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- (1) Subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom (which shall not affect the general principle hereof):
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- (a) Polish tax payable under the laws of Poland and in accordance with this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within Poland (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Polish tax is computed;
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- (b) in the case of a dividend paid by a company which is a resident of Poland to a company which is a resident of the United Kingdom and which controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividend, the credit shall take into account (in addition to any Polish tax for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the Polish tax payable by the company in respect of the profits out of which such dividend is paid.
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- (2) In the case of Poland, double taxation shall be avoided as follows:
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- (a) Where a resident of Poland derives income which, in accordance with the provisions of this Convention is taxed in the United Kingdom, Poland shall, subject to the provisions of sub-paragraph (b) of this paragraph exempt such income from tax.
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- (b) Where a resident of Poland derives income or capital gains which, in accordance with the provisions of Articles 10, 11, 12 or 13 of this Convention, may be taxed in the United Kingdom, Poland shall allow as a deduction from the tax on the income or capital gains of that resident an amount equal to the tax paid in the United Kingdom. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable to such income or capital gains derived from the United Kingdom.
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- (c) Where in accordance with any provision of this Convention, income derived by a resident of Poland is exempt from tax in Poland, Poland may nevertheless, in calculating the amount of tax on the remaining income or capital gains of such resident, take into account the exempted income.
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- (3) For the purposes of paragraphs (1) and (2) of this Article, profits, income and capital gains owned by a resident of a Contracting State which may be taxed in the other Contracting State in accordance with this Convention shall be deemed to arise from sources in that other State.
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- (4) Notwithstanding the provisions of the preceding paragraphs of this Article:
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- (a) Where gains may be taxed by a Contracting State by reason only of paragraph (6) of Article 13 of this Convention, that Contracting State and not the other Contracting State shall eliminate double taxation in accordance with the methods set out in this Article as if the gains arose from sources in that other Contracting State
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- (b) Where gains may be taxed by a Contracting State by reason of paragraphs (1), (2) or (3) of Article 13 of this Convention, the other Contacting State and not the first-mentioned Contracting State, shall eliminate double taxation in accordance with the methods set out in this Article.