Article 21. OTHER INCOME

This Article provides the rules for the taxation of items of

income that are not dealt with in the other articles of the Convention. The Article assigns taxing jurisdiction over such

items of income generally to the State of .residence of the

beneficial owner of the income. Items of income covered by this Article include classes of income not dealt with elsewhere in the

Convention, such as, for example, gambling winnings. It also

includes items of income that are not dealt with in the other articles because the income in question does not meet certain characteristics of the income covered by the other articles. For

example, Article **10** (Dividends) deals with dividends paid **by** a
company that is a resident of a Contracting State. **A** dividend
paid **by** a third-country corporation would not be covered **by**

Article 10, and would, therefore, come within the scope of this Article.

The general rule of paragraph 1 that the "other income" of a

resident of a Contracting State will be taxable only in the State

of residence applies irrespective of whether the residence State

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exercises its right to tax the income covered **by** the Article.

Paragraph 2 contains an exception to the general rule of
paragraph **1** for income, other than income from real property,
that is effectively connected with a permanent establishment <sup>or</sup>
fixed base maintained in a Contracting State **by** a resident of <sup>the</sup>
other Contracting State. The taxation of such income is governed
**by** the provisions of Articles **7** (Business Profits) and 14

(Independent Personal services). Thus, in general, third-country
income that is attributable to a permanent establishment
maintained in the United States **by** a resident of Austria would be
taxable **by** the United States.

An exception to this rule in paragraph 2 is provided for

income from real property, as defined in paragraph 2 of Article 6 (Income from Real Property). Even if such property is part of

the property of a permanent establishment or fixed base in a Con­

tracting State, that State may not tax income from the property if neither the situs of the property nor the residence of the owner is in that State. For example, if an Austrian resident derives income from real property located outside the United States that is effectively connected with the resident's perma­

nent establishment or fixed base in the United States, only
Austria may tax that income. This special rule for foreign-situs
real property is consistent with the general rule, also reflected
in Article **6,** that only the situs and residence States may tax

real property and real property income.

This Article is subject to the saving clause of paragraph 4
of Article 1 (Personal Scope). Thus, the United States may tax

the income of an Austrian resident not dealt with elsewhere in

the Convention, if that Austrian resident is a citizen of the
United States. The benefits of this Article are also subject to
the provisions of Article **16** (Limitation on Benefits), which
require that the beneficial owner of the income is qualified to
receive treaty benefits under at least one of the tests of
Article **16.**