 1 JANUARY 1971 TABLE OF ARTICLES CHAPTER 1 SCOPE OF CONVENTION Article 1---------------------------------Taxes Covered CHAPTER II DEFINITIONS Article 2---------------------------------General Definitions Article 3---------------------------------Fiscal Residence Article 4---------------------------------Permanent Establishment CHAPTER III TAXATION OF INCOME Article 5---------------------------------Business Profits Article 6---------------------------------Shipping and Air Transport Article 7---------------------------------Related Persons Article 8---------------------------------Dividends Article 9---------------------------------Interest Article 10--------------------------------Royalties Article 11--------------------------------Income from Real Property Article 12--------------------------------Capital Gains Article 13--------------------------------Independent Personal Services Article 14--------------------------------Dependent Personal Services Article 15--------------------------------Teachers Article 16--------------------------------Students and Trainees Article 17--------------------------------Governmental Functions Article 18--------------------------------Private Pensions and Annuities Article 19--------------------------------Social Security Payments Article 20--------------------------------Investment or Holding Companies CHAPTER IV TAXATION OF CAPITAL Article 21--------------------------------Capital Taxes CHAPTER V GENERAL RULES Article 22---------------------------------General Rules of Taxation Article 23---------------------------------Relief from Double Taxation Article 24---------------------------------Source of Income CHAPTER VI SPECIAL PROVISIONS Article 25---------------------------------Nondiscrimination Article 26---------------------------------Diplomatic and Consular Officers Article 27---------------------------------Mutual Agreement Procedure Article 28---------------------------------Exchange of Information Article 29---------------------------------Assistance in Collection Article 30---------------------------------Extension to Territories CHAPTER VII FINAL PROVISIONS Article 31---------------------------------Entry into Force Article 32---------------------------------Termination Letter of Submittal----------------------of 13 January, 1972 Letter of Transmittal--------------------of 3 February, 1972 Notes of Exchange----------------------of 3 December, 1971 Protocol-----------------------------------of 19 September, 1980 Letter of Submittal (Protocol)---------of 13 November, 1980 Letter of Transmittal (Protocol)-------of 2 December, 1980 The "Saving Clause"--------------------Paragraph 3 of Article 22 　　　　　　　　　　　　　　　MESSAGE 　　　　　　　　　　　　　　　FROM 　　　　　　　　THE PRESIDENT OF THE UNITED STATES 　　　　　　　　　　　　　　TRANSMITTING 　　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 LETTER OF SUBMITTAL DEPARTMENT OF STATE, Washington, January 13, 1972. The PRESIDENT, The White House. 　　THE PRESIDENT: I have the honor to submit to you, with a view to its transmission to the Senate for advice and consent to ratification, a 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. 　　This convention, upon entry into force, would terminate and replace the convention of June 13, 1949, for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, as modified and supplemented by a supplementary convention of July 10, 1958 (2 UST 2323; 10 UST 1924; Treaties and Other International Acts Series 2357 and 4360). 　　On the occasion of the signing of the new convention, the American Ambassador to Norway and the Norwegian Minister for Foreign Affairs also signed an exchange of notes relating to understandings in regard to certain provisions of the convention, as explained more fully hereinafter. The texts of the notes are also submitted herewith with a view to their transmission, for the information of the Senate, along with the convention. 　　The new convention takes into account important changes in the tax laws of the two countries and developments reflected in recent tax treaties concluded by them with other countries. It also reflects, as far as policy and technical considerations permit, the guidelines established in the model draft convention published in 1963 by the Organization for Economic Cooperation and Development. 　　The substance of the new convention is similar to that of income-tax conventions recently concluded by the United States with France, Belgium, and Japan. The convention retains the reciprocal exemptions from taxation of royalty and interest remittances and the maximum withholding rate of 15 percent on portfolio dividends as provided in the 1949 convention as modified. However, the maximum rate applicable to direct investment dividends is raised from 5 to 10 percent in view of the adoption by Norway of a split rate corporate tax which provides for a 24.1 percent tax on distributed profits compared with 50.6 percent on retained profits. United States tax treaties concluded with certain other countries which also have lower rates on distributed profits provide a withholding tax of 15 percent. Norway, however, agreed to a 10 percent withholding rate with respect to such profits. Under Norwegian law, Norwegian branches of foreign corporations are taxed at the higher rate of tax applicable to retained profits. In the new convention, Norway has agreed to limit that tax as it applies to branches of United States corporations to the tax which would be imposed if the branch were a separate corporation distributing the same proportion of its profits as the home office. 　　The new convention, interpreted and applied in accordance with the understandings in the exchange of notes, also stabilizes the tax treatment of international transportation involving the use of containers, the leasing of vehicles, and the use of partnerships and other forms of business organizations other than corporations. The exchange of notes makes it clear that the exemption for international shipping and aircraft income covers income from containers used in international traffic and income from the leasing of a ship or aircraft by a person engaged in international traffic. The exchange of notes states that, in the case of income derived by a partner who is a resident of one of the countries from an interest in a partnership which derives its income from the operation of ships or aircraft in international traffic and which is carried on with one or more partners resident in the other country, such income shall be taxable only in the country in which he is a resident. Capital invested in such a partnership by partners resident in the United States would be exempt from any Norwegian taxes on capital. The application of Article 6 in regard to the treatment of income earned by Scandinavian Airlines System, Inc. (a New York corporation) from the operation of aircraft in international traffic is clarified in relation to Scandinavian Airlines System, a consortium. Such income is to be treated as the income of the consortium. 　　The convention contains a preamble and 32 articles. 　　Chapter I (Article 1) indicates the scope of the convention, specifying the taxes that are covered. 　　Chapter II (Articles 2-4) contains definitions of various terms found in the convention. 　　Chapter III (Articles 5-20) deals with the tax treatment of specific items of income, including business profits, shipping and air transport profits, income of related persons, dividends, interest, royalties, income from real property, capital gains, independent and dependent personal service income, income from teaching or research, remittances of various kinds to students and trainees, remuneration for performance of governmental functions, private pensions and annuities, social security payments and income of investment or holding companies. 　　Chapter IV (Article 21) relates to capital taxes. 　　Chapter V (Articles 22-24) contains general rules concerning taxation, relief from double taxation, and source of income. 　　Chapter VI (Articles 25-30) contains special provisions regarding nondiscrimination, diplomatic and consular officers, mutual agreement procedure, exchange of information, assistance in collection, and extension to territories. 　　Chapter VII (Articles 31 and 32) contains the final provisions regarding entry into force and procedure for termination. 　　The convention would remain in effect for a minimum period of five years and indefinitely thereafter subject to the right of either party to terminate it by giving a six-month notice for that purpose. 　　The Department of the Treasury, with the cooperation of the Department of State, was primarily responsible for the negotiation of the convention submitted herewith. It has the approval of both Departments. Respectfully submitted, WILLIAM P. ROGERS. 　　(Enclosures: 1. Tax convention of December 3, 1971. 2. Exchange of notes.) 　　　　　　　　　　　　　LETTER OF TRANSMITTAL 　　　　　　　　　　　　　　　　　　THE WHITE HOUSE, February 3, 1972. To the Senate of the United States: 　　With a view to receiving the advice and consent of the Senate to ratification, I transmit herewith 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. 　　For the information of the Senate, I transmit also the report of the Secretary of State with respect to the convention and copies of two notes signed and exchanged on the same date as the convention and relating to understandings concerning certain provisions of the convention, as explained in the Secretary's report. 　　The existing income-tax convention with Norway of June 13, 1949, as modified and supplemented by a supplementary convention of July 10, 1958, would be terminated and replaced by the new convention when the latter comes into force. 　　The new convention follows the general pattern of bilateral income-tax conventions now in force between the United States and a number of other countries. It takes into account changes in United States and Norwegian tax laws and developments reflected in recent tax treaties concluded by the two countries with other countries. So far as policy and technical considerations permit, the convention follows the model draft convention of the Organization for Economic Cooperation and Development published in 1963. 　　The substance of the new convention is similar to that of income-tax conventions recently concluded with France, Belgium, and Japan. The provisions of the convention are outlined in the Secretary's report. 　　I recommend that the Senate give early and favorable consideration to the convention. 　　　　　　　　　　　　　　　　　　　　　　　　　　　　　RICHARD NIXON. 　　Enclosures: 1. Report of the Secretary of State; 2. Tax convention of December 3, 1971 with Norway; 3. Exchange of notes. 　　　　　　BY THE PRESIDENT OF THE UNITED STATES OF AMERICA 　　　　　　　　　　　　　　A PROCLAMATION CONSIDERING THAT: 　　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 was signed at Oslo on December 3, 1971, the text of which in English and Norwegian is hereto annexed; 　　The Senate of the United States of America by its resolution of August 11, 1972, two-thirds of the Senators present concurring therein, gave its advice and consent to the ratification of the Convention; 　　The Convention was duly ratified by the President of the United States of America on August 28, 1972 in pursuance of the advice and consent of the Senate, and was duly ratified on the part of the Kingdom of Norway; 　　It is provided in Article 31 of the Convention that the Convention shall enter into force two months after the date of exchange of instruments of ratification; 　　The instruments of ratification of the Convention were duly exchanged at Washington on September 29, 1972, and accordingly the Convention enters into force on November 29, 1972; 　　NOW, THEREFORE, be it known that I, Richard Nixon, President of the United States of America, proclaim and make public the Convention of December 3, 1971 to the end that it shall be observed and fulfilled with good faith by the United States of America and by the citizens of the United States of America and all other persons subject to the jurisdiction thereof. 　　IN TESTIMONY WHEREOF, I have signed this proclamation and caused the Seal of the United States of America to be affixed. 　　DONE at the city of Washington this thirty-first day of October in the year of our Lord one thousand nine hundred seventy-two and of the Independence of the United States of America the one hundred ninety-seventh. RICHARD NIXON By the President: WILLIAM P. ROGERS Secretary of State