ARTICLE 25

Mutual Agreement Procedure

Paragraph 1 provides that a person who considers that the actions of one or both of the Contracting States result, or will result, for him in taxation not in accordance with the Convention, may present his case to the competent authority of the State of which the person is a resident, or to the State of which he is a national if his case comes under paragraph 1 of Article 24 (Non-Discrimination), which deals with discrimination against nationals of a Contracting State by the other Contracting State. The person need not first have exhausted the remedies available to him in the domestic laws of the Contracting States.

Paragraph 2 provides that the competent authority, if it considers the objection to be justified, and if it is not able to arrive at a satisfactory solution itself, shall endeavor to resolve the case by mutual agreement with the competent authority of the other Contracting State in order to avoid taxation not in accordance with the Convention. Any agreement so reached shall be implemented without regard to any statutory time limits or other procedural limitations of the Contracting States. Thus, if it is agreed that a taxpayer's liability should be adjusted downward, a refund of the excess tax paid will be made even if the statute of limitations of the State called upon to make the refund may have expired. This waiver of the statute of limitations applies only for refunds and not for the imposition of additional taxes.

Paragraph 3 provides that the competent authorities shall endeavor by mutual agreement to resolve any difficulties or doubts which may arise as to the interpretation or application of the Convention. They may also consult together to eliminate double taxation in cases not specifically provided for in the Convention. The competent authorities may, for example, agree to:

(a) the attribution of income, deductions, credits, or allowances of an enterprise of

a Contracting State to its permanent establishment in the other Contracting State;

(b) the allocation of income, deductions, credits, or allowances between persons; (c) the characterization of items of income; (d) the application of source rules; (e) the meaning of a term; (f) increase any dollar amounts specified in the Convention, to reflect monetary or economic developments; and

(g) the application of domestic law provisions regarding penalties, fines and interest.

Thus, the competent authorities may agree to a common method of treating an issue in the interest of avoiding double taxation by the two Contracting States.

Paragraph 4 provides that the competent authorities may communicate with each other directly for the purpose of reaching agreement in accordance with Article 25.