International traffic profits limited to source-state taxation under treaty; includes container rental and incidental interest.

Profits from the operation of ships or aircraft in international traffic are taxable only in the enterprise's State of residence, covering transport of passengers, goods, mail and livestock, and extending to participation in pools, joint businesses and international operating agencies. Income from use or rental of containers and related equipment used in international traffic is taxable solely in the resident State unless used only within the other Contracting State. Interest directly connected with such operations is regarded as incidental operational profit and is excluded from the separate interest provisions.

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