Common use of Governmental Services Clause in Contracts

Governmental Services. 1. Remuneration, including pensions, paid by, or out of funds created by, a Contracting State, a political subdivision or a local authority thereof to any individual in respect of services rendered to that State, a political subdivision or local authority thereof in the discharge of functions of a governmental or other public nature may be taxed in that State. Such remuneration shall, however, be taxable only in that Contracting State if the recipient is a national of that State. 2. The provisions of Articles 15, 16 and 18 shall apply to remuneration or pensions in respect of services rendered in connection with any trade or business carried on by one of the Contracting States or a political subdivision or a local authority thereof. 3. Pensions paid out under the Social Security Scheme of a Contracting State may be taxable in that State.