Double taxation relief by foreign tax credit with proportional limitation and capped deemed taxes for passive income. The Convention provides that residents receive a credit in their residence State for tax paid in the source State on income from sources within that ... Summary
Double taxation relief by foreign tax credit with proportional limitation and capped deemed taxes for passive income.
The Convention provides that residents receive a credit in their residence State for tax paid in the source State on income from sources within that source State, subject to domestic rules on foreign tax credits and a proportional limitation related to the ratio of source income to total taxable income. Tax incentives giving rise to exemptions or reductions may be treated as if tax were payable for credit purposes if agreed by the competent authorities, but the Convention caps deemed tax amounts for dividends, interest and royalties by specified maximum percentages of gross amounts.
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