Article 8-11

(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.

(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).

(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.

(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.

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