Article 27. APPLICATION OF THE CONVENTION

This Article provides that nothing in this Agreement shall
be construed so as to preclude either Contracting State from
applying any withholding tax systems according to its domestic
laws. However, if the Convention provides for an exemption from

or a reduction of tax and the amount withheld exceeds the limits imposed by the Convention, the excess shall be refunded upon the

taxpayer's request.

Article 28. ENTRY INTO FORCE

This Article provides the rules for bringing the Convention

into force and the general rules for the effective dates of its

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provisions.

Paragraph **1** provides for the ratification of the Convention
**by** both Contracting States and the prompt exchange of instruments

of ratification.

Paragraph 2 provides that the Convention will enter into

force on the first day of the second month following the exchange

of instruments of ratification. The Convention will have effect

with respect to taxes withheld at source for amounts paid or credited on or after the first day of the second month next

following the date on which the Convention enters into force.
For all other income taxes, the Convention will have effect for
fiscal periods beginning on or after the first day of January
next following the date on which the Convention enters into

force. Thus, if instruments are exchanged on October **15** of a

year, the treaty will enter into force on December 1 of that

year. It will have effect for withholding tax purposes for
payments made or credited on or after February **1** of the next
year. For other purposes, it will have effect for taxable years
beginning on or after January **1** of that next year.

Paragraph 3 provides a general exception to the effective

date rules of paragraph 2. Under this paragraph, if the **1956**

Convention would have afforded greater relief from tax to a person entitled to its benefits than would be the case under this

convention, that person may elect to remain subject to all of the

provisions of the 1956 Convention for the first assessment period

or taxable year with respect to which this Convention would have

had effect under the provisions of paragraph 2 of this Article.

With regard to the interpretation of paragraph 3, the intent

is to allow the taxpayer to elect to extend the benefits of the
old Convention for one year from the date on which the relevant

provision of the new Convention would first take effect. For

example, suppose the instruments of ratification are exchanged on
February 1 of year 1 and the Convention thus enters into force on
April 1 **of** year **1.** The new Convention would take effect with

respect to interest withholding for interest paid or credited on

or after June 1 of the first year. If the election is made, the provisions of the old Convention regarding interest withholding would continue to have effect for interest paid or credited at any time prior to June 1 of the second year. With regard to assessed taxes, the new convention is applicable as of January 1

of year 2. Therefore, with respect to the branch tax, which is

imposed on an assessment basis, an election would allow the old

Convention to continue, thus preventing the imposition of the

branch tax for the first taxable year beginning on or after January 1 of year 3.

Paragraph 4 provides that the 1956 Convention will cease to

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have effect at the time this Convention takes effect under the provisions of paragraphs 2 and 3 of this Article.