1. This Convention shall be subject to ratification in accordance with the applicable procedures of each Contracting State and instruments of ratification shall be exchanged at Washington as soon as possible.
2. The Convention shall enter into force upon the exchange of instruments of ratification and its provisions shall have effect:
a) in respect of taxes withheld at source, for amounts paid or credited on or after the first day of the second month next following the date on which the Convention enters into force;
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 Convention enters into force.
3. Notwithstanding paragraph 2 of this Article, if either of the Contracting States lacks as of the date on which the Convention enters into force any of the authority described in paragraph 3 of Article 26 (Exchange of Information and Administrative Assistance), the Convention shall, solely for purposes of determining under paragraph 2 of this Article the date on which the provisions of paragraphs 5 and 6 of Article 16 (Limitation on Benefits) shall have effect with respect to companies resident in such Contracting State, be considered to enter into force on the date provided in an exchange of notes in which the Contracting States confirm that the first mentioned State has such authority. The Contracting States may, by an exchange of notes occurring upon or after the date on which the Convention enters into force but before the date upon which any of the provisions of the Convention has effect, confirm that both Contracting States had the requisite authority as of the date on which the Convention entered into force.
4. Subject to the provisions of paragraph 5, the Convention between the United States of America and the Kingdom of the Netherlands of April 28, 1948, as extended to the Netherlands Antilles (which then included Aruba) by exchange of notes at Washington of June 24, 1952, August 7, 1952, September 15, 1955, November 4, 1955 and November 10, 1955, and as amended by the Protocols of June 15, 1955 and October 23, 1963, ("the 1948 Convention") as in effect with Aruba on the date of signature of this Convention is terminated with respect to its application to Aruba. Its provisions shall cease to have effect for taxes for which the provisions of this Convention have effect in accordance with the provisions of paragraph 2.
5. Where any greater relief from tax would have been afforded by the provisions of the 1948 Convention than under this Convention, any such provision of the 1948 Convention shall continue to have effect for a period of 12 months following the date on which the relevant provision of this Convention has effect in accordance with the provisions of subparagraph a) or b) of paragraph 2. Notwithstanding any other provisions of this Convention, including paragraph 1 of Article 1 (General Scope), the benefits of the preceding sentence shall be available to any company organized under the laws of Aruba which was in existence on the date of signature of this Convention and the effective management of which was conducted in the Netherlands as of such date. For purposes of applying any provision of this Convention to such a company during the one-year period after the date on which the relevant benefits of the preceding sentence have ceased to apply, such company shall, if its effective management continues to be conducted in the Netherlands throughout such period, be treated as a resident of Aruba which is not subject to paragraph 1 or 4 of Article 16 (Limitation on Benefits).
6. Notwithstanding any other provisions of this Article, the provisions of Article VIII of the 1948 Convention shall continue to have effect with respect to interest payments described in section 127(g)(3) of the United States Tax Reform Act of 1984. For purposes of the preceding sentence, the determination of whether a corporation is an applicable CFC shall be made by treating all shareholders of such corporation as United States persons, and obligations issued on or before July 18, 1984 shall be treated as issued before June 22, 1984. Any Aruban tax paid with respect to interest described in this paragraph shall be considered to be income taxes for purposes of paragraph 1 of Article 23 (Relief from Double Taxation).
7. Notwithstanding the provisions of paragraph 2(a) of this Article, for purposes of applying section 861(a)(2)(B) of the United States Internal Revenue Code, an Aruban corporation existing on July 29, 1983, whose principal class of stock is traded on a stock exchange described in paragraph 3(a) of Article 16 (Limitation on Benefits), shall be treated as organized on the first day of such corporation's second taxable period described in paragraph 2(b) of this Article.
