ARTICLE 18 　　　　　　　　　　　Pensions and Annuities 　　1. Subject to the provisions of Article 19 (Government Service), pension distributions and other similar remuneration derived from sources within a Contracting State and beneficially owned by a resident of the other Contracting State, whether paid periodically or as a single sum, may be taxed by the first-mentioned State under the following conditions: 　　a) where the United States is the first-mentioned Contracting State, the tax imposed on the pension or similar remuneration may not exceed 15 per cent of the gross amount of the pension or similar remuneration, provided that such pension or similar remuneration is not subject to a penalty for early withdrawal; and 　　b) where South Africa is the first-mentioned Contracting State: 　　i) the beneficial owner of the pension or similar remuneration has been employed in South Africa for a period or periods aggregating two years or more during the ten year period immediately preceding the date from which the pension first became due; and 　　ii) the beneficial owner of the pension or similar remuneration was employed in South Africa for a period or periods aggregating ten years or more. 　　2. Notwithstanding paragraph 1 of this Article and paragraph 2(b) of Article 19 (Government Service), social security benefits and other similar public pensions paid by a Contracting State to a resident of the other Contracting State or to a citizen of the United States shall be taxable only the first-mentioned State. 　　3. Annuities beneficially derived by a resident of a Contracting State shall be taxable only in that State unless the annuity was purchased in the other Contracting State while such person was a resident of that other State, in which case the annuity may also be taxed in that other State. The term "annuities" as used in this paragraph means a stated sum paid periodically at stated times during life or during a specified number of years, under an obligation to make the payments in return for adequate and full consideration (other than services rendered). 　　4. Alimony paid by a resident of a Contracting State, and deductible therein, to a resident of the other Contracting State shall be taxable only in the first-mentioned State. Alimony paid by a resident of a Contracting State, and not deductible therein, to a resident of the other Contracting State shall be exempt from tax in both States. The term "alimony" as used in this paragraph means periodic payments made pursuant to a written separation agreement or a decree of divorce, separate maintenance or compulsory support. 　　5. Periodic payments, not dealt with in paragraph 4, for the support of a minor child made pursuant to a written separation agreement or a decree of divorce, separate maintenance or compulsory support, paid by a resident of a Contracting State to a resident of the other Contracting State, and not deductible in the first-mentioned State, shall be exempt from tax in both Contracting States. 　　6. For purposes of this Convention, where an individual who is a participant in a pension plan that is established and recognized under the legislation of one of the Contracting States performs personal services in the other Contracting State: 　　a) Contributions paid by or on behalf of the individual to the plan during the period that he performs such services in the other State shall be deductible (or excludible) in computing his taxable income in that State. Any benefits accrued under the plan or payments made to the plan by or on behalf of his employer during that period shall not be treated as part of the employees taxable income and shall be allowed as a deduction in computing the profits of his employer in that other State. 　　b) Income earned but not distributed by the plan shall not be taxable in the other State until such time and to the extent that a distribution is made from the plan. 　　c) Distributions from the plan to the individual shall not be subject to taxation in the other Contracting State if the individual contributes such amounts to a similar plan established in the other State within a time period and in accordance with any other requirements imposed under the laws of the other State. 　　d) The provisions of this paragraph shall not apply unless: 　　i) contributions by or on behalf of the individual to the plan (or to another similar plan for which this plan was substituted) were made before he arrived in the other State; and 　　ii) the competent authority of the other State has agreed that the pension plan generally corresponds to a pension plan recognized for tax purposes by that State. 　　The benefits granted under this paragraph shall not exceed the benefits that would be allowed by the other State to its residents for contributions to, or benefits otherwise accrued under a pension plan recognized for tax purposes by the other State. 　　7. For purposes of this Convention, a pension or similar remuneration is deemed to arise from sources within a Contracting State to the extent that the pensionable service to which it relates is performed in that State. 　　　　　　　　　　　　　　ARTICLE 19 　　　　　　　　　　　　Government Service 　　1. a) Remuneration, other than a pension, paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority thereof, shall be taxable only in that State. 　　b) However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the individual is a resident of that other State who: 　　i) is a national of that other State; or 　　ii) did not become a resident of that other State solely for the purpose of rendering the services. 　　2. a) Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority thereof, shall be taxable only in that State. 　　b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State. 　　3. The provisions of this Article shall not apply to payments in respect of services rendered in connection with any trade or business carried on by either of the Contracting States, a political subdivision or a local authority thereof. 　　　　　　　　　　　　　ARTICLE 20 　　　　　Students, Apprentices and Business Trainees 　　A student, apprentice or business trainee who is present in a Contracting State for the purpose of his full-time education or training and who is, or immediately before being so present was, a resident of the other Contracting State, shall be exempt from tax in the first-mentioned State on payments which arise from sources outside that first-mentioned State for the purposes of his maintenance, education or training. The exemption from tax provided by this Article shall apply to an apprentice or trainee for a period of time not exceeding one year from the date he first arrives in the first-mentioned Contracting State for the purpose of his apprenticeship or training. 　　　　　　　　　　　　　ARTICLE 21 　　　　　　　　　　　　　Other Income 　　1. Items of income beneficially owned by a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Convention shall be taxable only in that State. 　　2. The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6 (Income from Immovable Property (Real Property)), if the beneficial owner of the income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the income is attributable to such permanent establishment or fixed base. In such case, the provisions of Article 7 (Business Profits) or Article 14 (Independent Personal Services), as the case may be, shall apply. 　　　　　　　　　　　　　ARTICLE 22 　　　　　　　　　　　Limitation on Benefits 　　1. A resident of a Contracting State shall be entitled to benefits otherwise accorded to residents of a Contracting State by this Convention only to the extent provided in this Article. 　　2. A resident of a Contracting State shall be entitled to all the benefits of this Convention if the resident is: 　　a) an individual; 　　b) a Contracting State, political subdivision or local authority thereof; 　c) a company, if: 　　i) all the shares in the class or classes of shares representing more than 50 per cent of the voting power and value of the company are regularly traded on a recognized stock exchange, or 　　ii) at least 50 per cent of each class of shares in the company is owned directly or indirectly by companies entitled to benefits under clause i), provided that in the case of indirect ownership, each intermediate owner is a person entitled to benefits of the Convention under this paragraph; 　　d) a legal person organized under the laws of a Contracting State that is generally exempt from tax in that State under laws relating to charitable and other similar organizations; 　　e) a legal person organized under the laws of a Contracting State that is generally exempt from tax in that State, and is established and maintained in that State to provide pensions or other similar benefits to employees pursuant to a plan, provided that more than 50 per cent of the beneficiaries, members or participants are individuals resident in either Contracting State; 　　f) a person other than an individual or a trust, if: 　　i) on at least half the days of the taxable year persons described in subparagraphs a), b), c), d) or e) own, directly or indirectly (through a chain of ownership in which each person is entitled to benefits of the Convention under this paragraph), at least 50 per cent of each class of shares or other beneficial interests in the person, and 　　ii) less than 50 per cent of the person's gross income for the taxable year is paid or accrued, directly or indirectly, to persons who are not residents of either Contracting State (unless the payment is attributable to a permanent establishment situated in either State), in the form of payments that are deductible for income tax purposes in the person's State of residence; 　　g) a trust, if: 　　i) on at least 274 days of the taxable year persons described in subparagraphs a), b), c), d), e) or f) own directly or indirectly (through a chain of ownership in which each person is entitled to benefits of the Convention under this paragraph), at least 50 per cent of the aggregate beneficial interests in the trust, and 　　ii) less than 50 per cent of the trust's gross income for the taxable year is paid or accrued, directly or indirectly, to persons who are not residents of either Contracting State (unless the payment is attributable to a permanent establishment situated in either State), in the form of payments that are deductible for income tax purposes in the trust's State of residence. 　　3. a) A resident of a Contracting State not otherwise entitled to benefits shall be entitled to the benefits of this Convention with respect to an item of income derived from the other State, if: 　　i) the resident is engaged in the active conduct of a trade or business in the first-mentioned State, 　　ii) the income is connected with or incidental to the trade or business, and 　　iii) the trade or business is substantial in relation to the activity of the resident (and any related parties) in the other State generating the income. 　　b) For purposes of this paragraph, the business of making or managing investments will not be considered an active trade or business unless the activity is banking, insurance or securities activity conducted by a bank, insurance company or registered securities dealer, respectively. 　　c) Whether a trade or business is substantial for purposes of this paragraph will be determined based on all the facts and circumstances. In any case, however, a trade or business will be deemed substantial if, for the preceding taxable year, or for the average of the three preceding taxable years, the asset value, the gross income, and the payroll expense that are related to the trade or business in the first-mentioned State equal at least 7.5 per cent of the resident's (and any related parties) proportionate share of the asset value, gross income and payroll expense, respectively, that are related to the activity that generated the income in the other State, and the average of the three ratios exceeds 10 percent. 　　d) Income is derived in connection with a trade or business if the activity in the other State generating the income is a line of business that forms a part of or is complementary to the trade or business. Income is incidental to a trade or business if it facilitates the conduct of the trade or business in the other State. 　　4. A resident of a Contracting State not otherwise entitled to benefits may be granted benefits of the Convention if the competent authority of the State from which benefits are claimed so determines. 　　5. For purposes of this Article the term "recognized stock exchange" means: 　　a) the NASDAQ System owned by the National Association of Securities Dealers, Inc. and any stock exchange registered with the U.S. Securities and Exchange Commission as a national securities exchange under the U.S. Securities Exchange Act of 1934; 　　b) the Johannesburg Stock Exchange; and 　　c) any other exchange agreed upon by the competent authorities of the Contracting States. 　　6. Notwithstanding the other provisions of this Convention: 　　a) where an enterprise of South Africa derives income from the United States; 　　b) that income is attributable to a permanent establishment which that enterprise has in a third jurisdiction; and 　　c) the enterprise is not liable to tax in South Africa on the profits attributable to the permanent establishment; the United States tax benefits that otherwise would apply under the other provisions of this Convention will not apply to any item of income on which the combined tax in South Africa and in the third jurisdiction is less than 50 per cent of the tax that would be imposed in South Africa if the income were earned by the South African enterprise and were not attributable to the permanent establishment in the third jurisdiction. Any interest or royalties to which this paragraph applies will be subject to United States tax at a rate not exceeding 15 per cent of the gross amount thereof. 　　The preceding sentences of this paragraph shall not apply: 　　a) to interest derived in connection with or incidental to the active conduct of a trade or business carried on by the permanent establishment in the third jurisdiction (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, respectively); 　　b) to royalties that are received as a compensation for the use of, or the right to use, intangible property produced or developed by the permanent establishment itself; and 　　c) to income derived by an enterprise of South Africa if the United States taxes the profits of such enterprise according to the provisions of subpart F of part III of subchapter N of chapter 1 of subtitle A of the Internal Revenue Code of 1986, as it may be amended from time to time without changing the general principle thereof.