Article 6 - INCOME FROM IMMOVABLE PROPERTY (REAL PROPERTY)

   This Article deals with the taxation of income from immov­
able, or real, property. The two terms should be understood to
have the same meaning.

Paragraphs I and 3

   Paragraph 1 of Article 6 provides that income of a resident
of a Contracting State derived from real property situated in the
other Contracting State may be taxed in the Contracting State in

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which the property is situated. As clarified in paragraph 3, the
income referred to in paragraph 1 means income from any use of
real property, including, but not limited to, income from direct
use by the owner and rental income from the letting of the
property. Income from real property also includes income from
agriculture and forestry. This Article does not grant an exclu­
sive taxing right to the situs State, but merely grants it the
primary right to tax. The Article does not impose any limitation

on the situs State in terms of rate or form of tax.

Paragraph 2

Paragraph 2 provides that the terms "immovable property," or "real property," have the same meaning that they have under the

law of the situs State. In addition, the paragraph specifies
certain classes of property that, regardless of internal law
definitions, are to be included within the meaning of the term
for purposes of the Convention. This expanded definition con­
forms to that in the OECD Model, except that it also includes (at
Turkey's request) "fishing places of every kind." The definition
of "real property" for purposes of Article 6 is more limited than
the expansive definition of "real property situated in the Other
Contracting State" in paragraph 2 of Article 13 (Gains), which
includes not only immovable property as defined in Article 6 but
certain other interests in real property.

   Paragraph 4

Paragraph 4 clarifies that the situs State may tax income

from real property of an enterprise and income from real property
used for the performance of independent personal services,
regardless of whether the enterprise or individual has a perma­
nent establishment or fixed base in the situs State.

   The Article does not include language found in many U.S.
treaties providing for a taxpayer to elect to be taxed on real
property income on a net basis. It was unnecessary to include
such a provision because both States allow for net basis taxation
of real property income under their respective internal laws.

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