Elimination of double taxation via foreign tax credit and exemption with progression under the treaty framework. Article 23 provides reciprocal elimination of double taxation by allowing each Contracting State to grant a foreign tax credit limited to the portion of domestic tax attributable to income taxable in the other State. It also permits exemption with progression-allowing the residence State to consider exempt income when computing tax on remaining income-and deems foreign tax to include taxes on dividends, interest, royalties, service fees and business profits even where domestic incentives reduce tax; this deemed tax rule applies for an initial limited treaty period and is extendable by mutual agreement.
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.
Elimination of double taxation via foreign tax credit and exemption with progression under the treaty framework.
Article 23 provides reciprocal elimination of double taxation by allowing each Contracting State to grant a foreign tax credit limited to the portion of domestic tax attributable to income taxable in the other State. It also permits exemption with progression-allowing the residence State to consider exempt income when computing tax on remaining income-and deems foreign tax to include taxes on dividends, interest, royalties, service fees and business profits even where domestic incentives reduce tax; this deemed tax rule applies for an initial limited treaty period and is extendable by mutual agreement.
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