Common use of Gains Clause in Contracts

Gains. 1. Gains derived by a resident of a Contracting State from the alienation of real property referred to in Article 9 (Income from Real Property) and situated in the other Contracting State may be taxed in that other State. 2. Gains from the alienation of a) stock, participations or other rights in the capital of a company or other legal person (whether or not a resident of a Contracting State) the property of which Consists principally of real property situated in a Contracting State; or b) an interest in a partnership, trust, or estate (whether or not a resident of a Contracting State) to the extent attributable to real property situated in a Contracting State may be taxed in that State. For the purposes of this paragraph, the term "real property" includes the shares of a company referred to in subparagraph (a) or an interest in a partnership, trust, or estate referred to in subparagraph (b), and in case of The United States includes a United States real property interest, as defined in section 897 of The Internal Revenue Code (or any successor Statute). . 3. In addition to gains from the alienation of shares described in paragraph 2 of this Article, gains derived by a resident of a Contracting State from the alienation of stock, participations, or other rights in the capital of a company or other legal person which is a resident of the other Contracting State may be taxed in that other Contracting State if the recipient of the gain, at any time during the 12-month period preceding such alienation, had a participation, directly or indirectly, of at least 25 percent of the vote or value of that company or other legal person. Such gains shall be deemed to arise in that other State to the extent necessary to avoid double taxation. 4. Gains from the alienation of personal property which are attributable to a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or which are attributable to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, and gains from the alienation of such permanent establishment (alone or with the whole enterprise) or such fixed base, may be taxed in that other State. 5. Gains derived by a resident enterprise of a Contracting State from the alienation of ships, aircraft, or containers operated in international traffic shall be taxable only in that State. 6. Gains from the alienation of any property other than property referred to in paragraphs 1 through 5 shall be taxable only in the Contracting State of which the alienator is a resident.