(1) Income from immovable property (including gains derived from the sale or exchange of such property) is taxable only in the Contracting State in which the property is situated; interest on debts secured by mortgage on real estate and royalties or other amounts paid in respect of the operation of a mine, an oilfield, a quarry or other extraction of natural resources shall be regarded as income derived from immovable property.

(2) Paragraph (1) shall not apply where a resident of one of the Contracting States has a permanent establishment in the other State and such income is attributable to that permanent establishment; in such event Article V shall be applicable.