Article 10 (Dividends) or Article 11 (Interest)). Similarly, gain derived from the…

tangible personal property, other than tangible personal property described in paragraph 2, may be taxed only in the State of residence of the alienator. Gain derived from the alienation of any property, such as a patent or copyright, that produces income taxable under Article 12 (Royalties) is taxable under Article 12 and not under this article, provided that such gain is contingent on the productivity, use, or disposition of the property. Sales by a resident of a Contracting State of real property located in a third state are not taxable in the other Contracting State, even if the sale is attributable to a permanent establishment located in the other Contracting State.

Relation to Other Articles

Notwithstanding the foregoing limitations on taxation of certain gains by the State of source, the saving clause of paragraph 2 of Article 1 ((Personal Scope)) permits the United States to tax its citizens and residents as if the Convention had not come into effect. Thus, any limitation in this Article on the right of the United States to tax gains does not apply to gains of a U.S. citizen or resident. The benefits of this Article are also subject to the provisions of Article 2 of the Protocol, regarding limitation on benefits. Thus, only a resident of a Contracting State that satisfies one of the conditions in Article 2 of the Protocol is entitled to the benefits of this Article.