Article XVII of the Protocol, providing the rules for entry into force and effective dates

for the Second Protocol, contains a rule that refers to Article 26. Article XVII of the Protocol provides that when the Second Protocol (and, by inference, the convention as amended by the second Protocol) enters into force, the penultimate sentence of paragraph (1) of Article 26 is to be read as if that sentence had entered into force on May 30, 1980. This is intended to ensure that any U.S. statutory enactment of source rules for foreign tax credit purposes after May 30, 1980, that were intended by the congress to apply notwithstanding any pre-existing treaty rule to the contrary, would apply under this convention.

The rules of paragraph (4) of Article 26 and of the penultimate sentence of paragraph (1) of Article 26 generally have the same effect. However, it is not intended that the penultimate sentence of paragraph (1) of Article 26 in any way limit or otherwise affect the source rules as determined under paragraph (4) of Article 26.

Finally, paragraph 15 of the Exchange of Notes clarifies that the meaning of the terms "stock or intangible" in paragraph (4) has the meaning ascribed to it in section 865(h) of the Code when the taxpayer elects under that section.