AMENDING THE CONVENTION BETWEEN

THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND

THE GOVERNMENT OF THE FRENCH REPUBLIC

FOR THE AVOIDANCE OF DOUBLE TAXATION

AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME AND CAPITAL,

SIGNED AT PARIS ON AUGUST 31, 1994

The Government of the United States of America and the Government of the French

Republic, desiring to amend the Convention Between the Government of the United States of

America and the Government of the French Republic for the Avoidance of Double Taxation

and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital, signed at

Paris on August 31, 1994, have agreed as follows:

ARTICLE I

1. Subparagraph (b) (iii) of paragraph 2 of Article 4 (Resident) of the Convention shall be

deleted and replaced by the following:

“(iii) in the case of the United States, a regulated investment company, a real

estate investment trust, and a real estate mortgage investment conduit; in the case

of France, a “société d’investissement à capital variable”; and any similar

investment entities agreed upon by the competent authorities of both Contracting

States;”.

2. Subparagraph (b) (iv) of paragraph 2 of Article 4 (Resident) of the Convention shall be

deleted and replaced, and new subparagraphs (b) (v) and (vi) of paragraph 2 of Article 4 are

added as follows:

“iv) a partnership or similar pass-through entity, an estate, and a trust (other

than one referred to in subparagraph (ii) or (iii) above), whether or not organized

or managed in one of the Contracting States, but only to the extent that the income

derived by such partnership, similar entity, estate, or trust is treated for taxation

purposes in that Contracting State as the income of a resident, either in the hands

of such partnership, entity, estate or trust, or in the hands of its partners,

beneficiaries or grantors, it being understood that a “société de personnes”, a

“fonds commun de placement”, a “groupement d’intérêt économique” (economic

interest group), or a “groupement européen d’intérêt économique” (European

economic interest group) that is constituted in France and has its place of effective

management in France and that is not subject to company tax therein shall be

treated as a partnership for purposes of United States tax benefits under this

Convention, provided that a partnership or similar pass-through entity, an estate

and a trust which is not organized or managed in one of the Contracting States

shall be entitled to the benefits of this convention with respect to the income or

gains derived by such entity arising in France if the following additional

conditions are satisfied:

(bb) the fact that the partnership or similar pass-through entity, estate or trust

is not treated as a body corporate for tax purposes or otherwise liable to

tax on French source income either in its own hands or in the hands of its

partners, beneficiaries or grantors under the tax law of the third State;

(cc) a partner's, beneficiary’s, or grantor’s share of the income or gain of the

partnership or similar pass-through entity, estate or trust is taxed in the

same manner, including the nature or source of that income or gain and

the time when that income or gain is taxed, as would have been the case

if the income or gain had been derived directly, except to the extent

resulting from any difference in accounting methods, accounting periods,

or other similar difference; and

(dd) it is possible to exchange information concerning the partnership or

similar pass-through entity, estate or trust or partners, beneficiaries or

grantors under the terms of a double taxation convention between the

Contracting State in which the income or gain arises and the third State;

v) a partnership or similar pass-through entity, an estate, and a trust (other than

one referred to in subparagraph (ii) or (iii) above), which is organized in the

United States, shall be treated as a resident of the United States to the extent

provided in subparagraph (iv) above, and as a resident of France to the extent that

the income derived by such partnership, similar pass-through entity, estate or trust

arises in France and corresponds to the share of the profits or losses of such entity

which benefits a resident of France;

vi) it is understood that, for the purposes of the subparagraphs (iv) and (v)

above, the income derived by a partnership or similar pass-through entity, an

estate and a trust (other than one referred to in subparagraph (ii) or (iii) above), is

considered to be treated for taxation purposes in a Contracting State as the income

of a resident to the extent of this income which benefits a partner, beneficiary, or

grantor that is a pension trust, an other organization or a not- for-profit

organization referred to in subparagraph (ii) above, notwithstanding that all or part

of this income of such trust, other organization, or not- for-profit organization is

exempt from income taxation in that State.”

ARTICLE II

The last sentence in the final paragraph of paragraph 2 of Article 10 (Dividends) of the

Convention shall be deleted and replaced by the following new sentence:

“In the case of dividends paid by a United States real estate investment trust, the

provisions of subparagraph (b) shall apply only if:

(i) the beneficial owner of the dividends is an individual holding an interest

of not more than 10 percent in such real estate investment trust;

(ii) the dividends are paid with respect to a class of stock that is publicly

traded and the beneficial owner of the dividends is a person holding an

interest of not more than 5 percent of any class of the real estate

investment trust’s stock; or

(iii) the beneficial owner of the dividends is a person holding an interest of

not more than 10 percent in the real estate investment trust and the value

of no single interest in the real estate investment trust’s real property

ARTICLE III

Article 18 (Pensions) of the Convention shall be deleted and replaced by the following:

“ARTICLE 18 - Pensions

1. Payments under the social security legislation or similar legislation of a Contracting

State to a resident of the other Contracting State, and pension distributions and other similar

remuneration arising in one of the Contracting States in consideration of past employment paid

to a resident of the other contracting State, whether paid periodically or in a lump sum, shall be

taxable only in the first- mentioned State. For purposes of this paragraph, pension distributions

and other similar remuneration shall be deemed to arise in a Contracting State only if paid by a

pension or other retirement arrangement established in that State.

2. (a) Where an individual renders personal services and is a resident of a Contracting

State but not a national of that State, and that individual is a participant in a pension

or other retirement arrangement that is established, maintained, and recognized for tax

purposes in the other Contracting State:

(i) contributions paid by, or on behalf of, such individual to such pension or

retirement arrangement shall be deductible from the income taxable in the

first- mentioned State as if the contributions had been paid to a pension or

other retirement arrangement that is established, maintained, and

recognized for tax purposes in that State, subject to the same monetary

limits provided for by the law of that State; and

(ii) in the case of dependent personal services, any benefits accrued under

such arrangement or payments made to such an arrangement by or on

behalf of the individual’s employer shall be excluded from the

individual’s income taxable in the first-mentioned State and shall be

allowed as a deduction in computing the profits of the employer in that

State as if the contributions had been paid to a pension or other

retirement arrangement that is established, maintained, and recognized

for tax purposes in that State, subject to the same monetary limits

provided for by the law of that State.

(b) The provisions of this paragraph shall not apply unless:

(i) contributions by or on behalf of the individual to the pension or other

retirement arrangement (or to another similar arrangement for which this

arrangement was substituted) were made before he arrived in the firstmentioned

State; and

(ii) the competent authority of the first-mentioned State agrees that the

arrangement generally corresponds to a pension or other retirement

arrangement established, maintained, and recognized for tax purposes in

the first- mentioned State.

(c) For purposes of this paragraph:

(i) in the case of the United States, it is understood that a French pension or

other retirement arrangement organized under the French social security

legislation shall be considered to generally correspond to a pension or

other retirement arrangement established, maintained, and recognized for

tax purposes in the United States; and

(ii) in the case of France, it is understood that the social security or similar

legislation of the United States, qualified plans under section 401(a) of

the Internal Revenue Code, individual retirement plans (including

individual retirement plans that are part of a simplified employee pension

plan that satisfies section 408(k), individual retirement accounts,

individual retirement annuities, and section 408(p) accounts), section

403(a) qualified annuity plans, and section 403(b) plans shall be

considered to generally correspond to a pension or other retirement

arrangement established, maintained, and recognized for tax purposes in

France; and

(iii) a pension or other retirement arrangement is recognized for tax purposes

in a Contracting State if the contributions to the arrangement would

qualify for tax relief in that State.”

ARTICLE IV

1. Paragraphs 2 and 3 of Article 19 (Public Remuneration) of the Convention shall be

deleted.

2. A new paragraph 2 of Article 19 (Public Remuneration) of the Convention shall be

added as follows:

“2. The provisions of Articles 14 (Independent Personal Services), 15 (Dependent

Personal Services), 16 (Directors’ Fees), and 17 (Artistes and Sportsmen) shall apply to

remuneration paid in respect of services rendered in connection with a business carried on

by a Contracting State, a political subdivision (in the case of the United States) or local

authority thereof, or an agency or instrumentality of that State, subdivision, or authority.”

ARTICLE V

(Relief From Double Taxation) of the Convention shall be deleted.

Article 24 (Relief From Double Taxation) of the Convention shall be renumbered as

subparagraphs (b) (iv) and (b) (v), respectively.

(Relief From Double Taxation) of the Convention shall be deleted and replaced by the

following:

“(c) In the case of an individual who is both a resident and citizen of the United

States and a national of France, the provisions of paragraph 2 of Article 29

(Miscellaneous Provisions) shall apply to remuneration described in paragraph 1 of

Article 19 (Public Remuneration), but such remuneration shall be treated by the United

States as income from sources within France.”

ARTICLE VI

1. The last sentence of Paragraph 2 of Article 29 (Miscellaneous Provisions) of the

Convention shall be deleted and replaced by the following:

“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 United States), but only for a period of ten years following

such loss.”

2. Paragraph 3 of Article 29 (Miscellaneous Provisions) of the Convention shall be deleted

and replaced by the following:

“ 3. The provisions of paragraph 2 shall not affect:

(a) the benefits conferred under paragraph 2 of Article 9 (Associated

Enterprises), under paragraph 3 (a) of Article 13 (Capital Gains), under paragraph 1 of

Article 18 (Pensions), and under Articles 24 (Relief From Double Taxation), 25

(Non-Discrimination), and 26 (Mutual Agreement Procedure); and

(b) the benefits conferred under paragraph 2 of Article 18 (Pensions), and under

Articles 19 (Public Remuneration), 20 (Teachers and Researchers), 21 (Students and

Trainees), and 31 (Diplomatic and Consular Officers), upon individuals who are neither

citizens of, nor have immigrant status in, the United States.”

ARTICLE VII

1. The Contracting States shall notify each other when their respective constitutional and

statutory requirements for the entry into force of this Protocol have been satisfied. The

Protocol shall enter into force on the date of receipt of the later of such notifications.

2. Except as provided in paragraph 3, the provisions of this Protocol shall have effect:

(a) in respect of taxes withheld at source, for any amount paid or credited on or after the

first day of the second month next following the date on which the Protocol enters into force;

and

(b) in respect of other taxes, for taxable periods beginning on or after the first day of

January next following the date on which the Protocol enters into force.

3. The provisions of Article I, paragraph 2, of this Protocol, except to the extent such

paragraph treats a “fonds commun de placement” as a partnership for purposes of United States

tax benefits under this Convention, shall have effect:

(a) in respect of taxes withheld at source, for any amount paid or credited on or after

February 1, 1996; and

(b) in respect of other taxes, for taxable periods beginning on or after January 1, 1996.

IN WITNESS WHEREOF, the undersigned, being duly authorized thereto, have signed

and French languages, each text being equally authentic.

FOR THE GOVERNMENT FOR THE GOVERNMENT