The Government of the United States of America and the Government of the Polish People's Republic, desiring to further expand and facilitate mutual economic relations, have resolved to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and have agreed upon the following: 　　　　　　　　　　　　　 ARTICLE 1 　 　　　　　　　　　　 Scope of Convention 　　This Convention shall apply to persons who are residents of one or both of the Contracting States. ARTICLE 2 Taxes Covered by the Convention 　　(1) This Convention shall apply to taxes on income imposed by each Contracting State. 　　(2) The taxes existing at present, to which the Convention applies, are: 　　(a) In the case of the Polish People's Republic: 　　(i) The income tax, 　　(ii) The tax on salaries and wages, and 　　(iii) The equalization tax (Surtax), and 　　(b) In the case of the United States of America, the Federal income taxes imposed by the Internal Revenue Code (other than employment taxes imposed by chapters 2 and 21). 　　(3) The Convention shall also apply to any identical or substantially similar taxes which are subsequently imposed in addition to, or in place of, the existing taxes. 　　(4) For the purpose of Article 21, this Convention shall also apply to taxes imposed at the national, state, or local level, subject to any limitation contained in paragraph (4) of Article 21. 　　(5) The competent authorities of the Contracting States shall notify each other of any amendments of the tax laws referred to in paragraph (2) and of the adoption of any taxes referred to in paragraph (3) by transmitting the texts of any amendments or new statutes at least once a year. ARTICLE 3 General Definitions 　　(1) In this Convention, unless the context otherwise requires: 　　(a) The term "Poland" means the Polish People's Republic, and when used in a geographical sense the term "Poland" includes: 　　(i) The territorial sea thereof, and 　　(ii) The seabed and subsoil of the submarine areas adjacent to the coast thereof, but beyond the territorial sea, over which Poland exercises Sovereign rights, in accordance with international law, for the purpose of exploration for and exploitation of the natural resources of such areas, but only to the extent that the person, property, or activity to which this Convention is being applied is connected with such exploration or exploitation. 　　(b) The term "United States" means the United States of America, and when used in a geographical sense the term "United States" means the States thereof and the District of Columbia and also includes: 　　(i) The territorial sea thereof, and 　　(ii) The seabed and subsoil of the submarine areas adjacent to the coast thereof, but beyond the territorial sea, over which the United States exercises sovereign rights, in accordance with international law, for the purpose of exploration for and exploitation of the natural resources of such areas, but only to the extent that the person, property, or activity to which this Convention is being applied is connected with such exploration or exploitation. 　　(c) The terms "Contracting State" and "the other Contracting State" mean the Polish People's Republic or the United States of America as the context requires. 　　(d) The term "person" includes an individual, a trustee or administrator, a company or juridical person, and any other body of persons. 　　(e) The term "company" means any corporate body or any entity which is treated as a corporate body for tax purposes. 　　(f) (i) The term "Polish company" means a corporation, or any unincorporated entity treated as a Polish corporation for purposes of Polish tax, which is created or organized under the laws of Poland; and 　　(ii) The term "United States company" means a corporation, or any unincorporated entity treated as a United States corporation for purposes of United States tax, which is created or organized under the laws of the United States or any state thereof or the District of Columbia. 　　(g) The term "resident of Poland" means: 　　(i) A Polish company, and 　　(ii) Any person (except a company or any entity treated under Polish law as a company) resident in Poland for purposes of its tax, but in the case of a partnership, trustee or administrator only to the extent that the income derived by such person in that capacity is subject to Polish tax as the income of a resident. 　　(h) The term "resident of the United States" means: 　　(i) A United States company, and 　　(ii) Any person (except a company or any entity treated as a corporation for United States tax purposes) resident in the United States for purposes of its tax, but in the case of a partnership, trustee or administrator only to the extent that the income derived by such person in that capacity is subject to United States tax as the income of a resident. 　　(i) The terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean, respectively, an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State. 　　(j) The term "competent authority" means: 　　(i) In the case of Poland, the Minister of Finance; and 　　(ii) In the case of the United States, the Secretary of the Treasury or his delegate. 　　(k) The term "State" means any national State, whether or not one of the Contracting States. 　　(l) The term "tax" means any tax imposed by the United States or Poland, whichever is applicable, to which this Convention applies by virtue of Article 2. 　　(m) The term "international traffic" means any voyage of a ship or aircraft operated by a resident of a Contracting State except where such voyage is confined solely to places within that Contracting State. 　　(2) Any other term used in this Convention and not defined in this Convention shall, unless the context otherwise requires, have the meaning which it has under the laws of the Contracting State whose tax is being determined. Notwithstanding the preceding sentence, if the meaning of such a term under the laws of one of the Contracting States is different from the meaning of the term under the laws of the other Contracting State, or if the meaning of such a term is not readily determinable under the laws of one of the Contracting States, the competent authorities of the Contracting States may, in order to prevent double taxation or to further any other purpose of this Convention, establish a common meaning of the term for the purposes of this Convention. ARTICLE 4 Fiscal Residence 　　Where by reason of the provisions of paragraphs (1) (g) and (h) of Article 3 an individual is a resident of both Contracting States: 　　(a) He shall be deemed to be a resident of that Contracting State in which he maintains his permanent home. If he has a permanent home in both Contracting States or in neither of the Contracting States, he shall be deemed to be a resident of that Contracting State with which his personal and economic relations are closest (center of vital interests) 　　(b) If the Contracting State in which he has his center of vital interests cannot be determined, he shall be deemed to be a resident of that Contracting State in which he has a habitual abode; and 　　(c) If he has a habitual abode in both Contracting States or in neither of the Contracting States, he shall be deemed to be a resident of the Contracting State of which he is a citizen. ARTICLE 5 General Rules of Taxation 　　(1) A resident of one of the Contracting States may be taxed by the other Contracting State on any income from sources within that other Contracting State and only on such income, subject to any limitations set forth in this Convention. 　　(2) The provisions of this Convention shall not be construed to restrict in any manner any exclusion, exemption, deduction, credit, or other allowance now or hereafter accorded - 　　(a) By the laws of one of the Contracting States in the determination of the tax imposed by that Contracting State, or 　　(b) By any other agreement between the Contracting States. 　　(3) Notwithstanding any provisions of this Convention except paragraph (4), a Contracting State may tax a citizen of that Contracting State or a resident (as determined under Article 4) of that Contracting State as if this Convention had not come into effect. 　　(4) The provisions of paragraph (3) shall not affect: 　　(a) The benefits conferred by a Contracting State under Articles 20, 21, and 22; and 　　(b) The benefits conferred by a Contracting State under Articles 17, 18, 19, and 24 upon individuals who are neither citizens of, nor have immigrant status in, that Contracting State. 　　(5) The competent authorities of the two Contracting States may prescribe regulations necessary to carry out the provisions of this Convention. 　　　　　　　　　　　　　　ARTICLE 6 　　　　　　　　　　Permanent Establishment 　　(1) For the purposes of this Convention, the term "permanent establishment" means a fixed place of business in which the business of an enterprise is wholly or partly carried on. 　　(2) The term "permanent establishment" shall include especially: 　　(a) A branch; 　　(b) An office; 　　(c) A factory; 　　(d) A workshop; 　　(e) A mine, quarry, or other place of extraction of natural resources; 　　(f) A building site or construction or assembly project which exists for more than 18 months. 　　(3) Notwithstanding paragraphs (1) and (2), a permanent establishment shall not include a fixed place of business used only for one or more of the following: 　　(a) The use of facilities for the purpose of storage, display, or delivery of goods or merchandise belonging to the enterprise; 　　(b) The maintenance of a stock of goods or merchandise belonging to the enterprise for the purpose of storage, display, or delivery; 　　(c) The maintenance of a stock of goods or merchandise belonging to the enterprise for the purpose of processing or reprocessing by another enterprise; 　　(d) The maintenance of a fixed place of business for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise; or 　　(e) The maintenance of a fixed place of business for the purpose of advertising, for the supply of information, for scientific research, or for similar activities which have a preparatory or auxiliary character, for the enterprise. 　　(4) A person acting in a Contracting State on behalf of an enterprise of the other Contracting State, other than an agent of an independent status to whom paragraph (5) applies, shall be deemed to be a permanent establishment in the first-mentioned Contracting State if he has, and habitually exercises in that State, an authority to conclude contracts in the name of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise. 　　(5) An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent, or any other agent of an independent status, where such person is acting in the ordinary course of his business, whether or not such broker or agent acts exclusively for one or more principals. 　　(6) An enterprise of one of the Contracting States shall not be deemed to have a permanent establishment in the other Contracting State merely because such enterprise sells at the termination of a trade fair in such other Contracting State goods or merchandise which such enterprise displayed at such trade fair. 　　(7) The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other Contracting State (whether through a permanent establishment or otherwise), shall not of itself constitute for either company a permanent establishment of the other. ARTICLE 7 Income from Real Property 　　(1) Income from real property, including royalties and other payments in respect of the exploitation of natural resources and gains derived from the sale, exchange, or other disposition of such property or of the right giving rise to such royalties or other payments, may be taxed by the Contracting State in which such real property or natural resources are situated. For purposes of this Convention, interest on indebtedness secured by real property or secured by a right giving rise to royalties or other payments in this respect of the exploitation of natural resources shall not be regarded as income from real property. 　　(2) Paragraph (1) shall apply to income derived from the usufruct, direct use, letting, or use in any other form of real property. ARTICLE 8 Business Profits 　　(1) The profits of an enterprise of a Contracting State shall be taxable only by that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed by the other Contracting State but only so much of them as is attributable to that permanent establishment. 　　(2) Where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment. 　　(3) In the determination of the profits of a permanent establishment there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere. 　　(4) No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment, or by the enterprise of which it is a permanent establishment, of goods or merchandise for the enterprise. 　　(5) Where profits include items of income which are dealt with separately in other articles of this Convention, the provisions of those articles shall, except as otherwise provided therein, supercede the provisions of this Article. 　　　　　　　　　　　　　ARTICLE 9 　　　　　　　　　Shipping and Air Transport 　　(1) Notwithstanding Articles 8 and 14, income which a resident of Poland derives from the operation in international traffic of ships or aircraft shall be exempt from tax by the United States. 　　(2) Notwithstanding Articles 8 and 14, income which a resident of the United States derives from the operation in international traffic of ships or aircraft registered in the United States shall be exempt from tax by Poland. 　　(3) For purposes of this Article, income derived from the operation in international traffic of ships or aircraft also includes- 　　(a) Income derived from the charter of ships or aircraft operated in international traffic if such income is supplementary to other income described in paragraph (1) or (2); and 　　(b) Income derived from the use, maintenance, and lease of - 　　(i) Containers, 　　(ii) Trailers for the inland transport of containers, 　　(iii) Lighters operated in the lighters-aboard-ship system, and 　　(iv) Other related equipment in connection with the operation in international traffic of ships or aircraft by the resident described in paragraph (1) or (2). ARTICLE 10 Related Persons 　　(1) Where: 　　(a) An enterprise of a Contracting State participates directly or indirectly in the management, control, or capital of an enterprise of the other Contracting State, or 　　(b) The same persons participate directly or indirectly in the management, control, or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. 　　(2) Where an adjustment has been made by one Contracting State to the income of one of its residents in accordance with paragraph (1), then the other Contracting State shall, if it agrees with such redetermination, make a corresponding adjustment to the income of a person in such other Contracting State related to such resident. In the event the other Contracting State disagrees with such redetermination, the two Contracting States shall endeavor to reach agreement in accordance with the mutual agreement procedure in Article 22. ARTICLE 11 Dividends 　　(1) Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed by that other Contracting State. 　　(2) However, such dividends may be taxed in the Contracting State of which the company paying the dividends is a resident, and according to the law of that State, but the tax so charged shall not exceed: 　　(a) 5 percent of the gross amount of the dividends if the recipient is a company which holds directly at least 10 percent of the outstanding shares of the voting stock of the company paying the dividends, 　　(b) In all other cases, 15 percent of the gross amount of the dividends. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. 　　(3) The provisions of paragraph (2) shall not apply if the recipient of the dividends, being a resident of a Contracting State, has in the other Contracting State, of which the company paying the dividends is a resident, a permanent establishment with which the holding by virtue of which the dividends are paid is effectively connected. In such a case, the provisions of Article 8 shall apply.