Treaty limitation on benefits denies tax treaty relief for corporates subject to special low taxation with substantial nonresident ownership. The Protocol clarifies that the Icelandic social security charge Tryggingargjald is not a tax on total wages; interest integral to ship or aircraft operations is to be treated as operational profits and excluded from Article 11; treaty benefits for dividends, interest, royalties, technical service fees, or capital gains are denied where special low taxation and substantial nonresident ownership coexist as determined after competent authority consultation; and paragraph two of Article 25 permits higher taxation of permanent establishment profits than that applied to similar domestic companies within a limited rate margin.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Treaty limitation on benefits denies tax treaty relief for corporates subject to special low taxation with substantial nonresident ownership.
The Protocol clarifies that the Icelandic social security charge Tryggingargjald is not a tax on total wages; interest integral to ship or aircraft operations is to be treated as operational profits and excluded from Article 11; treaty benefits for dividends, interest, royalties, technical service fees, or capital gains are denied where special low taxation and substantial nonresident ownership coexist as determined after competent authority consultation; and paragraph two of Article 25 permits higher taxation of permanent establishment profits than that applied to similar domestic companies within a limited rate margin.
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