ARTICLE VI — U.S. Income Tax Treaty

A new Article 13A shall be added to the Convention as follows:

“ARTICLE 13A

Branch Tax

(1) A company which is a resident of a Contracting State may be subject in the other Contracting State to a tax in addition to the tax allowable under the other provisions of this Convention.

(2) Such tax may be imposed only on:

(a) in the case of the United States:

(i) the ”dividend equivalent amount” of the business profits of the company which are effectively connected (or treated as effectively connected) with the conduct of a trade or business in the United States and which are either attributable to a permanent establishment in the United States or subject to tax in the United States under Article 6 (Income from Real Property) or Article 13 (Gains) of this Convention; and

(ii) the excess, if any, of interest deductible in the United States in computing the profits of the company that are subject to tax in the United States and are either attributable to a permanent establishment in the United States or subject to tax in the United States under Article 6 (Income from Real Property) or Article 13 (Gains) of this Convention over the interest paid by or from the permanent establishment or trade or business in the United States; and (b) in the case of Barbados:

(i) on amounts sufficient to provide that a branch in Barbados of a United States company (or a company of the United States otherwise taxable on net income in

Barbados) is taxed in a manner comparable to a similarly situated Barbadian company and its United States shareholder, and

(ii) on interest expenses which are deductible for computing the income described in the preceding sub-subparagraph, and which are comparable to amounts described in subparagraph (a)(ii) of this paragraph.

(3) The taxes described in paragraph (2) of this Article shall not be imposed at a rate exceeding:

(a) the rate specified in paragraph (2)(a) of Article 10 (Dividends) for the taxes described in subparagraphs (a)(i) and (b)(i) of paragraph (2) of this Article; and

(b) the appropriate rate specified in paragraph (1) of Article 11 (Interest) for the taxes described in subparagraphs (a)(ii) and (b)(ii) of paragraph (2) of this Article.”