Article VII

Paragraph a) amends Article 23 of the convention by deleting paragraph 1) c), which provided that, regardless of any other provision of the Treaty, Finland could tax an individual Finnish national who is a resident of the United States, and who, under Finnish taxation laws, is also a resident of Finland. Due to changes in Finland’s domestic tax laws, such a provision is no longer required.

Paragraph b) makes conforming changes to Article 23 to reflect the amendments made to the saving clause of paragraph 4 Article 1 (Personal Scope) and to reflect amendments to section 877 of the Code in 1996.

Paragraph c) amends paragraph 4, which sets forth the source of income rules applicable for purposes of allowing relief under Article 23. Prior to amendment, the source rules of paragraph 4 were subject to such source rules in the domestic laws of the Contracting States as applied for the purpose of limiting the foreign tax credit. Paragraph c) of Article VII of the Protocol removes this limitation in order to ensure that the source rules set out in paragraph 4 of Article 23 have their intended effect.