Income tax treaty PDF

UNITED STATES - POLAND INCOME TAX CONVENTION
Convention signed at Washington October 8, 1974;
Ratification advised by the Senate of the United States of America November 18, 1975;
Ratified by the President of the United States of America December 15, 1975;
Ratified by the Polish People's Republic June 10, 1976;
Proclaimed by the President of the United States of America July 23, 1976;
Entered into force July 22, 1976;
GENERAL EFFECTIVE DATE UNDER ARTICLE 25: 1 JANUARY 1974
TABLE OF ARTICLES
Article 1----------------------------------Scope of Convention
Article 2----------------------------------Taxes Covered by the Convention
Article 3----------------------------------General Definitions
Article 4----------------------------------Fiscal Residence
Article 5----------------------------------General Rules of Taxation
Article 6----------------------------------Permanent Establishment
Article 7----------------------------------Income from Real Property
Article 8----------------------------------Business Profits
Article 9----------------------------------Shipping and Air Transport
Article 10--------------------------------Related Persons
Article 11--------------------------------Dividends
Article 12--------------------------------Interest
Article 13--------------------------------Royalties
Article 14--------------------------------Capital Gains
Article 15--------------------------------Independent Personal Services
Article 16--------------------------------Dependent Personal Services
Article 17--------------------------------Teachers
Article 18--------------------------------Students and Trainees
Article 19--------------------------------Governmental Functions
Article 20--------------------------------Relief from Double Taxation
Article 21--------------------------------Nondiscrimination
Article 22--------------------------------Mutual Agreement Procedure
Article 23--------------------------------Exchange of Information
Article 24--------------------------------Diplomatic and Consular Officers
Article 25--------------------------------Entry into force
Article 26--------------------------------Termination
Letter of Submittal---------------------of 11 December, 1974
Letter of Transmittal-------------------of 23 January, 1975
Notes of Exchange---------------------of 8 October, 1974
The “Saving Clause”-------------------Paragraph 3 of Article 5
MESSAGE

FROM
THE PRESIDENT OF THE UNITED STATES
TRANSMITTING
THE CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED STATES OF
AMERICA AND THE GOVERNMENT OF THE POLISH PEOPLE'S REPUBLIC FOR THE
AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL
EVASION WITH RESPECT TO INCOME, AND A RELATED EXCHANGE OF NOTES,
SIGNED AT WASHINGTON ON OCTOBER 8, 1974
LETTER OF SUBMITTAL
DEPARTMENT OF STATE,
Washington, December 11, 1974.
THE PRESIDENT,
The White House.
The PRESIDENT: I have the honor to submit to you, with a view to its transmission to the
Senate for advice and consent to ratification, the Convention between the Government of the
United States of America and the Government of the Polish People's Republic for the Avoidance
of Double Taxation and the Prevention of Fiscal Evasion with Respect to Income, and a related
exchange of notes, signed at Washington on October 8, 1974.
The Convention deals mainly with Federal income taxes in the case of the United States and
with substantially similar income taxes specified in Article 2 (2) (a) in the case of Poland. The
provision relating to nondiscrimination applies, however, to taxes of every kind imposed at the
national, state, or local 1evel.
This Convention is similar to other recent tax conventions concluded by this government. It
incorporates the same basic principles with respect to the taxation of business income, personal
service income and income from investments, and includes provisions for nondiscriminatory tax
treatment and for reciprocal administrative cooperation.
Pursuant to this Convention profits derived by a business enterprise of one country would be
subject to taxation by the other country only to the extent that the profits are attributable to a
“permanent establishment”' in that other country. Employees of a firm are not taxable by the host
country on their personal service income unless the services are performed there during a stay
lasting longer than six months during the taxable year concerned. Withholding taxes imposed on
income going from one country to residents of the other country will be limited to 15 percent on
portfolio dividends, 5 percent on dividends from a share holding of 10 percent or more, and 10
percent on royalties and film rentals, and interest will be exempt from tax. In the absence of a
convention the United States tax rate has been 30 percent of the gross amount, and the Polish tax,

although computed at graduated rates, also reaches 30 percent of the gross amount.
A technical memorandum explaining in detail the provisions and effect of the Convention is
being prepared by the Department of the Treasury and will be submitted to the Senate Foreign
Relations Committee for consideration in connection with the Convention.
Upon entry into force, this Convention will be effective from January 1, 1974, and will
remain in force for a minimum period of five years. After the initial five year period it will
remain in force indefinitely until terminated by either State.
The Department of the Treasury, with the cooperation of the Department of State, was
primarily responsible for the negotiation of the Convention. It has the approval of both
Departments.
Respectfully submitted,
ROBERT S. INGERSOLL.
LETTER OF TRANSMITTAL
THE WHITE HOUSE, January 23, 1975.
To the Senate of the United States:
I transmit herewith, for Senate advise and consent to ratification, the Convention between the
Government of the United States of America and the Government of the Polish People’s
Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with
Respect to Income as well as a related exchange of notes.
I also transmit for the information of the Senate, the report of the Department of State with
respect to this Convention.
The Convention was signed on October 8, 1974, during the visit to Washington of Polish
First Secretary Edward Gierek and is the first income tax convention between the two countries.
The Convention is similar to other income tax conventions recently concluded by this
Government and it is expected to encourage and support the growing interest in bilateral trade
and investment between the two countries. It provides rules of tax jurisdiction, reduces or
eliminates tax liability in certain cases, ensures nondiscriminatory tax treatment and provides for
administrative cooperation.
I recommend that the Senate give this Convention and related exchange of notes early and
favorable consideration and give its advice and consent to ratification.
GERALD R. FORD.

BY THE PRESIDENT OF THE UNITED STATES OF AMERICA
A PROCLAMATION
CONSIDERING THAT:
The Convention between the United States of America and the Polish People's Republic for
the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on
income and a related exchange of notes were signed at Washington on October 8, 1974, the texts
of which Convention and related notes, are hereto annexed;
The Senate of the United States of America by its resolution of November 18, 1975, two-
thirds of the Senators present concurring therein, gave its advice and consent to ratification of the
Convention and related notes;
The Convention and related notes were ratified by the President of the United States of
America on December 15, 1975, in pursuance of the advice and consent of the Senate, and was
duly ratified on the part of the Polish People's Republic on June 10, 1976;
It is provided in Article 25 of the Convention that the Convention shall enter into force thirty
days after the date of exchange of instruments of ratification, with effectiveness from January 1,
1974, with respect to income;
The instruments of ratification of the Convention were exchanged at Warsaw on June 22,
1976; and accordingly the Convention and related notes, enter into force on July 22, 1976, with
effectiveness from January 1, 1974, with respect to income;
NOW, THEREFORE, I, Gerald R. Ford, President of the United States of America, proclaim
and make public the Convention and related notes, to the end that they shall be observed and
fulfilled with good faith on and after July 22, 1976, 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.
IN TESTIMONY WHEREOF, I have signed this proclamation and caused the Seal of the
United States of America to be affixed.
DONE at the city of Washington this twenty-third day of July in the year of our Lord one
thousand nine hundred seventy-six and of the Independence of the United States of America the
two hundred first.
By the President:
GERALD R. FORD
Henry A. Kissinger
Secretary of State

CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED STATES OF
AMERICA AND THE GOVERNMENT OF THE POLISH PEOPLE'S REPUBLIC FOR THE
AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION
WITH RESPECT TO TAXES ON INCOME
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.
ARTICLE 12
Interest
(1) Interest arising in a Contracting State and paid to a resident of the other Contracting State
shall be exempt from tax by the first-mentioned Contracting State.
(2) Paragraph (1) shall not apply if the recipient of the interest, being a resident of one of the
Contracting States, has a permanent establishment in the other Contracting State and the
indebtedness giving rise to the interest is effectively connected with such permanent
establishment. In such a case, the provisions of Article 8 shall apply.
(3) Where, owing to a special relationship between the payer and the recipient or between
both of them and some other person, the amount of interest paid, having regard to the debt-claim
for which it is paid, exceeds the amount which would have been agreed upon by payer and the
recipient in the absence of such relationship, the provisions of this Article shall apply only to the
last-mentioned amount. In that case, the excess part of the payments shall remain taxable
according to the law of each Contracting State, due regard being had to the other provisions of
this Convention.
(4) The term “interest” as used in this Convention means income from bonds, debentures,
Government securities, notes, or other evidence of indebtedness, whether or not secured and
whether or not carrying a right to participate in profits, and debt claims of every kind, as well as
all other income which, under the taxation law of the Contracting State in which the income
arises, is assimilated to income from money lent.
(5) Interest shall be treated as arising in a Contracting State only if paid by such Contracting
State, a political subdivision or a local authority thereof, or by a resident of that Contracting
State. Notwithstanding the preceding sentence-
(a) If the person paying the interest (whether or not such person is a resident of
one of the Contracting States) has a permanent establishment in one of the Contracting
States in connection with which the indebtedness on which the interest is paid was
incurred and such interest is borne by such permanent establishment, or
(b) If the person paying the interest is a resident of one of the Contracting States
and has a permanent establishment in a State other than a Contracting State in connection

with which the indebtedness on which the interest is paid was incurred and such interest
is paid to a resident of the other Contracting State, and such interest is borne by such
permanent establishment,
such interest shall be deemed to arise in the State in which the permanent establishment is
situated.
ARTICLE 13
Royalties
(1) Royalties arising in a Contracting State and paid to a resident of the other Contracting
State shall be taxable by that other Contracting State.
(2) Royalties may be taxed in the Contracting State where they arise, and according to the
law of that State, but the tax so charged shall not exceed 10 percent of the gross amount of the
royalty.
(3) The term “royalties” as used in this Article means-
(a) Payments of any kind received as consideration for the use of, or the right to
use, any copyright of a literary, artistic or scientific work, including copyrights of motion
picture films or radio or television broadcasting tapes, any patent, trademark, design or
model, plan, secret formula or process, or for information concerning industrial,
commercial, or scientific experience or skill (know-how), and
(b) Gains derived from the sale, exchange, or other disposition of any such
property or rights to the extent that the amounts realized on such sale, exchange, or other
disposition for consideration are contingent on the productivity, use, or disposition of
such property or rights.
(4) The provisions of paragraph (2) shall not apply if the recipient of the royalties, being a
resident of a Contracting State, has in the other Contracting State in which the royalties arise, a
permanent establishment with which the right or property giving rise to the royalties is
effectively connected. In such a case, the provisions of Article 8 shall apply.
(5) Royalties shall be deemed to arise in a Contracting State only to the extent that such
royalties are payments made as consideration for the use of, or the right to use, property or rights
described in paragraph (3) within that Contracting State.
(6) Where, owing to a special relationship between the payer and the recipient or between
both of them and some other person, the amount of the royalties paid, having regard to the use,
right, or information for which they are paid, exceeds the amount which would have been agreed
upon by the payer and the recipient in the absence of such relationship, the provisions of this
Article shall apply only to the last-mentioned amount. In that case, the excess part of the
payments shall remain taxable according to the law of each Contracting State, due regard being
had to the other provisions of this Convention.

ARTICLE 14
Capital Gains
(1) A resident of one of the Contracting States shall be exempt from tax by the other
Contracting State on gains from the sale, exchange, or other disposition of capital assets unless-
(a) The gain is derived by a resident of one of the Contracting States from the
sale, exchange, or other disposition of property described in Article 7 situated within the
other Contracting State,
(b) The recipient of the gain, being a resident of one of the Contracting States, has
a permanent establishment in the other Contracting State and the property giving rise to
the gain is effectively connected with such permanent establishment, or
(c) The recipient of the gain, being an individual who is a resident of one of the
Contracting States is present in the other Contracting State for a period or periods
aggregating 183 days or more during the taxable year.
(2) In the case of gains described in paragraph (1) (a), see Article 7. In the case of gains
described in paragraph (1) (b), the provisions of Article 8 shall apply.
ARTICLE 15
Independent Personal Services
(1) Income derived by a resident of a Contracting State in respect of professional services or
other independent activities may be taxed by that Contracting State. Except as provided in
paragraph (2), such income shall be exempt from tax by the other Contracting State.
(2) Income described in paragraph (1) which is derived by an individual who is a resident of
one of the Contracting States from the performance of personal services in an independent
capacity in the other Contracting State may be taxed by that other Contracting State if the
individual is present in that other Contracting State for a period or periods aggregating 183 days
or more during the taxable year.
(3) The term "professional services" includes especially independent scientific, literary, and
artistic activities, as well as the independent activities of physicians, lawyers, engineers,
architects, dentists, journalists, and others.
ARTICLE 16
Dependent Personal Services
(1) Salaries, wages, and other similar remuneration derived by a resident of a Contracting
State in respect of an employment shall be taxable only by that Contracting State unless the
employment is exercised in the other Contracting State. If the employment is so exercised, such
remuneration as is derived therefrom may be taxed by the other Contracting State.
(2) Notwithstanding the provisions of paragraph (1), remuneration derived by a resident of a

Contracting State in respect of an employment exercised in the other Contracting State shall be
taxable only by the first-mentioned Contracting State if:
(a) The recipient is present in the other Contracting State for a period or periods
in the aggregate less than 183 days during the taxable year concerned, and
(b) The remuneration is paid by, or on behalf of, an employer who is not a
resident of the other Contracting State, and
(c) The remuneration is not borne by a permanent establishment which the
employer has in the other Contracting State.
(3) Notwithstanding paragraph (2), remuneration derived by an individual from the
performance of labor or personal services as an employee aboard ships or aircraft operated by a
resident of one of the Contracting States in international traffic shall be exempt from tax by the
other Contracting State if such individual is a member of the regular complement of the ship or
aircraft.
ARTICLE 17
Teachers
(1) Where a resident of one of the Contracting States is invited by the Government of the
other Contracting State, a political subdivision or a local authority thereof, or by a university or
other recognized educational institution in that other Contracting State to come to that other
Contracting State for a period not expected to exceed 2 years for the purpose of teaching or
engaging in research, or both, at a university or other recognized educational institution and such
resident comes to that other Contracting State primarily for such purpose, his income from
personal services for teaching or research at such university or educational institution shall be
exempt from tax by that other Contracting State for a period not exceeding 2 years from the date
of his arrival in that other Contracting State.
(2) This Article shall not apply to income from research if such research is undertaken not in
the public interest but primarily for the private benefit of a specific person or persons.
ARTICLE 18
Students and Trainees
(1)(a) An individual who is a resident of one of the Contracting States at the time he
becomes temporarily present in the other Contracting State and who is temporarily
present in that other Contracting State for the primary purpose of-
(i) Studying at a university or other recognized educational institution in
that other Contracting State, or
(ii) Securing training required to qualify him to practice a profession or
professional specialty, or
(iii) Studying or doing research as a recipient of a grant, allowance, or
award from a governmental, religious, charitable, scientific, literary, or
educational organization,

shall be exempt from tax by that other Contracting State with respect to amounts described in
subparagraph (b) for a period not exceeding 5 taxable years from the date of his arrival in that
other Contracting State.
(b) The amounts referred to in subparagraph (a) are-
(i) Gifts from abroad for the purpose of his maintenance, education, study,
research, or training;
(ii) The grant, allowance, or award;
(iii) Any other payment from the Contracting State of which the individual
is a resident, except income from the performance of personal services; and
(iv) Income from personal services performed in that other Contracting
State in an amount not in excess of 2,000 United States dollars or its equivalent in
Polish zlotys for any taxable year.
(2) An individual who is a resident of one of the Contracting States at the time he becomes
temporarily present in that other Contracting State as an employee of, or under contract with, a
resident of the first-mentioned Contracting State, for the primary purpose of-
(a) Acquiring technical, professional, or business experience from a person other
than that resident of the first-mentioned Contracting State or other than a person related
to such resident, or
(b) Studying at a university or other recognized educational institution in that
other Contracting State, shall be exempt from tax by that other Contracting State for a
period not exceeding 1 year with respect to his income from personal services in an
aggregate amount not in excess of 5,000 United States dollars or its equivalent in Polish
zlotys.
(3) An individual who is a resident of one of the Contracting States at the time he becomes
temporarily present in the other Contracting State and who is temporarily present in that other
Contracting State for a period not exceeding 1 year, as a participant in a program sponsored by
the Government of that other Contracting State, for the primary purpose of training, research, or
study; shall be exempt from tax by that other Contracting State with respect to his income from
personal services in respect of such training, research, or study performed in that other
Contracting State in an aggregate amount not in excess of 10,000 United States dollars or its
equivalent in Polish zlotys.
(4) The benefits provided under Article 17 and paragraph (1) of this Article shall, when taken
together, extend only for such period of time, not to exceed 5 taxable years from the date of
arrival of the individual claiming such benefits, as may reasonably or customarily be required to
effectuate the purpose of the visit. The benefits provided under Article 17 shall not be available
to an individual if, during the immediately preceding period, such individual enjoyed the benefits
of paragraph (1) of this Article.
ARTICLE 19
Governmental Functions
(1) Wages, salaries, and similar remuneration, including pensions, annuities, or similar

benefits, paid from public funds of one of the Contracting States to a citizen of that Contracting
State for labor or personal services performed as an employee of the national Government of that
Contracting State, or any agency thereof, in the discharge of functions of a governmental nature
shall be exempt from tax by the other Contracting State.
(2) Labor or personal services performed by a citizen of one of the Contracting States shall
be treated by the other Contracting State as performed in the discharge of governmental
functions if such labor or personal services would be treated under the internal laws of both
Contracting States as so performed.
ARTICLE 20
Relief from Double Taxation
Double taxation of income shall be avoided in the following manner:
(1) In accordance with the provisions and subject to the limitations of the law of Poland (as it
may be amended from time to time without changing the general principles hereof), Poland shall
allow to a resident of Poland as a credit against the Polish tax the appropriate amount of taxes
paid to the United States.
(2) In accordance with the provisions and subject to the limitations of the law of the United
States (as it may be amended from time to time without changing the general principles hereof),
the United States shall allow to a citizen or resident of the United States as a credit against the
United States tax the appropriate amount of taxes paid to Poland and, in the case of a United
States company owning at least 10 percent of the voting power of a Polish company from which
it receives dividends in any taxable year, shall allow credit for the appropriate amount of taxes
paid to Poland by the Polish company paying such dividends with respect to the profits out of
which such dividends are paid. Such appropriate amount shall be based upon the amount of tax
paid to Poland, but the credit shall not exceed that portion of the United States tax which such
citizen's or resident's net income from sources within Poland or on income from sources outside
of the United States bears to his entire net income for the same taxable year. For purposes of
applying the United States credit in relation to taxes paid to Poland, the taxes referred to in
paragraph (2) (a) of Article 2 shall be considered to be income taxes.
ARTICLE 21
Nondiscrimination
(1) A citizen of a Contracting State who is a resident of the other Contracting State shall not
be subject in the other Contracting State to any taxation or any requirement connected therewith
which is other or more burdensome than the taxation and connected requirements to which
citizens of that other Contracting State in the same circumstances are or may be subjected.
(2) A permanent establishment which a resident of one of the Contracting States has in the
other Contracting State shall not be subject in that other Contracting State to more burdensome

taxation than a permanent establishment of a resident of a third State carrying on the same
activities. However, this paragraph shall not require a Contracting State to grant to permanent
establishments of residents of the other Contracting State tax benefits granted by special
agreements to permanent establishments of a third State.
(3) A company of one of the Contracting States, the capital of which is wholly or partly
owned or controlled, directly or indirectly, by one or more residents of the other Contracting
State, shall not be subjected in the first-mentioned Contracting State to any taxation or any
requirement connected with taxation which is other or more burdensome than the taxation and
requirements to which a company of the first-mentioned Contracting State carrying on the same
activities, the capital of which is wholly or partly owned or controlled by one or more residents
of a third State, is or may be subjected. However, this paragraph shall not require a Contracting
State to grant to companies which are wholly or partly owned by residents of the other
Contracting State tax benefits granted by special agreements to companies which are wholly or
partly owned by residents of a third State.
(4) In this Article the term "taxation" means taxes of every kind and description, with the
exception of the Treasury residence registration fee (oplata skarbowa za zameldowanie). The
contribution for the retirement fund (skladka na cele emerytalne) made by Polish citizens shall be
regarded as a tax.
ARTICLE 22
Mutual Agreement Procedure
(1) Where a resident of a Contracting State considers that the actions of one or both of the
Contracting States result or will result for him in taxation not in accordance with this
Convention, he may, notwithstanding the remedies provided by the national laws of those States,
present his case to the competent authority of the Contracting State of which he is a resident or
citizen.
(2) The competent authority shall endeavor, if the objection appears to it to be justified and if
it is not itself able to arrive at an appropriate solution, to resolve the case by mutual agreement
with the competent authority of the other Contracting State, with a view to the avoidance of
taxation not in accordance with the Convention.
(3) The competent authorities of the Contracting States shall endeavor to resolve by mutual
agreement any difficulties or doubts arising as to the interpretation or application of the
Convention. They may also consult together for the elimination of double taxation in cases not
provided for in the Convention.
(4) The competent authorities of the Contracting States may communicate with each other
directly for the purpose of reaching an agreement in the sense of the preceding paragraphs.
(5) In the event that the competent authorities reach such an agreement, taxes shall be
imposed on such income in accordance with the agreement. Notwithstanding any procedural rule

(including statutes of limitations) applicable under the law of either Contracting State, refund or
credit of taxes shall be allowed, as appropriate, by the Contracting States in accordance with
such agreement.
ARTICLE 23
Exchange of Information
(1) The competent authorities shall exchange such information as is necessary for carrying
out the provisions of this Convention or for the prevention of fraud or for the administration of
statutory provisions concerning taxes to which this Convention applies, provided the information
is of a class that can be obtained under the laws and administrative practices of each Contracting
State with respect to its own taxes.
(2) Any information so exchanged shall be treated as secret, except that such information
may be-
(a) Disclosed to any person concerned with, or
(b) Made part of a public record with respect to, the assessment, collection, or
enforcement of, or litigation with respect to, the taxes to which this Convention applies.
(3) No information shall be exchanged which would be contrary to public policy.
(4) If specifically requested by the competent authority of a Contracting State, the competent
authority of the other Contracting State shall provide information under this article in the form of
depositions of witnesses and copies of unedited original documents (including books, papers,
statements, records, accounts, or writings), to the same extent such depositions and documents
can be obtained under the laws and administrative practices of each Contracting State with
respect to its own taxes.
(5) The exchange of information shall be either on a routine basis or on request with
reference to particular cases. The competent authorities of the Contracting States may agree on
the list of information which shall be furnished on a routine basis.
ARTICLE 24
Diplomatic and Consular Officers
Nothing in this Convention shall affect the fiscal privileges of diplomatic or consular
officials of the other Contracting State under the general rules of international law or under the
provisions of special agreements.
ARTICLE 25
Entry into Force
This Convention is subject to ratification and shall enter into force 30 days after the date of

exchange of the instruments of ratification, which shall be done at Warsaw. The provisions of the
Convention shall have effect with respect to income of calendar years or taxable years beginning
(or in the case of taxes payable at the source, payments made) on or after January 1, 1974.
ARTICLE 26
Termination
(1) This Convention shall remain in force for an indefinite period of time. It may be
terminated after 5 years from the date of entry into force provided that 6-months prior notice of
termination has been given.
(2) In the case of termination the Convention shall cease to have force with regard to income
of calendar years or taxable years beginning (or in the case of taxes payable at the source,
payments made) on or after January 1, next following the expiration of the 6-month period.
DONE at Washington this 8th day of October, 1974, in duplicate, in the English and Polish
languages, the two texts having equal authenticity.
For the Government of the For the Government of the
United States of America: Polish People’s Republic:
(s) Henry A. Kissinger, (s) Stephan Olszowski
Secretary of State Minister of Foreign Affairs.
NOTES OF EXCHANGE
DEPARTMENT OP STATE,
Washington, October 8, 1974.
His Excellency, STEFAN OLSZOWSKI,
Minister of Foreign Affairs of the Polish People's Republic
EXCELLENCY: I have the honor to refer to the Income Tax Convention between the
Government of the United States and the Government of the Polish People's Republic signed
today in Washington. During the course of negotiations, the question arose as to the effect of the
Convention upon the income taxes imposed by the states of the United States.
In that connection, I should like to note that the individual states of the United States each
have Constitutional authority to impose taxes within certain limitations. In light of this authority,
the Government of the United States has not considered it appropriate to enter into income tax
conventions which restrict or limit state taxes except to prohibit any state from imposing
discriminatory taxes.
A review of the tax laws of the states of the United States indicates that these laws generally
operate in such a manner that a resident of Poland entitled to a reduced rate of tax or to tax

exemption under the Convention would not be subject to tax by the individual states. This is also
the case as concerns Polish enterprises engaged in international traffic of ships or aircraft.
Nevertheless, I should like to assure you that if necessary, the tax authorities of the United States
will use their best efforts to secure exemption from any income taxes that may be imposed by
any of the states of the United States on such shipping or airline enterprises.
Accept, Excellency, the assurances of my highest consideration.
(s) Henry A. Kissinger,
Secretary of State of the
United States of America.
[TRANSLATION]
EMBASSY OF THE POLISH PEOPLE'S REPUBLIC,
Washington, October 8, 1974.
His Excellency, HENRY A. KISSINGER,
Secretary of State of the United States of America
EXCELLENCY: I have the honor to acknowledge the receipt of your letter dated October 8,
1974, which reads as follows:
“EXCELLENCY: I have the honor to refer to the Income Tax Convention between the
Government of the United States and the Government of the Polish People's Republic signed
today in Washington. During the course of negotiations, the question arose as to the effect of the
Convention upon the income taxes imposed by the states of the United States.
In that connection, I should like to note that the individual states of the United States each
have Constitutional authority to impose taxes within certain limitations. In light of this authority,
the Government of the United States has not considered it appropriate to enter into income tax
conventions which restrict or limit state taxes except to prohibit any state from imposing
discriminatory taxes.
A review of the tax laws of the states of the United States indicates that these laws generally
operate in such a manner that a resident of Poland entitled to a reduced rate of tax or to tax
exemption under the Convention would not be subject to tax by the individual states. This is also
the case as concerns Polish enterprises engaged in international traffic of ships or aircraft.
Nevertheless, I should like to assure you that if necessary, the tax authorities of the United States
will use their best efforts to secure exemption from any income taxes that may be imposed by
any of the states of the United States on such shipping or airline enterprises.
Accept, Excellency, the assurances of my highest consideration.”
I have the honor to acknowledge the receipt of the assurances contained in the above text.

Accept, Excellency, the expression of my highest consideration.
(s) Stefan Olszowski,
Minister of Foreign Affairs, Polish People’s Republic.