ARTICLE 5 — U.S. Income Tax Treaty

Source of Income

For purposes of this Convention:

(a) Except as provided in subparagraph (b) and in paragraph 5 of Article 12 (Dividends), dividends paid by a corporation of one of the Contracting States shall be treated as income from sources within that Contracting State; and dividends paid by any other corporation shall be treated as income from sources outside that Contracting State.

(b) Dividends paid by a Trinidad and Tobago corporation shall be treated as income from sources within the United States if, for the 3-year period ending with the close of its taxable year preceding the declaration of such dividends (or for such portion of that period as the corporation has been in existence), such corporation (i) Had a permanent establishment in the United States, and (ii) Derived 50 percent or more of its gross income from industrial or commercial profits effectively connected with the industrial or commercial activity engaged in through such permanent establishment, but only in an amount which bears the same ratio to such dividends as the gross income of the corporation for such period which is effectively connected with the commercial or industrial activity engaged in through such permanent establishment within the United States bears to its gross income from all sources. Notwithstanding the preceding sentence, the amount of dividends treated as income from United States sources under this subparagraph shall not exceed the net amount of money or property transferred from such permanent establishment during such period.

(a) Except as provided in subparagraph (b), interest paid by a Contracting State, including any local government thereof, or by a resident of that Contracting State shall be treated as income from sources within that Contracting State; and interest paid by any other person shall be treated as income from sources outside that Contracting State.

(b) Interest paid by a resident of any State with a permanent establishment in another State directly or indirectly out of the funds of such permanent establishment on indebtedness incurred for the sole use of, or on banking deposits made with, such permanent establishment shall be treated as income from sources within the State in which such permanent establishment is located.

Royalties paid for the use of, or the right to use, property described in paragraph 4 of Article 14 (Royalties) in a State shall be treated as income from sources within that State.
Income from real property and royalties from the operation of mines, quarries, or other natural resources shall be treated as income from sources within the State in which such property is located.
Income from the rental of tangible personal (movable) property shall be treated as income from sources within the State in which such property is located when rented.
Income received by an individual for his performance of personal services (either as an employee or in an independent capacity) or for furnishing the personal services of another person and income received by a corporation for furnishing the personal services of its employees or others shall be treated as income from sources within the State in which such services are performed. If services are performed partly within and partly outside a State, income from the performance or furnishing of such services shall be treated as income from sources partly within and partly outside that State. Compensation for personal services, and private pensions and annuities paid in respect of such services, performed aboard ships or aircraft operated in international traffic by a resident of a Contracting State and, in the case of the United States, registered in the United States, shall be treated as income from sources within that Contracting State, if performed by a member of the regular complement of the ship or aircraft.
Income from the purchase and sale of personal (movable) property shall be treated as income from sources within the State in which such property is sold.
Notwithstanding paragraphs 1 through 7, industrial or commercial profits which are attributable to a permanent establishment which the recipient, being a resident of one of the Contracting States, has in the other Contracting State, including income dealt within Articles 12 (Dividends), 13 (Interest), 14 (Royalties), and 15 (Income from Real Property) from rights or property which is effectively connected with such permanent establishment, shall be treated solely as income from sources within the other Contracting State. For the purposes of this Convention, to determine whether rights or property is effectively connected with a permanent establishment, the factors taken into account shall include whether the income is derived from property used in or held for use in the commercial or industrial activities carried on through such permanent establishment, or the commercial or industrial activities carried on through such permanent establishment were a material factor in the realization of the income.
The source of any item of income to which the provisions of this article are not expressly applicable shall be determined by each of the Contracting States in accordance with its own law.