ARTICLE 11 　　　　　　　　　　　　　　　Interest 　　1. Interest arising in a Contracting State and derived by a resident of the other Contracting State may be taxed in that other State. 　　2. However, such interest may also be taxed in the Contracting State in which it arises, and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 10 percent of the gross amount of such interest. 　　The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation. 　　3. Notwithstanding the provisions of paragraph 2, interest arising in one of the Contracting States and beneficially owned by a resident of the other Contracting State shall be exempt from tax in the first-mentioned State, provided that: 　　(a) the debtor of such interest is the Government of that Contracting State, a political or administrative subdivision thereof, or any of its local authorities; or 　　(b) the interest is paid to the Government of the other Contracting State, to a political or administrative subdivision thereof, or to any of its local authorities, or to an institution or organization (including financial institutions) wholly owned by them; or 　　(c) it is interest on a long-term loan (5 or more years) granted by a bank or other financial institution that is a resident of the other Contracting State. 　　4. Notwithstanding the provisions of paragraphs 2 and 3, interest arising in one of the Contracting States that is determined by reference to the profits of the issuer or of one of its associated enterprises and that is beneficially owned by a resident of the other Contracting State may be taxed in the State in which it arises, and according to the laws of that State, but the tax so charged shall not exceed the rate prescribed in paragraph 2 of Article 10 (Dividends). 　　5. The term "interest" as used in this Convention means income from debt-claims of every kind, whether or not secured by mortgage, and, subject to paragraph 5 of Article 10 (Dividends), whether or not carrying a right to participate in the debtor's profits, and in particular, income from government securities, and income from bonds or debentures, including premiums or prizes attaching to such securities, bonds, or debentures, as well as all other income assimilated to income from money lent by the taxation law of the State in which the income arises. 　　6. The provisions of paragraphs 1, 2, and 4 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on or has carried on business in the other Contracting State, in which the interest arises, through a permanent establishment situated therein, or performs or has performed in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 (Business Profits) or Article 15 (Independent Personal Services), as the case may be, shall apply. 　　7. For purposes of this Article, interest shall be deemed to arise in a Contracting State when the payer is that State itself or a political or administrative subdivision, local authority, or resident of that State. Where, however, the person paying the interest, whether a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 　　8. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount that would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of the Convention. 　　　　　　　　　　　　　ARTICLE 12 　　　　　　　　　　　　　Branch Tax 　　1. A corporation that is a resident of Portugal may be subject in the United States to a tax in addition to the tax allowable under the other provisions of this Convention. Such tax, however, may be imposed only on: 　　(a) the portion of the business profits of the corporation attributable to a permanent establishment in the United States, or subject to tax in the United States under Article 6 (Income from Immovable Property (Real Property)) or paragraph 1 of Article 14 (Capital Gains), that represents the "dividend equivalent amount," as defined in section 884 of the Internal Revenue Code, as it may be amended from time to time without changing the general principle thereof; and 　　(b) the excess, if any, of interest deductible in the United States in computing the business profits attributable to a permanent establishment in the United States or taxable in the United States under Article 6 (Income from Immovable Property (Real Property)) or paragraph 1 of Article 14 (Capital Gains), over the interest paid by the permanent establishment or trade or business in the United States. 　　2. The rate of the tax referred to in paragraph 1(a) shall not exceed the rate specified in paragraph 2 or, when applicable, paragraph 3 of Article 10 (Dividends). The rate of the tax referred to in paragraph 1(b) shall not exceed 5 percent in the case of a bank that is a resident of Portugal and 10 percent in all other cases. 　　　　　　　　　　　　　　ARTICLE 13 　　　　　　　　　　　　　　Royalties 　　1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 　　2. However, such royalties may also be taxed in the Contracting State in which they arise, and according to the laws of that State, but if the beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed 10 percent of the gross amount of the royalties. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation. 　　3. The term "royalties" as used in this Convention means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic, or scientific work, including cinematographic films, or films, tapes, and other means of image or sound reproduction, any patent, trademark, design, or model, plan, secret formula, or process, or other like right or property, or for the use of or the right to use, industrial, commercial, or scientific equipment, or for information concerning industrial, commercial, or scientific experience. It also includes payments for technical assistance performed in a Contracting State by a resident of the other State where such assistance is related to the application of any such right or property. The term "royalties" also includes gains derived from the use of such right or property in the case of an alienation of such right or property to the extent that such gains are contingent on the productivity, use, or disposition thereof. 　　4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on or has carried on business in the other Contracting State, in which the royalties arise, through a permanent establishment situated therein, or performs or has performed in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 (Business Profits) or Article 15 (Independent Personal Services), as the case may be, shall apply. 　　5. For purposes of this Article, royalties shall be deemed to arise in a Contracting State when the payer is that State itself, a political or administrative subdivision, local authority, or resident of that State. Where, however, the person paying the royalties, whether a resident of one of the Contracting States or not, has in one of the Contracting States a permanent establishment or fixed base in connection with which the liability to pay the royalties was incurred, and the royalties are borne by the permanent establishment or fixed base, then the royalties shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. Where the person paying the royalties is not a resident of either Contracting State, and the royalties are not borne by a permanent establishment or fixed base in either Contracting State, but the royalties relate to the use of, or the right to use, in one of the Contracting States, any property or right described in paragraph 3, the royalties shall be treated as arising in that State. 　　6. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right, or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of the Convention. 　　　　　　　　　　　　　ARTICLE 14 　　　　　　　　　　　　　Capital Gains 　　1. Gains derived by a resident of a Contracting State from the alienation of immovable property (real property) situated in the other Contracting State may be taxed in that other State. 　　2. For the purposes of paragraph 1, immovable property situated in Portugal includes stock, participations, or other rights in a company or other legal person the property of which consists, directly or indirectly, principally of immovable property Situated in Portugal; and real property situated in the United States includes a United States real property interest. 　　3. Gains from the alienation of movable (personal) property forming part of the business property of a permanent establishment that an enterprise of a Contracting State has or had in the other Contracting State, or of movable property pertaining to a fixed base that is or was available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or such a fixed base, may be taxed in that other State. 　　4. Gains derived by an enterprise of a Contracting State from the alienation of ships or aircraft operated in international traffic or movable property pertaining thereto shall be taxable only in that State. 　　5. Gains described in the last sentence of paragraph 3 of Article 13 (Royalties) shall be taxable only in accordance with the provisions of Article 13. 　　6. Gains from the alienation of any property other than property referred to in paragraphs 1 through 5 shall be taxable only in the Contracting State of which the alienator is a resident. 　　　　　　　　　　　　　ARTICLE 15 　　　　　　　　　Independent Personal Services 　　1. Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State except in the following circumstances, when such income may also be taxed in the other Contracting State: 　　(a) if he has or had a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; in that case, only so much of the income as is or was attributable to that fixed base may be taxed in that other State; or 　　(b) if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the aggregate 183 days in any 12-month period commencing or ending in the taxable year concerned; in that case, only so much of the income as is derived from his activities performed in that other State may be taxed in that other State. 　　2. The term "professional services" includes especially independent scientific, literary, artistic, educational, or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists, and accountants. 　　　　　　　　　　　　　　　ARTICLE 16 　　　　　　　　　　Dependent Personal Services 　　1. Subject to the provisions of Articles 18 (Directors Fees), 19 (Artistes and Sportsmen), 20 (Pensions, Annuities, Alimony, and Child Support), 21 (Government Service), 22 (Teachers and Researchers), and 23 (Students and Trainees), salaries, wages, and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State. 　　2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if 　　(a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any 12-month period commencing or ending in the taxable year concerned; and 　　(b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and 　　(c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. 　　3. Notwithstanding the preceding provisions of this Article, remuneration derived by a resident of a Contracting State in respect of an employment as a member of the regular complement of a ship or aircraft operated in international traffic shall be taxable only in that State. 　　　　　　　　　　　　　ARTICLE 17 　　　　　　　　　　　Limitation on Benefits 　　1. A resident of a Contracting State shall be entitled to the benefits of this Convention only if such person is: 　　(a) an individual; or 　　(b) a Contracting State, a political or administrative subdivision or local authority thereof, or an institution or organization wholly owned by them; or 　　(c) a company 　　(i) that is a resident of a Contracting State in whose principal class of shares there is substantial and regular trading on a recognized securities exchange, or 　　(ii) more than 50 percent of each class of whose shares is owned by companies that are residents of either Contracting State, in whose principal class of shares there is substantial and regular trading on a recognized securities exchange, or by persons referred to in subparagraph (b); or 　　(d) an organization, trust, or other arrangement referred to in subparagraph 3(b) of the Protocol, provided that more than half of the members, participants, or beneficiaries, if any, in such organization, trust, or arrangement are residents of that Contracting State who are entitled, under this Article, to the benefits of this Convention; or 　　(e) a person with respect to which both of the following conditions are satisfied: 　　(i) the ultimate beneficial owners of more than 50 percent of the beneficial interest in such person (or, in the case of a company, more than 50 percent of the vote and value of each class of the company's shares) are persons entitled to the benefits of this Convention under this paragraph or citizens of the United States; and 　　(ii) less than 50 percent of the gross income of such parson is used, directly or indirectly, to meet liabilities (including liabilities for interest or royalties) other than to persons entitled to the benefits of this Convention under this paragraph or citizens of the United States. 　　2. A resident of a Contracting State that is not entitled to the benefits of this Convention under paragraph 1 shall, nevertheless, be entitled to the benefits of this Convention with respect to an item of income derived from the other State, if: 　　(a) the resident is engaged in the active conduct of a trade or business in the firstmentioned State (other than the business of making or managing investments, unless these activities are banking or insurance activities carried on by a bank or insurance company); and 　　(b) the item of income is connected with or incidental to the trade or business in the first-mentioned State; and 　　(c) such trade or business is substantial in relation to the activity in the other State that generated the income. 　　3. A person that is not entitled to the benefits of the Convention pursuant to the provisions of paragraph 1 or 2 may, nevertheless, be granted the benefits of the Convention if the competent authority of the State in which the income in question arises so determines. For this purpose, one of the factors the competent authorities shall take into account is whether the establishment, acquisition, and maintenance of such person and the conduct of its operations did not have as one of its principal purposes the obtaining of benefits under the Convention. 　　4. For purposes of subparagraph (c) of paragraph 1, the term "recognized securities 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 purposes of the Securities Exchange Act of 1934; 　　(b) the Lisbon and Oporto Stock Exchanges; and 　　(c) any other stock exchange agreed upon by the competent authorities of the Contracting States. 　　5. For purposes of subparagraph (e) (ii) of paragraph 1, the term "gross-income" means gross receipts, or, where an enterprise is engaged in a business which includes the manufacture or production of goods, gross receipts reduced by the direct costs of labor and materials attributable to such manufacture or production and paid or payable out of such receipts. 　　6. Notwithstanding the provisions of paragraphs 1 through 5, the benefits of this Convention shall not be allowed to any person that is entitled to income tax benefits under the provisions of the legislation and other measures relating to the tax-free zones (zones francas) of Madeira and Santa Maria Island, or to benefits similar to those provided with respect to such tax-free zones that are made available under any legislation or other measure adopted by either Contracting State after the date of signature of this Convention. The competent authorities shall notify each other of any such legislation or measure and shall consult as to whether such benefits are similar. 　　　　　　　　　　　　　ARTICLE 18 　　　　　　　　　　　　Directors' Fees 　　Directors' fees and other similar payments derived by a resident of a Contracting State for services performed outside that Contracting State in his capacity as a member of the board of directors or supervisory board (in Portugal, conselho fiscal) or of another similar organ of a company that is a resident of the other Contracting State may be taxed in that other State. 　　　　　　　　　　　　　ARTICLE 19 　　　　　　　　　　　Artistes and Sportsmen 　　1. Notwithstanding the provisions of Articles 15 (Independent Personal Services) and 16 (Dependent Personal Services), income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as an athlete, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State except where the amount of the compensation derived by such entertainer or athlete, including expenses reimbursed to him or borne on his behalf, from such activities does not exceed 10,000 United States dollars or its equivalent in Portuguese escudos for the taxable year concerned. 　　2. Where income in respect of personal activities exercised by an entertainer or an athlete in his capacity as such accrues not to the entertainer or athlete but to another person, that income of that other person may, notwithstanding the provisions of Articles 7 (Business Profits) and 15 (Independent Personal Services), be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised, unless it is established that neither the entertainer or athlete nor persons related thereto participate directly or indirectly in the profits of that other person in any manner, including the receipt of deferred remuneration, bonuses, fees, dividends, partnership distributions, or other distributions. 　　3. Notwithstanding the provisions of paragraphs 1 and 2, income derived by a resident of a Contracting State as an entertainer or athlete shall be exempt from tax by the other Contracting State if the visit to that other State is substantially supported by public funds of the firstmentioned State or a political or administrative subdivision or local authority thereof.