Replaced by new DTA, which applies in UK from 1st April 2003 for
CT, 6th April 2003 for IT and 1st January 2004 for PRT. For US
withholding taxes it applies from 1st May 2003 and for other US
taxes from 1st January 2004. See DT19939N for nearest equivilent.
(1) The provisions of Articles 10 (Dividends), 11 (Interest)
or 12 (Royalties) of this Convention shall not apply to a
corporation which is a resident of one of the Contracting States
and which derives dividends, interest, or royalties arising within
the other Contracting State if:
(a)
(i) the tax imposed on the corporation by the
first-mentioned Contracting State in respect of such dividends,
interest or royalties is substantially less than the tax generally
imposed by that State on corporate profits; or
(ii) the corporation is a resident of the United States and
receives more than 80 per cent of its gross income from sources
outside the United States as determined by and for the period
prescribed in sections 861(a)(1)(B) and (a)(2)(A) of the United
States Internal Revenue Code of 1954, as they may be amended from
time to time in minor respects so as not to affect their general
principle; and
(b) 25 per cent or more of the capital of such corporation
is owned, directly or indirectly, by one or more persons who are
not individual residents of the first-mentioned Contracting State
and are not nationals of the United States.
(2) Nothing in this Article shall however prevent a claim
under the provisions of Articles 10 (Dividends), 11 (Interest) or
12 (Royalties) by a United States corporation where more than 75
per cent of the capital of that corporation directly or indirectly
owned:
(a) by a United States corporation which receives 20 per
cent or more of its gross income from sources within the United
States as determined by and for the period described in
subparagraph (1)(a)(ii) of this Article: or
(b) by a corporation (other than a United States
corporation) which by reference to the provisions of section 283 of
the United Kingdom Income and Corporation Taxes Act 1970(a) (as it
may be amended from time to time without changing the general
principle thereof) would not fall to be treated as a close company;
or
(c) by a corporation which is a resident of the United
Kingdom and in which more than 50 per cent of the voting power is
controlled, directly or indirectly, by individuals who are
residents of the United Kingdom.
