ARTICLE 26

Exchange of Information

This Article provides that the competent authorities shall exchange information for the purpose of applying the Convention or the domestic laws covered by the Convention, provided that the taxation under the domestic laws is not contrary to the Convention. The information exchanged may relate to nonresidents as well as to residents of a Contracting State. The State receiving information under this Article must keep it secret in the same manner as information obtained under its domestic laws. The information may be made available only to persons involved in the assessment, collection, administration, or enforcement of the taxes covered by the

Convention, or in the prosecution or determination of appeals in relation to such axes; and the information may be used only for such purposes. It may be disclosed in public court proceedings or in judicial decisions. The General Accounting Office and the tax committees of Congress may have access to the information exchanged, in their capacity of overseeing the administration of the U.S. income tax law, subject to the secrecy requirements applicable to domestic tax information.

Paragraph 2 provides that the obligation to exchange information under this Article does not require a Contracting State to carry out administrative measures contrary to the laws and practice of either State, or to supply information not obtainable in that or the other States under its laws or tax administration, or to supply information which would disclose any trade secret or which it is contrary to public policy in that State to disclose. For example, if one of the States requests the other to furnish information which the first State could not obtain under its own laws and practice, the second State is not required (but is permitted) to comply with that request if its laws and practice permit it to collect such information with respect to domestic tax claims.

Paragraph 3 provides that, subject to the conditions of paragraphs 1 and 2, a Contracting State will obtain information requested by the other Contracting State in the same manner and to the same extent as if the tax in question were its own tax, even though it may have no tax interest in the particular case to which the request relates. Further, the information shall be furnished in the form requested to the extent that the depositions and documents requested could be obtained under domestic law and practice with respect to domestic taxes.

It is contemplated that the information exchanged under this Article may be on a routine basis, such as reporting on income payments made and tax withheld, or in response to specific requests. The competent authorities may agree on the items of information to be furnished routinely. They may also agree to furnish information spontaneously which they believe to be relevant in applying the Convention or the domestic laws covered by the Convention and to develop and implement other programs of information exchange within the conditions of this Article.

The competent authorities agree to inform each other of materials published in their respective Contracting States which concern the application of this Convention. Such material, including legislation, regulations, rulings or judicial decisions, is to be transmitted in the calendar year following that of publication, or sooner if feasible.

Notwithstanding the provisions of Article 2 (Taxes Covered), the exchange of information provided for in this Article shall apply to all taxes imposed at the national level. Thus, for example, information may be exchanged with respect to estate, inheritance, gift, employment, excise and sales taxes.