Foreign tax credit required where income is taxed abroad, limited to the domestic tax attributable to that income. Article 23 provides that domestic laws govern taxation except where the Agreement provides otherwise and sets out methods to eliminate double taxation: either exempting income taxable in the other State (with progression) or allowing a deduction for tax paid abroad subject to a limitation. Paragraphs 2 and 3 are replaced by MLI Article 5(6), which requires the resident State to allow a deduction equal to income tax paid in the other State up to the domestic tax attributable to that income, while still permitting consideration of exempted income for progression.
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.
Foreign tax credit required where income is taxed abroad, limited to the domestic tax attributable to that income.
Article 23 provides that domestic laws govern taxation except where the Agreement provides otherwise and sets out methods to eliminate double taxation: either exempting income taxable in the other State (with progression) or allowing a deduction for tax paid abroad subject to a limitation. Paragraphs 2 and 3 are replaced by MLI Article 5(6), which requires the resident State to allow a deduction equal to income tax paid in the other State up to the domestic tax attributable to that income, while still permitting consideration of exempted income for progression.
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