Article 15 deals with the taxation of remuneration derived

by a resident of a Contracting State as an employee.

   Paragraph 1

   Under paragraph 1, remuneration in respect of employment
derived by an individual who is a resident of a Contracting State

generally may be taxed only by the State of residence. To the

extent, however, that the remuneration is derived from an employ­

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ment exercised in the other State ("the host State"), the remu­
neration may also be taxed by the host State, subject to the
conditions specified in paragraph 2. In such a case the individ­
ual's State of residence will relieve double taxation in accor­
dance with the provisions of Article 23 (Relief from Double
Taxation). Consistent with the general rule of construction that
the more specific rule takes precedence over the more general,
employment income dealt with in Articles 16 (Directors' Fees), 18
(Pensions and Annuities), 19 (Government Service) and 20 (Stu­
dents, Apprentices, and Teachers) is governed by the provisions
of those articles rather than this Article. Thus, even though
the State of source has a right to tax employment income general­
ly under Article 15, it may not have the right to tax a particu­
lar type of income under the Convention if that right is pro­
scribed by one of the aforementioned articles. Similarly, these
other articles may expand the source State's right to tax beyond
the circumstances in which Article 15 would permit it to tax.

Paragraph 2

   Paragraph 2 provides that the host State may tax the remu­
neration of a resident of the other State derived from services
performed in the host State if one of the following is true: (i)
the individual is present in.the host State for a period or
periods exceeding 183 days in any continuous twelve-month period;
(ii) the remuneration is paid by, or on behalf of, an employer
who is a resident of the host State; or (iii) the remuneration is
borne as a deductible expense by a permanent establishment or
fixed base that the employer has in the host State. If a foreign
employer pays the salary of an employee, but a host State corpo­
ration or permanent establishment reimburses the foreign employer
in a deductible payment that can be identified as a reimburse­
ment, either condition (ii) or (iii), as the case may be, will be
considered to have been fulfilled. Conditions (ii) and (iii) are
intended to assure that a Contracting State will not be required
both to allow a deduction to the payor for the amount paid and to
exempt the employee on the amount received. Failure to satisfy
any of the three conditions will result in exclusive residence
State taxation of employment income.

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   The 183-day period in condition (i) is to be measured using
the "days of physical presence" method. Under this method, the
days that are counted include any day in which a part of the.day
is spent in the host country. (Rev. Rul. 56-24, 1956-1 C.B.
851.) Thus, days that are counted include the days of arrival
and departure; week-ends and holidays on which the employee does
not work but is present within the country; vacation days spent

in the country before, during and after the employment period,
unless the individual's presence before or after the employment

can be shown to be independent of his presence there for
employment purposes; and time during periods of sickness,
training periods, strikes, etc., when the individual is present
but not working. If illness prevented the individual from
leaving the country in sufficient time to qualify for the
benefit, those days will not count. Also, any part of a day
spent in the host country while in transit between the two points
outside the host country is not counted. These rules are
consistent with the description of the 183-day period in
paragraph 5 of the Commentary to the OECD Model.

Paragraph 3

Paragraph 3 contains a special rule applicable to remunera­

tion for services performed by an individual resident of one
Contracting State as an employee aboard a ship or aircraft
operated in international traffic. Under this paragraph, the

employment income of such persons may be taxed in the State of
residence of the enterprise operating the ship or aircraft. This
is not an exclusive taxing right. The State of residence of the
employee may also tax the remuneration. This provision is taken
from the OECD Model, at Turkey's insistence. The United States

prefers not to use this rule in treaties because U.S. internal

law does not impose tax on non-U.S. source income of a person who

is neither a U.S. citizen nor a U.S. resident, even if that person is an employee of a U.S. resident enterprise.

Paragraph 3 deals only with those employees who are members

of the "regular complement" of a ship or aircraft. The "regular
complement" includes the crew. In the case of a cruise ship, for

example, it may also include others, such as entertainers,

lecturers, etc., employed by the shipping company to serve on the

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ship during its voyage. The use of the term "regular complement"
is intended to clarify that a person who exercises his employment
as, for example, an insurance salesman, while aboard a ship or
aircraft is not covered by this paragraph.

Relation to other articles

   A U.S. citizen who is resident in Turkey and who performs
dependent services in the United States will be taxable in the
United States on his remuneration by virtue of the saving clause

of paragraph 3 of Article 1 (Personal Scope) even if , under

paragraph 2, he would be exempt from U.S. tax were he not a U.S.
citizen.