of which the company paying the dividends is a resident, income from insurance activities mainly derived from insurance of property not situated in that Contracting State or of persons who are not resi-dents of that Contracting State, and income from banking operations not mainly directed at the market of that Contracting State.

2. In the case of Peru, double taxation shall be eliminated as follows:

a) Residents of Peru may credit against Peruvian tax, as a credit, the Portu-guese tax payable on income taxed in accordance with the laws of Portugal and the provisions of this Convention. Such credit shall not, in any case, exceed that part of the Peruvian tax which is attributable to the income which may be taxed in Portugal;

b) Where a company which is a resident of Portugal pays dividends to a

company which is a resident of Peru that controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividends, the credit mentioned in subparagraph a) of paragraph 2 of this Article shall take into account the tax payable in Portugal by such company in respect of the profits out of which such dividends are paid but only to the extent that the Peruvian tax exceeds the amount of the credit determined without reference to this subparagraph.

3. Where in accordance with any provisions of this Convention income derived by a resident of a Contracting State is exempt from tax in that State, such State may never-theless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income.

CHAPTER V SPECIAL PROVISIONS

ARTICLE 23

NON-DISCRIMINATION 1. Nationals of a Contracting State shall not be subjected 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 nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also ap-ply to persons who are not residents of one or both of the Contracting States. 2. The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reduc-

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