Article 6 (General Rules of Ti,xatlon), such a partnership may be taxed

by the Philippines only on income from sources therein, to the extent the partnership is treated as a resident of the United States under para­ graph (1 )(b)(ii), Similarly "resident of the United States" means a United States corporation (as defined In Article 2) and any other person (except a corporation or any entity treated as a corporation for United States tax purposes) resident In the United States for purposes of United States tax. Thus, a resident of the United States includes a resident alien individual who is subject to tax in the United States on his worldwide income and a resident citizen, but under no circumstances, a foreign corporation.

A citizen of the United States or the Philippines Is not automatically a resident of the United States or the Philippines for purpos_es of this Convention. An Individual's residence Is determined on the basis of whether the Individual Is treated as a resident for tax purposes by a _

Contracting State. An individual who is a resident of both Contracting States will be deemed to be a resident of the Contracting State in which he has his permanent home, his center of Vital interests (closest personal and economic :relations), a habitual abode, or his citizenship, in the order listed. If the issue ls not settled by these tests, the competent authorities will t3ecide by mutual agreement the one Contracting State of which he will be considered to be a resident.

The Convention provides that a partnership, estate or trust, in the case of the United States, and a professional partnership, estate, or trust, in the case of the Philippines, is a resident or the applicable Contracting State only to the extent that the income derived by such person is subject to tax in such Contracting State as the income of a resident. For example, under United States law, a partnership is never, and an estate or trust is often not, taxed as such. Under the Convention, in the case of the United States income received by a partnership, estate, or trust will not qualify for the benefits of the Convention unless such income is subject to tax in the United States as the income of a resident. Thus, for United States tax purposes, the treatment of income received by a partnership will be de­ termined by the residence and taxation of its partners with respect to that income rather than by whether the partnership Is resident in the United States by engaging in a trade or business here. To the extent the income of the partners is subject to United States tax as the income of residents of the United States, the partnership will be treated as a resident of the United States. Similarly, the treatment of income received by a trust or estate will be determined by the residence and taxation of the person subject to tax on such income, which may be the grantor, the beneficiaries or the trust or estate itself, as the case may be.

The fact that a charitable trust or pension fund is exempt from tax in the countcy in which it is otherwise resident is not to be construed to deny such exempt trust or fund resident status under this Convention,