ARTICLE 17

Artistes and Athletes

This Article deals with the taxation of income derived by a resident of a Contracting State as an entertainer, musician or athlete from the performance of services as such in a Contracting State.

Paragraph 1 overrides the provisions of Article 14 (Independent Personal Services) and Article 15 (Dependent Personal Services) to allow the other State to tax such income, where the latter Articles would not permit such taxation, but only if the gross receipts for such services, not including expenses reimbursed to the artiste or athlete or borne on his behalf, exceeds $250 (or its equivalent in Barbadian currency) per day of performance or $4,000 (or its equivalent in

Barbadian currency) in the taxable year. If such gross receipts exceed $250 per day or $4,000 per year, the full amount, not just the excess, is subject to tax by the Contracting State in which the services are performed. Income derived from services rendered by persons such as producers, directors and technicians and others who are not artistes or athletes is taxable in accordance with the provisions of Article 14 or Article 15, as the case may be.

Paragraph 2 deals with cases in which income in respect of the activities of an entertainer or athlete accrues to a person other than, or in addition to, the entertainer or athlete; e.g., where the entertainer performs services as an employee of, or a contractor for, a corporation or other person. Paragraph 2 provides that income in respect of the personal activities of an artiste or athlete which accrues to the benefit of another person, including a company, trust, or partnership, may, notwithstanding the provisions of Articles 7 (Business Profits), 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or athlete take place. Thus, such other person could not claim the permanent establishment protection otherwise provided by Article 7. For purposes of paragraph 2, income is considered not to accrue to another person if it is established that neither the artiste or athlete, nor any persons related to him, participates directly or indirectly in the profits of such other person in any manner, including the receipt of deferred compensation, bonuses, fees, dividends, partnership distributions, or other distributions. A person may be considered related to the artiste or athlete regardless of whether the person is considered to be related to him under the provisions of Article 9 (Associated Enterprises). Paragraph 2 does not affect the rule of paragraph 1 that applies to the entertainer or athlete himself.

Paragraph 3 provides three exceptions to the rules in the preceding paragraphs of the Article. The preceding rules do not apply

(1) where the visit by an entertainer or athlete is substantially supported by public funds of the Contracting State of residence of the entertainer or athlete, including any political subdivision, local authority or statutory body of that State;

(2) where the person providing the services of the athlete or entertainer is a non-profit organization, and no part of the organization's income inures to the benefit of any other person (other than the remuneration to the athlete or entertainer); and

(3) where the entertainer or athlete is providing his services to such a non-profit organization. The taxation of any income in respect of the services of an entertainer or athlete in circumstances where paragraph 3 applies is governed by Articles 14 and 15.

This Article is subject to the saving clause of paragraph 3 of Article 1 (General Scope).