provides that the benefits provided in State.

Poland and, in the case of a United paragraph (1) and the benefits pro- In order to avoid a potential con- States company owning at least ten vided under Article 17 (Teachers), flict as to what constitutes govern- percent of the voting power (i.e., when taken together, may extend only mental functions, paragraph (2) pro- voting stock) of a Polish company for such period of time, not to exceed vides that labor or personal services from which it receives dividends in five taxable years from the date of the performed by a citizen of one Con- any taxable year, will allow credit individual's arrival, as may reasonably tracting State shall be treated by the for the appropriate amount of taxes or customarily be required to effectu- other Contracting State as performed paid to Poland by the Polish company ate the purpose of the visit. The sec- in the discharge of governmental func- paying the dividends with respect to ond sentence of paragraph (4) makes tions if such labor or personal services the profits out of which the dividends it clear that the benefits provided by would be treated under the internal are paid. The appropriate amount Article 17 (Teachers) will not be laws of both Contracting States as so shall be based upon the amount of available to an individual if, during performed. Thus, compensation paid tax paid to Poland, but the credit the immediately preceding period, the in connection with industrial or com- shall not exceed that portion of the individual enjoyed the benefits pro- mercial activity is treated the same United States tax which such citizen's vided by paragraph (1).

as compensation received from a pri- or resident's net income (i.e., taxable If an individual qualifies for the

vate employer. This article does not income) from sources within Poland benefits of more than one of the pro

include remuneration paid by a politi or on income from sources outside visions of Articles 17 (Teachers) and cal subdivision or a local authority of the United States bears to his en

tire net incorne for the same taxable 18 (Students and Trainees), such in

thereof within the exemption. dividual may choose the most favor

. If the citizen becomes a citizen of, year. This provision does not require able provision but may not claim the

the or acquires immigrant status in, the the United States to maintain a perbenefits of more than one provision in

in other Contracting State, that other country and overall limitation in the any taxable vear as a means of avoid. Contracting State may tax the indi- future so long as the general principle ing the limitations provided. Thus, for

vidual without regard to this article. of a foreign tax credit remains in example, an individual who comes to

See paragraph (3) and (4)(b) of effect. the other Contracting State for the

Article 5 (General Rules of Taxa- For purposes of applying the United primary purpose of studying may be v he tion).

States credit in relation to taxes paid able to qualify under either paragraph ARTICLE 20. RELIEF FROM DOUBLE

to Poland, the taxes referred to in (2) or (3). However, he cannot com- TAXATION

paragraph (2) (a) of Article 2 (Taxes bine the maximum exclusion limits in

Covered by the Convention) will be

In order to avoid double taxation those two paragraphs to exclude

considered to be income taxes. It is each Contracting State agrees in this $15,000 during the taxable year. If

intended that any income of a resiarticle to provide a credit against its the individual becomes a citizen of,

dent of the United States which has W becomes a citizen or,

taxes

taxes for taxes paid to the other Conor acquires immigrant status in, the tracting State.

been subject to tax by Poland in acother Contracting State, that other

cordance with the Convention will be

Under paragraph (1) Poland will Contracting State may tax the indi

treated as income from Polish sources. allow to a resident of Poland as a vidual without regard to this article.

credit against the Polish tax the ap- ARTICLE 21. NONDISCRIMINATION See paragraphs (3) and (4) (6) of

propriate amount of taxes paid to the Paragraph Article 5 (General Rules of Taxation).

(1) provides that a United States, in accordance with the citizen of one Contracting State who ARTICLE 19. GOVERNMENTAL

provisions and subject to the limita is a resident of the other Contracting FUNCTIONS

tions of the law of Poland (as it may State shall not be subjected in that

be amended from time to time with other Contracting State to any taxalis article, wages, salaries, out changing the general principles tion or any requirement connected and similar remuneration, including of paragraph (1).

therewith which is other or more pensions, annuities or similar benefits, paid from public funds of one Con

Under paragraph (2), in accord- burdensome than the taxation and

ance with the provisions and subject connected requirements to which tracting State to a citizen of that Con

to the limitations of United States law citizens of that other Contracting State tracting State for labor or personal

(as it may be amended from time to in the same circumstances are or may services performed as an employee of

time without changing the general be subjected. The determination the national government of that Con- principles of paragraph (2)). the whether there is a greater burden is tracting State, or any agency thereof, United States will allow to a citizen to be made by comparing the treatin the discharge of functions of a or resident of the United States as a ment of individuals who are in comgovernmental nature will be exempt credit against United States tax the parable positions. Thus, for example,

Uniteds of paragraph

petent authority of the other Contracting State with a view to the avoidance of taxation not in accordance with the Convention.

Paragraph (3) requires the competent authorities of the two Contracting States to endeavor to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention, and they may consult together for the elimination of double taxation in cases not provided for in the Convention. Thus, for example, the com

paragraph

resident alien at any time during a

of the United States and who other State, or to companies owned or conwise meets the requirements specified trolled by such residents, tax benefits in section 911 of the Code would granted by special agreements, e.g., under this article, be eligible for the bilateral income tax

bilateral income tax conventions, to benefits of section 911 even though residents of a third State or companies not a citizen of the United States. owned or controlled by such residents. On the other hand, just as a United

Paragraph (4) of this article and States citizen who becomes a non- paragraph (4) of Article 2 (Taxes

Covered by the Convention) make whose spouse is a clear that for this article the term nonresident alien at any time during "taxation" means taxes of every kind a taxable year cannot file a joint re- and description (whether imposed at turn for that year, a Polish citizen the national, state or local level), would not be entitled to file a joint

with the exception of the Polish return with his spouse if either is a nonresident alien at any time during (oplata skarbowa za zameldowanie). the taxable year.

This registration fee is a nominal anParagraph (2) provides that one mual fee required of both Polish citi Contracting State may not impose zens and aliens. The fee is higher for more burdensome taxes on permanent

aliens than for Polish citizens (in establishments of residents of the other 1973. approximately $1.00 for aliens Contracting State than it generally as compared to approximately ten imposes on permanent establishments cents for citizens). However, in light of residents of third States carrying of its nominal nature, the United on the same activities.

States consented to its exclusion from

the nondiscrimination article. Paratracting State from subjecting a com

graph (4) specifically states that the pany of such Contracting State the contribution for the retirement fund capital of which is wholly or partly (skladka na cele emerytalne) made by owned or controlled, directly or in

Polish citizens will be regarded as a directly, by one or more residents of the other Contracting State to any taxation or any requirement connected

ARTICLE 22. MUTUAL AGREEMENT with taxation which is other or more

PROCEDURE burdensome than those generally ap- When a resident of one Contracting plicable to companies of the first-men State considers that actions of one or tioned Contracting State carrying on both Contracting States result or will the same activities, the capital of result for hini in taxation not in acwhich is wholly or partly owned or cordance with the Convention, such controlled by one or more residents of ne or more residents of resident may, notwithstanding resident may, notwithstanding the

the a third State.

remedies provided by the national laws The criterion in paragraphs (2) of the Contracting States, present his and (3) is in terms of permanent case to the competent authority of the establishments of and companies Contracting State of which he is a owned or controlled by, residents of resident or citizen. A resident of a third States, rather than to citizens Contracting State need not, although or residents of that Contracting State, it is anticipated that in the normal because the Polish taxation of other situation he will, exhaust his other foreign businesses is a more relevant administrative or judicial remedies comparison than Polish taxation of prior to resorting to the use of the domestic businesses which are fre- mutual agreement procedure. If the quently state enterprises.

objection appears to it to be justified However, paragraphs (2) and (3) and if it is not able itself to arrive do not require a Contracting State to at an appropriate solution, that comgrant to permanent establishments of petent authority must endeavor to

same attribution of profits to an enter-
prise of one Contracting State and its
permanent establishment situated in
the other Contracting State; the same
allocation of income, deductions,
credits or allowances between an en-
terprise
terprise of one Contracting State and
a related person and to the readjust-
ment of taxes imposed by each Con-
tracting State to reflect such alloca-
tion; the same determination of the
source of particular items of income;
and the same characterization of par.
ticular items of income.

Under paragraph (4), in implementing the provisions of this article, the competent authorities may communicate with each other directly for the purpose of reaching an agreement in the sense of this article.

Under paragraph (5), in cases in which the competent authorities reach an agreement, taxes will be imposed in accordance with the agreement. This permits the issuance of a refund or credit notwithstanding procedural barriers otherwise existing under a Contracting State's law, such as the statute of limitations

tax.

ARTICLE 23. EXCHANGE OF
INFORMATION

Paragraph (1) provides for a system of administrative cooperation between the competent authorities of the two Contracting States by requiring an exchange of information necessary for carrying out the provisions of the Convention or for the prevention of fraud or for the administration of statutory provisions concerning taxes tracting State with respect to its own terminated, such termination will be to which the Convention applies. The taxes. The standard to be used by a effective with respect to income of competent authorities may exchange Contracting State, when requested to calendar years or taxable years beinformation in connection with tax provide such depositions and docu- ginning (or, in the case of taxes paycompliance generally, not merely il- ments, is the same standard as de- able at source, payments made) on legal acts or crimes.

scribed above under paragraph (1). or after January 1 next following the Under paragraph (2) information Paragraph (5) provides for the ex- expiration of the six month period. exchanged must be treated as secret change of information on either a except that it may be disclosed to any routine basis cr on request with referperson concerned with, or made partence to particular cases. The com- Subpart B.-Legislation and of a public record with respect to, the petent authorities may agree on the Related Committee Reports assessment, collection, enforcement of, list of information to be furnished on or litigation with respect to the taxes a routine basis.

Public Law 95-19 to which the Convention applies. ARTICLE 24. DIPLOMATIC AND

95th Congress, H.R. 4800' Thus, disclosure is not prohibited as a part of a public proceeding before

April 12, 1977 CONSULAR OFFICERS a court or administrative body.

This article provides that nothing An Act to extend the Emergency The article provides two limitations

in the Convention will affect the fiscal Unemployment Compensation Act of on what kind of information can be

privileges of diplomatic or consular 1974, and for other purposes. exchanged. Under paragraph (1), the

officials under the general rules and Be it enacted by the Senate and information must be of a class that

norms of international law or under House of Representatives of the can be obtained under the laws and

the provisions of special agreements. United States of America in Congress administrative practices of each Con

This is merely a special case of the assembled. tracting State with respect to its own gen

general rule provided in paragraph taxes. Thus, a Contracting State re

Section 1. SHORT Title.
(2) of Article 5 (General Rules of
12).

sec quested to furnish information will

This Act may be cited as the "Emeruse the standard it uses in the en- ARTICLE 25. ENTRY INTO FORCE

gency Unemployment Compensation forcement of its own laws by its ad.

Extension Act of 1977.”

This article provides that the Conministrative and judicial authorities,

vention is subject to ratification and TITLE I - AMENDMENTS TO treating the tax of the Contracting

for the exchange of instruments of THE EMERGENCY UNEMState with respect to which the re

ratification. The Convention will enter PLOYMENT COMPENSATION quest relates as if it were a tax of the

into force thirty days after the date PROGRAM Contracting State requested to furnish

of exchange of such instruments of the information and were being im

ratification. The provisions of the Sec. 101. EXTENSION OF PROGRAM. posed by such Contracting State. Un

Convention shall first have effect with der paragraph (3), no information will

(a) GENERAL Rule.—Section 102 respect to income of calendar years or be exchanged which would be con

(f) (2) of the Emergency Unemploytaxable years beginning (or in the case trary to public policy. However, in

ment Compensation Act of 1974 is of taxes payable at source, payments formation which may be furnished in

amended to read as follows: made) on or after January 1, 1974. It accordance with this article should

“(2) No. emergency compensation is intended for purposes of this article not be withheld by reason of any doc

shall be payable to any individual and Article 26 (Termination) that the trine of law under which international

under an agreement entered into reference to calendar years applies judicial assistance is not accorded in

under this Actonly to cases where the taxable year tax matters.

"(A) for any week ending after Ocis the calendar year. Under paragraph (4), depositions

tober 31, 1977, or of witnesses and copies of unedited ARTICLE 26. TERMINATION

"(B) in the case of an individual original documents (including books, Paragraph (1) provides that the who (for a week ending after the bepapers, statements, records, accounts, Convention will continue in effect ginning of his most recent beneht year or writings) shall be provided by the indefinitely, but that it may be termic and before October 31, 1977) had a competent authority of a Contracting

fa Contracting nated by either Contracting State at week with respect to which emergency

individual for such week;

apply to weeks of unemployment be- to such individual under any Federal "(B) if the position was not offered ginning after the date of the enact- unemployment compensation law adto such individual in writing and was ment of this Act.

ministered by the State agency or not listed with the State employment Sec. 105. RECOVERY OF

under any other Federal law adminservice;

OVERPAY- istered by the State agency which pro"(C) if such failure would not reMENTS.

vides for the payment of any assistance sult in a denial of compensation under (a) GENERAL Rule.—Section 105 or allowance with respect to any week the provisions of the applicable State of the Emergency Unemployment of unemployment, during the threelaw to the extent that such provisions Compensation Act of 1974 is amended year period after the date such individare not inconsistent with the provisions by inserting “(a)” after "Sec. 105." uals received the payment of the emerof paragraph (4); or

and by adding at the end thereof the gency compensation to which they “(D) if the position pays wages less following new subsection:

were not entitled, except that no sinthan the higher of —

"(b)(1) If an individual knowing gle deduction may exceed 50 per "(i) the minimum wage provided ly has made, or caused to be made by centum of the weekly beneht amount by section 6(a)(1) of the Fair Labor another, a false statement or repre

from which such deduction is made. Standards Act of 1938, without regard sentation of a material fact, or know “(C) No repayment shall be reto any exemption; or

ingly has failed, or caused another to quired, and no deduction shall be "(ii) any applicable State or local fail, to disclose a material fact, and as made, until a determination has been minimum wage.

a result of such false statement or rep. made, notice thereof and an oppor“(4) For purposes of this subsec resentation or of such nondisclosure

tunity for a fair hearing has been tionsuch individual has received an

given to the individual, and the de

given to "(A) The term 'suitable work' amount of emergency compensation

ñ

te

termination has become final. means, with respect to any individual, under this Act to which he was not en

“(3) Any determination by a State any work which is within such indi- titled, such individual

agency under paragraph (1) or (2) vidual's capabilities; except that, if "(A) shall be ineligible for further

shall be subject to review in the same the individual furnishes evidence satis- emergency compensation under this

manner and to the same extent as defactory to the State agency that such Act in accordance with the provisions

terminations under the State unemindividual's prospects for obtaining of the applicable State unemployment

ployment compensation law, and only work in his customary occupation compensation law relating to fraud in

in that manner and to that extent.”

(b) EFFECTIVE DATE. within a reasonably short period are

The connection with a claim for unemploygood, the determination of whether ment compensation; and

amendment made by subsection (a) any work is suitable work with respect “(B) shall be subject to prosecution

shall take effect on the date of the to such individual shall be made in under section 1001 of title 18, United

enactment of this Act. accordance with the applicable State States Code.

Sec. 106. MODIFICATION OF AGREElaw,

“(2)(A) In the case of individuals MENTS. "(B) An individual shall be treated who have received amounts of emer- The Secretary of Labor shall, at as actively engaged in seeking work gency compensation under this Act to the earliest practicable date after the during any week if

which they were not entitled, the State date of the enactment of this Act, "(i) the individual has engaged in is authorized to require such individ- propose to each State with which he a systematic and sustained effort to uals to repay the amounts of such

has in effect an agreement under secobtain work during such week, and emergency compensation to the State tion 102 of the Emergency Unemploy"(ii) the individual provides tangi- agency, except that the State agency

ency, except that the State agency ment Compensation Act of 1974 a ble evidence to the State agency that may waive such repayment if it deter- modification of such agreement dehe has engaged in such an effort dur- mines that,

signed to provide for the payment of ing such week.

"(i) the payment of such emergency emergency compensation under such “(5) Any agreement under subsec. compensation was without fault on the Act in accordance with the amendtion (a) shall provide that, in the ad- part of any such individual, and ments made by this title. Notwithministration of this Act, States shall “(ii) such repayment would be con- standing any other provision of law, make provision for referring appli- trary to equity and good conscience. if any State fails or refuses, within cants for benefits under this Act to "(B) The State agency may recover the 3-week period beginning on the any suitable work to which subpara- the amount to be repaid, or any part date the Secretary of Labor proposes graphs (A), (B), (C), and (D) of thereof, by deductions from any emer- such a modification to such State, to paragraph (3) would not apply." gency compensation payable to such enter into such a modification of such

(b) EFFECTIVE DATE.—The amend individual under this Act or from any agreement, the Secretary of Labor