exchange of the instruments of ratification. Its provisions shall for the first time have effect:

(a) In the case of France:

(i) As respects withholding taxes, to any proceeds payable and transactions completed on or after the date on which this Convention enters into force;

(ii) As respects other income taxes, to taxes which are levied for the assessment year 1967; and

(iii) As respects the tax on stock exchange transactions, the date on which this Convention enters into force.

(b) In the case of the United States:

(i) As respects the rate of withholding tax, to amounts received on or after the date on which this Convention enters into force;

(ii) As respects other income taxes, to taxable years beginning on or after January 1, 1967.

(2) Upon the coming into effect of this Convention, there shall terminate: (a) The Convention of July 25, 1939 [C.B. 1945, 522], relating to income and other taxes.

(b) The Convention of October 18, 1946 [C.B. 1956-1, 837, at 840], the supplementary Protocol of May 17, 1948 [C.B. 1956-1, 837 at 845], and the Convention of June 22, 1956 [C.B. 1957–2, 1030],' insofar as they concern taxes on income, on capital and tax on stock exchange transactions. The provisions of those Conventions and of that Protocol will cease to have effect from the date on which the corresponding provisions of the present Convention shall for the first time have effect according to the subparagraph (1) abovementioned.

ARTICLE 32

TERMINATION

This Convention shall remain in force until denounced by one of the Contracting States. Either Contracting State may denounce the Convention, through diplomatic channels, by giving notice of termination at least 6 months before the end of any calendar year after the year 1969. In such event, the Convention shall cease to have effect:

(1) In the case of France:

(a) As respects withholding taxes, on January 1 of the year following the year in which notice is given.

(b) As respects other income taxes, for any year of assessment beginning on or after January 1 of the year next following the year in which notice is given; and

(c) As respects the tax on stock exchange transactions, for any transactions occurring on or after January 1 of the year following the year in which notice is given.

(2) In the case of the United States:

(a) As respects withholding taxes, on January 1 of the year following the year in which notice is given;

(b) As respects other income taxes, for any taxable year beginning on or after January 1 of the year following the year in which notice is given; and (c) As respects taxes referred to in paragraph (2) of Article 1, for any transactions occurring on or after January 1 of the year following the year in which notice is given.

IN WITNESS WHEREOF, the respective plenipotentiaries have signed the present Convention.

DONE at Paris in duplicate, in the English and French languages, each text be ing equally authentic, this 28th day of July, 1967.

WHEREAS the Senate of the United States of America by its resolution of June 6, 1968, two-thirds of the Senators present concurring

2 Also embodied in Treasury Decision 6273, C.B. 1957-2, 1020.

therein, did advise and consent to the ratification of the aforesaid convention subject to the following reservation:

"The extension of this convention to the Overseas Territories of the French Republic, referred to in Article 29, and the adjustments in the provisions of this convention, referred to in Article 30(3), shall become effective for the United States only in ac cordance with the procedure set forth in Article II, Section 2, of the Constitution of the United States.";

WHEREAS the aforesaid convention was duly ratified by the President of the United States of America on June 19, 1968, in pursuance of the aforesaid advice and consent of the Senate and subject to the aforesaid reservation, and the aforesaid convention was duly ratified on the part of the French Republic;

WHEREAS it is provided in Article 31 of the aforesaid convention that it shall enter into force one month after the date of exchange of the instrument of ratification, the provisions thereof to be effective as prescribed in Article 31;

WHEREAS the respective instruments of ratification of the aforesaid convention were duly exchanged at Washington on July 11, 1968;

AND WHEREAS, in accordance with Article 31 of the aforesaid convention, the convention enters into force on August 11, 1968, one month after the date of exchange of the instruments of ratification;

NOW, THEREFORE, be it known that I, Lyndon B. Johnson, President of the United States of America, do hereby proclaim and make public the aforesaid convention, to the end that the same and every article and clause thereof may be observed and fulfilled in good faith on and after August 11, 1968, by the United States of America and by the citizens of the United States of America and all other persons subject to the jurisdiction thereof, subject to the aforesaid reservation.

IN TESTIMONY WHEREOF, I have hereunto set my hand and caused the Seal of the United States of America to be affixed.

DONE at the city of Washington this seventeenth day of July in the year of our Lord one thousand nine hundred sixty-eight [SEAL] and of the Independence of the United States of America. the one hundred ninety-third.

By the President:

DEAN RUSK

Secretary of State

LYNDON B. JOHNSON

A professor who is a resident of France engaged in research at a university in the United States is exempt from Federal tax on income incident thereto under Article 10 of the United States-France Income Tax Convention; Revenue Ruling 66–357 amplified.

UNITED STATES-FRANCE INCOME TAX CONVENTION

(Also Part I, Section 894; 26 CFR 1.894-1.) T.D. 5499, C.B. 1946-1, 134; Section 7.420 (redesignated 514.111): Compensation for labor or personal services.

Rev. Rul. 68-353

Advice has been requested whether a professor who is a resident of France and engaged in research activities for a university in the

United States is exempt from Federal income tax liability on income derived from such activities.

A, a resident of France, is a professor at a university in that country on leave from his regular duties. He is presently in the United States under a fellowship for the purpose of engaging in research in the capacity of research assistant for a university in the United States. He does not maintain an office or other fixed place in the United States incident to the practice of his profession.

Article 10 of the United States-France Tax Convention provides as follows:

Income from the exercise of a liberal profession shall be taxable only in the State in which the professional activity is exercised. There is the exercise of a liberal profession in one of the two contracting States only when the professional activity has a fixed center in that country.

In Revenue Ruling 66-357, C.B. 1966–2, 564, it is concluded, in general, that under Article 10 of the tax treaty between the United States and France, a teacher or professor who practices his profession in the United States and at the time his stay in the United States begins, is neither a citizen nor a resident of the United States, but is a resident of France, is exempt from U.S. tax on income from the practice of such profession in the United States if he does not maintain at some time during the taxable year an office or other fixed place in the United States incident to the practice of his profession.

Engaging in research for a college or university is a sufficiently common adjunct to typical academic duties to preclude limiting the term "professor" to individuals who have teaching responsibilities. Accordingly, since A is engaged in research activities for a university in the United States his income derived therefrom is exempt from United States income tax under the provisions of Article 10 of the tax treaty between the United States and France.

Revenue Ruling 66-357 is amplified.

Remuneration received by a citizen and resident of Switzerland serving as a visiting lecturer at a United States university during an academic year is exempt under Article XII of the U.S.-Swiss Confederation Income Tax Convention, even though he subsequently becomes a resident of the United States.

UNITED STATES-SWISS CONFEDERATION INCOME TAX

CONVENTION

T.D. 6149, C.B. 1955-2, 814; 26 CFR 509.115:
Visiting professors or teachers.

(Also Part I, Section 894; 1.894-1.)

Rev. Rul. 68-646

A citizen and resident of Switzerland, a lecturer at a Swiss Uni versity, arrived in the United States on October 1, 1966, and served as a visiting lecturer at a university in the United States during the academic year ended June 30, 1967. On July 1, 1967, he accepted and began serving an appointment with tenure as a professor at the university in the United States and, at that time, his status in the United

States changed from that of a nonresident alien to that of a resident alien. He did not pay taxes to Switzerland on the remuneration he received from the university in the United States during the period October 1, 1966, through June 30, 1967.

Held, under Article XII of the United States-Swiss Confederation Income Tax Convention, T.D. 6149, C.B. 1955-2, 814, the professor is exempt from United States Federal income tax on the remuneration he received from the United States university as a visiting lecturer, for the period October 1, 1966, through June 30, 1967. There is no requirement in the Convention, as a prerequisite for exemption from United States Federal income tax under Article XII of the Convention on income otherwise taxable, that a tax on such income must have been paid or be payable to Switzerland. All that is required is that he be a nonresident of the United States and a resident of Switzerland for the entire period for which he claims the benefits of Article XII of the Convention, up to a maximum of two years.

UNITED STATES-UNITED KINGDOM INCOME TAX CONVENTION 1

Effective January 1, 1969, the income tax treaty between the United States and the United Kingdom that was extended to Jamaica (including the Cayman Islands) in 1959 will no longer apply to the Cayman Islands. The termination has been achieved in accordance with procedure provided for in the convention. It does not affect any other aspect of the tax convention between the United States and United Kingdom.

Pursuant to an agreement between the United States and the United Kingdom, C.B. 1960-2, 653, the tax convention of April 16, 1945, C.B. 1947-1, 209, as modified by protocols signed on June 6, 1946, C.B. 1947-1, 217; May 25, 1954, Č.B. 1957-1, 665; and August 19, 1957, C.B. 1958-2, 1078; was extended to a number of British overseas territories, including Jamaica, as of January 1, 1959 (Announcement 59-21, I.R.B. 1959-11, 51). The United States considered that the extension of the treaty to Jamaica also made it applicable to the Cayman Islands which were then under the same administrative organization as Jamaica.

Jamaica attained its independence on August 6, 1962, and assumed all the obligations and responsibilities that had previously been in force under the United States-United Kingdom income tax treaty. The Cayman Islands, however, remained a dependent territory under British jurisdiction.

The Treasury Department has received inquiries as to whether the U.S.-U.K. tax treaty, as extended to Jamaica, continued to apply in the case of the Cayman Islands.

The British Government's view is that the tax convention never applied to the Cayman Islands, even though the Islands were administered together with Jamaica.

The United States considers the matter to be largely academic, since the Cayman Islands do not impose an income tax, and, therefore, such

1 Based on Treasury Department Release F-1378, dated October 4, 1968.

key provisions of the treaty as the reduced U.S. withholding tax on dividends would in any case not be applicable.

Nevertheless, to eliminate any further questions concerning the application of the convention in the future, the United States, on June 30, 1968, gave notice to the British Government terminating its application to the Cayman Islands after December 31, 1968.