Article 17. ARTISTES AND ATHLETES

   This Article deals with the taxation by a Contracting State

of artistes (i~e., performing artists and entertainers) and athletes resident in the other Contracting State from the perfor­ mance of their services as such. The term is considered to include participants in certain activities, such as chess and bridge tournaments, who might not be considered "athletes" in the

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traditional sense. The Article applies both to the income of an
entertainer or athlete who performs services on his own behalf
and one who performs services on behalf of another person, either
as an employee of that person, or pursuant to any other arrange­
ment. Paragraph 1 of the Article applies only with respect to
the income of performing artists and athletes, themselves.
Paragraph 2 applies in certain circumstances to income received
by persons providing the services of the artists and athletes.
Others involved in a performance or athletic event, such as
producers, directors, technicians, managers, coaches, etc.,
remain subject to the provisions of Articles 14 (Independent
Personal Services) and 15 (Dependent Personal Services).

   Paragraph 1 describes the circumstances in which a Contract­
ing State may tax the performance income of an entertainer or
athlete who is a resident of the other Contracting State. Under
the paragraph, the other Contracting State may tax the income
derived by a resident of a Contracting State from personal
activities as an entertainer or athlete exercised in the other
Contracting State if the amount of the gross receipts derived by
the individual exceeds $20,000 (or its equivalent in Austrian
shillings) for the taxable year. The $20,000 includes expenses
reimbursed to or borne on behalf of, the individual. If the
gross receipts exceed $20,000, the full amount, not just the
excess, may be taxed in the State of performance.

   The OECD Model provides for taxation by the country of
performance of the remuneration of entertainers or athletes with
no dollar or time threshold. The United States imposes a dollar```

threshold test in its treaties to distinguish between two groups
of entertainers and athletes **--** those who are paid very large

sums of money for very short periods of service, and who would, therefore, normally be exempt from host country tax under the standard personal services income rules, and those who earn only modest amounts and are, therefore, not clearly distinguishable from those who earn other types of personal service income.

Paragraph **I** applies notwithstanding the provisions of

Articles 7 (Business Profits), 14 (Independent Personal Services) and 15 (Dependent Personal Services). Thus, an individual who would otherwise be exempt from tax under those Articles, but is subject to tax under this Article, may be taxed. An entertainer or athlete who receives less than the $20,000 threshold amount, and who is, therefore, not subject to host-country tax under this Article may, nevertheless, be subject to tax in that country

under Article **7,** 14 or **15** if the tests for taxability under those

-Articles are met. For example, if an entertainer who is an independent contractor earns only $19,000 of income for the taxable year, but the income is attributable to a fixed base regularly available to the entertainer in the State of perfor­ mance, that State may tax that income under Article 14.

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Since it is frequently not possible to know until the end of

the _year_ whether the income an entertainer or athlete derived
from performance in a Contracting State exceeds $20,000, nothing

in the Convention precludes that Contracting State from withhold­ ing tax during the year and refunding after the close of the year if the taxability threshold is then shown to have not been met. (See discussion of paragraph 3, below, regarding withholding of

tax on payments to a person other than the performer.)