(1) Except as otherwise provided in this Convention, this Convention shall apply to persons who are residents of one or both of the Contracting States.
- (a) Notwithstanding any provision of this Convention except paragraph 3 of this Article, a Contracting State may tax its residents (as determined under Article 4 (Fiscal Domicile)), and by reason of citizenship may tax its citizens, as if this Convention had not come into effect.
- (b) For this purpose, the term “citizen” shall include a former citizen or long-term resident whose loss of such status had as one of its principal purposes the avoidance of tax (as defined under the laws of the Contracting State of which the person was a citizen or long-term resident), but only for a period of 10 years following such loss. The term “long-term resident” shall mean any individual who is a lawful permanent resident of a Contracting State in 8 or more income years or taxable years during the preceding 15 income years or taxable years. In determining whether the threshold in the preceding sentence is met, there shall not count any year in which the individual is treated as a resident of the other Contracting State under this Convention, or as a resident of any country other than the first-mentioned Contracting State under the provisions of any other tax treaty of that State, and, in either case, the individual does not waive the benefits of such treaty applicable to residents of the other country.
(3) The provisions of paragraph 2 shall not affect:
- (a) the benefits conferred by a Contracting State under paragraph 2 of Article 9 (Associated Enterprises), paragraphs 2 and 5 of Article 19 (Pensions, Et Cetera), Articles 23 (Relief From Double Taxation), 24 (Non-discrimination), and 25 (Mutual Agreement Procedure); and
- (b) the benefits conferred by a Contracting State under Articles 20 (Government Service), 21 (Teachers, Students and Trainees) and 27 (Effect of Convention on Diplomatic Agents and Consular Officers, Domestic Laws, And Other Treaties), upon individuals who are neither citizens of, nor have immigrant status in, that State.