Article 2. TAXES COVERED

This Article identifies the U.S. and Austrian taxes to which

the Convention applies. Paragraph **1** makes the general statement

that the Convention applies to taxes on income imposed on behalf

of a Contracting State. Thus, except, as noted below, the

Convention does not apply to state and local taxes or to capital taxes.

Paragraph 2 identifies the existing covered taxes. Subpara­

graph (a) identifies the U.S. taxes covered as the Federal income

taxes imposed **by** the Code. The Convention does not apply to
social security taxes (Code sections 1401, **3101** and **3111).** **U.S.**

and Austrian social security taxes are dealt with in the bilater­ al Social Security Totalization Agreement, which entered into force on November 1, 1991.

Subparagraph **2(b)** identifies the Austrian taxes covered as
the Einkommensteuer (income tax), and the Koerperschaftsteuer

(corporation tax). The **1956** Convention also covers these taxes.

Paragraph 3 states that the Convention will apply to any

taxes that are identical, or substantially similar, to those

enumerated in paragraph 2, and which are imposed in addition to, or in place of, the existing taxes after the date of signature of

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the Convention. The paragraph also provides that the **U.S.** and

Austrian competent authorities shall notify each other of any changes in their taxation laws that are significant to the

operation of the Convention. They are also to notify each other

of any official published materials concerning the application

of the Convention. Such materials include explanations,

regulations, rulings or judicial decisions.

.Paragraph 4 expands the type of taxes covered for certain
specific purposes. With respect to Article **23** (Non-Discrimi­
nation), the Convention applies in both Contracting States to all
taxes imposed **by** a Contracting State or a political subdivision
or local authority thereof. Thus, although state and local taxes

in the United States are not, for any other purpose, covered by

the Convention, they must be imposed in a non-discriminatory
manner, consistent with the rules of Article **23.** The **1956**

Convention applies the same scope of taxes covered for

nondiscrimination purposes. Paragraph 4 also provides that for

purposes of applying paragraphs 1 through 5 of Article 25 (Exchange of Information and Administrative Assistance), the Convention applies to all taxes imposed by the Contracting

States. Thus, for example, the United States can request

information from Austria for the purpose of enforcing the Federal

estate tax or Federal excise taxes. Information cannot be
requested, however, for state and local tax purposes.