Common use of INCOME FROM IMMOVABLE PROPERTY Clause in Contracts

INCOME FROM IMMOVABLE PROPERTY. See treaty text. The general rule is that income derived by a resident of a Contracting State from immovable property in the other State may be taxed in that other State. Thus, for instance, if a resident of one State owns a building in the other State and receives rent, that rent may be taxable in the other State. This treatment also applies to income from immovable property used by an enterprise and to income from immovable property used for the performance of independent personal services. Immovable property is defined as per the domestic law of the State in which the property is located but it will include livestock and equipment used in agriculture, forestry, general property rights and rights for the working of natural resources. There is no extension giving the Situs State any right to tax income from movable property of a permanent establishment.

INCOME FROM IMMOVABLE PROPERTY. See treaty text. The general rule is that income derived by a resident of a Contracting State from immovable property in the other State may be taxed in that other State. Thus, for instance, if a resident of one State owns a building in the other State and receives rent, that rent may be taxable in the other State. This treatment also applies to income from immovable property used by an enterprise and to income from immovable property used for the performance of independent personal services. Immovable property is defined as per the domestic law of the State in which the property is located but it will include livestock and equipment used in agriculture, forestry, general property rights and rights for the working of natural resources. There is no extension giving the Situs State any right to tax income from movable property of a permanent establishment. Note that these rules also apply to profits form the disposal (alienation) of immovable property (Protocol).