Article 15 provides the rule that — U.S. Income Tax Treaty

company) who is a resident of a Contracting State and who derives income from the performance of professional services or other independent activities of a similar character will be exempt from tax in respect of that income by the other Contracting State unless certain conditions are satisfied. The income may be taxed in the other Contracting State if the person has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities and the income is attributable to that fixed base or if the person stays in the other Contracting State for a period or periods amounting to or exceeding in the aggregate 90 days in the relevant taxable year.

If, however, the individual is an Indian resident who performs independent personal services in the United States, and he is also a U.S. citizen, the United States may, by virtue of the

saving clause of paragraph 3 of Article 1 (General Scope) tax his income without regard to the restrictions of this Article.

Amounts described in this Article are not subject to tax under Article 12 (Royalties and Fees for Included Services).

The term "fixed base" is not defined in the Convention, but its meaning is understood to be analogous to that of the term "permanent establishment", as defined in Article S (Permanent Establishment). Similarly, some rules of Article 7 (Business profits) for attributing income and expenses to a permanent establishment are relevant for attributing income to a fixed base. However, the taxing right conferred by this Article with respect to income from independent personal services is somewhat more limited than that provided in Article 7 for the taxation of business profits. Both Articles 7 and 15 provide that a Contracting State may tax certain income of a resident of the other Contracting State which is attributable to a permanent establishment or fixed base in the first State. In Article 15, however the income must be attributable to services performed in the first State, while Article 7 does not require that all of the income-generating activities be performed in the State where the permanent establishment is located.

Paragraph 2 notes that the term "professional services" includes independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists, and accountants. Other independent activities of a similar character are also covered by this Article. Article 15 applies to all such services performed by an individual for his own account or by a firm of individuals, where the individual or firm of individuals receives the income and bears the risk of loss arising from the services. The taxation of income of an individual from those types of independent services which are covered by Articles 17 through 22 is governed by the provisions of those Articles.

Paragraph III of the protocol (Ad Articles 7, 10, 11, 12, 15, and 23) refers to Article 15. With regard to this Article, Paragraph III of the protocol states the understanding of the Contracting States that income which is attributable to a fixed base, but is deferred and received after the fixed base no longer exists, may, nevertheless, be taxed by the State in which the fixed base was located. It permits the United States to apply Code 864(c)(6)