- 1
- The Netherlands, when imposing tax on its residents, may include in the basis upon which such taxes are imposed the items of income which, according to the provisions of this Convention, may be taxed in Barbados.
- 2
- However, where a resident of the Netherlands derives items of income which according to Article 6, Article 7, paragraph 9 of Article 10, paragraph 6 of Article 11, paragraph 6 of Article 12, paragraphs 1 and 2 of Article 13, paragraph 1 of Article 14, paragraphs 1 and 3 of Article 15, paragraphs 1 and 2 of Article 18, paragraphs 1 (subparagraph a) and 2 (subparagraph a) of Article 19, paragraph 2 of Article 23 of this Convention may be taxed in Barbados and are included in the basis referred to in paragraph 1, the Netherlands shall exempt such items of income by allowing a reduction of its tax. This reduction shall be computed in conformity with the provisions of Netherlands law for the avoidance of double taxation. For that purpose the said items of income shall be deemed to be included in the amount of the items of income which are exempt from Netherlands tax under those provisions.
- 3
- Further, the Netherlands shall allow a deduction from the Netherlands tax so computed for the items of income which according to paragraph 2 of Article 10, paragraph 2 of Article 11, paragraph 2 of Article 12, paragraph 5 of Article 13, Article 16 and Article 17 of this Convention may be taxed in Barbados to the extent that these items are included in the basis referred to in paragraph 1. The amount of this deduction shall be equal to the tax paid in Barbados on these items of income, butshall, in case the provisions of the Netherlands law for the avoidance of double taxation provide so, not exceed the amount of the deduction which would be allowed if the items of income so included were the sole items of income which are exempt from Netherlands tax under the provisions of Netherlands law for the avoidance of double taxation.
- This paragraph shall not restrict allowance now or hereafter accorded by the provisions of the Netherlands law for the avoidance of double taxation, but only as far as the calculation of the amount of the deduction of Netherlands tax is concerned with respect to the aggregation of income from more than one country and the carry forward of the tax paid in Barbados on the said items of income to subsequent years.
- 4
- Notwithstanding the provisions of paragraph 2, the Netherlands shall allow a deduction from the Netherlands tax for the tax paid in Barbados on items of income which according to Article 7, paragraph 9 of Article 10, paragraph 6 of Article 11, paragraph 6 of Article 12 and paragraph 2 of Article 23 of this Convention may be taxed in Barbados to the extent that these items are included in the basis referred to in paragraph 1, insofar as the Netherlands under the provisions of Netherlands law for the avoidance of double taxation allows a deduction from the Netherlands tax of the tax levied in another country on such items of income. For the computation of this deduction the provisions of paragraph 3 of this Article shall apply accordingly.
- 5
- In Barbados, double taxation shall be eliminated as follows:
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- a)Subject to the provisions of the laws of Barbados regarding the allowance as a credit against Barbados tax of tax payable in a territory outside Barbados (which shall not affect the general principle hereof):
- (i)Netherlands tax payable under the laws of the Netherlands and in accordance with the Convention, whether directly or by deduction, on profits or income from sources within the Netherlands (excluding, in the case of a dividend tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any Barbados tax computed by reference to the same profits or income by reference to which the Netherlands tax is computed;
- (ii)In the case of a dividend paid by a company which is a resident of the Netherlands to a company which is a resident of Barbados and which holds directly at least 5 percent of the capital of the company paying the dividend, the credit shall take into account in addition to any Netherlands tax creditable under sub-paragraph a)(i) the Netherlands tax payable by the company paying the dividend in respect of the profits out of which such dividend is paid.
- b)The credit, however, shall in no case exceed the part of the Barbados tax, as computed before the credit is given, which is appropriate to the income which may be taxed in the Netherlands.
