ARTICLE 28

Entry into Force

This article provides for the ratification of the Convention and for the exchange of instruments of ratification as soon as possible. The exchange of instruments of ratification took place on June 9, 1972. The Convention entered into force on the thirtieth day after the day of exchange of such instruments (July 9, 1972). However, the provisions of the Convention became effective, for both States, for income derived during any taxable year beginning on or after January 1, 1973, and, in the case of the United States, as respects taxes withheld at source on dividends, interest, royalties, and similar payments to any obligation to pay such taxes arising on or after January 1,1973.

In the case of Japan, no distinction is made with respect to the effective date for withholding taxes on dividends, interest, royalties, and similar payments, because foreign recipients of such payments are treated under Japanese internal law as having a taxable year beginning on January 1. This rule applies if a United States resident has a permanent establishment in Japan, even if the taxable year of such resident is different, except that the permanent establishment's taxable year would control if such payments are effectively connected

with it. However, there would be no withholding if such payments are effectively connected with the permanent establishment.

The Convention of April 16, 1954 [1955-1 C.B. 658], as well as the Protocols of May 7, 1960 [1965-1 C.B. 611], and August 14, 1962 [1965-2 C.B. 562], terminated and ceased to have effect in respect of income to which the new Convention applies under the above-mentioned rules of this article.