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an agency in the other Contracting State but only on so much of the activity of that agency exclusively concerned with the sale of tickets with regard to the carriage of passengers or cargo by ships and aircraft (belonging or not to that enterprise), including the connecting service.

3. In case where an air transport enterprise of one of the Contracting States participates in a pool, in a joint business or in an international operating agency, the provisions of the preceding paragraph shall also apply to profits obtained by the said enterprise through the type of cooperation described above.

Article IV. 1. Income from immovable property may be taxed in the Contracting State in which such property is situated.

2. The term "immovable property" shall be defined in accordance with the laws of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment of agricultural and forestry enterprises, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of mineral deposits, sources and other natural resources; ships, boats and aircraft shall not be regarded as immovable property.

3. The provisions of paragraphs 1 and 2 above shall apply to income derived from the direct use, or from the letting of immovable property or the use in any other form of such property, including income from agricultural or forestry enterprises. They shall likewise apply to profits from the alienation of immovable property.

4. The provisions of paragraphs 1 to 3 above shall apply to the income from immovable property of any enterprises other than agricultural or forestry enterprises and to income from immovable property used for the performance of professional services.

Article V. 1. Capital represented by immovable property, as defined in paragraph 2 of article IV, may be taxed in the Contracting State in which such property is situated.

2. Subject to the provisions of paragraph 1 above, capital represented by assets forming part of the business property employed in a permanent establishment of an enterprise, or by assets pertaining to a fixed base used for the performance of professional services, may be taxed in the Contracting State in which the permanent establishment or fixed base is situated.

3. Ships and aircraft operated in international traffic and assets other than immovable property pertaining to the operation of such ships and aircraft, shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

4. All other elements of capital of a resident of a Contracting State shall be taxable only in that State.

5. For the purpose of this article the tax on bonds (imposta sulle obbligazioni) is not deemed to be a tax on capital.

Article VI. 1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If theVol. 1332. I-22351