Page:United States Statutes at Large Volume 56 Part 2.djvu/321

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CANADA-DOUBLE TAXATION-MAR. 4, 1942 ing States may consult together with a view to such determination of profits of the Canadian enterprise as may appear fair and reasonable. 2. The same principle applies, mutatis mutandis, in the event that profits are diverted from a United States enterprise to a Canadian enterprise. ARTICLE V Income which an enterprise of one of the contracting States derives from the operation of ships or aircraft registered in that State shall be exempt from taxation in the other contracting State. The present Convention will not be deemed to affect the exchange of notes between the United States of America and Canada, dated August 2 and September 17, 1928, [l ] providing for relief from double income taxation on shipping profits. ARTICLE VI Wages, salaries and similar compensation paid by the Government, or any agency or instrumentality thereof, of one of the contracting States or by the political subdivisions or territories or possessions thereof to citizens of such State residing in the other State shall be exempt from taxation in the latter State. Pensions and life annuities derived from within one of the contract- ing States and paid to individuals residing in the other contracting State shall be exempt from taxation in the former State. ARTICLE VII 1. A resident of Canada shall be exempt from United States income tax upon compensation for labor or personal services performed within the United States of America if he conforms to either of the following conditions: (a) He is temporarily present within the United States of America for a period or periods not exceeding a total of one hun- dred and eighty-three days during the taxable year and such compensation (A) is received for labor or personal services per- formed as an employee of, or under contract with, a resident or corporation or other entity of Canada and (B) does not exceed $5,000 in the aggregate during such taxable year; or (b) he is temporarily present in the United States of America for a period or periods not exceeding a total of ninety days during the taxable year and the compensation received for such services does not exceed $1,500 in the aggregate during such taxable year. 2. The provisions of paragraph 1 (a) of this Article shall have no application to the professional earnings of such individuals as actors, artists, musicians and professional athletes. 3. The provisions of paragraphs 1 and 2 of this Article shall apply, mutatis mutandis, to a resident of the United States of America de- riving compensation for personal services performed within Canada. 1 [Executive Agreement Series 4; 47 Stat. 2580.] Income from opera- tion of ships or air- craft. Prior agreement not affected. Government sala- ries, etc. Pensions and life annuities. Compensation for labor or personal serv- ices. Resident of Canada. Exception; earnings of actors, artists, etc. Resident of U.S. A. 85714--43 --PT. II--20 56 STAT.] 1401