Article 27 deals — U.S. Income Tax Treaty

Contracting States in the collection of taxes.

Paragraphs 1, 2, and 3 are similar to Article XVII of the prior Convention. Under these paragraphs, the States agree to lend assistance in collection of the taxes that are the subject of the Convention, along with interest, costs, and additions to the taxes. The taxes to be collected must be finally determined in the requesting State, as established by documents accompanying the request. A revenue claim is finally determined when the applicant State has the right under its internal law to collect the revenue claim, and all administrative and judicial rights of the taxpayer to restrain collection in the applicant State have lapsed or been exhausted. The requested State will use the procedures that it uses in the collection of its own taxes.

Paragraph 4 provides that assistance will not be granted with respect to citizens, corporations or other entities of the requested State, except to the extent necessary to insure that the benefits of the Convention are enjoyed only by persons entitled to those benefits under the terms of the Convention. Under this paragraph, assistance will be provided in those cases where an exemption or reduced rate of tax at source granted under the Convention by that other State has been enjoyed by persons not

entitled to those benefits.


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Paragraph 5 makes clear that the Contracting State asked to collect the tax is not obligated, in the process, to carry out administrative measures that are different from those used in the collection of its own taxes, or that would be contrary to its sovereignty, security or public policy.