Shipping profits tax relief: mutual taxation with partial tax credit reduces double taxation on cross-border ship operations.

Profits from ship operations may be taxed in both source and residence States, but the source-State tax is reduced by half and the reduced tax is creditable against the residence-State tax, subject to the credit not exceeding residence-State tax on that income; profits from coastal traffic are excluded and if the source State does not tax foreign enterprises' shipping income, the profits may be taxed only in the residence State. Domestic assessment rules for occasional shipping remain applicable, with the treaty provision applying for specified adjustments.

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