ARTICLE 10. SHIPS AND AIRCAFT

This Article provides that, notwithstanding the rules of Article 8 (Business Profits), a resident of Trinidad and Tobago will be exempt from tax in the United States on income derived from the operation in international traffic of ships or aircraft, including capital gain derived from the sale of a ship or aircraft used in such traffic, and that a resident of the United States will be exempt from tax In Trinidad and Tobago on Income derived from the operation in international traffic of ships or aircraft, including capital gain derived from the sale of a ship or aircraft used in such traffic, registered in the United States. It should be noted that the registration requirement Is only applicable in the case of a resident of the United States.

This Article also will apply to income derived from the leasing, to a person engaged in the operation of ships or aircraft, of a ship or aircraft under a full or bareboat charter, where the lessor Is engaged In the operation of ships or aircraft if such lease is ancillary to the lessor's other operations. For example, if an airline of one of the Contracting States which has excess equipment in the winter months leases several aircraft which are excess during that period to an airline in the other Contracting State, the lessor is not subject to tax by that other Contracting State.