ARTICLE 32

Entry into Force

1. This Convention shall be ratified and the instruments of ratification shall be exchanged at Washington as soon as possible.

2. This Convention shall enter into force on the date on which the instruments of ratification are exchanged and shall have effect in both Contracting States

a) in respect of taxes withheld at source as well as excise taxes imposed on insurance premiums for amounts paid or credited on or after 1 January, 1990;

b) in respect of other taxes on income for any taxable year (Steuerjahr) or assessment period (Veranlagungszeitraum), as the case may be, beginning on or after 1 January, 1990, but excluding any fiscal year (Wirtschaftsjahr) commencing before such date; and

c) in respect of taxes on capital for the taxes levied on items of capital owned on or after 1 January, 1990.

3.Where any greater relief from tax would have been afforded to a person entitled to the benefits of the Convention between the United States of America and the Federal Republic of Germany for the Avoidance of Double Taxation with Respect to Taxes on Income and to certain other Taxes, signed on 22 July, 1954, as amended by the Protocol signed on 17 September, 1965 (“the 1954 Convention”),

under that Convention than under this Convention, the 1954 Convention shall, at the election of such person, continue to have effect in its entirety for the first assessment period, or taxable year, with respect to which the provisions of this Convention would otherwise have effect under paragraph 2 b).

4. Notwithstanding the foregoing provisions of this Article, the tax charged pursuant to paragraph 2 a) of Article 10 (Dividends) on dividends (within the meaning of paragraph 4 of that Article) paid or credited before 1 January, 1992, may exceed 5 percent of the gross amount of the dividends, but shall not exceed 10 percent thereof.

5. Notwithstanding the foregoing provisions of this Article,

a) the provisions of paragraph 8 of Article 10 (Dividends) shall have effect in respect of taxes levied on the dividend equivalent amount for assessment periods or taxable years beginning on or after 1 January, 1991, but excluding fiscal years commencing before such date; for purposes of the preceding sentence the dividend equivalent amount shall be treated as paid on the last day of the company’s fiscal year;

b) the provisions of the fourth sentence of paragraph 2 a) of Article 23 (Relief from Double Taxation) shall not have effect on dividends paid by a Regulated Investment Company prior to 1 January, 1991, provided that such Regulated Investment Company was in existence on 1 October, 1988.

6. Notwithstanding the foregoing provisions of this Article, the following shall apply with respect to items of income described in Article 11 (Interest) and in paragraphs 4 and 5 of Article 10 (Dividends):

a) the 1954 Convention, and not this Convention, shall apply to interest as that term is used in the 1954 Convention, including interest derived from a “partiarisches Darlehen” or a “Gewinnobligation”, paid or credited before 1 January, 1991;

b) income from debt obligations to which paragraph 4 of Article 10 (Dividends) applies, and income derived from a “partiarisches Darlehen" or a “Gewinnobligation” to which paragraph 5 of Article 10 (Dividends) does not apply, and that is paid or credited on or after 1 January, 1991, shall be taxable in the Contracting State in which it arises at the rates provided for in paragraphs 2 and 3 of Article 10;

c) income derived under a “Stille Gesellschaft", and income derived from “jouissance” shares or "jouissance” rights, to which paragraph 5 of Article 10 (Dividends) applies and that is paid or credited before 1 January, 1991 shall be taxable in the Contracting State in which it arises at a rate not exceeding 15 percent of the gross. amount;

d) income derived under a “Stille Gesellschaft”, and income derived from “jouissance” shares or “jouissance” rights, to which paragraph 5 of Article 10 (Dividends) does not apply, shall be taxable in the Contracting State in which it arises at the rates provided for in paragraphs 2 and 3 of Article 10 if such income is paid or credited on or after 1 January, 1990; and e) the foregoing provisions of this paragraph shall not apply to income described in paragraph 6 of Article 10 (Dividends) or in paragraph 3 of Article 11 (Interest).

7. The 1954 Convention shall cease to have effect when the provisions of this Convention take effect in accordance with this Article.