Double taxation relief: reciprocal limited tax credits and exemption-with-progression for residents with cross-border income.

Elimination of double taxation is effected reciprocally through limited tax deductions and allowance for progression when exemptions apply. A resident of one Contracting State who derives income taxable in the other receives a deduction from domestic tax equal to tax paid abroad, limited to the portion attributable to that income. Where income is exempt under the Agreement, the residence State may nevertheless take the exempted income into account in calculating tax on the remaining income, implementing an exemption-with-progression mechanism.

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